G.R. No.

172699

July 27, 2011

ELECTROMAT MANUFACTURING and RECORDING CORPORATION, Petitioner, vs. HON. CIRIACO

LAGUNZAD, in his capacity as Regional Director, National Capital Region, Department of Labor and
Employment; and HON. HANS LEO J. CACDAC, in his capacity as Director of Bureau of Labor
Relations, Department of Labor and Employment, Public Respondents.
NAGKAKAISANG SAMAHAN NG MANGGAGAWA NG ELECTROMAT-WASTO, Private Respondent.
DECISION

BRION, J.:

We resolve the present petition for review on certiorari1 assailing the decision2 and the resolution3 of the Court
of Appeals (CA) dated February 3, 2006 and May 11, 2006, respectively, rendered in CA G.R. SP No. 83847.
The Antecedents
The private respondent Nagkakaisang Samahan ng Manggagawa ng Electromat-Wasto (union), a charter
affiliate of the Workers Advocates for Struggle, Transformation and Organization (WASTO), applied for
registration with the Bureau of Labor Relations (BLR). Supporting the application were the following
documents: (1) copies of its ratified constitution and by-laws (CBL); (2) minutes of the CBLs adoption and
ratification; (3) minutes of the organizational meetings; (4) names and addresses of the union officers; (5) list
of union members; (6) list of rank-and-file employees in the company; (7) certification of non-existence of a
collective bargaining agreement (CBA) in the company; (8) resolution of affiliation with WASTO, a labor
federation; (9) WASTOs resolution of acceptance; (10) Charter Certificate; and (11) Verification under oath.
The BLR thereafter issued the union a Certification of Creation of Local Chapter (equivalent to the certificate
of registration of an independent union), pursuant to Department Order No. (D.O.) 40-03.4
On October 1, 2003, the petitioner Electromat Manufacturing and Recording Corporation (company) filed a
petition for cancellation of the unions registration certificate, for the unions failure to comply with Article 234
of the Labor Code. It argued that D.O. 40-03 is an unconstitutional diminution of the Labor Codes union
registration requirements under Article 234.
On November 27, 2003, Acting Director Ciriaco A. Lagunzad of the Department of Labor and Employment
(DOLE)-National Capital Region dismissed the petition.5
In the appeal by the company, BLR Director Hans Leo J. Cacdac affirmed the dismissal.6 The company
thereafter sought relief from the CA through a petition for certiorari, contending that the BLR committed grave
abuse of discretion in affirming the unions registration despite its non-compliance with the requirements for
registration under Article 234 of the Labor Code. It assailed the validity of D.O. 40-03 which amended the
rules of Book V (Labor Relations) of the Labor Code. It posited that the BLR should have strictly adhered to
the union registration requirements under the Labor Code, instead of relying on D.O. 40-03 which it
considered as an invalid amendment of the law since it reduced the requirements under Article 234 of the
Labor Code. It maintained that the BLR should not have granted the unions registration through the issuance
of a Certification of Creation of Local Chapter since the union submitted only the Charter Certificate issued to
it by WASTO.
The CA Decision

In its decision rendered on February 3, 2006,7 the CA Tenth Division dismissed the petition and affirmed the
assailed BLR ruling. It brushed aside the companys objection to D.O. 40-03, and its submission that D.O. 4003 removed the safety measures against the commission of fraud in the registration of unions. It noted that
"there are sufficient safeguards found in other provisions of the Labor Code to prevent the same."8 In any
event, it pointed out that D.O. 40-03 was issued by the DOLE pursuant to its rule-making power under the
law.9
The company moved for reconsideration, arguing that the unions registration certificate was invalid as there
was no showing that WASTO, the labor federation to which the union is affiliated, had at least ten (10) locals
or chapters as required by D.O. 40-03. The CA denied the motion,10 holding that no such requirement is found
under the rules. Hence, the present petition.
The Case for the Petitioner
The company seeks a reversal of the CA rulings, through its submissions (the petition 11 and the
memorandum12), on the ground that the CA seriously erred and gravely abused its discretion in affirming the
registration of the union in accordance with D.O. 40-03. Specifically, it assails as unconstitutional Section 2(E),
Rule III of D.O. 40-03 which provides:
The report of creation of a chartered local shall be accompanied by a charter certificate issued by the
federation or national union indicating the creation or establishment of the chartered local.
The company points out that D.O. 40-03 delisted some of the requirements under Article 234 of the Labor
Code for the registration of a local chapter. Article 234 states:
ART. 234. Requirements of Registration.13 Any applicant labor organization, association or group of unions or
workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate of registration based on the following
requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it.
The company contends that the enumeration of the requirements for union registration under the law is
exclusive and should not be diminished, and that the same requirements should apply to all labor unions
whether they be independent labor organizations, federations or local chapters. It adds that in making a

different rule for local chapters, D.O. 40-03 expanded or amended Article 234 of the Labor Code, resulting in
an invalid exercise by the DOLE of its delegated rule-making power. It thus posits that the unions certificate of
registration which was issued "in violation of the letters of Article 234 of the Labor Code" 14 is void and of no
effect, and that the CA committed grave abuse of discretion when it affirmed the unions existence.
The Case for the Union
In a Resolution dated January 16, 2008,15 the Court directed union board member Alex Espejo, in lieu of union
President Roberto Beltran whose present address could not be verified, to furnish the Court a copy of the
union comment/opposition to the companys motion for reconsideration dated February 22, 2006 in CA G.R.
SP No. 83847, which the union adopted as its comment on the present petition. 16
Through this comment/opposition,17 the union submits that the company failed to show that the CA committed
reversible error in upholding the registration certificate issued to it by the BLR. Citing Castillo v. National Labor
Relations Commission,18 it stressed that the issuance of the certificate by the DOLE agencies was supported
by substantial evidence, which should be entitled to great respect and even finality.
The Courts Ruling
We resolve the core issue of whether D.O. 40-03 is a valid exercise of the rule-making power of the DOLE.
We rule in the affirmative. Earlier in Progressive Development Corporation v. Secretary, Department of Labor
and Employment,19 the Court encountered a similar question on the validity of the old Section 3, Rule II, Book
V of the Rules Implementing the Labor Code20 which stated:
Union affiliation; direct membership with a national union. - The affiliate of a labor federation or national union
may be a local or chapter thereof or an independently registered union.
a) The labor federation or national union concerned shall issue a charter certificate indicating the creation or
establishment of a local or chapter, copy of which shall be submitted to the Bureau of Labor Relations within
thirty (30) days from issuance of such charter certificate.
xxxx
e) The local or chapter of a labor federation or national union shall have and maintain a constitution and bylaws, set of officers and books of accounts. For reporting purposes, the procedure governing the reporting of
independently registered unions, federations or national unions shall be observed.
Interpreting these provisions of the old rules, the Court said that by force of law, 21 the local or chapter of a
labor federation or national union becomes a legitimate labor organization upon compliance with Section 3,
Rule II, Book V of the Rules Implementing the Labor Code, the only requirement being the submission of the
charter certificate to the BLR. Further, the Court noted that Section 3 omitted several requirements which are
otherwise required for union registration, as follows:
1) The requirement that the application for registration must be signed by at least 20% of the
employees in the appropriate bargaining unit;

2) The submission of officers addresses, principal address of the labor organization, the minutes of
organization meetings and the list of the workers who participated in such meetings;
3) The submission of the minutes of the adoption or ratification of the constitution and by-laws and the
list of the members who participated in it.22
Notwithstanding these omissions, the Court upheld the governments implementing policy expressed in the old
rules when it declared in Progressive Development
Undoubtedly, the intent of the law in imposing lesser requirements in the case of a branch or local of a
registered federation or national union is to encourage the affiliation of a local union with a federation or
national union in order to increase the local unions bargaining powers respecting terms and conditions of
labor.23
It was this same Section 3 of the old rules that D.O. 40-03 fine-tuned when the DOLE amended the rules on
Book V of the Labor Code, thereby modifying the governments implementing policy on the registration of
locals or chapters of labor federations or national unions. The company now assails this particular amendment
as an invalid exercise of the DOLEs rule-making power.
We disagree. As in the case of D.O. 9 (which introduced the above-cited Section 3 of the old rules) in
Progressive Development, D.O. 40-03 represents an expression of the governments implementing policy on
trade unionism. It builds upon the old rules by further simplifying the requirements for the establishment of
locals or chapters. As in D.O. 9, we see nothing contrary to the law or the Constitution in the adoption by the
Secretary of Labor and Employment of D.O. 40-03 as this department order is consistent with the intent of the
government to encourage the affiliation of a local union with a federation or national union to enhance the
locals bargaining power. If changes were made at all, these were those made to recognize the distinctions
made in the law itself between federations and their local chapters, and independent unions; local chapters
seemingly have lesser requirements because they and their members are deemed to be direct members of
the federation to which they are affiliated, which federations are the ones subject to the strict registration
requirements of the law.1avvphi1
In any case, the local union in the present case has more than satisfied the requirements the petitioner
complains about; specifically, the union has submitted: (1) copies of the ratified CBL; (2) the minutes of the
CBLs adoption and ratification; (3) the minutes of the organizational meetings; (4) the names and addresses
of the union officers; (5) the list of union members; (6) the list of rank-and-file employees in the company; (7) a
certification of non-existence of a CBA in the company; (8) the resolution of affiliation with WASTO and the
latters acceptance; and (9) their Charter Certificate. These submissions were properly verified as required by
the rules. In sum, the petitioner has no factual basis for questioning the unions registration, as even the
requirements for registration as an independent local have been substantially complied with.
We, thus, find no compelling justification to nullify D.O. 40-03. Significantly, the Court declared in another
case:24
Pagpalain cannot also allege that Department Order No. 9 is violative of public policy. x x x [T]he sole function
of our courts is to apply or interpret the laws. It does not formulate public policy, which is the province of the
legislative and executive branches of government. It cannot, thus, be said that the principles laid down by the
Court in Progressive and Protection Technology constitute public policy on the matter. They do, however,

constitute the Courts interpretation of public policy, as formulated by the executive department through its
promulgation of rules implementing the Labor Code. However, this public policy has itself been changed by
the executive department, through the amendments introduced in Book V of the Omnibus Rules by
Department Order No. 9. It is not for us to question this change in policy, it being a well-established principle
beyond question that it is not within the province of the courts to pass judgments upon the policy of legislative
or executive action.
This statement is as true then as it is now.
In light of the foregoing, we find no merit in the appeal.
WHEREFORE, premises considered, we DENY the petition for lack of merit. The assailed decision and
resolution of the Court of Appeals are AFFIRMED. Costs against the petitioner Electromat Manufacturing and
Recording Corporation.
G.R. No. 171153

September 12, 2007

SAN MIGUEL CORPORATION EMPLOYEES UNIONPHILIPPINE TRANSPORT AND GENERAL

WORKERS ORGANIZATION (SMCEUPTGWO), petitioner,
vs.
SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA NG
MANGGAGAWANG PILIPINO (SMPPEUPDMP), respondent1.
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner SAN MIGUEL
CORPORATION EMPLOYEES UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS
ORGANIZATION (SMCEU-PTGWO) prays that this Court reverse and set aside the (a) Decision 2 dated 9
March 2005 of the Court of Appeals in CA-G.R. SP No. 66200, affirming the Decision3 dated 19 February
2001 of the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE) which
upheld the Certificate of Registration of respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES
UNIONPAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP); and (b) the
Resolution4 dated 16 January 2006 of the Court of Appeals in the same case, denying petitioner's Motion for
Reconsideration of the aforementioned Decision.
The following are the antecedent facts:
Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the regular monthly-paid rank
and file employees of the three divisions of San Miguel Corporation (SMC), namely, the San Miguel Corporate
Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel Packaging Products
(SMPP), in all offices and plants of SMC, including the Metal Closure and Lithography Plant in Laguna. It had
been the certified bargaining agent for 20 years from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP). PDMP
issued Charter Certificate No. 112 to respondent on 15 June 1999. 5 In compliance with registration

requirements, respondent submitted the requisite documents to the BLR for the purpose of acquiring legal
personality.6 Upon submission of its charter certificate and other documents, respondent was issued
Certificate of Creation of Local or Chapter PDMP-01 by the BLR on 6 July 1999.7 Thereafter, respondent filed
with the Med-Arbiter of the DOLE Regional Officer in the National Capital Region (DOLE-NCR), three
separate petitions for certification election to represent SMPP, SMCSU, and SMBP. 8 All three petitions were
dismissed, on the ground that the separate petitions fragmented a single bargaining unit. 9
On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's
registration and its dropping from the rolls of legitimate labor organizations. In its petition, petitioner accused
respondent of committing fraud and falsification, and non-compliance with registration requirements in
obtaining its certificate of registration. It raised allegations that respondent violated Articles 239(a), (b) and
(c)10 and 234(c)11of the Labor Code. Moreover, petitioner claimed that PDMP is not a legitimate labor
organization, but a trade union center, hence, it cannot directly create a local or chapter. The petition was
docketed as Case No. NCR-OD-9908-007-IRD.12
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations of
fraud and misrepresentation, and irregularity in the submission of documents by respondent. Regional
Director Lim further ruled that respondent is allowed to directly create a local or chapter. However, he found
that respondent did not comply with the 20% membership requirement and, thus, ordered the cancellation of
its certificate of registration and removal from the rolls of legitimate labor organizations. 13 Respondent
appealed to the BLR. In a Decision dated 19 February 2001, it declared:
As a chartered local union, appellant is not required to submit the number of employees and names of
all its members comprising at least 20% of the employees in the bargaining unit where it seeks to
operate. Thus, the revocation of its registration based on non-compliance with the 20% membership
requirement does not have any basis in the rules.
Further, although PDMP is considered as a trade union center, it is a holder of Registration Certificate
No. FED-11558-LC issued by the BLR on 14 February 1991, which bestowed upon it the status of a
legitimate labor organization with all the rights and privileges to act as representative of its members
for purposes of collective bargaining agreement. On this basis, PDMP can charter or create a local, in
accordance with the provisions of Department Order No. 9.
WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the Regional Director
dated July 14, 2000, canceling the registration of appellant San Miguel Packaging Products
Employees Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is REVERSED
and SET ASIDE. Appellant shall hereby remain in the roster of legitimate labor organizations.14
While the BLR agreed with the findings of the DOLE Regional Director dismissing the allegations of fraud and
misrepresentation, and in upholding that PDMP can directly create a local or a chapter, it reversed the
Regional Director's ruling that the 20% membership is a requirement for respondent to attain legal personality
as a labor organization. Petitioner thereafter filed a Motion for Reconsideration with the BLR. In a Resolution
rendered on 19 June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for
Reconsideration and affirmed its Decision dated 19 February 2001. 15
Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner filed with the
Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-

G.R. SP No. 66200. The Court of Appeals, in a Decision dated 9 March 2005, dismissed the petition and
affirmed the Decision of the BLR, ruling as follows:
In Department Order No. 9, a registered federation or national union may directly create a local by
submitting to the BLR copies of the charter certificate, the local's constitution and by-laws, the principal
office address of the local, and the names of its officers and their addresses. Upon complying with the
documentary requirements, the local shall be issued a certificate and included in the roster of
legitimate labor organizations. The [herein respondent] is an affiliate of a registered federation PDMP,
having been issued a charter certificate. Under the rules we have reviewed, there is no need for
SMPPEU to show a membership of 20% of the employees of the bargaining unit in order to be
recognized as a legitimate labor union.
xxxx
In view of the foregoing, the assailed decision and resolution of the BLR are AFFIRMED, and the
petition is DISMISSED.16
Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied petitioner's Motion for
Reconsideration of the aforementioned Decision.
Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where petitioner raises the sole
issue of:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR
IN RULING THAT PRIVATE RESPONDENT IS NOT REQUIRED TO SUBMIT THE NUMBER OF
EMPLOYEES AND NAMES OF ALL ITS MEMBERS COMPRISING AT LEAST 20% OF THE
EMPLOYEES IN THE BARGAINING UNIT WHERE IT SEEKS TO OPERATE.
The present petition questions the legal personality of respondent as a legitimate labor organization.
Petitioner posits that respondent is required to submit a list of members comprising at least 20% of the
employees in the bargaining unit before it may acquire legitimacy, citing Article 234(c) of the Labor Code
which stipulates that any applicant labor organization, association or group of unions or workers shall acquire
legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the following requirements:
a. Fifty pesos (P50.00) registration fee;
b. The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such meetings;
c. The names of all its members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate;
d. If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and

e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification and the list of the members who participated in it.17
Petitioner also insists that the 20% requirement for registration of respondent must be based not on the
number of employees of a single division, but in all three divisions of the company in all the offices and plants
of SMC since they are all part of one bargaining unit. Petitioner refers to Section 1, Article 1 of the Collective
Bargaining Agreement (CBA),18 quoted hereunder:
ARTICLE 1
SCOPE
Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this Agreement
consists of all regular rank and file employees paid on the basis of fixed salary per month and
employed by the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing Products (SMBP)
and San Miguel Packaging Products (SMPP) and in different operations existing in the City of Manila
and suburbs, including Metal Closure and Lithography Plant located at Canlubang, Laguna subject to
the provisions of Article XV of this Agreement provided however, that if during the term of this
Agreement, a plant within the territory covered by this Agreement is transferred outside but within a
radius of fifty (50) kilometers from the Rizal Monument, Rizal Park, Metro Manila, the employees in the
transferred plant shall remain in the bargaining unit covered by this Agreement. (Emphasis supplied.)
Petitioner thus maintains that respondent, in any case, failed to meet this 20% membership requirement since
it based its membership on the number of employees of a single division only, namely, the SMPP.
There is merit in petitioner's contentions.
A legitimate labor organization19 is defined as "any labor organization duly registered with the Department of
Labor and Employment, and includes any branch or local thereof."20 The mandate of the Labor Code is to
ensure strict compliance with the requirements on registration because a legitimate labor organization is
entitled to specific rights under the Labor Code,21 and are involved in activities directly affecting matters of
public interest. Registration requirements are intended to afford a measure of protection to unsuspecting
employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control
union funds or use the labor organization for illegitimate ends. 22 Legitimate labor organizations have exclusive
rights under the law which cannot be exercised by non-legitimate unions, one of which is the right to be
certified as the exclusive representative23 of all the employees in an appropriate collective bargaining unit for
purposes of collective bargaining.24 The acquisition of rights by any union or labor organization, particularly
the right to file a petition for certification election, first and foremost, depends on whether or not the labor
organization has attained the status of a legitimate labor organization. 25
A perusal of the records reveals that respondent is registered with the BLR as a "local" or "chapter" of PDMP
and was issued Charter Certificate No. 112 on 15 June 1999. Hence, respondent was directly chartered by
PDMP.
The procedure for registration of a local or chapter of a labor organization is provided in Book V of the
Implementing Rules of the Labor Code, as amended by Department Order No. 9 which took effect on 21 June
1997, and again by Department Order No. 40 dated 17 February 2003. The Implementing Rules as amended

by D.O. No. 9 should govern the resolution of the petition at bar since respondent's petition for certification
election was filed with the BLR in 1999; and that of petitioner on 17 August 1999.26
The applicable Implementing Rules enunciates a two-fold procedure for the creation of a chapter or a local.
The first involves the affiliation of an independent union with a federation or national union or industry union.
The second, finding application in the instant petition, involves the direct creation of a local or a chapter
through the process of chartering.27
A duly registered federation or national union may directly create a local or chapter by submitting to the DOLE
Regional Office or to the BLR two 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. 28
The Implementing Rules stipulate that a local or chapter may be directly created by a federation or national
union. A duly constituted local or chapter created in accordance with the foregoing shall acquire legal
personality from the date of filing of the complete documents with the BLR. 29 The issuance of the certificate of
registration by the BLR or the DOLE Regional Office is not the operative act that vests legal personality upon
a local or a chapter under Department Order No. 9. Such legal personality is acquired from the filing of the
complete documentary requirements enumerated in Section 1, Rule VI. 30
Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No. 9, violated
Article 234 of the Labor Code when it provided for less stringent requirements for the creation of a chapter or
local. This Court disagrees.
Article 234 of the Labor Code provides that an independent labor organization acquires legitimacy only
upon its registration with the BLR:
Any applicant labor organization, association or group of unions or workers shall acquire legal
personality and shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such meetings;

(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it. (Italics supplied.)
It is emphasized that the foregoing pertains to the registration of an independent labor organization,
association or group of unions or workers.
However, the creation of a branch, local or chapter is treated differently. This Court, in the landmark case
ofProgressive Development Corporation v. Secretary, Department of Labor and Employment,31 declared that
when an unregistered union becomes a branch, local or chapter, some of the aforementioned requirements
for registration are no longer necessary or compulsory. Whereas an applicant for registration of an
independent union is mandated to submit, among other things, the number of employees and names of all its
members comprising at least 20% of the employees in the bargaining unit where it seeks to operate, as
provided under Article 234 of the Labor Code and Section 2 of Rule III, Book V of the Implementing Rules, the
same is no longer required of a branch, local or chapter. 32 The intent of the law in imposing less requirements
in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a
local union with a federation or national union in order to increase the local union's bargaining powers
respecting terms and conditions of labor.33
Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of Department Order No. 9 was
directly put in issue, this Court was unequivocal in finding that there is no inconsistency between the Labor
Code and Department Order No. 9.
As to petitioner's claims that respondent obtained its Certificate of Registration through fraud and
misrepresentation, this Court finds that the imputations are not impressed with merit. In the instant case, proof
to declare that respondent committed fraud and misrepresentation remains wanting. This Court had, indeed,
on several occasions, pronounced that registration based on false and fraudulent statements and documents
confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap
of paper. Under such circumstances, the labor organization, not being a legitimate labor organization,
acquires no rights.35
This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization based on
fraud and misrepresentation in securing its certificate of registration is a serious allegation which deserves
careful scrutiny. Allegations thereof should be compounded with supporting circumstances and evidence. The
records of the case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this
doctrine applies with greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial
bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific
matters, are generally accorded not only great respect but even finality. 36
Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP cannot create a
local or chapter as it is not a legitimate labor organization, it being a trade union center.

Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as a labor organization.
Firstly, this line of reasoning attempts to predicate that a trade union center is not a legitimate labor
organization. In the process, the legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same
contention premises that a trade union center cannot directly create a local or chapter through the process of
chartering.
Anent the foregoing, as has been held in a long line of cases, the legal personality of a legitimate labor
organization, such as PDMP, cannot be subject to a collateral attack. The law is very clear on this matter.
Article 212 (h) of the Labor Code, as amended, defines a legitimate labor organization37 as "any labor
organization duly registered with the DOLE, and includes any branch or local thereof."38 On the other hand, a
trade union center is any group of registered national unions or federations organized for the mutual aid and
protection of its members; for assisting such members in collective bargaining; or for participating in the
formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE
in accordance with Rule III, Section 2 of the Implementing Rules. 39
The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to
a union, its legal personality cannot be subject to collateral attack. 40 It may be questioned only in an
independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing
Rules. The aforementioned provision is enunciated in the following:
Sec. 5. Effect of registration. The labor organization or workers' association shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of registration.
Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in
an independent petition for cancellation in accordance with these Rules.
PDMP was registered as a trade union center and issued Registration Certificate No. FED-11558-LC by the
BLR on 14 February 1991. Until the certificate of registration of PDMP is cancelled, its legal personality as a
legitimate labor organization subsists. Once a union acquires legitimate status as a labor organization, it
continues to be recognized as such until its certificate of registration is cancelled or revoked in an independent
action for cancellation.41 It bears to emphasize that what is being directly challenged is the personality of
respondent as a legitimate labor organization and not that of PDMP. This being a collateral attack, this Court
is without jurisdiction to entertain questions indirectly impugning the legitimacy of PDMP.
Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor organization, 42 and
continues to be recognized as such until its certificate of registration is successfully impugned and thereafter
cancelled or revoked in an independent action for cancellation.
We now proceed to the contention that PDMP cannot directly create a local or a chapter, it being a trade union
center.
This Court reverses the finding of the appellate court and BLR on this ground, and rules that PDMP cannot
directly create a local or chapter.
After an exhaustive study of the governing labor law provisions, both statutory and regulatory, 43 we find no
legal justification to support the conclusion that a trade union center is allowed to directly create a local or
chapter through chartering. Apropos, we take this occasion to reiterate the first and fundamental duty of this

Court, which is to apply the law. The solemn power and duty of the Court to interpret and apply the law does
not include the power to correct by reading into the law what is not written therein. 44
Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being a legislation on
social justice,45 the provisions of the Labor Code and the Implementing Rules have been subject to several
amendments, and they continue to evolve, considering that labor plays a major role as a socio-economic
force. The Labor Code was first amended by Republic Act No. 6715, and recently, by Republic Act No. 9481.
Incidentally, the term trade union center was never mentioned under Presidential Decree No. 442, even as it
was amended by Republic Act No. 6715. The term trade union center was first adopted in the Implementing
Rules, under Department Order No. 9.
Culling from its definition as provided by Department Order No. 9, a trade union center is any group of
registered national unions or federations organized for the mutual aid and protection of its members; for
assisting such members in collective bargaining; or for participating in the formulation of social and
employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule
III, Section 2 of the Implementing Rules.46 The same rule provides that the application for registration of an
industry or trade union center shall be supported by the following:
(a) The list of its member organizations and their respective presidents and, in the case of an industry
union, the industry where the union seeks to operate;
(b) The resolution of membership of each member organization, approved by the Board of Directors of
such union;
(c) The name and principal address of the applicant, the names of its officers and their addresses, the
minutes of its organizational meeting/s, and the list of member organizations and their representatives
who attended such meeting/s; and
(d) A copy of its constitution and by-laws and minutes of its ratification by a majority of the presidents
of the member organizations, provided that where the ratification was done simultaneously with the
organizational meeting, it shall be sufficient that the fact of ratification be included in the minutes of the
organizational meeting.47
Evidently, while a "national union" or "federation" is a labor organization with at least ten locals or chapters or
affiliates, each of which must be a duly certified or recognized collective bargaining agent; 48 a trade union
center, on the other hand, is composed of a group of registered national unions or federations.49
The Implementing Rules, as amended by Department Order No. 9, provide that "a duly registered federation
or national union" may directly create a local or chapter. The provision reads:
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. 50
Department Order No. 9 mentions two labor organizations either of which is allowed to directly create a local
or chapter through chartering a duly registered federation or a national union. Department Order No. 9
defines a "chartered local" as a labor organization in the private sector operating at the enterprise level that
acquired legal personality through a charter certificate, issued by a duly registered federation or national
union and reported to the Regional Office in accordance with Rule III, Section 2-E of these Rules.51
Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization,
Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of
the Philippines" lapsed52 into law on 25 May 2007 and became effective on 14 June 2007.53 This law further
amends the Labor Code provisions on Labor Relations.
Pertinent amendments read as follows:
SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines, is hereby further amended to read as follows:
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 (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization,
the minutes of the organizational meetings and the list of the workers who participated in such
meetings;
(c) In case the applicant is an independent union, the names of all its members comprising at
least twenty percent (20%) of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it.

SECTION 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as
follows:
ART. 234-A. Chartering and Creation of a Local Chapter. A duly registered federation or
national union may directly create a local chapter by issuing a charter certificate indicating the
establishment of the local chapter. The chapter shall acquire legal personality only for purposes
of filing a petition for certification election from the date it was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a legitimate labor organization
only upon the submission of the following documents in addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and the principal office of the chapter;
and
(b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and
by-laws are the same as that of the federation or the national union, this fact shall be indicated
accordingly.
The additional supporting requirements shall be certified under oath by the secretary or treasurer of
the chapter and attested by its president. (Emphasis ours.)
Article 234 now includes the term trade union center, but interestingly, the provision indicating the procedure
for chartering or creating a local or chapter, namely Article 234-A, still makes no mention of a "trade union
center."
Also worth emphasizing is that even in the most recent amendment of the implementing rules, 54 there was no
mention of a trade union center as being among the labor organizations allowed to charter.
This Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of
statutory interpretation, the expression of one thing is the exclusion of another. When certain persons or
things are specified in a law, contract, or will, an intention to exclude all others from its operation may be
inferred. If a statute specifies one exception to a general rule or assumes to specify the effects of a certain
provision, other exceptions or effects are excluded.55 Where the terms are expressly limited to certain matters,
it may not, by interpretation or construction, be extended to other matters.56 Such is the case here. If its intent
were otherwise, the law could have so easily and conveniently included "trade union centers" in identifying the
labor organizations allowed to charter a chapter or local. Anything that is not included in the enumeration is
excluded therefrom, and a meaning that does not appear nor is intended or reflected in the very language of
the statute cannot be placed therein.57 The rule is restrictive in the sense that it proceeds from the premise
that the legislating body would not have made specific enumerations in a statute if it had the intention not to
restrict its meaning and confine its terms to those expressly mentioned.58 Expressium facit cessare
tacitum.59 What is expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A
person, object or thing omitted must have been omitted intentionally.
Therefore, since under the pertinent status and applicable implementing rules, the power granted to labor
organizations to directly create a chapter or local through chartering is given to a federation or national union,
then a trade union center is without authority to charter directly.

The ruling of this Court in the instant case is not a departure from the policy of the law to foster the free and
voluntary organization of a strong and united labor movement, 60 and thus assure the rights of workers to selforganization.61 The mandate of the Labor Code in ensuring strict compliance with the procedural requirements
for registration is not without reason. It has been observed that the formation of a local or chapter becomes a
handy tool for the circumvention of union registration requirements. Absent the institution of safeguards, it
becomes a convenient device for a small group of employees to foist a not-so-desirable federation or union on
unsuspecting co-workers and pare the need for wholehearted voluntariness, which is basic to free
unionism.62 As a legitimate labor organization is entitled to specific rights under the Labor Code and involved
in activities directly affecting public interest, it is necessary that the law afford utmost protection to the parties
affected.63 However, as this Court has enunciated in Progressive Development Corporation v. Secretary of
Department of Labor and Employment, it is not this Court's function to augment the requirements prescribed
by law. Our only recourse, as previously discussed, is to exact strict compliance with what the law provides as
requisites for local or chapter formation.64
In sum, although PDMP as a trade union center is a legitimate labor organization, it has no power to directly
create a local or chapter. Thus, SMPPEU-PDMP cannot be created under the more lenient requirements for
chartering, but must have complied with the more stringent rules for creation and registration of an
independent union, including the 20% membership requirement.
WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March 2005 of the Court of Appeals
in CA-GR SP No. 66200 is REVERSED and SET ASIDE. The Certificate of Registration of San Miguel
Packaging Products Employees UnionPambansang Diwa ng Manggagawang Pilipino is ORDERED
CANCELLED, and SMPPEU-PDMP DROPPED from the rolls of legitimate labor organizations. Costs against
petitioner.
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 Appeals March 15, 2005
Decision1 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 Resolution3 denying petitioner unions 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-Arbiters Ruling
On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision6 dismissing the petition for certification
election. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter
Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and "Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under
oath and certified by the union secretary and attested to by the union president as required by Section 235 of
the Labor Code7 in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union
registration was, thus, fatally defective.
The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman, mill
operator and leadman who performed supervisory functions. Under Article 245 of the Labor Code, said
supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-and-file
employees of respondent company.
As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for
certification election for the purpose of collective bargaining.
Department of Labor and Employments Ruling
On July 16, 1999, the DOLE initially issued a Decision8 in favor of respondent company dismissing petitioner
unions appeal on the ground that the latters 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 companys 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 unions 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 Appeals 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-Arbiters finding that petitioner union consisted of both rank-and-file and supervisory
employees. Moreover, the CA held that the issues as to the legitimacy of petitioner union may be attacked
collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot
be remedied through the exclusion-inclusion proceedings in a pre-election conference pursuant to the ruling
in Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union. 11 Thus, considering that
petitioner union is not a legitimate labor organization, it has no legal right to file a petition for certification
election.
Issues
I
Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of
jurisdiction in granting the respondent [companys] 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
[unions] membership is [a] ground for the cancellation of petitioner [unions] 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 [unions] legal personality as a labor organization and for the dismissal of the petition
for certification election.12
Petitioner Unions 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
unions registration under Section 3, Rule VIII of said issuance. It contends that what is required to be certified
under oath by the local unions secretary or treasurer and attested to by the local unions president are limited
to the unions 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 Companys Arguments
Respondent company asserts that it cannot be precluded from challenging the July 16, 1999 Decision of the
DOLE. The said decision did not attain finality because the DOLE subsequently reversed its earlier ruling and,
from this decision, respondent company timely filed its motion for reconsideration.
On the issue of lack of verification of the charter certificate, respondent company notes that Article 235 of the
Labor Code and Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of
1997, expressly requires that the charter certificate be certified under oath.
It also contends that petitioner union is not a legitimate labor organization because its composition is a mixture
of supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Respondent
company maintains that the ruling in Toyota Motor Philippines vs. Toyota Motor Philippines Labor

Union14 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 unions 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 unions 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
regulations19 implementing R.A. No. 6715, as amended by D.O. No. 9,20
series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.21
In the main, the CA ruled that petitioner union failed to comply with the requisite documents for registration
under Article 235 of the Labor Code and its implementing rules. It agreed with the Med-Arbiter that the Charter
Certificate, Sama-samang Pahayag ng Pagsapi at Authorization, and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas were not executed under
oath. Thus, petitioner union cannot be accorded the status of a legitimate labor organization.
We disagree.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9,
series of 1997, provides:
Section 1. Chartering and creation of a local chapter A duly registered federation or national union may
directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the
following:
(a) A charter certificate issued by the federation or national union indicating the creation or
establishment of the local/chapter;
(b) The names of the local/chapters officers, their addresses, and the principal office of the
local/chapter; and
(c) The local/chapters constitution and by-laws provided that where the local/chapters 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-SMAMRFUFFW),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
wasnot 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/chapters 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 unions charter certificate need not be executed under oath.
Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter
certificate,24 (2) the names of its officers, their addresses, and its principal office,25 and (3) its constitution and
by-laws26 the last two requirements having been executed under oath by the proper union officials as borne
out by the records.
The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality
as a legitimate labor organization.

The CA found that petitioner union has for its membership both rank-and-file and supervisory employees.
However, petitioner union sought to represent the bargaining unit consisting of rank-and-file employees.
Under Article 24527 of the Labor Code, supervisory employees are not eligible for membership in a labor
organization of rank-and-file employees. Thus, the appellate court ruled that petitioner union cannot be
considered a legitimate labor organization pursuant to Toyota Motor Philippines v. Toyota Motor Philippines
Corporation Labor Union28(hereinafter Toyota).
Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by the
appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory
employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after
respondent company submitted in evidence the job descriptions29 of the aforesaid employees. The job
descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which are
not merely routinary but require the use of independent judgment, hence, falling within the definition of
supervisory employees under Article 212(m)30 of the Labor Code. For this reason, we are constrained to agree
with the Med-Arbiter, as upheld by the appellate court, that petitioner union consisted of both rank-and-file and
supervisory employees.
Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its
status as a legitimate labor organization. The appellate courts reliance on Toyota is misplaced in view of this
Courts subsequent ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.31 (hereinafter Kawashima).
InKawashima, 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 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 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 Dunlopand 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, Kawashimaapplies with equal force here. As a result, petitioner union was not divested of its status as
a legitimate labor organization even if some of its members were supervisory employees; it had the right to file
the subject petition for certification election.
The legal personality of petitioner union cannot be collaterally attacked by respondent company in the
certification election proceedings.
Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification
election proceedings. As we explained in Kawashima:
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for
certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their collective bargaining with the employer.
The choice of their representative is the exclusive concern of the employees; the employer cannot have any
partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss
or an appeal from it; not even a mere allegation that some employees participating in a petition for certification
election are actually managerial employees will lend an employer legal personality to block the certification
election. The employer's only right in the proceeding is to be notified or informed thereof.
The amendments to the Labor Code and its implementing rules have buttressed that policy even more. 33
WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16, 2005 Resolution
of the Court of Appeals in CA-G.R. SP No. 58203 are REVERSED and SET ASIDE. The January 13, 2000
Decision of the Department of Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019)
is REINSTATED. No pronouncement as to costs.
G.R. No. 183317

December 21, 2009

MARIWASA SIAM CERAMICS, INC., Petitioner,

vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, CHIEF OF THE BUREAU OF
LABOR RELATIONS, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL DIRECTOR OF DOLE
REGIONAL OFFICE NUMBER IV-A & SAMAHAN NG MGA MANGGAGAWA SA MARIWASA SIAM
CERAMICS, INC. (SMMSC-INDEPENDENT), Respondents.
DECISION
NACHURA, J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court, seeking to annul the
Decision2dated December 20, 2007 and the Resolution3 dated June 6, 2008 of the Court of Appeals in CAG.R. SP No. 98332.
The antecedent facts are as follows

On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc. (SMMSCIndependent) was issued a Certificate of Registration4 as a legitimate labor organization by the Department of
Labor and Employment (DOLE), Region IV-A.
On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union
Registration against respondent, claiming that the latter violated Article 234 5 of the Labor Code for not
complying with the 20% requirement, and that it committed massive fraud and misrepresentation in violation of
Article 2396 of the same code. The case was docketed as Case No. RO400-0506-AU-004.
On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the petition, revoking the
registration of respondent, and delisting it from the roster of active labor unions.
Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).
In a Decision7 dated June 14, 2006, the BLR granted respondents appeal and disposed as follows
WHEREFORE, premises considered, the appeal by Samahan ng Manggagawa sa Mariwasa Siam Ceramics,
Inc. (SMMSC-Independent) is hereby GRANTED, and the Decision dated 26 August 2005 by DOLE-RegionIV-A Director Maximo B. Lim is hereby REVERSED and SET ASIDE. Samahan ng Manggagawa sa Mariwasa
Siam Ceramics, Inc. (SMMSC-Independent), under Registration Certificate No. RO400-200505-UR-002,
remains in the roster of legitimate labor organizations.
SO DECIDED.8
Petitioner filed a Motion for Reconsideration but the BLR denied it in a Resolution 9 dated February 2, 2007.
Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari; but the CA denied
the petition for lack of merit.
Petitioners motion for reconsideration of the CA Decision was likewise denied, hence, this petition based on
the following grounds
Review of the Factual Findings of the Bureau of Labor Relations, adopted and confirmed by the Honorable
Court of Appeals is warranted[;]
The Honorable Court of Appeals seriously erred in ruling that the affidavits of recantation cannot be given
credence[;]
The Honorable Court of Appeals seriously erred in ruling that private respondent union complied with the 20%
membership requirement[; and]
The Honorable Court of Appeals seriously erred when it ruled that private respondent union did not commit
misrepresentation, fraud or false statement.10
The petition should be denied.

The petitioner insists that respondent failed to comply with the 20% union membership requirement for its
registration as a legitimate labor organization because of the disaffiliation from the total number of union
members of 102 employees who executed affidavits recanting their union membership.
It is, thus, imperative that we peruse the affidavits appearing to have been executed by these affiants.
The affidavits uniformly state
Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado bilang Rank & File sa Mariwasa
Siam Ceramics, Inc., Bo. San Antonio, Sto. Tomas, Batangas, matapos na makapanumpa ng naaayon sa
batas ay malaya at kusang loob na nagsasaad ng mga sumusunod:
1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa sa Mariwasa Siam
Ceramics, Inc. o SMMSC-Independent sa kabila ng aking pag-aalinlangan[;]
2. Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at handa ako[ng] tumalikod sa
anumang kasulatan na aking nalagdaan sa kadahilanan na hindi angkop sa aking pananaw ang mga
mungkahi o adhikain ng samahan.
SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan ngayong ika-____ ng ______, 2005 dito
sa Lalawigan ng Batangas, Bayan ng Sto. Tomas.
____________________
Nagsasalaysay
Evidently, these affidavits were written and prepared in advance, and the pro forma affidavits were ready to be
filled out with the employees names and signatures.
The first common allegation in the affidavits is a declaration that, in spite of his hesitation, the affiant was
forced and deceived into joining the respondent union. It is worthy to note, however, that the affidavit does not
mention the identity of the people who allegedly forced and deceived the affiant into joining the union, much
less the circumstances that constituted such force and deceit. Indeed, not only was this allegation couched in
very general terms and sweeping in nature, but more importantly, it was not supported by any evidence
whatsoever.
The second allegation ostensibly bares the affiants regret for joining respondent union and expresses the
desire to abandon or renege from whatever agreement he may have signed regarding his membership with
respondent.
Simply put, through these affidavits, it is made to appear that the affiants recanted their support of
respondents application for registration.
In appreciating affidavits of recantation such as these, our ruling in La Suerte Cigar and Cigarette Factory v.
Director of the Bureau of Labor Relations11 is enlightening, viz.
On the second issuewhether or not the withdrawal of 31 union members from NATU affected the petition for
certification election insofar as the 30% requirement is concerned, We reserve the Order of the respondent

Director of the Bureau of Labor Relations, it appearing undisputably that the 31 union members had withdrawn
their support to the petition before the filing of said petition. It would be otherwise if the withdrawal was made
after the filing of the petition for it would then be presumed that the withdrawal was not free and voluntary. The
presumption would arise that the withdrawal was procured through duress, coercion or for valuable
consideration. In other words, the distinction must be that withdrawals made before the filing of the petition are
presumed voluntary unless there is convincing proof to the contrary, whereas withdrawals made after the filing
of the petition are deemed involuntary.
The reason for such distinction is that if the withdrawal or retraction is made before the filing of the petition, the
names of employees supporting the petition are supposed to be held secret to the opposite party. Logically,
any such withdrawal or retraction shows voluntariness in the absence of proof to the contrary. Moreover, it
becomes apparent that such employees had not given consent to the filing of the petition, hence the
subscription requirement has not been met.
When the withdrawal or retraction is made after the petition is filed, the employees who are supporting the
petition become known to the opposite party since their names are attached to the petition at the time of filing.
Therefore, it would not be unexpected that the opposite party would use foul means for the subject employees
to withdraw their support.12
In the instant case, the affidavits of recantation were executed after the identities of the union members
became public, i.e., after the union filed a petition for certification election on May 23, 2005, since the names
of the members were attached to the petition. The purported withdrawal of support for the registration of the
union was made after the documents were submitted to the DOLE, Region IV-A. The logical conclusion,
therefore, following jurisprudence, is that the employees were not totally free from the employers pressure,
and so the voluntariness of the employees execution of the affidavits becomes suspect.
It is likewise notable that the first batch of 25 pro forma affidavits shows that the affidavits were executed by
the individual affiants on different dates from May 26, 2005 until June 3, 2005, but they were all sworn before
a notary public on June 8, 2005.
There was also a second set of standardized affidavits executed on different dates from May 26, 2005 until
July 6, 2005. While these 77 affidavits were notarized on different dates, 56 of these were notarized on June
8, 2005, the very same date when the first set of 25 was notarized.
Considering that the first set of 25 affidavits was submitted to the DOLE on June 14, 2005, it is surprising why
petitioner was able to submit the second set of affidavits only on July 12, 2005.
Accordingly, we cannot give full credence to these affidavits, which were executed under suspicious
circumstances, and which contain allegations unsupported by evidence. At best, these affidavits are selfserving. They possess no probative value.
A retraction does not necessarily negate an earlier declaration. For this reason, retractions are looked upon
with disfavor and do not automatically exclude the original statement or declaration based solely on the
recantation. It is imperative that a determination be first made as to which between the original and the new
statements should be given weight or accorded belief, applying the general rules on evidence. In this case,
inasmuch as they remain bare allegations, the purported recantations should not be upheld. 13

Nevertheless, even assuming the veracity of the affidavits of recantation, the legitimacy of respondent as a
labor organization must be affirmed. While it is true that the withdrawal of support may be considered as a
resignation from the union, the fact remains that at the time of the unions application for registration, the
affiants were members of respondent and they comprised more than the required 20% membership for
purposes of registration as a labor union. Article 234 of the Labor Code merely requires a 20% minimum
membership during the application for union registration. It does not mandate that a union must maintain the
20% minimum membership requirement all throughout its existence. 141avvphi1
Respondent asserts that it had a total of 173 union members at the time it applied for registration. Two names
were repeated in respondents list and had to be deducted, but the total would still be 171 union members.
Further, out of the four names alleged to be no longer connected with petitioner, only two names should be
deleted from the list since Diana Motilla and T.W. Amutan resigned from petitioner only on May 10, 2005 and
May 17, 2005, respectively, or after respondents registration had already been granted. Thus, the total union
membership at the time of registration was 169. Since the total number of rank-and-file employees at that time
was 528, 169 employees would be equivalent to 32% of the total rank-and-file workers complement, still very
much above the minimum required by law.
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. 15
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 respondents certificate of registration. The
cancellation of a unions registration doubtless has an impairing dimension on the right of labor to selforganization. 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.
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.
WHEREFORE, the petition is DENIED. The assailed December 20, 2007 Decision and the June 6, 2008
Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.
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 CAG.R. SP No. 98624, denying a similar recourse petitioner earlier interposed to set aside the December 21,
2006 Decision3 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 employers opposition to their
aspiration.
The Facts
On December 6, 2005, at least 20% of Eagle Ridges rank-and-file employeesthe percentage threshold
required under Article 234(c) of the Labor Code for union registrationhad 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 ratified7 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.
199810before 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-UR003.
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
cancellation12of Reg. Cert. No. RO400-200512-UR-003. Docketed as RO400-0602-AU-003, Eagle Ridges
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 Salaysay13 on
February 15, 2006, attesting that they arrived late at said meeting which they claimed to be drinking spree;
that they did not know that the documents they signed on that occasion pertained to the organization of a
union; and that they now wanted to be excluded from the Union. The withdrawal of the five, Eagle Ridge
maintained, effectively reduced the union membership to 20 or 21, either of which is below the mandatory
minimum 20% membership requirement under Art. 234(c) of the Labor Code. Reckoned from 112 rank-andfile 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 Ridges 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 unions
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-Calleja15 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 forms18 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 Salaysay19 dated March 20, 2006 of eight union members;
anotherSama-Samang Sinumpaang Salaysay,20 also bearing date March 20, 2006, of four other union
members; and the Sworn Statement21 dated March 16, 2006 of the Unions legal counsel, Atty. Domingo T.
Aonuevo. 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 unions
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 Salaysay23 of retraction dated March 15, 2006 of
another union member. The membership of EREU had thus been further reduced to only 19 or 20. This same
member was listed in the first Sama-Samang Sinumpaang Salaysay24 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 Order25 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. RO4000602-AU-003).
The Ruling of the BLR
Initially, the BLR, then headed by an Officer-in-Charge (OIC), affirmed26 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 EREUs registration.
In turn aggrieved, Eagle Ridge sought but was denied reconsideration per the BLRs 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 Ridges 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

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] Secretarys Certificate or
Board Resolution authorizing her to execute and sign the same.
The CA later denied, in its second assailed resolution, Eagle Ridges 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 COMPANYS PETITION FOR CERTIORARI AND
DENYING ITS MOTION FOR RECONSIDERATION CONSIDERING THAT THE COMPANYS 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 Courts 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
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 secretarys Certificate33 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 Ridges 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 courts 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 secretarys certificate through a motion for reconsideration of the CAs 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 secretarys 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.381avvphi1

To us, Eagle Ridge has not satisfactorily explained its failure to comply. It may be true, as Eagle Ridge urges,
that its counsels authority to represent the corporation was never questioned before the DOLE regional office
and agency. But EREUs misstep could hardly lend Eagle Ridge comfort. And obviously, Eagle Ridge and its
counsel erred in equating the latters representation as legal counsel with the authority to sign the verification
and the certificate of non-forum shopping in the formers 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 counselclient relationship is presumed by the counsels 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 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 counsels act of signing the sworn
certification of non-forum shopping.
We are not inclined to grant the desired liberality owing to Eagle Ridges 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 EREUs 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 unions constitution and by-laws.
Before their amendment by Republic Act No. 948140 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,
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 Unions 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 meeting43 held on December 6, 2005 showing 26 founding
members who elected its union officers by secret ballot;
(b) the list of rank-and-file employees44 of Eagle Ridge who attended the organizational
meeting and the election of officers with their individual signatures;
(c) the list of rank-and-file employees45 who ratified the unions 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 unions constitution and by-laws46 as approved on December 6, 2005;
(e) the list of officers47 and their addresses;
(f) the list of union members48 showing a total of 30 members; and
(g) the Sworn Statement49 of the unions elected president and secretary. All the foregoing
documents except the sworn statement of the president and the secretary were accompanied
by Certifications50 by the union secretary duly attested to by the union president.
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 Ridges 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 Unions 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 admissionas erroneously asserted by Eagle Ridge.
Fifth. The difference between the number of 26 members, who ratified the Unions constitution and bylaws, 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 certifications
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.
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 MedArbiter orHearing 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 affiants 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 jointaffidavits 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 rankand-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 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 Unions 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 EREUs 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 Unions
certificate of registration on essentially the same grounds it raised in its opposition to the
Unions petition for certification election.
Evidently, as the Union persuasively argues, the withdrawal of six member-employees from the Union will
affect neither the Unions registration nor its petition for certification election, as their affidavits of retraction
were executed after the Unions 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,53that "even if there were less than 30% [the required percentage of minimum membership then] of the
employees asking for a certification election, that of itself would not be a bar to respondent Director ordering
such an election provided, of course, there is no grave abuse of discretion." 54 Citing Philippine Association of
Free Labor Unions v. Bureau of Labor Relations,55 the Court emphasized that a certification election is the
most appropriate procedure for the desired goal of ascertaining which of the competing organizations should
represent the employees for the purpose of collective bargaining. 56
Indeed, where the company seeks the cancellation of a unions 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 Unions 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
thatsuch 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. Costs against
petitioner.
G.R. No. 115077 April 18, 1997
PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT, petitioner,
vs.
HON. BIENVENIDO LAGUESMA, in his capacity as Undersecretary of Labor, and NAGKAKAISANG
LAKAS NG MANGGAGAWA (NLM)-KATIPUNAN, respondents.

KAPUNAN, J.:
On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent Union) filed a petition
for certification election with the Department of Labor (National Capital Region) in behalf of the rank and file
employees of the Progressive Development Corporation (Pizza Hut) docketed as NCR Case No. NCR-OD-M9307-020. 1
Petitioner filed on August 20, 1993, a verified Motion to Dismiss the petition alleging fraud, falsification and
misrepresentation in the respondent. Union's registration making it void and invalid. The motion specifically
alleged that: a) respondent Union's registration was tainted with false, forged, double or multiple signatures of
those who allegedly took part in the ratification of the respondent Union's constitution and by-laws and in the
election of its officers that there were two sets of supposed attendees to the alleged organizational meeting
that was alleged to have taken place on June 26, 1993; that the alleged chapter is claimed to have been
supported by 318 members when in fact the persons who actually signed their names were much less; and b)
while the application for registration of the charter was supposed to have been approved in the organizational
meeting held on June 27, 1993, the charter certification issued by the federation KATIPUNAN was dated June
26, 1993 or one (1) day prior to the formation of the chapter, thus, there were serious falsities in the dates of
the issuance of the charter certification and the organization meeting of the alleged chapter.

Citing other instances of misrepresentation and fraud, petitioner, on August 29, 1993, filed a Supplement to its
Motion to Dismiss, 2 claiming that:
1) Respondent Union alleged that the election of its officers was held on June 27, 1993;
however, it appears from the documents submitted by respondent union to the BIR-DOLE that
the Union's constitution and by-laws were adopted only on July 7, 1993, hence, there was no
bases for the supposed election of officers on June 27, 1993 because as of this date, there
existed no positions to which the officers could be validly elected;
2) Voting was not conducted by secret ballot in violation of Article 241, section (c) of the Labor
Code;
3) The Constitution and by Laws submitted in support of its petition were not properly
acknowledged and notarized. 3
On August 30, 1993, petitioner filed a Petition 4 seeking the cancellation of the Union's registration on the
grounds of fraud and falsification, docketed as BIR Case No. 8-21-83. 5 Motion was likewise filed by petitioner
with the Med-Arbiter requesting suspension of proceedings in the certification election case until after the
prejudicial question of the Union's legal personality is determined in the proceedings for cancellation of
registration.
However, in an Order dated September 29, 1993, 6 Med-Arbiter Rasidali C. Abdullah directed the holding of a
certification election among petitioner's rank and file employees. The Order explained:
. . . Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labor organization in
contemplation of law and shall remain as such until its very charter certificate is canceled or
otherwise revoked by competent authority. The alleged misrepresentation, fraud and false
statement in connection with the issuance of the charter certificate are collateral issues which
could be properly ventilated in the cancellation proceedings. 7
On appeal to the office of the Secretary of Labor, Labor Undersecretary Bienvenido E. Laguesma in a
Resolution dated December 29, 1993 8 denied the same.
A motion for reconsideration of the public respondent's resolution was denied in his Order 9 dated January 27,
1994, hence, this special civil action for certiorari under Rule 65 of the Revised Rules of Court where the
principal issue raised is whether or not the public respondent committed grave abuse of discretion in affirming
the Med-Arbiter's order to conduct a certification election among petitioner's rank and file employees,
considering that: (1) respondent Union's legal personality was squarely put in issue; (2) allegations of fraud
and falsification, supported by documentary evidence were made; and (3) a petition to cancel respondent
Union's registration is pending with the regional office of the Department of Labor and Employment. 10
We grant the petition.
In the public respondent's assailed Resolution dated December 29, 1993, the suggestion is made that once a
labor organization has filed the necessary documents and papers and the same have been certified under
oath and attested to, said organization necessarily becomes clothed with the character of a legitimate labor
organization. The resolution declares:

Records show that at the time of the filing of the subject petition on 9 July 1993 by the petitioner
NLM-KATIPUNAN, for and in behalf of its local affiliate Sumasaklaw sa Manggagawa ng Pizza
Hut, the latter has been clothed with the status and/or character of a legitimate labor
organization. This is so, because on 8 July 1993, petitioner submitted to the Bureau of Labor
Relations (BLR), this Department, the following documents: Charter Certificate, Minutes of the
Organizational Meeting, List of Officers, and their respective addresses, financial statement,
Constitution and By-Laws (CBL, and the minutes of the ratification of the CBL). Said documents
(except the charter certificate) are certified under oath and attested to by the local union's
Secretary/Treasurer and President, respectively.
As to the contention that the certification election proceedings should be suspended in view of
the pending case for the cancellation of the petitioner's certificate of registration, let it be
stressed that the pendency of a cancellation case is not a ground for the dismissal or
suspension of a representation proceedings considering that a registered labor organization
continues to be a legitimate one entitled to all the rights appurtenant thereto until a final valid
order is issued canceling such registration. 11
In essence, therefore, the real controversy in this case centers on the question of whether or not, after the
necessary papers and documents have been filed by a labor organization, recognition by the Bureau of Labor
Relations merely becomes a ministerial function.
We do not agree.
In the first place, the public respondent's views as expressed in his December 29, 1993 Resolution miss the
entire point behind the nature and purpose of proceedings leading to the recognition of unions as legitimate
labor organizations. Article 234 of the Labor Code provides:
Art. 234. Requirements of registration. Any applicant labor organization, association or group
of unions or workers shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization,
the minutes of the organizational meetings and the list of the workers who participated in such
meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees
in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it.

A more than cursory reading of the aforecited provisions clearly indicates that the requirements embodied
therein are intended as preventive measures against the commission of fraud. After a labor organization has
filed the necessary papers and documents for registration, it becomes mandatory for the Bureau of Labor
Relations to check if the requirements under Article 234 have been sedulously complied with. If its application
for registration is vitiated by falsification and serious irregularities, especially those appearing on the face of
the application and the supporting documents, a labor organization should be denied recognition as a
legitimate labor organization. And if a certificate of recognition has been issued, the propriety of the labor
organization's registration could be assailed directly through cancellation of registration proceedings in
accordance with Articles 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the
issuance of an order for certification election.
These measures are necessary and may be undertaken simultaneously if the spirit behind the Labor
Code's requirements for registration are to be given flesh and blood. Registration requirements specifically
afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or flyby-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate
ends. 12 Such requirements are a valid exercise of the police power, because the activities in which labor
organizations, associations and unions of workers are engaged directly affect the public interest and should
be protected. 13
Thus, in Progressive Development Corporation vs. Secretary of Labor and Employment, 14 we held:
The controversy in this case centers on the requirements before a local or chapter of a
federation may file a petition for certification election and be certified as the sole and exclusive
bargaining agent of the petitioner's employees.
xxx xxx xxx
But while Article 257 cited by the Solicitor General directs the automatic conduct of a
certification election in an unorganized establishment, it also requires that the petition for
certification election must be filed by a legitimate labor organization . . .
xxx xxx xxx
. . . The employer naturally needs assurance that the union it is dealing with is a bona-fide
organization, one which has not submitted false statements or misrepresentations to the
Bureau. The inclusion of the certification and attestation requirements will in a marked degree
allay these apprehensions of management. Not only is the issuance of any false statement and
misrepresentation or ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is
also a ground for a criminal charge of perjury.
The certification and attestation requirements are preventive measures against the commission
of fraud. They likewise afford a measure of protection to unsuspecting employees who may be
lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union
funds or to use the union for dubious ends.
xxx xxx xxx

. . . It is not this Court's function to augment the requirements prescribed by law in order to
make them wiser or to allow greater protection to the workers and even their employer. Our
only recourse is, as earlier discussed, to exact strict compliance with what the law provides as
requisites for local or chapter formation.
xxx xxx xxx
The Court's conclusion should not be misconstrued as impairing the local union's right to be
certified as the employees' bargaining agent in the petitioner's establishment. We are merely
saying that the local union must first comply with the statutory requirements in order to exercise
this right. Big federations and national unions of workers should take the lead in requiring their
locals and chapters to faithfully comply with the law and the rules instead of merely snapping
union after union into their folds in a furious bid with rival federations to get the most number of
members
Furthermore, the Labor Code itself grants the Bureau of Labor Relations a period of thirty (30) days within
which to review all applications for registration. Article 235 provides:
Art. 235. Action on application. The Bureau shall act on all applications for registration within
thirty (30) days from filing.
All requisite documents and papers shall be certified under oath by the secretary or the
treasurer of the organization, as the case may be, and attested to by its president.
The thirty-day period in the aforecited provision ensures that any action taken by the Bureau of Labor
Relations is made in consonance with the mandate of the Labor Code, which, it bears emphasis, specifically
requires that the basis for the issuance of a certificate of registration should be compliance with the
requirements for recognition under Article 234. Since, obviously, recognition of a labor union or labor
organization is not merely a ministerial function, the question now arises as to whether or not the public
respondent committed grave abuse of discretion in affirming the Med-Arbiter's order in spite of the fact that the
question of the Union's legitimacy was squarely put in issue and that the allegations of fraud and falsification
were adequately supported by documentary evidence.
The Labor Code requires that in organized and unorganized 15 establishments, a petition for certification
election mustbe filed by a legitimate labor organization. The acquisition of rights by any union or labor
organization, particularly the right to file a petition for certification election, first and foremost, depends on
whether or not the labor organization has attained the status of a legitimate labor organization.
In the case before us, the Med-Arbiter summarily disregarded the petitioner's prayer that the former look into
the legitimacy of the respondent. Union by a sweeping declaration that the union was in the possession of a
charter certificate so that "for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a
legitimate labor organization." 16 Glossing over the transcendental issue of fraud and misrepresentation raised
by herein petitioner, Med-Arbiter Rasidali Abdullah held that:
The alleged misrepresentation, fraud and false statement in connection with the issuance of the
charter certificate are collateral issues which could be ventilated in the cancellation
proceedings. 17

It cannot be denied that the grounds invoked by petitioner for the cancellation of respondent Union's
registration fall under paragraph (a) and (c) of Article 239 of the Labor Code, to wit:
(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, the list of
members who took part in the ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, the list of members who took part in the ratification;
xxx xxx xxx
(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.
xxx xxx xxx
The grounds ventilated in cancellation proceedings in accordance with Article 239 of the Labor Code
constitute a grave challenge to the right of respondent Union to ask for certification election. The Med-Arbiter
should have looked into the merits of the petition for cancellation before issuing an order calling for
certification election. Registration based on false and fraudulent statements and documents confer no
legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper.
Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no
rights, particularly the right to ask for certification election in a bargaining unit.
As we laid emphasis in Progressive Development Corporation Labor, 18 "[t]he employer needs the assurance
that the union it is dealing with is a bona fide organization, one which has not submitted false statements or
misrepresentations to the Bureau." Clearly, fraud, falsification and misrepresentation in obtaining recognition
as a legitimate labor organization are contrary to the Med-Arbiter's conclusion not merely collateral issues.
The invalidity of respondent Union's registration would negate its legal personality to participate in certification
election.
Once a labor organization attains the status of a legitimate labor organization it begins to possess all of the
rights and privileges granted by law to such organizations. As such rights and privileges ultimately affect areas
which are constitutionally protected, the activities in which labor organizations, associations and unions are
engaged directly affect the public interest and should be zealously protected. A strict enforcement of the Labor
Code's requirements for the acquisition of the status of a legitimate labor organization is in order.
Inasmuch as the legal personality of respondent Union had been seriously challenged, it would have been
more prudent for the Med-Arbiter and public respondent to have granted petitioner's request for the
suspension of proceedings in the certification election case, until the issue of the legality of the Union's
registration shall have been resolved. Failure of the Med-Arbiter and public respondent to heed the request
constituted a grave abuse of discretion.
WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED and the Resolution and Order of
the public respondent dated December 29, 1993 and January 24, 1994, respectively, are hereby SET ASIDE.

The case is REMANDED to the Med-Arbiter to resolve with reasonable dispatch petitioner's petition for
cancellation of respondent Union's registration.
G.R. No. L-43495-99 January 20, 1990
TROPICAL HUT EMPLOYEES' UNION-CGW, JOSE ENCINAS, JOSE LUIS TRIBINO, FELIPE DURAN,
MANUEL MANGYAO, MAMERTO CAHUCOM, NEMESIO BARRO, TEODULFO CAPAGNGAN,
VICTORINO ABORRO, VIDAL MANTOS, DALMACIO DALDE, LUCIO PIASAN, CANUTO LABADAN,
TERESO ROMERDE, CONRADO ENGALAN, SALVADOR NERVA, BERNARDO ENGALAN, BONIFACIO
CAGATIN, BENEDICTO VALDEZ, EUSEBIO SUPILANAS, ALFREDO HAMAYAN, ASUERO BONITO,
GAVINO DEL CAMPO, ZACARIAS DAMING, PRUDENCIO LADION, FULGENCIO BERSALUNA,
ALBERTO PERALES, ROMEO MAGRAMO, GODOFREDO CAMINOS, GILDARDO DUMAS, JORGE
SALDIVAR, GENARO MADRIO, SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR JAPAY, ROGELIO
CUIZON, RENATO ANTIPADO, GREGORIO CUEVO, MARTIN BALAZUELA, CONSTANCIO CHU,
CRISPIN TUBLE, FLORENCIO CHIU, FABIAN CAHUCOM, EMILIANO VILLAMOR, RESTITUTO
HANDAYAN, VICTORINO ESPEDILLA, NOEL CHUA, ARMANDO ALCORANO, ELEUTERIO TAGUIK,
SAMSON CRUDA, DANILO CASTRO, CENON VALLENAS, DANILO CAWALING, SIMPLICIO
GALLEROS, PERFECTO CUIZON, PROCESO LAUROS, ANICETO BAYLON, EDISON ANDRES,
REYNALDO BAGOHIN, IRENEO SUPANGAN, RODRIGO CAGATIN, TEODORO ORENCIO, ARMANDO
LUAYON, JAIME NERVA, NARCISO CUIZON, ALFREDO DEL ROSARIO, EDUARDO LORENZO, PEDRO
ARANGO, VICENTE SUPANGAN, JACINTO BANAL AND BONIFACIO PUERTO, petitioners,
vs.
TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE, ARTURO DILAG, MARCELINO LONTOK JR.,
NATIONAL ASSOCIATION OF TRADE UNIONS (NATU), NATIONAL LABOR RELATIONS COMMISSION
(NLRC), HON. DIEGO P. ATIENZA, GERONIMO Q. QUADRA, FEDERICO C. BORROMEO, AND HON.
BLAS F. OPLE,respondents.
Pacifico C. Rosal for petitioners.
Marcelino Lontok, Jr. for private respondents.
Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and Que.

MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 seeking to set aside the decisions of the public respondents
Secretary of Labor and National Labor Relations Commission which reversed the Arbitrators rulings in favor of
petitioners herein.
The following factual background of this case appears from the record:
On January 2, 1968, the rank and file workers of the Tropical Hut Food Market Incorporated, referred to herein
as respondent company, organized a local union called the Tropical Hut Employees Union, known for short as
the THEU, elected their officers, adopted their constitution and by-laws and immediately sought affiliation with
the National Association of Trade Unions (NATU). On January 3, 1968, the NATU accepted the THEU

application for affiliation. Following such affiliation with NATU, Registration Certificate No. 5544-IP was issued
by the Department of Labor in the name of the Tropical Hut Employees Union NATU. It appears, however,
that NATU itself as a labor federation, was not registered with the Department of Labor.
After several negotiations were conducted between THEU-NATU, represented by its local president and the
national officers of the NATU, particularly Ignacio Lacsina, President, Pacifico Rosal, Executive Vice-President
and Marcelino Lontok, Jr., Vice President, and respondent Tropical Hut Food Market, Incorporated, thru its
President and General Manager, Cesar Azcona, Sr., a Collective Bargaining Agreement was concluded
between the parties on April 1, 1968, the term of which expired on March 31, 1971. Said agreement'
contained these clear and unequivocal terms:
This Agreement made and entered into this __________ day of ___________, 1968, by and
between:
The Tropical Hut Food Market, Inc., a corporation duly organized and existing under and by
virtue of the laws of the Republic of the Philippines, with principal office at Quezon City,
represented in this Act by its President, Cesar B. Azcona (hereinafter referred to as the
Company)
and
The Tropical Hut Employees Union NATU, a legitimate labor organization duly organized
and existing in accordance with the laws of the Republic of the Philippines, and affiliated with
the National Association of Trade Unions, with offices at San Luis Terraces, Ermita, Manila,
and represented in this Act by its undersigned officers (hereinafter referred to as the UNION)
Witnesseth:
xxx xxx xxx
Article I
Coverage and Effectivity
Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective bargaining
agent for all its workers and employees in all matters concerning wages, hours of work, and
other terms and conditions of employment.
xxx xxx xxx
Article III
Union Membership and Union Check-off
Sec. 1 . . . Employees who are already members of the UNION at the time of the signing of
this Agreement or who become so thereafter shall be required to maintain their membership
therein as a condition of continued employment.

xxx xxx xxx

Sec. 3Any employee who is expelled from the UNION for joining another federation or
forming another union, or who fails or refuses to maintain his membership therein as required, .
. . shall, upon written request of the UNION be discharged by the COMPANY. (Rollo, pp. 667670)
And attached to the Agreement as Appendix "A" is a check-off Authorization Form, the terms of which are as
follows:
We, the undersigned, hereby designate the NATIONAL Association of Trade Unions, of which
the TROPICAL HUT EMPLOYEES UNION is an affiliate as sole collective bargaining agent in
all matters relating to salary rates, hours of work and other terms and conditions of employment
in the Tropical Hut Food Market, Inc. and we hereby authorize the said company to deduct the
amount of Four (P 4.00) Pesos each every month as our monthly dues and to deliver the
amount to the Treasurer of the Union or his duly authorized representatives. (Rollo, pp. 680684)
On May 21, 1971, respondent company and THEU-NATU entered into a new Collective Bargaining
Agreement which ended on March 31, 1974. This new CBA incorporated the previous union-shop security
clause and the attached check-off authorization form.
Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, was appointed by the respondent
company as Assistant Unit Manager. On July 24, 1973, he wrote the general membership of his union that for
reason of his present position, he was resigning as President of the THEU-NATU effective that date. As a
consequence thereof, his Vice-President, Jose Encinas, assumed and discharged the duties of the presidency
of the THEU-NATU.
On December 19,1973, NATU received a letter dated December 15, 1973, jointly signed by the incumbent
officers of the local union informing the NATU that THEU was disaffiliating from the NATU federation. On
December 20, 1973, the Secretary of the THEU, Nemesio Barro, made an announcement in an open letter to
the general membership of the THEU, concerning the latter's disaffiliation from the NATU and its affiliation
with the Confederation of General Workers (CGW). The letter was passed around among the members of the
THEU-NATU, to which around one hundred and thirty-seven (137) signatures appeared as having given their
consent to and acknowledgment of the decision to disaffiliate the THEU from the NATU.
On January 1, 1974, the general membership of the so-called THEU-CGW held its annual election of officers,
with Jose Encinas elected as President. On January 3, 1974, Encinas, in his capacity as THEU-CGW
President, informed the respondent company of the result of the elections. On January 9, 1974, Pacifico
Rosal, President of the Confederation of General Workers (CGW), wrote a letter in behalf of complainant
THEU-CGW to the respondent company demanding the remittance of the union dues collected by the Tropical
Hut Food Mart, Incorporated to the THEU-CGW, but this was refused by the respondent company.
On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, Jr., wrote Vidal Mantos, requiring
the latter to assume immediately the position of President of the THEU-NATU in place of Jose Encinas, but
the position was declined by Mantos. On the same day, Lontok, Jr., informed Encinas in a letter, concerning
the request made by the NATU federation to the respondent company to dismiss him (Encinas) in view of his

violation of Section 3 of Article III of the Collective Bargaining Agreement. Encinas was also advised in the
letter that NATU was returning the letter of disaffiliation on the ground that:
1. Under the restructuring program NOT of the Bureau of Labor but of the Philippine National
Trade Union Center in conjunction with the NATU and other established national labor centers,
retail clerks and employees such as our members in the Tropical Hut pertain to Industry II
which by consensus, has been assigned already to the jurisdiction of the NATU;
2. The right to disaffiliate belongs to the union membership who on the basis of verified
reports received by have not even been consulted by you regarding the matter;
3. Assuming that the disaffiliation decision was properly reached; your letter nevertheless is
unacceptable in view of Article V, Section 1, of the NATU Constitution which provides that
"withdrawal from the organization shall he valid provided three (3) months notice of intention to
withdraw is served upon the National Executive Council." (p. 281, Rollo)
In view of NATU's request, the respondent company, on the same day, which was January 11, 1974,
suspended Encinas pending the application for clearance with the Department of Labor to dismiss him.
On January 12, 1974, members of the THEU-CGW passed a resolution protesting the suspension of
Encinas and reiterated their ratification and approval of their union's disaffiliation from NATU and their
affiliation with the Confederation of General Workers (CGW). It was Encinas' suspension that caused
the filing of NLRC Case No. LR-2511 on January 11, 1974 against private respondents herein,
charging them of unfair labor practice.
On January 15,1974, upon the request of NATU, respondent company applied for clearance with the
Secretary of Labor to dismiss the other officers and members of THEU-CGW. The company also suspended
them effective that day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual complainants
against private respondents for unfair labor practices.
On January 19, 1974, Lontok, acting as temporary chairman, presided over the election of officers of the
remaining THEU-NATU in an emergency meeting pending the holding of a special election to be called at a
later date. In the alleged election, Arturo Dilag was elected acting THEU-NATU President together with the
other union officers. On February 14, 1974, these temporary officers were considered as having been elected
as regular officers for the year 1974.
On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce Enrile, Secretary of National
Defense, complaining of the unfair labor practices committed by respondent company against its members
and requesting assistance on the matter. The aforementioned letter contained the signatures of one hundred
forty-three (143) members.
On February 24,1974, the secretary of THEU-NATU, notified the entire rank and file employees of the
company that they will be given forty-eight (48) hours upon receipt of the notice within which to answer and
affirm their membership with THEU-NATU. When the petitioner employees failed to reply, Arturo Dilag advised
them thru letters dated February 26, March 2 and 5, 1974, that the THEU-NATU shall enforce the union
security clause set forth in the CBA, and that he had requested respondent company to dismiss them.

Respondent company, thereafter, wrote the petitioner employees demanding the latter's comment on Dilag's
charges before action was taken thereon. However, no comment or reply was received from petitioners. In
view of this, Estelita Que, President/General Manager of respondent company, upon Dilag's request,
suspended twenty four (24) workers on March 5, 1974, another thirty seven (37) on March 8, 1974 and two (2)
more on March 11, 1974, pending approval by the Secretary of Labor of the application for their dismissal.
As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an unnumbered case were filed by
petitioners against Tropical Hut Food Market, Incorporated, Estelita Que, Hernando Sarmiento and Arturo
Dilag.
It is significant to note that the joint letter petition signed by sixty-seven (67) employees was filed with the
Secretary of Labor, the NLRC Chairman and Director of Labor Relations to cancel the words NATU after the
name of Tropical Hut Employee Union under Registration Certificate No. 5544 IP. Another letter signed by one
hundred forty-six (146) members of THEU-CGW was sent to the President of the Philippines informing him of
the unfair labor practices committed by private respondents against THEU-CGW members.
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed with the Labor Arbiter, Arbitrator
Daniel Lucas issued an order dated March 21, 1974, holding that the issues raised by the parties became
moot and academic with the issuance of NLRC Order dated February 25, 1974 in NLRC Case No. LR-2670,
which directed the holding of a certification election among the rank and file workers of the respondent
company between the THEU-NATU and THEU-CGW. He also ordered: a) the reinstatement of all
complainants; b) for the respondent company to cease and desist from committing further acts of dismissals
without previous order from the NLRC and for the complainant Tropical Hut Employees UNION-CGW to file
representation cases on a case to case basis during the freedom period provided for by the existing CBA
between the parties (pp. 91-93, Rollo).
With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered case, Arbitrator Cleto T. Villatuya
rendered a decision dated October 14, 1974, the dispositive portion of which states:
Premises considered, a DECISION is hereby rendered ordering respondent company to
reinstate immediately the sixty three (63) complainants to their former positions with back
wages from the time they were illegally suspended up to their actual reinstatement without loss
of seniority and other employment rights and privileges, and ordering the respondents to desist
from further committing acts of unfair labor practice. The respondent company's application for
clearance filed with the Secretary of Labor to terminate the subject complainants' services
effective March 20 and 23, 1974, should be denied.
SO ORDERED. (pp. 147-148, Rollo)
From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases No. LR-2511 and LR-2521 and by
Arbitrator Cleto Villatuya in NLRC Cases Nos. LR-2971, LR-3015, and the unnumbered case, all parties
thereto, namely, petitioners herein, respondent company, NATU and Dilag appealed to the National Labor
Relations Commission.
In a decision rendered on August 1, 1975, the National Labor Relations Commission found the private
respondents' appeals meritorious, and stated, inter alia:

WHEREFORE, in view of the foregoing premises, the Order of Arbitrator Lucas in NLRC CASE
NOS. LR-2511, 2521 and the decision of Arbitrator Villatuya in NLRC CASE NOS. LR-2971,
3015 and the unnumbered Case are hereby REVERSED. Accordingly, the individual
complainants are deemed to have lost their status as employees of the respondent company.
However, considering that the individual complainants are not presumed to be familiar with nor
to have anticipated the legal mesh they would find themselves in, after their "disaffiliation" from
National Association of Trade Unions and the THEU-NATU, much less the legal consequences
of the said action which we presume they have taken in all good faith; considering, further, that
the thrust of the new orientation in labor relations is not towards the punishment of acts
violative of contractual relations but rather towards fair adjustments of the resulting
complications; and considering, finally, the consequent economic hardships that would be
visited on the individual complainants, if the law were to be strictly enforced against them, this
Commission is constrained to be magnanimous in this instant, notwithstanding its obligation to
give full force and effect to the majesty of the law, and hereby orders the respondent company,
under pain of being cited for contempt for failure to do so, to give the individual complainants a
second chance by reemploying them upon their voluntary reaffirmation of membership and
loyalty to the Tropical Hut Employees Union-NATU and the National Association of Trade
Unions in the event it hires additional personnel.
SO ORDERED. (pp. 312-313, Rollo)
The petitioner employees appealed the decision of the respondent National Labor Relations Commission to
the Secretary of Labor. On February 23, 1976, the Secretary of Labor rendered a decision affirming the
findings of the Commission, which provided inter alia:
We find, after a careful review of the record, no sufficient justification to alter the decision
appealed from except that portion of the dispositive part which states:
. . . this Commission . . . hereby orders respondent company under pain of being
cited for contempt for failure to do so, to give the individual complainants a
second chance by reemploying them upon their voluntary reaffirmation of
membership and loyalty to the Tropical Hut Employees UNION-NATU and the
National Association of Trade Union in the event it hires additional personnel.
Compliance by respondent of the above undertaking is not immediately feasible considering
that the same is based on an uncertain event, i.e., reemployment of individual complainants "in
the event that management hires additional personnel," after they shall have reaffirmed their
loyalty to THEU-NATU, which is unlikely.
In lieu of the foregoing, and to give complainants positive relief pursuant to Section 9,
Implementing Instruction No. 1. dated November 9, 1972, respondent is hereby ordered to
grant to all the individual complainants financial assistance equivalent to one (1) month salary
for every year of service.
WHEREFORE, with the modification as above indicated, the Decision of the National Labor
Relations Commission is hereby affirmed.

SO ORDERED.(pp. 317-318, Rollo)

From the various pleadings filed and arguments adduced by petitioners and respondents, the following issues
appear to be those presented for resolution in this petition to wit: 1) whether or not the petitioners failed to
exhaust administrative remedies when they immediately elevated the case to this Court without an appeal
having been made to the Office of the President; 2) whether or not the disaffiliation of the local union from the
national federation was valid; and 3) whether or not the dismissal of petitioner employees resulting from their
unions disaffiliation for the mother federation was illegal and constituted unfair labor practice on the part of
respondent company and federation.
We find the petition highly meritorious.
The applicable law then is the Labor Code, PD 442, as amended by PD 643 on January 21, 1975, which
states:
Art. 222. Appeal . . .
xxx xxx xxx
Decisions of the Secretary of Labor may be appealed to the President of the Philippines subject
to such conditions or limitations as the President may direct. (Emphasis ours)
The remedy of appeal from the Secretary of Labor to the Office of the President is not a mandatory
requirement before resort to courts can be had, but an optional relief provided by law to parties seeking
expeditious disposition of their labor disputes. Failure to avail of such relief shall not in any way served as an
impediment to judicial intervention. And where the issue is lack of power or arbitrary or improvident exercise
thereof, decisions of the Secretary of Labor may be questioned in a certiorari proceeding without prior appeal
to the President (Arrastre Security Association TUPAS v. Ople, No. L-45344, February 20, 1984, 127 SCRA
580). Since the instant petition raises the same issue of grave abuse of discretion of the Secretary of Labor
amounting to lack of or in excess of jurisdiction in deciding the controversy, this Court can properly take
cognizance of and resolve the issues raised herein.
This brings Us to the question of the legality of the dismissal meted to petitioner employees. In the celebrated
case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, L-33187, September 4, 1975, 66 SCRA
512, We held that the validity of the dismissals pursuant to the union security clause in the collective
bargaining agreement hinges on the validity of the disaffiliation of the local union from the federation.
The right of a local union to disaffiliate from its mother federation is well-settled. A local union, being a
separate and voluntary association, is free to serve the interest of all its members including the freedom to
disaffiliate when circumstances warrant. This right is consistent with the constitutional guarantee of freedom of
association (Volkschel Labor Union v. Bureau of Labor Relations, No. L-45824, June 19, 1985, 137 SCRA
42).
All employees enjoy the right to self organization and to form and join labor organizations of their own
choosing for the purpose of collective bargaining and to engage in concerted activities for their mutual aid or
protection. This is a fundamental right of labor that derives its existence from the Constitution. In interpreting

the protection to labor and social justice provisions of the Constitution and the labor laws or rules or
regulations, We have always adopted the liberal approach which favors the exercise of labor rights.
Relevant on this point is the basic principle We have repeatedly in affirmed in many rulings:
. . . The locals are separate and distinct units primarily designed to secure and maintain an
equality of bargaining power between the employer and their employee-members in the
economic struggle for the fruits of the joint productive effort of labor and capital; and the
association of the locals into the national union (PAFLU) was in furtherance of the same end.
These associations are consensual entities capable of entering into such legal relations with
their member. The essential purpose was the affiliation of the local unions into a common
enterprise to increase by collective action the common bargaining power in respect of the terms
and conditions of labor. Yet the locals remained the basic units of association, free to serve
their own and the common interest of all, subject to the restraints imposed by the Constitution
and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare
upon the terms laid down in the agreement which brought it into existence. (Adamson &
Adamson, Inc. v. CIR, No. L-35120, January 31, 1984, 127 SCRA 268; Elisco-Elirol Labor
Union (NAFLU) v. Noriel, No. L-41955, December 29, 1977, 80 SCRA 681; Liberty Cotton Mills
Workers Union v. Liberty Cotton Mills, Inc., supra).
The inclusion of the word NATU after the name of the local union THEU in the registration with the
Department of Labor is merely to stress that the THEU is NATU's affiliate at the time of the registration. It does
not mean that the said local union cannot stand on its own. Neither can it be interpreted to mean that it cannot
pursue its own interests independently of the federation. A local union owes its creation and continued
existence to the will of its members and not to the federation to which it belongs.
When the local union withdrew from the old federation to join a new federation, it was merely exercising its
primary right to labor organization for the effective enhancement and protection of common interests. In the
absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local union a
local may sever its relationship with its parent (People's Industrial and Commercial Employees and Workers
Organization (FFW) v. People's Industrial and Commercial Corporation, No. 37687, March 15, 1982, 112
SCRA 440).
There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was
expressly forbidden to disaffiliate from the federation (pp. 62, 281, Rollo), The alleged non-compliance of the
local union with the provision in the NATU Constitution requiring the service of three months notice of intention
to withdraw did not produce the effect of nullifying the disaffiliation for the following grounds: firstly, NATU was
not even a legitimate labor organization, it appearing that it was not registered at that time with the
Department of Labor, and therefore did not possess and acquire, in the first place, the legal personality to
enforce its constitution and laws, much less the right and privilege under the Labor Code to organize and
affiliate chapters or locals within its group, and secondly, the act of non-compliance with the procedure on
withdrawal is premised on purely technical grounds which cannot rise above the fundamental right of selforganization.
Respondent Secretary of Labor, in affirming the decision of the respondent Commission, concluded that the
supposed decision to disaffiliate was not the subject of a free and open discussion and decision on the part of

the THEU-NATU general membership (p. 305, Rollo). This, however, is contradicted by the evidence on
record. Moreover, We are inclined to believe Arbitrator Villatuya's findings to the contrary, as follows:
. . . . However, the complainants refute this allegation by submitting the following: a) Letter
dated December 20, 1.973 signed by 142 members (Exhs. "B to B-5") resolution dated January
12, 1974, signed by 140 members (Exhs. "H to H-6") letter dated February 26, 1974 to the
Department of Labor signed by 165 members (Exhs. "I to I-10"); d) letter dated January 30,
1974 to the Secretary of the National Defense signed by 144 members (Exhs. "0 to 0-5") and;
e) letter dated March 6, 1974 signed by 146 members addressed to the President of the
Philippines (Exhs. "HH to HH-5"), to show that in several instances, the members of the THEUNATU have acknowledged their disaffiliation from NATU. The letters of the complainants also
indicate that an overwhelming majority have freely and voluntarily signed their union's
disaffiliation from NATU, otherwise, if there was really deception employed in securing their
signatures as claimed by NATU/ Dilag, it could not be possible to get their signatures in five
different documents. (p. 144, Rollo)
We are aware of the time-honored doctrine that the findings of the NLRC and the Secretary of Labor are
binding on this Court if supported by substantial evidence. However, in the same way that the findings of facts
unsupported by substantial and credible evidence do not bind this Court, neither will We uphold erroneous
conclusions of the NLRC and the Secretary of Labor when We find that the latter committed grave abuse of
discretion in reversing the decision of the labor arbiter (San Miguel Corporation v. NLRC, L-50321, March 13,
1984, 128 SCRA 180). In the instant case, the factual findings of the arbitrator were correct against that of
public respondents.
Further, there is no merit in the contention of the respondents that the act of disaffiliation violated the union
security clause of the CBA and that their dismissal as a consequence thereof is valid. A perusal of the
collective bargaining agreements shows that the THEU-NATU, and not the NATU federation, was recognized
as the sole and exclusive collective bargaining agent for all its workers and employees in all matters
concerning wages, hours of work and other terms and conditions of employment (pp. 667-706, Rollo).
Although NATU was designated as the sole bargaining agent in the check-off authorization form attached to
the CBA, this simply means it was acting only for and in behalf of its affiliate. The NATU possessed the status
of an agent while the local union remained the basic principal union which entered into contract with the
respondent company. When the THEU disaffiliated from its mother federation, the former did not lose its legal
personality as the bargaining union under the CBA. Moreover, the union security clause embodied in the
agreements cannot be used to justify the dismissals meted to petitioners since it is not applicable to the
circumstances obtaining in this case. The CBA imposes dismissal only in case an employee is expelled from
the union for joining another federation or for forming another union or who fails or refuses to maintain
membership therein. The case at bar does not involve the withdrawal of merely some employees from the
union but of the whole THEU itself from its federation. Clearly, since there is no violation of the union security
provision in the CBA, there was no sufficient ground to terminate the employment of petitioners.
Public respondents considered the existence of Arturo Dilag's group as the remaining true and valid union.
We, however, are inclined to agree instead with the Arbitrator's findings when he declared:
. . . . Much more, the so-called THEU-NATU under Dilag's group which assumes to be the
original THEU-NATU has a very doubtful and questionable existence not to mention that the

alleged president is performing supervisory functions and not qualified to be a bona

fide member of the rank and file union. (p. 146, Rollo)
Records show that Arturo Dilag had resigned in the past as President of THEU-NATU because of his
promotion to a managerial or supervisory position as Assistant Unit Manager of respondent Company.
Petitioner Jose Encinas replaced Dilag as President and continued to hold such position at the time of the
disaffiliation of the union from the federation. It is therefore improper and contrary to law for Dilag to reassume
the leadership of the remaining group which was alleged to be the true union since he belonged to the
managerial personnel who could not be expected to work for the betterment of the rank and file employees.
Besides, managers and supervisors are prohibited from joining a rank and file union (Binalbagan Isabela
Sugar Co., Inc. (BISCOM) v. Philippine Association of Free Labor Unions (PAFLU), et al., L-18782, August 29,
1963, 8 SCRA 700). Correspondingly, if a manager or supervisor organizes or joins a rank and file union, he
will be required to resign therefrom (Magalit, et al. v. Court of Industrial Relations, et al., L-20448, May 25,
1965,14 SCRA 72).
Public respondents further submit that several employees who disaffiliate their union from the NATU
subsequently retracted and reaffirmed their membership with the THEU-NATU. In the decision which was
affirmed by respondent Secretary of Labor, the respondent Commission stated that:
. . . out of the alleged one hundred and seventy-one (171) members of the THEU-CGW whose
signatures appeared in the "Analysis of Various Documents Signed by Majority Members of the
THEU-CGW, (Annex "T", Complainants), which incidentally was relied upon by Arbitrator
Villatuya in holding that complainant THEU-CGW commanded the majority of employees in
respondent company, ninety-three (93) of the alleged signatories reaffirmed their membership
with the THEU-NATU and renounced whatever connection they may have had with other labor
unions, (meaning the complainant THEU-CGW) either through resolution or membership
application forms they have unwittingly signed." (p. 306, Rollo)
Granting arguendo, that the fact of retraction is true, the evidence on record shows that the letters of retraction
were executed on various dates beginning January 11, 1974 to March 8, 1974 (pp. 278-280, Rollo). This
shows that the retractions were made more or less after the suspension pending dismissal on January 11,
1974 of Jose Encinas, formerly THEU-NATU President, who became THEU-CGW President, and the
suspension pending their dismissal of the other elected officers and members of the THEU-CGW on January
15, 1974. It is also clear that some of the retractions occurred after the suspension of the first set of workers
numbering about twenty-four (24) on March 5, 1974. There is no use in saying that the retractions obliterated
the act of disaffiliation as there are doubts that they were freely and voluntarily done especially during such
time when their own union officers and co-workers were already suspended pending their dismissal.
Finally, with regard to the process by which the workers were suspended or dismissed, this Court finds that it
was hastily and summarily done without the necessary due process. The respondent company sent a letter to
petitioners herein, advising them of NATU/Dilag's recommendation of their dismissal and at the same time
giving them forty-eight (48) hours within which to comment (p. 637, Rollo). When petitioners failed to do so,
respondent company immediately suspended them and thereafter effected their dismissal. This is certainly not
in fulfillment of the mandate of due process, which is to afford the employee to be dismissed an opportunity to
be heard.

The prerogative of the employer to dismiss or lay-off an employee should be done without abuse of discretion
or arbitrainess, for what is at stake is not only the employee's name or position but also his means of
livelihood. Thus, the discharge of an employee from his employment is null and void where the employee was
not formally investigated and given the opportunity to refute the alleged findings made by the company (De
Leon v. NLRC, L-52056, October 30, 1980, 100 SCRA 691). Likewise, an employer can be adjudged guilty of
unfair labor practice for having dismissed its employees in line with a closed shop provision if they were not
given a proper hearing (Binalbagan-Isabela Sugar Co., Inc.,(BISCOM) v. Philippine Association of Free Labor
Unions (PAFLU) et al., L-18782, August 29, 1963, 8 SCRA 700).
In view of the fact that the dispute revolved around the mother federation and its local, with the company
suspending and dismissing the workers at the instance of the mother federation then, the company's liability
should be limited to the immediate reinstatement of the workers. And since their dismissals were effected
without previous hearing and at the instance of NATU, this federation should be held liable to the petitioners
for the payment of their backwages, as what We have ruled in the Liberty Cotton Mills Case (supra).
ACCORDINGLY, the petition is hereby GRANTED and the assailed decision of respondent Secretary of Labor
is REVERSED and SET ASIDE, and the respondent company is hereby ordered to immediately reinstate all
the petitioner employees within thirty (30) days from notice of this decision. If reinstatement is no longer
feasible, the respondent company is ordered to pay petitioners separation pay equivalent to one (1) month
pay for every year of service. The respondent NATU federation is directed to pay petitioners the amount of
three (3) years backwages without deduction or qualification. This decision shall be immediately executory
upon promulgation and notice to the parties.
G.R. No. L-50283-84 April 20, 1983
DOLORES VILLAR, ROMEO PEQUITO, DIONISIO RAMOS, BENIGNO MAMARALDO, ORLANDO
ACOSTA, RECITACION BERNUS, ANSELMA ANDAN, ROLANDO DE GUZMAN and RITA
LLAGAS, petitioners,
vs.
THE HON. AMADO G. INCIONG, as Deputy Minister of the Ministry of Labor, AMIGO MANUFACTURING
INCORPORATED and PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), respondents.
Aniceto Haber for petitioners.
Roberto T. Neri for respondents.

GUERRERO, J.:
Petition for review by certiorari to set aside the Order dated February 15, 1979 of respondent Deputy Minister
Amado G. Inciong affirming the Decision of the OIC of Regional Office No. 4 dated October 14, 1978 which
jointly resolved RO4-Case No. T-IV-3549-T and RO4-Case No. RD 4-4088-77-T.
The facts are as follows:

Petitioners were members of the Amigo Employees Union-PAFLU, a duly registered labor organization which,
at the time of the present dispute, was the existing bargaining agent of the employees in private respondent
Amigo Manufacturing, Inc. (hereinafter referred to as Company). The Company and the Amigo Employees
Union-PAFLU had a collective bargaining agreement governing their labor relations, which agreement was
then about to expire on February 28, 1977. Within the last sixty (60) days of the CBA, events transpired giving
rise to the present dispute.
On January 5, 1977, upon written authority of at least 30% of the employees in the company, including the
petitioners, the Federation of Unions of Rizal (hereinafter referred to as FUR) filed a petition for certification
election with the Med-Arbiter's Office, Regional Office No. 4 of the Ministry of Labor and Employment. The
petition was, however, opposed by the Philippine Association of Free Labor Unions (hereinafter referred to as
PAFLU) with whom, as stated earlier, the Amigo Employees Union was at that time affiliated. PAFLU's
opposition cited the "Code of Ethics" governing inter-federation disputes among and between members of the
Trade Unions Congress of the Philippines (hereinafter referred to as TUCP). Consequently, the Med-Arbiter
indorsed the case to TUCP for appropriate action but before any such action could be taken thereon, the
petitioners disauthorized FUR from continuing the petition for certification election for which reason FUR
withdrew the petition.
On February 7, 1977, the same employees who had signed the petition filed by FUR signed a joint resolution
reading in toto as follows:
Sama-Samang Kapasiyahan
1. TUMIWALAG bilang kasaping Unyon ng Philippine Association of Free Labor Unions
(PAFLU) at kaalinsabay nito, inaalisan namin ang PAFLU ng kapangyarihan na katawanin kami
sa anumang pakikipagkasundo (CBA) sa Pangasiwaan ng aming pinapasukan at kung sila
man ay nagkasundo o magkakasundo sa kabila ng pagtitiwalag na ito, ang nasabing
kasunduan ay hindi namin pinagtitibay at tahasang aming itinatakwil/tinatanggihan;
2. BINABAWI namin ang aming pahintulot sa Federation of Unions of Rizal (FUR) na katawanin
kami sa Petition for Certification Election (RO4-MED Case No. 743-77) at/o sa sama-samang
pakikipagkasundo sa aming patrons;
3. PANATILIHIN na nagsasarili (independent) ang aming samahan, AMIGO EMPLOYEES'
UNION, alinsunod sa Artikulo 240 ng Labor Code;
4. MAGHAIN KAAGAD ang aming Unyong nagsasarili, sa pamumuno ng aming
pangsamantalang Opisyal na kinatawan, si Ginang DOLORES VILLAR, ng Petition for
Certification Election sa Department of Labor, para kilalanin ang aming Unyong nagsasarili
bilang Tanging kinatawan ng mga manggagawa sa sama-samang pakikipagkasundo (CBA);
5. BIGYAN ng kopya nito ang bawa't kinauukulan at ang mga kapasiyahang ito ay
magkakabisa sa oras na matanggap ng mga kinauukulan ang kani-kanilang sipi nito. 1
Immediately thereafter or on February 9, 1977, petitioner Dolores Villar, representing herself to be the
authorized representative of the Amigo Employees Union, filed a petition for certification election in the
Company before Regional Office No. 4, with the Amigo Employees Union as the petitioner. The Amigo

Employees Union-PAFLU intervened and moved for the dismissal of the petition for certification election filed
by Dolores Villar, citing as grounds therefor, viz: (a) the petition lacked the mandatory requisite of at least 30%
of the employees in the bargaining unit; (2) Dolores Villar had no legal personality to sign the petition since
she was not an officer of the union nor is there factual or legal basis for her claim that she was the authorized
representative of the local union; (3) there was a pending case for the same subject matter filed by the same
individuals; (4) the petition was barred by the new CBA concluded on February 15, 1977; (5) there was no
valid disaffiliation from PAFLU; and (6) the supporting signatures were procured through false pretenses.
Finding that the petition involved the same parties and causes of action as the case previously indorsed to the
TUCP, the Med-Arbiter dismiss the petition filed by herein petitioner Villar, which dismissal is still pending
appeal before the Bureau of Labor Relations.
In the meantime, on February 14, 1977, the Amigo Employees Union- PAFLU called a special meeting of its
general membership. A Resolution was thereby unanimously approved which called for the investigation by
the PAFLU national president, pursuant to the constitution and by-laws of the Federation, of all of the
petitioners and one Felipe Manlapao, for "continuously maligning, libelling and slandering not only the
incumbent officers but even the union itself and the federation;" spreading 'false propaganda' that the union
officers were 'merely appointees of the management', and for causing divisiveness in the union.
Pursuant to the Resolution approved by the Amigo Employees Union- PAFLU, the PAFLU, through its national
President, formed a Trial Committee to investigate the local union's charges against the petitioners for acts of
disloyalty inimical to the interest of the local union, as well as directing the Trial Committee to subpoena the
complainants (Amigo Employees Union-PAFLU) and the respondents (herein petitioners) for investigation, to
conduct the said investigation and to submit its findings and recommendations for appropriate action.
And on the same date of February 15, 1977, the Amigo Employees Union- PAFLU and the Company
concluded a new CBA which, besides granting additional benefits to the workers, also reincorporated the
same provisions of the existing CBA, including the union security clause reading, to wit:
ARTICLE III
UNION SECURITY WITH RESPECT TO PRESENT MEMBERS
All members of the UNION as of the signing of this Agreement shall remain members thereof in
good standing. Therefore, any members who shall resign, be expelled, or shall in any manner
cease to be a member of the UNION, shall be dismissed from his employment upon written
request of the UNION to the Company. 2
Subsequently, petitioners were summoned to appear before the PAFLU Trial Committee for the
aforestated investigation of the charges filed against them by the Amigo Employees UnionPAFLU. Petitioners, however, did not attend but requested for a "Bill of Particulars" of the
charges, which charges were stated by the Chairman of the committee as follows:
1. Disaffiliating from PAFLU and affiliating with the Federation of Unions of Rizal (FUR).
2. Filling petition for certification election with the Bureau of Labor Relations and docketed as
Case No. R04-MED-830-77 and authorizing a certain Dolores Villar as your authorized
representative without the official sanction of the mother Federation- PAFLU.

3. Maligning, libelling and slandering the incumbent officers of the union as well as of the
PAFLU Federation.
4. By spreading false propaganda among members of the Amigo Employees Union-PAFLU that
the incumbent union officers are 'merely appointees' of the management.
5. By sowing divisiveness instead of togetherness among members of the Amigo Employees
Union-PAFLU.
6. By conduct unbecoming as members of the Amigo Employees Union- PAFLU which is highly
prejudicial to the union as well as to the PAFLU Federation.
All these charges were formalized in a resolution of the incumbent officers of the Amigo
Employees Union-PAFLU dated February 14, 1977. 3
Not recognizing PAFLU's jurisdiction over their case, petitioners again refused to participate in the
investigation rescheduled and conducted on March 9, 1979. Instead, petitioners merely appeared to file their
Answer to the charges and moved for a dismissal.
Petitioners contend in their Answer that neither the disaffiliation of the Amigo Employees Union from PAFLU
nor the act of filing the petition for certification election constitute disloyalty as these are in the exercise of their
constitutional right to self-organization. They further contended that PAFLU was without jurisdiction to
investigate their case since the charges, being intra-union problems within the Amigo Employees UnionPAFLU, should be conducted pursuant to the provisions of Article XI, Sections 2, 3, 4 and 5 of the local
union's constitution and by-laws.
The complainants, all of whom were the then incumbent officers of the Amigo Employees Union-PAFLU,
however, appeared and adduced their evidence supporting the charges against herein petitioners.
Based on the findings and recommendations of the PAFLU trial committee, the PAFLU President, on March
15, 1977, rendered a decision finding the petitioners guilty of the charges and disposing in the last paragraph
thereof, to wit,
Excepting Felipe Manlapao, the expulsion from the AMIGO EMPLOYEES UNION of all the
other nine (9) respondents, Dionisio Ramos, Recitation Bernus, Dolores Villar, Romeo Dequito,
Rolando de Guzman, Anselma Andan, Rita Llagas, Benigno Mamaradlo and Orlando Acosta is
hereby ordered, and as a consequence the Management of the employer, AMIGO
MANUFACTURING, INC. is hereby requested to terminate them from their employment in
conformity with the security clause in the collective bargaining agreement. Further, the Trial
Committee is directed to investigate Felipe Manlapao when he shall have reported back for
duty. 4
Petitioners appealed the Decision to the PAFLU, citing the same grounds as before, and in addition thereto,
argued that the PAFLU decision cannot legally invoke a CBA which was unratified, not certified, and entered
into without authority from the union general membership, in asking the Company to terminate them from their
employment. The appeal was, likewise, denied by PAFLU in a Resolution dated March 28, 1977.

After denying petitioner's appeal, PAFLU on March 28, 1977 sent a letter to the Company stating, to wit,
We are furnishing you a copy of our Resolution on the Appeal of the respondent in
Administrative Case No. 2, Series of 1977, Amigo Employees Union-PAFLU vs. Dionisio
Ramos, et al.
In view of the denial of their appeal and the Decision of March 15, 1977 having become final
and executory we would appreciate full cooperation on your part by implementing the provision
of our CBA on security clause by terminating the respondents concerned from their
employment. 5
This was followed by another letter from PAFLU to the Company dated April 25, 1977, reiterating the demand
to terminate the employment of the petitioners pursuant to the security clause of the CBA, with a statement
absolving the Company from any liability or damage that may arise from petitioner's termination.
Acting on PAFLU's demand, the Company informed PAFLU that it will first secure the necessary clearances to
terminate petitioners. By letter dated April 28, 1977, PAFLU requested the Company to put petitioners under
preventive suspension pending the application for said clearances to terminate the petitioners, upon a
declaration that petitioners' continued stay within the work premises will "result in the threat to the life and limb
of the other employees of the company." 6
Hence, on April 29, 1977, the Company filed the request for clearance to terminate the petitioners before the
Department of Labor, Regional Office No. 4. The application, docketed as RO4-Case No. 7-IV-3549-T, stated
as cause therefor, "Demand by the Union Pursuant to the Union Security Clause," and further, as effectivity
date, "Termination-upon issuance of clearance; Suspension-upon receipt of notice of workers
concerned." 7 Petitioners were then informed by memorandum dated April 29, 1977 that the Company has
applied for clearance to terminate them upon demand of PAFLU, and that each of them were placed under
preventive suspension pending the resolution of the said applications. The security guard was, likewise,
notified to refuse petitioners entry into the work premises. 8
In an earlier development, on April 25, 1977, or five days before petitioners were placed under preventive
suspension, they filed a complaint with application for preliminary injunction before the same Regional Office
No. 4, docketed as RO4-Case No. RD-4-4088-77-T, praying that after due notice and hearing, "(1) A
preliminary injunction be issued forthwith to restrain the respondents from doing the act herein complained of,
namely: the dismissal of the individual complainants from their employment; (2) After due hearing on the
merits of the case, an Order be entered denying and/or setting aside the Decision dated March 15, 1977 and
the Resolution dated March 28, 1977, issued by respondent Onofre P. Guevara, National President of
respondent PAFLU; (3) The Appeal of the individual complainants to the General Membership of the
complainant AMIGO EMPLOYEES UNION, dated March 22, 1977, pursuant to Sections 2, 3, 4 & 5, Article XI
in relation of Section 1, Article XII of the Union Constitution and By-Laws, be given due course; and (4)
Thereafter, the said preliminary injunction be made permanent, with costs, and with such further orders/reliefs
that are just and equitable in the premises." 9
In these two cases filed before the Regional Office No. 4, the parties adopted their previous positions when
they were still arguing before the PAFLU trial committee.

On October 14, 1977, Vicente Leogardo, Jr., Officer-in-Charge of Regional Office No. 4, rendered a decision
jointly resolving said two cases, the dispositive portion of which states, to wit,
IN VIEW OF THE FOREGOING, judgment is hereby rendered granting the application of the
Amigo Manufacturing, Inc., for clearance to terminate the employment of Dolores D. Villar,
Dionisio Ramos, Benigno Mamaraldo, Orlando Acosta, Recitacion Bernus, Anselma Andan,
Rolando de Guzman, and Rita Llagas. The application of oppositors, under RO4-Case No. RD4-4088-77, for a preliminary injunction to restrain the Amigo Manufacturing, Inc. from
terminating their employment and from placing them under preventive suspension, is hereby
DISMISSED. 10
Not satisfied with the decision, petitioners appealed to the Office of the Secretary of Labor. By Order dated
February 15, 1979, the respondent Amado G. Inciong, Deputy Minister of Labor, dismissed their appeal for
lack of merit. 11
Hence, the instant petition for review, raising the following issues:
A. Is it not error in both constitutional and statutory law by the respondent Minister when he
affirmed the decision of the RO4-Officer-in-Charge allowing the preventive suspension and
subsequent dismissal of petitioners by reason of the exercise of their right to freedom of
association?
B. Is it not error in law by the respondent Minister when he upheld the decision of the RO4 OIC
which sustained the availment of the respondent PAFLU's constitution over that of the local
union constitution in the settlement of intra-union dispute?
C. Is it not error in law amounting to grave abuse of discretion by the Minister in affirming the
conclusion made by the RO4 OIC, upholding the legal applicability of the security clause of a
CBA over alleged offenses committed earlier than its conclusion, and within the 60-day
freedom period of an old CBA? 12
The main thrust of the petition is the alleged illegality of the dismiss of the petitioners by private respondent
Company upon demand of PAFLU which invoked the security clause of the collective bargaining agreement
between the Company and the local union, Amigo Employees Union-PAFLU. Petitioners contend that the
respondent Deputy Minister acted in grave abuse of discretion when he affirmed the decision granting the
clearance to terminate the petitioners and dismissed petitioners' complaint, and in support thereof, allege that
their constitutional right to self-organization had been impaired. Petitioner's contention lacks merit.
It is true that disaffiliation from a labor union is not open to legal objection. It is implicit in the freedom of
association ordained by the Constitution. 13 But this Court has laid down the ruling that a closed shop is a valid
form of union security, and such provision in a collective bargaining agreement is not a restriction of the right
of freedom of association guaranteed by the Constitution. 14
In the case at bar, it appears as an undisputed fact that on February 15, 1977, the Company and the Amigo
Employees Union-PAFLU entered into a Collective Bargaining Agreement with a union security clause
provided for in Article XII thereof which is a reiteration of the same clause in the old CBA. The quoted
stipulation for closed-shop is clear and unequivocal and it leaves no room for doubt that the employer is

bound, under the collective bargaining agreement, to dismiss the employees, herein petitioners, for non- union
membership. Petitioners became non-union members upon their expulsion from the general membership of
the Amigo Employees Union-PAFLU on March 15, 1977 pursuant to the Decision of the PAFLU national
president.
We reject petitioners' theory that their expulsion was not valid upon the grounds adverted to earlier in this
Decision. That PAFLU had the authority to investigate petitioners on the charges filed by their co-employees
in the local union and after finding them guilty as charged, to expel them from the roll of membership of the
Amigo Employees Union-PAFLU is clear under the constitution of the PAFLU to which the local union was
affiliated. And pursuant to the security clause of the new CBA, reiterating the same clause in the old CBA,
PAFLU was justified in applying said security clause. We find no abuse of discretion on the part of the OIC of
Regional Office No. 4 in upholding the validity of the expulsion and on the part of the respondent Deputy
Minister of Labor in sustaining the same. We agree with the OIC's decision, pertinent portion of which reads:
Stripped of non-essentials, the basic and fundamental issue in this case tapers down to the
determination of WHETHER OR NOT PAFLU HAD THE AUTHORITY TO INVESTIGATE
OPPOSITORS AND, THEREAFTER, EXPEL THEM FROM THE ROLL OF MEMBERSHIP OF
THE AMIGO EMPLOYEES UNION-PAFLU.
Recognized and salutary is the principle that when a labor union affiliates with a mother union,
it becomes bound by the laws and regulations of the parent organization. Thus, the Honorable
Secretary of Labor, in the case of Amador Bolivar, et al. vs. PAFLU, et al., NLRC Case No. LR133 & MC-476, promulgated on December 3, 1973, declaredWhen a labor union affiliates with a parent organization or mother union, or accepts a charter
from a superior body, it becomes subject to the laws of the superior body under whose
authority the local union functions. The constitution, by-laws and rules of the parent body,
together with the charter it issues pursuant thereto to the subordinate union, constitute an
enforceable contract between the parent body and the subordinate union, and between the
members of the subordinate union inter se. (Citing Labor Unions, Dangel and Shriber, pp. 279280).
It is undisputable that oppositors were members of the Amigo Employees Union at the time that
said union affiliated with PAFLU; hence, under the afore-quoted principle, oppositors are bound
by the laws and regulations of PAFLU.
Likewise, it is undeniable that in the investigation of the charges against them, oppositors were
accorded 'due process', because in this jurisdiction, the doctrine is deeply entrenched that the
term 'due process' simply means that the parties were given the opportunity to be heard. In the
instant case, ample and unmistakable evidence exists to show that the oppositors were
afforded the opportunity to present their evidence, but they themselves disdained or spurned
the said opportunity given to them.
PAFLU, therefore, correctly and legally acted when, pursuant to its Constitution and By-Laws, it
conducted and proceeded with the investigation of the charges against the oppositors and
found them guilty of acts prejudicial and inimical to the interests of the Amigo Employees
Union- PAFLU, to wit: that of falsely and maliciously slandering the officers of the union;

spreading false propaganda among the members of the Amigo Employees Union-PAFLU;
calling the incumbent officers as mere appointees and robots of management; calling the union
company-dominated or assisted union; committing acts unbecoming of the members of the
union and destructive of the union and its members.
Inherent in every labor union, or any organization for that matter, is the right of selfpreservation. When members of a labor union, therefore, sow the seeds of dissension and
strife within the union; when they seek the disintegration and destruction of the very union to
which they belong, they thereby forfeit their rights to remain as members of the union which
they seek to destroy. Prudence and equity, as well as the dictates of law and justice, therefore,
compelling mandate the adoption by the labor union of such corrective and remedial measures
in keeping with its laws and regulations, for its preservation and continued existence; lest by its
folly and inaction, the labor union crumble and fall.
Correctly and legally, therefore, the PAFLU acted when, after proper investigation and finding
of guilt, it decided to remove the oppositors from the list of members of the Amigo Employees
Union-PAFLU, and thereafter, recommended to the Amigo Manufacturing, Inc.; the termination
of the employment of the oppositors. 15
We see no reason to disturb the same.
The contention of petitioners that the charges against them being intra-union problems, should have been
investigated in accordance with the constitution and by-laws of the Amigo Employees Union-PAFLU and not
of the PAFLU, is not impressed with merit. It is true that under the Implementing Rules and Regulations of the
Labor Code, in case of intra-union disputes, redress must first be sought within the organization itself in
accordance with its constitution and by-laws. However, it has been held that this requirement is not absolute
but yields to exception under varying circumstances. Thus, in Kapisanan ng mga Manggagawa sa MRR vs.
Hernandez, 20 SCRA 109, We held:
In the case at bar, noteworthy is the fact that the complaint was filed against the union and its
incumbent officers, some of whom were members of the board of directors. The constitution
and by-laws of the union provide that charges for any violations thereof shall be filed before the
said board. But as explained by the lower court, if the complainants had done so the board of
directors would in effect be acting as respondent investigator and judge at the same time. To
follow the procedure indicated would be a farce under the circumstances, where exhaustion of
remedies within the union itself would practically amount to a denial of justice or would be
illusory or vain, it will not be insisted upon, particularly where property rights of the members
are involved, as a condition to the right to invoke the aid of a court.
The facts of the instant petition stand on all fours with the aforecited case that the principle therein enunciated
applies here as well. In the case at bar, the petitioners were charged by the officers of the Amigo Employees
Union- PAFLU themselves who were also members of the Board of Directors of the Amigo Employees UnionPAFLU. Thus, were the petitioners to be charged and investigated according to the local union's constitution,
they would have been tried by a trial committee of three (3) elected from among the members of the Board
who are themselves the accusers. (Section 2, Article 11, Constitution of the Local Union). Petitioners would be
in a far worse position had this procedure been followed. Nonetheless, petitioners admit in their petition that

two (2) of the six (6) charges, i.e. disaffiliation and filing a petition for certification election, are not intra-union
matters and, therefore, are cognizable by PAFLU.
Petitioners insist that their disaffiliation from PAFLU and filing a petition for certification election are not acts of
disloyalty but an exercise of their right to self-organization. They contend that these acts were done within the
60-day freedom period when questions of representation may freely be raised. Under the peculiar facts of the
case, We find petitioners' insistence untenable.
In the first place, had petitioners merely disaffiliated from the. Amigo Employees Union-PAFLU, there could be
no legal objections thereto for it was their right to do so. But what petitioners did by the very clear terms of
their "Sama-Samang Kapasiyahan" was to disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an
act which they could not have done with any effective consequence because they constituted the minority in
the Amigo Employees Union-PAFLU.
Extant from the records is the fact that petitioners numbering ten (10), were among the ninety-six (96) who
signed the "Sama-Samang Kapasiyahan" whereas there are two hundred thirty four (234) union members in
the Amigo Employees Union-PAFLU. Hence, petitioners constituted a small minority for which reason they
could not have successfully disaffiliated the local union from PAFLU. Since only 96 wanted disaffiliation, it can
be inferred that the majority wanted the union to remain an affiliate of PAFLU and this is not denied or
disputed by petitioners. The action of the majority must, therefore, prevail over that of the minority members. 16
Neither is there merit to petitioners' contention that they had the right to present representation issues within
the 60-day freedom period. It is true, as contended by petitioners, that under Article 257 of the Labor Code
and Section 3, Rule 2, Book 2 of its Implementing Rules, questions of exclusive bargaining representation are
entertainable within the sixty (60) days prior to the expiry date of an existing CBA, and that they did file a
petition for certification election within that period. But the petition was filed in the name of the Amigo
Employees Union which had not disaffiliated from PAFLU, the mother union. Petitioners being a mere minority
of the local union may not bind the majority members of the local union.
Moreover, the Amigo Employees Union, as an independent union, is not duly registered as such with the
Bureau of Labor Relations. The appealed decision of OIC Leogardo of Regional Office No. 4 states as a fact
that there is no record in the Bureau of Labor Relations that the Amigo Employees Union (Independent) is
registered, and this is not disputed by petitioners, notwithstanding their allegation that the Amigo Employees
Union is a duly registered labor organization bearing Ministry of Labor Registration Certification No. 5290-IP
dated March 27, 1967. But the independent union organized after the "Sama-Samang Kapasiyahan" executed
February 7, 1977 could not have been registered earlier, much less March 27, 1967 under Registration
Certificate No. 5290-IP. As such unregistered union, it acquires no legal personality and is not entitled to the
rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration. Article 234 of the New Labor Code specifically provides:
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. ....

In Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40, We had occasion to interpret
Section 23 of R.A. No. 875 (Industrial Peace Act) requiring of labor unions registration by the Department of
Labor in order to qualify as "legitimate labor organization," and We said:
The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of
assembly and association guaranteed in the Bill of Rights is devoid of factual basis. The
registration prescribed in paragraph (b) of said section 17 is not a limitation to the right of
assembly or association, which may be exercised with or without said registration. The latter is
merely a condition sine qua non for the acquisition of legal personality by labor organizations,
associations or unions and the possession of the 'rights and privileges granted by law to
legitimate labor organizations.' The Constitution does not guarantee these rights and privileges,
much less said personality, which are mere statutory creations, for the possession and exercise
of which registration is required to protect both labor and the public against abuses, fraud, or
impostors who pose as organizers, although not truly accredited agents of the union they
purport to represent. Such requirement is a valid exercise of the police power, because the
activities in which labor organizations, associations and union or workers are engaged affect
public interest, which should be protected.
Simply put, the Amigo Employees Union (Independent) Which petitioners claim to represent, not being a
legitimate labor organization, may not validly present representation issues. Therefore, the act of petitioners
cannot be considered a legitimate exercise of their right to self-organization. Hence, We affirm and reiterate
the rationale explained in Phil Association of Free Labor Unions vs. Sec. of Labor case, supra, in order to
protect legitimate labor and at the same time maintain discipline and responsibility within its ranks.
The contention of petitioners that the new CBA concluded between Amigo Employees Union-PAFLU and the
Company on February 15, 1977 containing the union security clause cannot be invoked as against the
petitioners for offenses committed earlier than its conclusion, deserves scant consideration. We find it to be
the fact that the union security clause provided in the new CBA merely reproduced the union security clause
provided in the old CBA about to expire. And since petitioners were expelled from Amigo Employees UnionPAFLU on March 28, 1982 upon denial of their Motion for Reconsideration of the decision expelling them, the
CBA of February 15, 1977 was already applicable to their case. The "closed-shop provision" in the CBA
provides:
All members of the UNION as of the signing of this Agreement shall remain members thereof in
good standing. Therefore, any members who shall resign, be expelled, or shall in any manner
cease to be a member of the UNION, shall be dismissed from his employment upon written
request of the UNION to the Company. (Art. III)
A closed-shop is a valid form of union security, and a provision therefor in a collective bargaining agreement is
not a restriction of the right of freedom of association guaranteed by the Constitution. (Manalang, et al. vs.
Artex Development Co., Inc., et al., L-20432, October 30, 1967, 21 SCRA 561). Where in a closed-shop
agreement it is stipulated that union members who cease to be in good standing shall immediately be
dismissed, such dismissal does not constitute an unfair labor practice exclusively cognizable by the Court of
Industrial Relations. (Seno vs. Mendoza, 21 SCRA 1124).
Finally, We reject petitioners' contention that respondent Minister committed error in law amounting to grave
abuse of discretion when he affirmed the conclusion made by the RO4 OIC, upholding the legal applicability of

the security clause of a CBA over alleged offenses committed earlier than its conclusion and within the 60-day
freedom period of an old CBA. In the first place, as We stated earlier, the security clause of the new CBA is a
reproduction or reiteration of the same clause in the old CBA. While petitioners were charged for alleged
commission of acts of disloyalty inimical to the interests of the Amigo Employees Union-PAFLU in the
Resolution of February 14, 1977 of the Amigo Employees Union- PAFLU and on February 15, 1977 PAFLU
and the Company entered into and concluded a new collective bargaining agreement, petitioners may not
escape the effects of the security clause under either the old CBA or the new CBA by claiming that the old
CBA had expired and that the new CBA cannot be given retroactive enforcement. To do so would be to create
a gap during which no agreement would govern, from the time the old contract expired to the time a new
agreement shall have been entered into with the union. As this Court said in Seno vs. Mendoza, 21 SCRA
1124, "without any agreement to govern the relations between labor and management in the interim, the
situation would well be productive of confusion and result in breaches of the law by either party. "
The case of Seno vs. Mendoza, 21 SCRA 1124 mentioned previously needs further citation of the facts and
the opinion of the Court, speaking through Justice Makalintal who later became Chief Justice, and We quote:
It appears that petitioners other than Januario T. Seno who is their counsel, were members of
the United Seamen's Union of the Philippines. Pursuant to a letter-request of the Union stating
that they 'had ceased to be members in good standing' and citing a closed shop clause in its
bargaining agreement with respondent Carlos A. Go Thong & Co., the latter dismissed said
petitioners. Through counsel, petitioners requested that they be reinstated to their former
positions and paid their backwages, otherwise they would picket respondents' offices and
vessels. The request was denied on the ground that the dismissal was unavoidable under the
terms of the collective bargaining agreement. ...
We, therefore, hold and rule that petitioners, although entitled to disaffiliate from their union and form a new
organization of their own, must, however, suffer the consequences of their separation from the union under
the security clause of the CBA.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed from affirming the joint decision of
the OIC of Regional Office No. 4 in RO4-Case No. T-IV-3549-T and RO4 Case No. RD-4-4088-77-T granting
clearance to terminate petitioners as well as dismissing their complaint with application for preliminary
injunction, is hereby AFFIRMED. No costs.
G.R. No. 131374

January 26, 2000

ABBOTT LABORATORIES PHILIPPINES, INC., petitioner,

vs.
ABBOTT LABORATORIES EMPLOYEES UNION, MR. CRESENCIANO TRAJANO, in his capacity as
Acting Secretary of The Department Labor and of Employment and MR. BENEDICTO ERNESTO
BITONIO, JR., in his capacity as Director IV of the Bureau of Labor Relations, respondents.
DAVIDE, JR., C.J.:
This special civil action for certiorari mandamus assails the action of the then Acting Secretary of Labor and
Employment Creseciano B. Trajano contained in its letter dated 19 September 1997, 1 informing petitioner
Abbott Laboratories Philippines, Inc. (hereafter ABBOTT), thru its counsel that the Office of the Secretary of

Labor cannot act on ABBOTT's appeal from the decision of 31 March 1997 2 and the Order of 9 July 19973 of
the Bureau of Labor Relations, for lack of appellate jurisdiction.
ABBOTT is a corporation engaged in the manufacture and distribution of pharmaceutical drugs. On 22
February 1996,4 the Abbott Laboratories Employees Union (hereafter ALEU) represented by its president,
Alvin B. Buerano, filed an application for union registration in the Department of Labor and Employment.
ALEU alleged in the application that it is a labor organization with members consisting of 30 rank-and-file
employees in the manufacturing unit of ABBOTT and that there was no certified bargaining agent in the unit it
sought to represent, namely, the manufacturing unit.
On 28 February 1996,5 application was approved by the Bureau of Labor Relations, which in due course
issued Certificate of Registration No. NCR-UR-2-1638-96. Consequently, ALEU became a legitimate labor
organization.
On 2 April 1996,6 ABBOTT filed a petition for cancellation of the Certificate of Registration No. NCR-UR-21638-96 in the Regional Office of the Bureau of Labor Relations. This case was docketed as Case No. OD-M9604-006. ABBOTT assailed the certificate of registration since ALEU's application was not signed by at least
20% of the total 286 rank-and-file employees of the entire employer unit; and that it omitted to submit copies
of its books of account.
On 21 June 1996,7 the Regional Director of the Bureau of Labor Relations decreed the cancellation of ALEU's
registration certificate No. NCR-UR-11-1585-95.8 In its decision, the Regional Director adopted the 13 June
19969findings and recommendations of the Med-Arbiter. It ruled that the union has failed to show that the
rank-and-file employees in the manufacturing unit of ABBOTT were bound by a common interest to justify the
formation of a bargaining unit separate from those belonging to the sales and office staff units. There was,
therefore, sufficient reason to assume that the entire membership of the rank-and-file consisting of 286
employees or the "employer unit" make up the appropriate bargaining unit. However, it was clear on the
record that the union's application for registration was supported by 30 signatures of its members or barely
constituting 10% of the entire rank-and-file employees of ABBOTT. Thus the Regional Director found that for
ALEU's failure to satisfy the requirements of union registration under Article 234 of the Labor Code, the
cancellation of its certificate of registration was in order.
Forthwith, on 19 August 1996,10 ALEU appealed said cancellation to the Office of the Secretary of Labor and
Employment, which referred the same to the Director of the Bureau of the Labor Relations. The said appeal
was docketed as Case No. BLR-A-10-25-96.
On 31 March 1997,11 The Bureau of Labor Relations rendered judgment reversing the 21 June 1996 decision
of the Regional Director, thus:
WHEREFORE, the appeal is GRANTED and the decision of the Regional Director dated 21 June 1996
is hereby REVERSED. Abbott Laboratories Employees Union shall remain in the roster of legitimate
labor organizations, with all the rights, privilege and obligations appurtenant thereto. 12
It gave the following reasons to justify the reversal: (1) Article 234 of the Labor Code does not require an
applicant union to show proof of the "desirability of more than one bargaining unit within an employer unit,"
and the absence of such proof is not a ground for the cancellation of a union's registration pursuant to Article
239 of Book V, Rule II of the implementing rules of the Labor Code; (2) the issue pertaining to the

appropriateness of a bargaining unit cannot be raised in a cancellation proceeding but may be treshed out in
the exclusion-inclusion process during a certification election; and (3) the "one-bargaining unit, one-employer
unit policy" must not be interpreted in a manner that shall derogate the right of the employees to selforganization and freedom of association as guaranteed by Article III, Section 8 of the 1987 Constitution and
Article II of the International Labor Organization's Convention No. 87.
Its motion to reconsider the 31 March 1997 decision of the Bureau of Labor Relations having been denied for
lack of merit in the Order13 of 9 July 1997, ABBOTT appealed to the Secretary of Labor and Employment.
However, in its letter dated 19 September 1997,14 addressed to ABBOTT's counsel, the Secretary of Labor
and Employment refused to act on ABBOTT's appeal on the ground that it has no jurisdiction to review the
decision of the Bureau of Labor Relations on appeals in cancellation cases emanating from the Regional
Offices. The decision of the Bureau of Labor Relations therein is final and executory under Section 4, Rule III,
Book V of the Rules and Regulations Implementing the Labor Code, as amended by Department Order No.
09, s. of 1997. Finally, the Secretary stated:
It has always been the policy of this Office that pleadings denominated as appeal thereto over
decisions of the BLR in cancellation cases coming from the Regional offices are referred back to the
BLR, so that the same may be treated as motions for reconsideration and disposed of accordingly.
However, since your office has already filed a motion for reconsideration with the BLR which has been
denied in its Order dated 09 July 1997, your recourse should have been a special civil action
for certiorari with the Supreme Court.
In view of the foregoing, please be informed that the Office of the Secretary cannot act upon your
Appeal, except to cause the BLR to include it in the records of the case.
Hence, this petition. ABBOTT, premised its argument on the authority of the Secretary of Labor and
Employment to review the decision of the Bureau of Labor Relations and at the same time raised the issue on
the validity of ALEU's certificate of registration.
We find no merit in this petition.
At the outset, it is worthy to note that the present petition assails only the letter of the then Secretary of Labor
& Employment refusing to take cognizance of ABBOTT's appeal for lack of appellate jurisdiction. Hence, in the
resolution of the present petition, it is just appropriate to limit the issue on the power of the Secretary of Labor
and Employment to review the decisions of the Bureau of Labor Relations rendered in the exercise of its
appellate jurisdiction over decisions of the Regional Director in cases involving cancellations of certificates of
registration of labor unions. The issue anent the validity of ALEU's certificate of registration is subject of the
Bureau of Labor Relations decision dated 31 March 1997. However, said decision is not being assailed in the
present petition; hence, we are not at liberty to review the same.1wphi1.nt
Contrary to ABBOTT's contention, there has been no grave abuse of discretion on the part of the Secretary of
Labor and Employment. Its refusal to take cognizance of ALEU's appeal from the decision of the Bureau of
Labor Relations is in accordance with the provisions of Rule VIII, Book V of the Omnibus Rules Implementing
the Labor Code as amended by Department Order No. 09.15 The rule governing petitions for cancellation of
registration of any legitimate labor organization or worker association, as it now stands, provides:

Sec. 1. Venue of Action. If the respondent to the petition is a local/chapter, affiliate, or a workers'
association with operations limited to one region, the petition shall be filed with the Regional Office
having jurisdiction over the place where the respondent principally operates. Petitions filed against
federations, national or industry unions, trade union centers, or workers' associations operating in
more than one regional jurisdiction, shall be filed with the Bureau.
Sec. 3. Cancellation of registration; nature and grounds. Subject to the requirements of notice and
due process, the registration of any legitimate labor organization or worker's association may be
cancelled by the Bureau or the Regional Office upon the filing of an independent petition for
cancellation based on any of the following grounds:
(a) Failure to comply with any of the requirements prescribed under Articles 234, 237 and 238
of the Code;
(b) Violation of any of the provisions of Article 239 of the Code;
(b) Commission of any of the acts enumerated under Article 241 of the Code; provided, that no
petition for cancellation based on this ground may be granted unless supported by at least thirty
percent (30%) of all the members of the respondent labor organization or workers' association.
Sec. 4. Action on the petition; appeals. The Regional or Bureau Director, as the case may be, shall
have thirty (30) days from submission of the case for resolution within which to resolve the petition.
The decision of the Regional or Bureau Director may be appealed to the Bureau or the Secretary, as
the case may be, within ten (10) days from receipt thereof by the aggrieved party on the ground of
grave abuse of discretion or any violation of these Rules.
The Bureau or the Secretary shall have fifteen (15) days from receipt of the records of the case within
which to decide the appeal. The decision of the Bureau or the Secretary shall be final and executory.
Clearly, the Secretary of Labor and Employment has no jurisdiction to entertain the appeal of ABBOTT. The
appellate jurisdiction of the Secretary of Labor and Employment is limited only to a review of cancellation
proceedings decided by the Bureau of labor Relations in the exercise of its exclusive and original jurisdiction.
The Secretary of Labor and Employment has no jurisdiction over decisions of the Bureau of Labor Relations
rendered in the exercise of its appellate power to review the decision of the Regional Director in a petition to
cancel the union's certificate of registration, said decisions being final and inappealable. 16 We sustain the
analysis and interpretation of the OSG on this matter, to wit:
From the foregoing, the Office of the Secretary correctly maintained that it cannot take cognizance of
petitioner's appeal from the decision of BLR Director Bitonio. Sections 7 to 917 [of the implementing
Rules of the Labor Code] thus provide for two situations:
(1) The first situation involves a petition for cancellation of union registration which is filed with
aRegional Office. A decision of a Regional Office cancelling a union's certificate of registration
may be appealed to the BLR whose decision on the matter shall be final and inappealable.
(2) The second situation involves a petition for cancellation of certificate of union registration
which is filed directly with the BLR. A decision of the BLR cancelling a union's certificate of

registration may be appealed to the Secretary of Labor whose decision on the mater shall be
final and inappealable.
Respondent Acting Labor Secretary's ruling that the BLR's decision upholding the validity of
respondent union's certificate of registration is final and inappealable is thus in accordance with
aforequoted Omnibus Rules because the petition for cancellation of union registration was filed by
petitioner with a Regional Office, specifically, with the Regional Office of the BLR, National Capital
Region (vide pp. 1-2, Annex 2, Petition). The cancellation proceedings initiated by petitioner before the
Regional Office is covered by the first situation contemplated by Sections 7 to 9 of the Omnibus Rules.
Hence, an appeal from the decision of the Regional Office may be brought to the BLR whose decision
on the matter is final and inappealable.
In the instant case, upon the cancellation of respondent union's registration by the Regional Office,
respondent union incorrectly appealed said decision to the Office of the Secretary. Nevertheless, this
situation was immediately rectified when the Office of the Secretary motu propio referred the appeal to
the BLR. However, upon reversal by the BLR of the decision of the Regional Office cancelling
registration, petitioner should have immediately elevated the BLR decision to the Supreme Court in a
special civil action for certiorari under Rule 65 of the Rules of Court.
Under Sections 3 and 4, Rule VIII of Book V of the Rules and Regulations implementing the Labor
Code, as amended by Department Order No. 09, petitions for cancellation of union registration may be
filed with a Regional office, or directly, with the Bureau of Labor Relations. Appeals from the decision
of a Regional Director may be filed with the BLR Director whose decision shall be final and executory.
On the other hand, appeals from the decisions of the BLR may be filed with the Secretary of Labor
whose decision shall be final and executory.
Thus, under Sections 7 to 9 of the Omnibus Rules and under Sections 3 and 4 of the Implementing
Rules (as amended by Department Order No. 09), the finality of the BLR decision is dependent on
whether or not the petition for cancellation was filed with the BLR directly. Under said Rules, if the
petition for cancellation is directly filed with the BLR, its decision cancelling union registration is not yet
final and executory as it may still be appealed to the Office of the Secretary. However, if the petition for
cancellation was filed with the Regional Office, the decision of the BLR resolving an appeal of the
decision of said Regional Office is final and executory.18
It is clear then that the Secretary of Labor and Employment did not commit grave abuse of discretion in not
acting an ABBOTT's appeal. The decisions 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 of the Rules of Court.19
Even if we relaxed the rule and consider the present petition as a petition for certiorari not only of the letter of
the Secretary of Labor and Employment but also of the decision of the Bureau of the Labor Relations which
overruled the order of cancellation of ALEU's certificate registration, the same would still be dismissable for
being time-barred. Under Sec. 4 of Rule 65 of the 1997 Revised Rules of Court the special civil action
for certiorari should be instituted within a period of sixty (60) days from notice of the judgment, order or
resolution sought to be assailed. ABBOTT received the decision of the Bureau of Labor Relations on 14 April
1997 and the order denying its motion for reconsideration of the said decision on 16 July 1997. The present
petition was only filed on 28 November 1997, after the lapse of more than four months. Thus, for failure to

avail of the correct remedy within the period provided by law, the decision of the Bureau of Labor Relations
has become final and executory.
WHEREFORE, the petition is DENIED. The challenged order in BLR-A-10-25-96 of the Secretary of Labor
and Employment embodied in its 19 September letter is hereby AFFIRMED.
G.R. No. 178296

January 12, 2011

THE HERITAGE HOTEL MANILA, acting through its owner, GRAND PLAZA HOTEL
CORPORATION,Petitioner,
vs.
NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED INDUSTRIES-HERITAGE
HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC), Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari of the Decision 1 of the Court of Appeals (CA) dated May
30, 2005 and Resolution dated June 4, 2007. The assailed Decision affirmed the dismissal of a petition for
cancellation of union registration filed by petitioner, Grand Plaza Hotel Corporation, owner of Heritage Hotel
Manila, against respondent, National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage
Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC), a labor organization of the supervisory employees
of Heritage Hotel Manila.
The case stemmed from the following antecedents:
On October 11, 1995, respondent filed with the Department of Labor and Employment-National Capital
Region (DOLE-NCR) a petition for certification election.2 The Med-Arbiter granted the petition on February 14,
1996 and ordered the holding of a certification election. 3 On appeal, the DOLE Secretary, in a Resolution
dated August 15, 1996, affirmed the Med-Arbiters order and remanded the case to the Med-Arbiter for the
holding of a preelection conference on February 26, 1997. Petitioner filed a motion for reconsideration, but it
was denied on September 23, 1996.
The preelection conference was not held as initially scheduled; it was held a year later, or on February 20,
1998. Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of
respondent. The latter agreed to suspend proceedings until further notice. The preelection conference
resumed on January 29, 2000.
Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations
(BLR) its annual financial report for several years and the list of its members since it filed its registration
papers in 1995. Consequently, on May 19, 2000, petitioner filed a Petition for Cancellation of Registration of
respondent, on the ground of the non-submission of the said documents. Petitioner prayed that respondents
Certificate of Creation of Local/Chapter be cancelled and its name be deleted from the list of legitimate labor
organizations. It further requested the suspension of the certification election proceedings. 4

On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or Suspend the [Certification
Election] Proceedings,5 arguing that the dismissal or suspension of the proceedings is warranted, considering
that the legitimacy of respondent is seriously being challenged in the petition for cancellation of registration.
Petitioner maintained that the resolution of the issue of whether respondent is a legitimate labor organization
is crucial to the issue of whether it may exercise rights of a legitimate labor organization, which include the
right to be certified as the bargaining agent of the covered employees.
Nevertheless, the certification election pushed through on June 23, 2000. Respondent emerged as the
winner.6
On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of Election Results and
Winner,7stating that the certification election held on June 23, 2000 was an exercise in futility because, once
respondents registration is cancelled, it would no longer be entitled to be certified as the exclusive bargaining
agent of the supervisory employees. Petitioner also claimed that some of respondents members were not
qualified to join the union because they were either confidential employees or managerial employees. It then
prayed that the certification of the election results and winner be deferred until the petition for cancellation
shall have been resolved, and that respondents members who held confidential or managerial positions be
excluded from the supervisors bargaining unit.
Meanwhile, respondent filed its Answer8 to the petition for the cancellation of its registration. It averred that the
petition was filed primarily to delay the conduct of the certification election, the respondents certification as
the exclusive bargaining representative of the supervisory employees, and the commencement of bargaining
negotiations. Respondent prayed for the dismissal of the petition for the following reasons: (a) petitioner is
estopped from questioning respondents status as a legitimate labor organization as it had already recognized
respondent as such during the preelection conferences; (b) petitioner is not the party-in-interest, as the union
members are the ones who would be disadvantaged by the non-submission of financial reports; (c) it has
already complied with the reportorial requirements, having submitted its financial statements for 1996, 1997,
1998, and 1999, its updated list of officers, and its list of members for the years 1995, 1996, 1997, 1998, and
1999; (d) the petition is already moot and academic, considering that the certification election had already
been held, and the members had manifested their will to be represented by respondent.
Citing National Union of Bank Employees v. Minister of Labor, et al.9 and Samahan ng Manggagawa sa
Pacific Plastic v. Hon. Laguesma,10 the Med-Arbiter held that the pendency of a petition for cancellation of
registration is not a bar to the holding of a certification election. Thus, in an Order 11 dated January 26, 2001,
the Med-Arbiter dismissed petitioners protest, and certified respondent as the sole and exclusive bargaining
agent of all supervisory employees.
Petitioner subsequently appealed the said Order to the DOLE Secretary. 12 The appeal was later dismissed by
DOLE Secretary Patricia A. Sto. Tomas (DOLE Secretary Sto. Tomas) in the Resolution of August 21,
2002.13Petitioner moved for reconsideration, but the motion was also denied. 14
In the meantime, Regional Director Alex E. Maraan (Regional Director Maraan) of DOLE-NCR finally resolved
the petition for cancellation of registration. While finding that respondent had indeed failed to file financial
reports and the list of its members for several years, he, nonetheless, denied the petition, ratiocinating that
freedom of association and the employees right to self-organization are more substantive considerations. He
took into account the fact that respondent won the certification election and that it had already been certified
as the exclusive bargaining agent of the supervisory employees. In view of the foregoing, Regional Director

Maraanwhile emphasizing that the non-compliance with the law is not viewed with favorconsidered the
belated submission of the annual financial reports and the list of members as sufficient compliance thereof
and considered them as having been submitted on time. The dispositive portion of the decision 15 dated
December 29, 2001 reads:
WHEREFORE, premises considered, the instant petition to delist the National Union of Workers in the Hotel,
Restaurant and Allied Industries-Heritage Hotel Manila Supervisors Chapter from the roll of legitimate labor
organizations is hereby DENIED.
SO ORDERED.16
Aggrieved, petitioner appealed the decision to the BLR.17 BLR Director Hans Leo Cacdac inhibited himself
from the case because he had been a former counsel of respondent.
In view of Director Cacdacs inhibition, DOLE Secretary Sto. Tomas took cognizance of the appeal. In a
resolution18 dated February 21, 2003, she dismissed the appeal, holding that the constitutionally guaranteed
freedom of association and right of workers to self-organization outweighed respondents noncompliance with
the statutory requirements to maintain its status as a legitimate labor organization.
Petitioner filed a motion for reconsideration,19 but the motion was likewise denied in a resolution20 dated May
30, 2003. DOLE Secretary Sto. Tomas admitted that it was the BLR which had jurisdiction over the appeal,
but she pointed out that the BLR Director had voluntarily inhibited himself from the case because he used to
appear as counsel for respondent. In order to maintain the integrity of the decision and of the BLR, she
therefore accepted the motion to inhibit and took cognizance of the appeal.
Petitioner filed a petition for certiorari with the CA, raising the issue of whether the DOLE Secretary acted with
grave abuse of discretion in taking cognizance of the appeal and affirming the dismissal of its petition for
cancellation of respondents registration.
In a Decision dated May 30, 2005, the CA denied the petition. The CA opined that the DOLE Secretary may
legally assume jurisdiction over an appeal from the decision of the Regional Director in the event that the
Director of the BLR inhibits himself from the case. According to the CA, in the absence of the BLR Director,
there is no person more competent to resolve the appeal than the DOLE Secretary. The CA brushed aside the
allegation of bias and partiality on the part of the DOLE Secretary, considering that such allegation was not
supported by any evidence.
The CA also found that the DOLE Secretary did not commit grave abuse of discretion when she affirmed the
dismissal of the petition for cancellation of respondents registration as a labor organization. Echoing the
DOLE Secretary, the CA held that the requirements of registration of labor organizations are an exercise of
the overriding police power of the State, designed for the protection of workers against potential abuse by the
union that recruits them. These requirements, the CA opined, should not be exploited to work against the
workers constitutionally protected right to self-organization.
Petitioner filed a motion for reconsideration, invoking this Courts ruling in Abbott Labs. Phils., Inc. v. Abbott
Labs. Employees Union,21 which categorically declared that the DOLE Secretary has no authority to review
the decision of the Regional Director in a petition for cancellation of union registration, and Section 4, 22 Rule
VIII, Book V of the Omnibus Rules Implementing the Labor Code.

In its Resolution23 dated June 4, 2007, the CA denied petitioners motion, stating that the BLR Directors
inhibition from the case was a peculiarity not present in the Abbott case, and that such inhibition justified the
assumption of jurisdiction by the DOLE Secretary.
In this petition, petitioner argues that:
I.
The Court of Appeals seriously erred in ruling that the Labor Secretary properly assumed jurisdiction over
Petitioners appeal of the Regional Directors Decision in the Cancellation Petition x x x.
A. Jurisdiction is conferred only by law. The Labor Secretary had no jurisdiction to review the decision
of the Regional Director in a petition for cancellation. Such jurisdiction is conferred by law to the BLR.
B. The unilateral inhibition by the BLR Director cannot justify the Labor Secretarys exercise of
jurisdiction over the Appeal.
C. The Labor Secretarys assumption of jurisdiction over the Appeal without notice violated Petitioners
right to due process.
II.
The Court of Appeals gravely erred in affirming the dismissal of the Cancellation Petition despite the
mandatory and unequivocal provisions of the Labor Code and its Implementing Rules. 24
The petition has no merit.
Jurisdiction to review the decision of the Regional Director lies with the BLR. This is clearly provided in the
Implementing Rules of the Labor Code and enunciated by the Court in Abbott. But as pointed out by the CA,
the present case involves a peculiar circumstance that was not present or covered by the ruling in Abbott. In
this case, the BLR Director inhibited himself from the case because he was a former counsel of respondent.
Who, then, shall resolve the case in his place?
In Abbott, the appeal from the Regional Directors decision was directly filed with the Office of the DOLE
Secretary, and we ruled that the latter has no appellate jurisdiction. In the instant case, the appeal was filed by
petitioner with the BLR, which, undisputedly, acquired jurisdiction over the case. Once jurisdiction is acquired
by the court, it remains with it until the full termination of the case. 25
Thus, jurisdiction remained with the BLR despite the BLR Directors inhibition. When the DOLE Secretary
resolved the appeal, she merely stepped into the shoes of the BLR Director and performed a function that the
latter could not himself perform. She did so pursuant to her power of supervision and control over the BLR. 26
Expounding on the extent of the power of control, the Court, in Araneta, et al. v. Hon. M. Gatmaitan, et
al.,27pronounced that, if a certain power or authority is vested by law upon the Department Secretary, then
such power or authority may be exercised directly by the President, who exercises supervision and control
over the departments. This principle was incorporated in the Administrative Code of 1987, which defines
"supervision and control" as including the authority to act directly whenever a specific function is entrusted by

law or regulation to a subordinate.28 Applying the foregoing to the present case, it is clear that the DOLE
Secretary, as the person exercising the power of supervision and control over the BLR, has the authority to
directly exercise the quasi-judicial function entrusted by law to the BLR Director.
It is true that the power of control and supervision does not give the Department Secretary unbridled authority
to take over the functions of his or her subordinate. Such authority is subject to certain guidelines which are
stated in Book IV, Chapter 8, Section 39(1)(a) of the Administrative Code of 1987. 29 However, in the present
case, the DOLE Secretarys act of taking over the function of the BLR Director was warranted and
necessitated by the latters inhibition from the case and the objective to "maintain the integrity of the decision,
as well as the Bureau itself."30
Petitioner insists that the BLR Directors subordinates should have resolved the appeal, citing the provision
under the Administrative Code of 1987 which states, "in case of the absence or disability of the head of a
bureau or office, his duties shall be performed by the assistant head." 31 The provision clearly does not apply
considering that the BLR Director was neither absent nor suffering from any disability; he remained as head of
the BLR. Thus, to dispel any suspicion of bias, the DOLE Secretary opted to resolve the appeal herself.
Petitioner was not denied the right to due process when it was not notified in advance of the BLR Directors
inhibition and the DOLE Secretarys assumption of the case. Well-settled is the rule that the essence of due
process is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to
explain ones side or an opportunity to seek a reconsideration of the action or ruling complained
of.32 Petitioner had the opportunity to question the BLR Directors inhibition and the DOLE Secretarys taking
cognizance of the case when it filed a motion for reconsideration of the latters decision. It would be well to
state that a critical component of due process is a hearing before an impartial and disinterested tribunal, for all
the elements of due process, like notice and hearing, would be meaningless if the ultimate decision would
come from a partial and biased judge.33 It was precisely to ensure a fair trial that moved the BLR Director to
inhibit himself from the case and the DOLE Secretary to take over his function.
Petitioner also insists that respondents registration as a legitimate labor union should be cancelled. Petitioner
posits that once it is determined that a ground enumerated in Article 239 of the Labor Code is present,
cancellation of registration should follow; it becomes the ministerial duty of the Regional Director to cancel the
registration of the labor organization, hence, the use of the word "shall." Petitioner points out that the Regional
Director has admitted in its decision that respondent failed to submit the required documents for a number of
years; therefore, cancellation of its registration should have followed as a matter of course.
We are not persuaded.
Articles 238 and 239 of the Labor Code read:
ART. 238. CANCELLATION OF REGISTRATION; APPEAL
The certificate of registration of any legitimate labor organization, whether national or local, shall be canceled
by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets
one or more of the requirements herein prescribed.34
ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION.

The following shall constitute grounds for cancellation of union registration:

xxxx
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every
fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself;
xxxx
(i) Failure to submit list of individual members to the Bureau once a year or whenever required by the
Bureau.35
These provisions give the Regional Director ample discretion in dealing with a petition for cancellation of a
unions registration, particularly, determining whether the union still meets the requirements prescribed by law.
It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient
compliance with the requirements of the law. After all, the law requires the labor organization to submit the
annual financial report and list of members in order to verify if it is still viable and financially sustainable as an
organization so as to protect the employer and employees from fraudulent or fly-by-night unions. With the
submission of the required documents by respondent, the purpose of the law has been achieved, though
belatedly.
We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the
petition for cancellation of respondents registration. The union members and, in fact, all the employees
belonging to the appropriate bargaining unit should not be deprived of a bargaining agent, merely because of
the negligence of the union officers who were responsible for the submission of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union
registration, lest they be accused of interfering with union activities. In resolving the petition, consideration
must be taken of the fundamental rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights
of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities.
Labor authorities should bear in mind that registration confers upon a union the status of legitimacy and the
concomitant right and privileges granted by law to a legitimate labor organization, particularly the right to
participate in or ask for certification election in a bargaining unit. 36 Thus, the cancellation of a certificate of
registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it
loses - as a rule - its rights under the Labor Code.37
It is worth mentioning that the Labor Codes provisions on cancellation of union registration and on reportorial
requirements have been recently amended by Republic Act (R.A.) No. 9481, An Act Strengthening the
Workers Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As
Amended, Otherwise Known as the Labor Code of the Philippines, which lapsed into law on May 25, 2007 and
became effective on June 14, 2007. The amendment sought to strengthen the workers right to selforganization and enhance the Philippines compliance with its international obligations as embodied in the
International Labour Organization (ILO) Convention No. 87,38 pertaining to the non-dissolution of workers
organizations by administrative authority.39 Thus, R.A. No. 9481 amended Article 239 to read:
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.
R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:
ART. 242-A. Reportorial Requirements.The following are documents required to be submitted to the Bureau
by the legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification of the constitution and by-laws within thirty (30) days from
adoption or ratification of the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from
election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for cancellation of union registration but
shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate
penalty.
ILO Convention No. 87, which we have ratified in 1953, provides that "workers and employers organizations
shall not be liable to be dissolved or suspended by administrative authority." The ILO has expressed the
opinion that the cancellation of union registration by the registrar of labor unions, which in our case is the BLR,
is tantamount to dissolution of the organization by administrative authority when such measure would give rise
to the loss of legal personality of the union or loss of advantages necessary for it to carry out its activities,
which is true in our jurisdiction. Although the ILO has allowed such measure to be taken, provided that judicial
safeguards are in place, i.e., the right to appeal to a judicial body, it has nonetheless reminded its members
that dissolution of a union, and cancellation of registration for that matter, involve serious consequences for
occupational representation. It has, therefore, deemed it preferable if such actions were to be taken only as a
last resort and after exhausting other possibilities with less serious effects on the organization.40
The aforesaid amendments and the ILOs opinion on this matter serve to fortify our ruling in this case. We
therefore quote with approval the DOLE Secretarys rationale for denying the petition, thus:
It is undisputed that appellee failed to submit its annual financial reports and list of individual members in
accordance with Article 239 of the Labor Code. However, the existence of this ground should not necessarily
lead to the cancellation of union registration. Article 239 recognizes the regulatory authority of the State to

exact compliance with reporting requirements. Yet there is more at stake in this case than merely monitoring
union activities and requiring periodic documentation thereof.
The more substantive considerations involve the constitutionally guaranteed freedom of association and right
of workers to self-organization. Also involved is the public policy to promote free trade unionism and collective
bargaining as instruments of industrial peace and democracy.1avvphi1 An overly stringent interpretation of the
statute governing cancellation of union registration without regard to surrounding circumstances cannot be
allowed. Otherwise, it would lead to an unconstitutional application of the statute and emasculation of public
policy objectives. Worse, it can render nugatory the protection to labor and social justice clauses that
pervades the Constitution and the Labor Code.
Moreover, submission of the required documents is the duty of the officers of the union. It would be
unreasonable for this Office to order the cancellation of the union and penalize the entire union membership
on the basis of the negligence of its officers. In National Union of Bank Employees vs. Minister of Labor, L53406, 14 December 1981, 110 SCRA 296, the Supreme Court ruled:
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to selforganization finds general and specific constitutional guarantees. x x x Such constitutional guarantees should
not be lightly taken much less nullified. A healthy respect for the freedom of association demands that acts
imputable to officers or members be not easily visited with capital punishments against the association itself."
At any rate, we note that on 19 May 2000, appellee had submitted its financial statement for the years 19961999. With this submission, appellee has substantially complied with its duty to submit its financial report for
the said period. To rule differently would be to preclude the union, after having failed to meet its periodic
obligations promptly, from taking appropriate measures to correct its omissions. For the record, we do not
view with favor appellees late submission. Punctuality on the part of the union and its officers could have
prevented this petition.41
WHEREFORE, premises considered, the Court of Appeals Decision dated May 30, 2005 and Resolution
dated June 4, 2007 are AFFIRMED.
G.R. No. 169754

February 23, 2011

LEGEND INTERNATIONAL RESORTS LIMITED, Petitioner,

vs.
KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT), Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the September 18, 2003 Decision of the Court of Appeals in CAG.R. SP No. 72848 which found no grave abuse of discretion on the part of the Office of the Secretary of the
Department of Labor and Employment (DOLE) which ruled in favor of Kilusang Manggagawa ng Legenda
(KML). Also assailed is the September 14, 2005 Resolution denying petitioners motion for reconsideration.
Factual Antecedents

On June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando, Pampanga, a Petition
for Certification Election1 docketed as Case No. RO300-0106-RU-001. KML alleged that it is a legitimate labor
organization of the rank and file employees of Legend International Resorts Limited (LEGEND). KML claimed
that it was issued its Certificate of Registration No. RO300-0105-UR-002 by the DOLE on May 18, 2001.
LEGEND moved to dismiss2 the petition alleging that KML is not a legitimate labor organization because its
membership is a mixture of rank and file and supervisory employees in violation of Article 245 of the Labor
Code. LEGEND also claimed that KML committed acts of fraud and misrepresentation when it made it appear
that certain employees attended its general membership meeting on April 5, 2001 when in reality some of
them were either at work; have already resigned as of March 2001; or were abroad.
In its Comment,3 KML argued that even if 41 of its members are indeed supervisory employees and therefore
excluded from its membership, the certification election could still proceed because the required number of the
total rank and file employees necessary for certification purposes is still sustained. KML also claimed that its
legitimacy as a labor union could not be collaterally attacked in the certification election proceedings but only
through a separate and independent action for cancellation of union registration. Finally, as to the alleged acts
of misrepresentation, KML asserted that LEGEND failed to substantiate its claim.
Ruling of the Med-Arbiter
On September 20, 2001, the Med-Arbiter4 rendered judgment5 dismissing for lack of merit the petition for
certification election. The Med-Arbiter found that indeed there were several supervisory employees in KMLs
membership. Since Article 245 of the Labor Code expressly prohibits supervisory employees from joining the
union of rank and file employees, the Med-Arbiter concluded that KML is not a legitimate labor organization.
KML was also found to have fraudulently procured its registration certificate by misrepresenting that 70
employees were among those who attended its organizational meeting on April 5, 2001 when in fact they were
either at work or elsewhere.
KML thus appealed to the Office of the Secretary of the DOLE.
Ruling of the Office of the Secretary of DOLE
On May 22, 2002, the Office of the Secretary of DOLE rendered its Decision 6 granting KMLs appeal thereby
reversing and setting aside the Med-Arbiters Decision. The Office of the Secretary of DOLE held that KMLs
legitimacy as a union could not be collaterally attacked, citing Section 5, 7 Rule V of Department Order No. 9,
series of 1997.
The Office of the Secretary of DOLE also opined that Article 245 of the Labor Code merely provides for the
prohibition on managerial employees to form or join a union and the ineligibility of supervisors to join the union
of the rank and file employees and vice versa. It declared that any violation of the provision of Article 245 does
not ipso facto render the existence of the labor organization illegal. Moreover, it held that Section 11,
paragraph II of Rule XI which provides for the grounds for dismissal of a petition for certification election does
not include mixed membership in one union.
The dispositive portion of the Office of the Secretary of DOLEs Decision reads:

WHEREFORE, the appeal is hereby GRANTED and the order of the Med-Arbiter dated 20 September 2001 is
REVERSED and SET ASIDE.
Accordingly, let the entire record of the case be remanded to the regional office of origin for the immediate
conduct of the certification election, subject to the usual pre-election conference, among the rank and file
employees of LEGEND INTERNATIONAL RESORTS LIMITED with the following choices:
1. KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT); and
2. NO UNION.
Pursuant to Rule XI, Section II.1 of D.O. No. 9, the employer is hereby directed to submit to the office of origin,
within ten days from receipt of the decision, the certified list of employees in the bargaining unit for the last
three (3) months prior to the issuance of this decision.
SO DECIDED.8
LEGEND filed its Motion for Reconsideration9 reiterating its earlier arguments. It also alleged that on August
24, 2001, it filed a Petition10 for Cancellation of Union Registration of KML docketed as Case No. RO3000108-CP-001 which was granted11 by the DOLE Regional Office No. III of San Fernando, Pampanga in its
Decision12 dated November 7, 2001.
In a Resolution13 dated August 20, 2002, the Office of the Secretary of DOLE denied LEGENDs motion for
reconsideration. It opined that Section 11, paragraph II(a), Rule XI of Department Order No. 9 requires a final
order of cancellation before a petition for certification election may be dismissed on the ground of lack of legal
personality. Besides, it noted that the November 7, 2001 Decision of DOLE Regional Office No. III of San
Fernando, Pampanga in Case No. RO300-0108-CP-001 was reversed by the Bureau of Labor Relations in a
Decision dated March 26, 2002.
Ruling of the Court of Appeals
Undeterred, LEGEND filed a Petition for Certiorari14 with the Court of Appeals docketed as CA-G.R. SP No.
72848. LEGEND alleged that the Office of the Secretary of DOLE gravely abused its discretion in reversing
and setting aside the Decision of the Med-Arbiter despite substantial and overwhelming evidence against
KML.
For its part, KML alleged that the Decision dated March 26, 2002 of the Bureau of Labor Relations in Case
No. RO300-0108-CP-001 denying LEGENDs petition for cancellation and upholding KMLs legitimacy as a
labor organization has already become final and executory, entry of judgment having been made on August
21, 2002.15
The Office of the Secretary of DOLE also filed its Comment16 asserting that KMLs legitimacy cannot be
attacked collaterally. Finally, the Office of the Secretary of DOLE stressed that LEGEND has no legal
personality to participate in the certification election proceedings.
On September 18, 2003, the Court of Appeals rendered its Decision 17 finding no grave abuse of discretion on
the part of the Office of the Secretary of DOLE. The appellate court held that the issue on the legitimacy of

KML as a labor organization has already been settled with finality in Case No. RO300-0108-CP-001. The
March 26, 2002 Decision of the Bureau of Labor Relations upholding the legitimacy of KML as a labor
organization had long become final and executory for failure of LEGEND to appeal the same. Thus, having
already been settled that KML is a legitimate labor organization, the latter could properly file a petition for
certification election. There was nothing left for the Office of the Secretary of DOLE to do but to order the
holding of such certification election.
The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing, and finding that no grave abuse of discretion amounting to lack or
excess of jurisdiction has been committed by the Department of Labor and Employment, the assailed May 22,
2002 Decision and August 20, 2002 Resolution in Case No. RO300-106-RU-001 are UPHELD and
AFFIRMED. The instant petition is DENIED due course and, accordingly, DISMISSED for lack of merit. 18
LEGEND filed a Motion for Reconsideration19 alleging, among others, that it has appealed to the Court of
Appeals the March 26, 2002 Decision in Case No. RO300-0108-CP-001 denying its petition for cancellation
and that it is still pending resolution.
On September 14, 2005, the appellate court denied LEGENDs motion for reconsideration.
Hence, this Petition for Review on Certiorari raising the lone assignment of error, viz:
WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN THE
APPLICATION OF LAW IN DENYING THE PETITIONERS PETITION FOR CERTIORARI.20
Petitioners Arguments
LEGEND submits that the Court of Appeals grievously erred in ruling that the March 26, 2002 Decision
denying its Petition for Cancellation of KMLs registration has already become final and executory. It asserts
that it has seasonably filed a Petition for Certiorari21 before the CA docketed as CA-G.R. SP No. 72659
assailing said Decision. In fact, on June 30, 2005, the Court of Appeals granted the petition, reversed the
March 26, 2002 Decision of the Bureau of Labor Relations and reinstated the November 7, 2001 Decision of
the DOLE Regional Office III ordering the cancellation of KMLs registration.
Finally, LEGEND posits that the cancellation of KMLs certificate of registration should retroact to the time of
its issuance.22 It thus claims that the petition for certification election and all of KMLs activities should be
nullified because it has no legal personality to file the same, much less demand collective bargaining with
LEGEND.23
LEGEND thus prays that the September 20, 2001 Decision of the Med-Arbiter dismissing KMLs petition for
certification election be reinstated.24
Respondents Arguments
In its Comment filed before this Court dated March 21, 2006, KML insists that the Decision of the Bureau of
Labor Relations upholding its legitimacy as a labor organization has already attained finality 25 hence there was

no more hindrance to the holding of a certification election. Moreover, it claims that the instant petition has
become moot because the certification election sought to be prevented had already been conducted.
Our Ruling
The petition is partly meritorious.
LEGEND has timely appealed the March 26, 2002 Decision of the Bureau of Labor Relations to the Court of
Appeals.
We cannot understand why the Court of Appeals totally disregarded LEGENDs allegation in its Motion for
Reconsideration that the March 26, 2002 Decision of the Bureau of Labor Relations has not yet attained
finality considering that it has timely appealed the same to the Court of Appeals and which at that time is still
pending resolution. The Court of Appeals never bothered to look into this allegation and instead dismissed
outright LEGENDs motion for reconsideration. By doing so, the Court of Appeals in effect maintained its
earlier ruling that the March 26, 2002 Decision of the Bureau of Labor Relations upholding the legitimacy of
KML as a labor organization has long become final and executory for failure of LEGEND to appeal the same.
This is inaccurate. Records show that (in the cancellation of registration case) LEGEND has timely filed on
September 6, 2002 a petition for certiorari26 before the Court of Appeals which was docketed as CA-G.R. SP
No. 72659 assailing the March 26, 2002 Decision of the Bureau of Labor Relations. In fact, KML received a
copy of said petition on September 10, 200227 and has filed its Comment thereto on December 2,
2002.28 Thus, we find it quite interesting for KML to claim in its Comment (in the certification petition case)
before this Court dated March 21, 200629 that the Bureau of Labor Relations Decision in the petition for
cancellation case has already attained finality. Even in its Memorandum30 dated March 13, 2007 filed before
us, KML is still insisting that the Bureau of Labor Relations Decision has become final and executory.
Our perusal of the records shows that on June 30, 2005, the Court of Appeals rendered its Decision 31 in CAG.R. SP No. 72659 reversing the March 26, 2002 Decision of the Bureau of Labor Relations and reinstating
the November 7, 2001 Decision of the Med-Arbiter which canceled the certificate of registration of KML. 32 On
September 30, 2005, KMLs motion for reconsideration was denied for lack of merit. 33 On November 25, 2005,
KML filed its Petition for Review on Certiorari34 before this Court which was docketed as G.R. No. 169972.
However, the same was denied in a Resolution35 dated February 13, 2006 for having been filed out of time.
KML moved for reconsideration but it was denied with finality in a Resolution 36 dated June 7, 2006. Thereafter,
the said Decision canceling the certificate of registration of KML as a labor organization became final and
executory and entry of judgment was made on July 18, 2006.37
The cancellation of KMLs certificate of registration should not retroact to the time of its issuance.
Notwithstanding the finality of the Decision canceling the certificate of registration of KML, we cannot
subscribe to LEGENDs proposition that the cancellation of KMLs certificate of registration should retroact to
the time of its issuance. LEGEND claims that KMLs petition for certification election filed during the pendency
of the petition for cancellation and its demand to enter into collective bargaining agreement with LEGEND
should be dismissed due to KMLs lack of legal personality.
This issue is not new or novel. In Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor,38 we already
ruled that:

Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial question to the
petition for certification election, the following ruling in the case of Association of the Court of Appeals
Employees (ACAE) v. Hon. Pura Ferrer-Calleja, x x x is in point, to wit:
x x x It is well-settled rule that a certification proceedings is not a litigation in the sense that the term is
ordinarily understood, but an investigation of a non-adversarial and fact finding character. (Associated Labor
Unions (ALU) v. Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v.
NLRC, 183 SCRA 451 [1990]. Thus, the technical rules of evidence do not apply if the decision to grant it
proceeds from an examination of the sufficiency of the petition as well as a careful look into the arguments
contained in the position papers and other documents.
At any rate, the Court applies the established rule correctly followed by the public respondent that an order to
hold a certification election is proper despite the pendency of the petition for cancellation of the registration
certificate of the respondent union. The rationale for this is that at the time the respondent union filed its
petition, it still had the legal personality to perform such act absent an order directing the
cancellation.39 (Emphasis supplied.)
In Capitol Medical Center, Inc. v. Hon. Trajano,40 we also held that "the pendency of a petition for cancellation
of union registration does not preclude collective bargaining."41 Citing the Secretary of Labor, we held viz:
That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion
the mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a
petition to cancel the unions registration certificate x x x more so should the collective bargaining process
continue despite its pendency. 42 (Emphasis supplied.)
In Association of Court of Appeals Employees v. Ferrer-Calleja,43 this Court was tasked to resolve the issue of
whether "the certification proceedings should be suspended pending [the petitioners] petition for the
cancellation of union registration of the UCECA44."45 The Court resolved the issue in the negative holding that
"an order to hold a certification election is proper despite the pendency of the petition for cancellation of the
registration certificate of the respondent union. The rationale for this is that at the time the respondent union
filed its petition, it still had the legal personality to perform such act absent an order directing a
cancellation."46 We reiterated this view in Samahan ng Manggagawa sa Pacific Plastic v. Hon.
Laguesma47 where we declared that "a certification election can be conducted despite pendency of a petition
to cancel the union registration certificate. For the fact is that at the time the respondent union filed its petition
for certification, it still had the legal personality to perform such act absent an order directing its
cancellation."48
Based on the foregoing jurisprudence, it is clear that a certification election may be conducted during the
pendency of the cancellation proceedings. This is because at the time the petition for certification was filed,
the petitioning union is presumed to possess the legal personality to file the same. There is therefore no basis
for LEGENDs assertion that the cancellation of KMLs certificate of registration should retroact to the time of
its issuance or that it effectively nullified all of KMLs activities, including its filing of the petition for certification
election and its demand to collectively bargain.
The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification
election.

We agree with the ruling of the Office of the Secretary of DOLE that the legitimacy of the legal personality of
KML cannot be collaterally attacked in a petition for certification election proceeding. This is in consonance
with our ruling in Laguna Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor
and Employment49 that "such legal personality may not be subject to a collateral attack but only through a
separate action instituted particularly for the purpose of assailing it." 50 We further held therein that:
This is categorically prescribed by Section 5, Rule V of the Implementing Rules of Book V, which states as
follows:
SEC. 5.51 Effect of registration. The labor organization or workers association shall be deemed registered
and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality
cannot thereafter be subject to collateral attack but may be questioned only in an independent petition for
cancellation in accordance with these Rules.
Hence, to raise the issue of the respondent unions legal personality is not proper in this case.1avvphi1 The
pronouncement of the Labor Relations Division Chief, that the respondent union acquired a legal personality x
x x cannot be challenged in a petition for certification election.
The discussion of the Secretary of Labor and Employment on this point is also enlightening, thus:
. . . Section 5, Rule V of D.O. 9 is instructive on the matter. It provides that the legal personality of a union
cannot be the subject of collateral attack in a petition for certification election, but may be questioned only in
an independent petition for cancellation of union registration. This has been the rule since NUBE v. Minister of
Labor, 110 SCRA 274 (1981). What applies in this case is the principle that once a union acquires a legitimate
status as a labor organization, it continues as such until its certificate of registration is cancelled or revoked in
an independent action for cancellation.
Equally important is Section 11, Paragraph II, Rule IX of D.O. 9, which provides for the dismissal of a petition
for certification election based on the lack of legal personality of a labor organization only in the following
instances: (1) appellant is not listed by the Regional Office or the BLR in its registry of legitimate labor
organizations; or (2) appellants legal personality has been revoked or cancelled with finality. Since appellant
is listed in the registry of legitimate labor organizations, and its legitimacy has not been revoked or cancelled
with finality, the granting of its petition for certification election is proper. 52
"[T]he legal personality of a legitimate labor organization x x x cannot be subject to a collateral attack. The law
is very clear on this matter. x x x The Implementing Rules stipulate that a labor organization shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of registration. Once a
certificate of registration is issued to a union, its legal personality cannot be subject to a collateral attack. In
may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V,
Book V of the Implementing Rules."53
WHEREFORE, in view of the foregoing, the petition is PARTLY GRANTED. The Decision of the Court of
Appeals dated September 18, 2003 in CA-G.R. SP No. 72848 insofar as it affirms the May 22, 2002 Decision
and August 20, 2002 Resolution of the Office of the Secretary of Department of Labor and Employment
is AFFIRMED. The Decision of the Court of Appeals insofar as it declares that the March 26, 2002 Decision of
the Bureau of Labor Relations in Case No. RO300-0108-CP-001 upholding that the legitimacy of KML as a

labor organization has long become final and executory for failure of LEGEND to appeal the same, is
REVERSED and SET ASIDE.
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. RO3000001-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 YEUs 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 Pinedas 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) Pinedas 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 YEUs
organization; and (6) 50 YEU members executed aSama-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 pagoorganisa 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.
6. Malinaw na ginagawa ng kompanya ang lahat ng paraan upang hadlangan ang aming karapatan sa pagoorganisa 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 YEUs 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 paragraph 11 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) Pinedas 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) Calmas 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) Davids affidavit was only filed before the BLR when YTPI filed its motion for reconsideration of
the BLRs 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 BLRs 12 March 2001
Resolution; (9) Villanueva and Bognot were not signatories to YEUs organizational documents; (10)
cancellation of union registration must be done with great caution; (11) YTPI, in filing the petition for
revocation of YEUs 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 Pinedas handwritten statement, wherein he made references to at
least 2 meetings he had attended during which he had signed the organizational documents, than to Pinedas
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
pangalawangmeeting graveyard din ako, pinapirma ako doon sa siyam (9) na pirasong papel noong umagang
pag-uwi namin. x x x
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 petitioners 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 Calmas 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, YEUs 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
Davids earliersinumpaang salaysay, whereby he attested to his attendance at the organizational meeting and
to his election thereat as vice president.

As to the inclusion of Pinedas signature in the organizational documents, the BLR Director correctly ruled that
evidence to prove the participation of YEU in the failure to delete Pinedas 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 Tontons 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 respondents 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
Whether YEU committed fraud and misrepresentation in failing to remove Pinedas signature from the list of
employees who supported YEUs 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 employers 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 Directors 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--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 YEUs
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 Pinedas 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 unions 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)
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.
G.R. No. 100898 July 5, 1993

ALEX FERRER, RAFAEL FERRER HENRY DIAZ, DOMINGO BANCOLITA, GIL DE GUZMAN, and
FEDERATION OF DEMOCRATIC LABOR UNIONS, (FEDLU), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HUI KAM CHANG (In his capacity
as General Manager of Occidental Foundry Corporation), OCCIDENTAL FOUNDRY CORPORATION,
MACEDONIO S. VELASCO (In his capacity as representative of the Federation of Free Workers),
GENARO CAPITLE, JESUS TUMAGAN, ERNESTO BARROGA, PEDRO LLENA, GODOFREDO
PACHECO, MARCELINO CASTILLO, GEORGE IGNAS, PIO DOMINGO, and JAIME
BAYNADO, respondents.
Genrosa P. Jacinto and Raymundo D. Mallilin for private respondents.

MELO, J.:
The petition for certiorari before us seeks to annul and set aside: (a) the decision dated June 20, 1991 of the
Second Division of the National Labor Relations Commission (NLRC) (Penned by Commissioner Rustico L.
Diokno and concurred in by Presiding Commissioner Edna Bonto-Perez and Commissioner Domingo H.
Zapanta) which affirmed in toto the decision of April 5, 1990 of Labor Arbiter Eduardo J. Carpio dismissing the
complaint for illegal dismissal and unfair labor practice on the ground that both the company and the union
merely complied with the collective bargaining agreement provision sanctioning the termination of any
employee who fails to retain membership in good standing with the union; and (b) the NLRC resolution
denying the motion for the reconsideration of said decision (NLRC NCR Case No. 00-10-04855-89).
Petitioners were regular and permanent employees of the Occidental Foundry Corporation (OFC) in
Malanday, Valenzuela, Metro Manila which was under the management of Hui Kam Chang. As piece workers,
petitioners' earnings ranged from P110 to P140 a day. They had been in the employ of OFC for about ten
years at the time of their dismissal in 1989 (p. 38, Rollo).
On January 5, 1989, the Samahang Manggagawa ng Occidental Foundry Corporation-FFW (SAMAHAN) and
the OFC entered into a collective bargaining agreement (CBA) which would be effective for the three-year
period between October 1, 1988 and September 30, 1991 (Memorandum for OFC and Hui Kam Chang, p.
6, Rollo; p. 551). Article II thereof provides for a union security clause thus:
Sec. 1 The company agrees that all permanent and regular factory workers in the company
who are members in good standing of the union or who thereafter may become members, shall
as a condition of continued employment, maintain their membership in the union in good
standing for the duration of the agreement.
xxx xxx xxx
Sec. 3 The parties agree that failure to retain membership in good standing with the UNION
shall be ground for the operation of paragraph 1 hereof and the dismissal by the company of
the aforesaid employee upon written request by the union. The aforesaid request shall be
accompanied by a verified carbon original of the Board of (sic) Resolution by the UNION signed
by at least a majority of its officers/directors. (p. 562, Rollo.)

On May 6, 1989, petitioner Alex Ferrer and the SAMAHAN, filed in the Department of Labor and Employment
(DOLE), a complaint for the expulsion from SAMAHAN of the following officers: Genaro Capitle (president),
Jesus Tumagan (vice-president), Godofredo Pacheco (auditor), and Marcelino Pacheco (board member)
(Case No. NCR-00-M-89-11-01). The complaint was founded on said officers' alleged inattentiveness to the
economic demands of the workers. However, on September 4, 1989, petitioners Diaz and Alex Ferrer
withdrew the petition (p. 590, Rollo).
On September 10, 1989, petitioners conducted a special election of officers of the SAMAHAN (pp. 205 &
583,Rollo). Said election was, however, later questioned by the FFW. Nonetheless, the elected set of officers
tried to dissuade the OFC from remitting union dues to the officers led by Capitle who were allied with the
FFW. Later, however, Romulo Erlano, one of the officers elected at the special election, manifested to the
DOLE that he was no longer objecting to the remittance of union dues to the officers led by Capitle.
Petitioners' move to stage a strike based on economic demands was also later disowned by members of the
SAMAHAN.
The intraunion squabble came to a head when, on September 11, 1989, a resolution expelling petitioners from
the SAMAHAN was issued by the aforesaid union officials headed by Capitle, together with board members
George Ignas, Pio Domingo, and Jaime Baynado (pp. 286 & 599, Rollo). The following day, Capitle sent OFC
the following letter:
12
Septe
mber
1989
Mr. Hui Kam Chang
General Manager
Malanday, Valenzuela
Metro Manila
Dear Mr. Chang:
In compliance with Article II, Sec. 3 of the Union Security Clause as enunciated in our
Collective Bargaining Agreement, I would like you to dismiss the following employees on the
ground of failure to retain membership in good standing:
1. Alex Ferrer
2. Gil de Guzman
3. Henry Diaz
4. Domingo Bancolita
5. Rafael Ferrer, Jr.
Attached herewith is the verified carbon original of the Board Resolution of the union signed by
the majority of its officers/directors.
Thank you very much.

Very truly yours,

(Sgd.)
GENARO CAPITLE
President
(p. 66, Rollo.)
Although petitioners received this letter weeks after its date, it appears that on that same date, they had
learned about their dismissal from employment as shown by the letter also dated September 13, 1989 which
they sent the Federation of Democratic Labor Unions (FEDLU). They volunteered therein to be admitted as
members of the FEDLU and requested that they be represented ("katawanin") by said federation before the
DOLE in the complaint which they intended to file against the union (SAMAHAN), the FFW and the company
for illegal dismissal, reinstatement, and other benefits in accordance with law
(p. 74, Rollo).
Thereafter, on various dates, petitioners sent individual letters to Hui Kam Chang professing innocence of the
charges levelled against them by the SAMAHAN and the FFW and pleading that they be reinstated (pp. 6973,Rollo). Their letters appear to have elicited no response.
Thus, contending that their dismissal was without cause and in utter disregard of their right to due process of
law, petitioners, through the FEDLU, filed a complaint for illegal dismissal and unfair labor practice before the
NLRC against Hui Kam Chang, OFC, Macedonio S. Velasco (as representative of the FFW) the FFW, and the
SAMAHAN officers headed by Capitle (p. 75, Rollo).
In due course, after the case was ventilated through position papers and other documents, the labor arbiter
rendered a decision dismissing petitioners' complaint (pp. 79-89, Rollo). He found that in dismissing
petitioners, OFC was "merely complying with the mandatory provisions of the CBA the law between it and
the union." He added:
To register compliance with the said covenant, all that is necessary is a written request of the
union requesting dismissal of the employees who have failed to retain membership in good
standing with the union. The matter or question, therefore of determining why and how did
complainants fail to retain membership in good standing is not for the company to inquire via
formal investigation. By having the request of the union, a legal presumption that the request
was born out of a formal inquiry by the union that subject employees failed to exist. This means
generally that where a valid closed shop or similar agreement is in force with respect to a
particular bargaining unit as in the case a quo, the employer shall refuse to employ any person
unless he is a member of the majority union and the employer shall dismiss employees who fail
to retain their membership in the majority union. This must be deemed a just cause recognized
by law and jurisprudence. The effect is discrimination to encourage membership in other
unions. (pp. 86-87, Rollo.)
Hence, the labor arbiter concluded, the dismissal of petitioners was an exercise of legitimate management
prerogative which cannot be considered as an unfair labor practice. On whether the SAMAHAN and the FFW
could be held liable for illegal dismissal and unfair labor practice, the arbiter opined that since there was no
employer-employee relationship between petitioners and respondent unions, the complaint against the latter

has no factual and legal bases, because petitioners "should not have confused expulsion from membership in
the union as one and the same incident to their subsequent employment termination."
Consequently, petitioners appealed to the NLRC on the grounds that there was prima facie evidence of abuse
of discretion on the part of the labor arbiter and that he committed serious errors in his findings of facts.
On June 20, 1991, the NLRC rendered the herein questioned decision affirming in toto the decision of the
arbiter. Petitioners motion for the reconsideration of the NLRC decision having been denied, they resorted to
the instant petition for certiorari which presents the issue of wether or not respondent Commision gravely
abused its discretion in affirming the decision of the labor arbiter which is allegedly in defiance of the
elementary principles of procedural due process as the petitioners were summarily dismissed from
employment without an investigation having been conducted by the OFC on the veracity of the allegation of
the SAMAHAN-FFW that they violated the CBA.
A CBA is the law between the company and the union and compliance therewith is mandated by the express
policy to give protection to labor. Said policy should be given paramount consideration unless otherwise
provided for by law (Meycauayan College vs. Drilon, 185 SCRA 50 [1990]. A CBA provision for a closed shop
is a valid form of union security and it is not a restriction on the right or freedom of association guaranteed by
the Constitution (Lirag Textile Mill, Inc. vs. Blanco, 109 SCRA 87 [1981]. However, in the implementation of
the provisions of the CBA, both parties thereto should see to it that no right is violated or impaired. In the case
at bar, while it is true that the CBA between OFC and the SAMAHAN provided for the dismissal of employees
who have not maintained their membership in the union, the manner in which the dismissal was enforced left
much to be desired in terms of respect for the right of petitioners to procedural due process.
In the first place, the union has a specific provision for the permanent or temporary "expulsion" of its erring
members in its constitution and by-laws ("saligang batas at alituntunin"). Under the heading membership and
removal ("pag-aanib at pagtitiwalag"), it states:
Sec. 4. Ang sinumang kasapi ay maaring itwalag (sic) ng Samahan pangsamantala o tuluyan
sa pamamagitan (sic) ng tatlo't ikaapat () na bahagi ng dami ng bilang ng Pamunuang
Tagapagpaganap. Pagkaraan lamang sa pandinig sa kanyang kaso. Batay sa sumusunod:
(a) Sinumang gumawa ng mga bagay bagay na labag at lihis sa patakaran ng Samahan.
(b) Sinumang gumawa ng mga bagay na maaaring ikabuwag ng Samahan.
(c) Hindi paghuhulog ng butaw sa loob ng tatlong buwan na walang sakit o Doctor's Certificate.
(d) Hindi pagbibigay ng abuloy na itinatadhana ng Samahan.
(e) Sinumang kasapi na natanggal sa kapisanan at gustong, sumapi uli ay magpapanibago ng
bilang, mula sa taon ng kanyang pagsapi uli sa Samahan. (Emphasis supplied; Ibid., p. 177).
No hearing ("pandinig") was ever conducted by the SAMAHAN to look into petitioners' explanation of their
moves to oust the union leadership under Capitle, or their subsequent affiliation with FEDLU. While it is true
that petitioners' actions might have precipitated divisiveness and, later, showed disloyalty to the union, still,
the SAMAHAN should have observed its own constitution and by-laws by giving petitioners an opportunity to

air their side and explain their moves. If, after an investigation the petitioners were found to have violated
union rules, then and only then should they be subjected to proper disciplinary measures.
Here lies the distinction between the facts of this case and that of Cario vs. NLRC (185 SCRA 177 [1990])
upon which the Solicitor General heavily relies in supporting the stand of petitioners. In Cario, the erring
union official was given the chance to answer the complaints against him before an investigating committee
created for that purpose. On the other, hand, herein petitioners were not given even one opportunity to explain
their side in the controversy. This procedural lapse should not have been overlooked considering the union
security provision of the CBA.
What aggravated the situation in this case is the fact that OFC itself took for granted that the SAMAHAN had
actually conducted an inquiry and considered the CBA provision for the closed shop as self-operating that,
upon receipt of a notice that some members of the SAMAHAN had failed to maintain their membership in
good standing in accordance with the CBA, it summarily dismissed petitioners. To make matters worse, the
labor arbiter and the NLRC shared the same view in holding that "(t)he matter or question, therefore, of
determining why and how did complainants fail to retain membership in good standing is not for the company
to inquire via formal investigation" (pp. 87 & 135, Rollo). In this regard, the following words of my learned
brother, Mr. Justice Feliciano, in the Resolution in Cario are apt:
4. Turning now to the involvement of the Company in the dismissal of petitioner Cario, we note
that the Company upon being formally advised in writing of the expulsion of petitioner Cario
from the Union, in turn simply issued a termination letter to Cario, the termination being made
effective the very next day. We believe that the Company should have given petitioner Cario
an opportunity to explain his side of the controversy with the Union. Notwithstanding the
Union's Security Clause in the CBA, the Company should have reasonably satisfied itself by its
own inquiry that the Union had not been merely acting arbitrarily and capriciously in impeaching
and expelling petitioner Cario . . .
xxx xxx xxx
5. We conclude that the Company had failed to accord to petitioner Cario the latter's right to
procedural due process. The right of an employee to be informed of the charges against him
and to reasonable opportunity to present his side in a controversy with either the Company or
his own Union, is not wiped away by a Union Security Clause or a Union Shop Clause in a
CBA. An employee is entitled to be protected not only from a company which disregards his
rights but also from his own Union the leadership of which could yield to the temptation of swift
and arbitrary expulsion from membership and hence dismissal from his job. (pp. 186 & 189.)
The need for a company investigation is founded on the consistent ruling of this Court that the twin
requirements of notice and hearing which are essential elements of due process must be met in employmenttermination cases. The employee concerned must be notified of the employer's intent to dismiss him and of
the reason or reasons for the proposed dismissal. The hearing affords the employee an opportunity to answer
the charge or charges against him and to defend himself therefrom before dismissal is effected (Kwikway
Engineering Works vs. NLRC, 195 SCRA 526 [1991]; Salaw vs. NLRC, 202 SCRA 7 [1991]). Observance to
the letter of company rules on investigation of an employee about to be dismissed is not mandatory. It is
enough that there is due notice and hearing before a decision to dismiss is made (Mendoza vs. NLRC, 195
SCRA 606 (1991]). But even if no hearing is conducted, the requirement of due process would have been met

where a chance to explain a party's side of the controversy had been accorded him (Philippine Airlines, Inc.
vs. NLRC, 198 SCRA 748 [1991]).
If an employee may be considered illegally dismissed because he was not accorded fair investigation
(Hellenic Philippine Shipping vs. Siete, 195 SCRA 179 (1991]), the more reason there is to strike down as an
inexcusable and disdainful rejection of due process a situation where there is no investigation at all (See:
Colegio del Sto. Nio vs. NLRC, 197 SCRA 611 [1991]; Artex Development Co., Inc. vs. NLRC, 187 SCRA
611 [1990]). The need for the observance of an employee's right to procedural due process in termination
cases cannot be overemphasized. After all, one's employment, profession, trade, or calling is a "property right"
and the wrongful interference therewith gives rise to an actionable wrong (Callanta vs. Carnation Philippines,
Inc., 145 SCRA 268 (1986]). Verily, a man's right to his labor is property within the meaning of constitutional
guarantees which he cannot be deprived of without due process (Batangas Laguna Tayabas Bus Co. vs.
Court of Appeals, 71 SCRA 470 [1976]).
While the law recognizes the right of an employer to dismiss employees in warranted cases, it frowns upon
arbitrariness as when employees are not accorded due process (Tan, Jr. vs. NLRC, 183 SCRA 651 [1990]).
Thus, the prerogatives of the OFC to dismiss petitioners should not have been whimsically done for it unduly
exposed itself to a charge of unfair labor practice for dismissing petitioners in line with the closed shop
provision of the CBA, without a proper hearing (Tropical Hut Employees' Union-CGW vs. Tropical Hut Food
Market, Inc., 181 SCRA 173 [1990]; citing Binalbagan-Isabela Sugar Co., Inc. (BISCOM) vs. Philippine
Association of Free Labor Unions (PAFLU), 8 SCRA 700 [1983]). Neither can the manner of dismissal be
considered within the ambit of managerial prerogatives, for while termination of employment is traditionally
considered a management prerogative, it is not an absolute prerogative subject as it is to limitations founded
in law, the CBA, or general principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA
758 [1990]).
Under Rule XIV, Sections 2, 5, and 6 of the rules implementing Batas Pambansa Blg. 130, the OFC and the
SAMAHAN should solidarity indemnify petitioners for the violation of their right to procedural due process
(Great Pacific Life Assurance Corporation vs. NLRC, 187 SCRA 694[1990], citing Wenphil vs. NLRC, 170
SCRA 69 [1989], Cario vs. NLRC, supra). However, such penalty may be imposed only where the
termination of employment is justified and not when the dismissal is illegal as in this case where the damages
are in the form of back wages.
As earlier discussed, petitioners' alleged act of sowing disunity among the members of the SAMAHAN could
have been ventilated and threshed out through a grievance procedure within the union itself. But resort to
such procedure was not pursued. What actually happened in this case was that some members, including
petitioners, tried to unseat the SAMAHAN leadership headed by Capitle due to the latter's alleged inattention
to petitioners' demands for the implementation of the P25-wage increase which took effect on July 1, 1989.
The intraunion controversy was such that petitioners even requested the FFW to intervene to facilitate the
enforcement of the said wage increase (Petition, p. 54; p. 55, Rollo).
Petitioners sought the help of the FEDLU only after they had learned of the termination of their employment
upon the recommendation of Capitle. Their alleged application with federations other than the FFW (Labor
Arbiter's Decision, pp. 4-5; pp. 82-83, Rollo) can hardly be considered as disloyalty to the SAMAHAN, nor may
the filing of such applications denote that petitioners failed to maintain in good standing their membership in
the SAMAHAN. The SAMAHAN is a different entity from FFW, the federation to which it belonged. Neither

may it, be inferred that petitioners sought disaffiliation from the FFW for petitioners had not formed a union
distinct from that of the SAMAHAN. Parenthetically, the right of a local union to disaffiliate from a federation in
the absence of any provision in the federation's constitution preventing disaffiliation of a local union is legal
(People's Industrial and Commercial Employees and Worker's Org. (FFW) vs. People's Industrial and
Commercial Corp., 112 SCRA 440 (1982]). Such right is consistent with the constitutional guarantee of
freedom of association (Tropical Hut Employees Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA
173 [1990]).
Hence, while petitioners' act of holding a special election to oust Capitle, et al. may be considered as an act of
sowing disunity among the SAMAHAN members, and, perhaps, disloyalty to the union officials, which could
have been dealt with by the union as a disciplinary matter, it certainly cannot be considered as constituting
disloyalty to the union. Faced with a SAMAHAN leadership which they had tried to remove as officials, it was
but a natural act of self-preservation that petitioners fled to the arms of the FEDLU after the union and the
OFC had tried to terminate their employment. Petitioners should not be made accountable for such an act.
With the passage of Republic Act No. 6715 which took effect on March 21, 1989, Article 279 of the Labor
Code was amended to read as follows:
Security of Tenure. In cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by this Title. An employee
who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.
and as implemented by Section 3, Rule 8 of the 1990 New Rules of Procedure of the National Labor Relations
Commission, it would seem that the Mercury Drug Rule (Mercury Drug Co., Inc. vs. Court of Industrial
Relations, 56 SCRA 694 [1974]) which limited the award of back wages of illegally dismissed workers to three
(3) years "without deduction or qualification" to obviate the need for further proceedings in the course of
execution, is no longer applicable.
A legally dismissed employee may now be paid his back wages, allowances, and other benefits for the entire
period he was out of work subject to the rule enunciated before the Mercury Drug Rule, which is that the
employer may, however, deduct any amount which the employee may have earned during the period of his
illegal termination (East Asiatic Company, Ltd. vs. Court of Industrial Relations, 40 SCRA 521 [1971]).
Computation of full back wages and presentation of proof as to income earned elsewhere by the illegally
dismissed employee after his termination and before actual reinstatement should be ventilated in the
execution proceedings before the Labor Arbiter concordant with Section 3, Rule 8 of the 1990 new Rules of
Procedure of the National Labor Relations Commission.
Inasmuch as we have ascertained in the text of this discourse that the OFC whimsically dismissed petitioners
without proper hearing and has thus opened OFC to a charge of unfair labor practice, it ineluctably follows that
petitioners can receive their back wages computed from the moment their compensation was withheld after
their dismissal in 1989 up to the date of actual reinstatement. In such a scenario, the award of back wages
can extend beyond the 3-year period fixed by the Mercury Drug Rule depending, of course, on when the
employer will reinstate the employees.

It may appear that Article 279 of the Labor Code, as amended by Republic Act No. 6715, has made the
employer bear a heavier burden than that pronounced in the Mercury Drug Rule, but perhaps Republic Act
No. 6715 was enacted precisely for the employer to realize that the employee must be immediately restored to
his former position, and to impress the idea that immediate reinstatement is tantamount to a cost-saving
measure in terms of overhead expense plus incremental productivity to the company which lies in the hands
of the employer.
WHEREFORE, the decision appealed from is hereby SET ASIDE and private respondents are hereby ordered
to reinstate petitioners to their former or equivalent positions without loss of seniority rights and with full back
wages, inclusive of allowances and other benefits or their monetary equivalent, pursuant to Article 279 of the
Labor Code, as amended by Republic Act No. 6715.
G.R. No. 85333 February 26, 1990
CARMELITO L. PALACOL, ET AL., petitioners,
vs.
PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, MANILA CCBPI SALES FORCE
UNION, and COCA-COLA BOTTLERS (PHILIPPINES), INC., respondents.
Wellington B. Lachica for petitioners.
Adolpho M. Guerzon for respondent Union.

GANCAYCO, J.:
Can a special assessment be validly deducted by a labor union from the lump-sum pay of its members,
granted under a collective bargaining agreement (CBA), notwithstanding a subsequent disauthorization of the
same by a majority of the union members? This is the main issue for resolution in the instant petition for
certiorari.
As gleaned from the records of the case, the pertinent facts are as follows:
On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as the Union),
as the collective bargaining agent of all regular salesmen, regular helpers, and relief helpers of the Manila
Plant and Metro Manila Sales Office of the respondent Coca-Cola Bottlers (Philippines), Inc. (hereinafter
referred to as the Company) concluded a new collective bargaining agreement with the latter. 1 Among the
compensation benefits granted to the employees was a general salary increase to be given in lump sum
including recomputation of actual commissions earned based on the new rates of increase.
On the same day, the president of the Union submitted to the Company the ratification by the union members
of the new CBA and authorization for the Company to deduct union dues equivalent to P10.00 every payday
or P20.00 every month and, in addition, 10% by way of special assessment, from the CBA lump-sum pay
granted to the union members. The last one among the aforementioned is the subject of the instant petition.

As embodied in the Board Resolution of the Union dated September 29, 1987, the purpose of the special
assessment sought to be levied is "to put up a cooperative and credit union; purchase vehicles and other
items needed for the benefit of the officers and the general membership; and for the payment for services
rendered by union officers, consultants and others." 2 There was also an additional proviso stating that the
"matter of allocation ... shall be at the discretion of our incumbent Union President."
This "Authorization and CBA Ratification" was obtained by the Union through a secret referendum held in
separate local membership meetings on various dates. 3 The total membership of the Union was about 800.
Of this number, 672 members originally authorized the 10% special assessment, while 173 opposed the
same. 4
Subsequently however, one hundred seventy (170) members of the Union submitted documents to the
Company stating that although they have ratified the new CBA, they are withdrawing or disauthorizing the
deduction of any amount from their CBA lump sum. Later, 185 other union members submitted similar
documents expressing the same intent. These members, numbering 355 in all (170 + 185), added to the
original oppositors of 173, turned the tide in favor of disauthorization for the special assessment, with a total of
528 objectors and a remainder of 272 supporters. 5
On account of the above-mentioned disauthorization, the Company, being in a quandary as to whom to remit
the payment of the questioned amount, filed an action for interpleader with the Bureau of Labor Relations in
order to resolve the conflicting claims of the parties concerned. Petitioners, who are regular rank-and-file
employees of the Company and bona fide members of the Union, filed a motion/complaint for intervention
therein in two groups of 161 and 94, respectively. They claimed to be among those union members who either
did not sign any individual written authorization, or having signed one, subsequently withdrew or retracted
their signatures therefrom.
Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to Article 222(b) of
the Labor Code. Article 222(b) provides as follows:
ART. 222. Appearances and Fees.
xxx xxx xxx
(b) No attorney's fees, negotiation fees or similar charges of any kind arising
from any collective bargaining negotiations or conclusion of the collective
agreement shall be imposed on any individual member of the contracting union;
Provided, however, that attorney's fees may be charged against union funds in
an amount to be agreed upon by the parties. Any contract, agreement or
arrangement of any sort to the contrary shall be null and void.
On the other hand, Article 241(o) mandates that:
ART. 241. Rights and conditions of membership in a labor organization.
xxx xxx xxx

(o) Other than for mandatory activities under the Code, no special assessments,
attorney's fees, negotiation fees or any other extraordinary fees may be checked
off from any amount due to an employee without an individual written
authorization duly signed by the employee. The authorization should specifically
state the amount, purpose and beneficiary of the deduction;
As authority for their contention, petitioners cited Galvadores v. Trajano, 6 wherein it was ruled that no checkoffs from any amount due employees may be effected without individual written authorizations duly signed by
the employees specifically stating the amount, purpose, and beneficiary of the deduction.
In its answer, the Union countered that the deductions not only have the popular indorsement and approval of
the general membership, but likewise complied with the legal requirements of Article 241 (n) and (o) of the
Labor Code in that the board resolution of the Union imposing the questioned special assessment had been
duly approved in a general membership meeting and that the collection of a special fund for labor education
and research is mandated.
Article 241(n) of the Labor Code states that
ART. 241. Rights and conditions of membership in a labor organization.
xxx xxx xxx
(n) No special assessment or other extraordinary fees may be levied upon the members of a
labor organization unless authorized by a written resolution of a majority of all the members at a
general membership meeting duly called for the purpose. The secretary of the organization
shall record the minutes of the meeting including the list of all members present, the votes cast,
the purpose of the special assessment or fees and the recipient of such assessments or fees.
The record shall be attested to by the president;
Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February 15, 1988 whereby he
directed the Company to remit the amount it had kept in trust directly to the rank-and-file personnel without
delay.
On appeal to the Bureau of Labor Relations, however, the order of the Med-Arbiter was reversed and set
aside by the respondent-Director in a resolution dated August 19, 1988 upholding the claim of the Union that
the special assessment is authorized under Article 241 (n) of the Labor Code, and that the Union has
complied with the requirements therein.
Hence, the instant petition.
Petitioners allege that the respondent-Director committed a grave abuse of discretion amounting to lack or
excess of jurisdiction when she held Article 241 (n) of the Labor Code to be the applicable provision instead of
Article 222(b) in relation to Article 241(o) of the same law.
According to petitioners, a cursory examination and comparison of the two provisions of Article 241 reveals
that paragraph (n) cannot prevail over paragraph (o). The reason advanced is that a special assessment is not

a matter of major policy affecting the entire union membership but is one which concerns the individual rights
of union members.
Petitioners further assert that assuming arguendo that Article 241(n) should prevail over paragraph (o), the
Union has nevertheless failed to comply with the procedure to legitimize the questioned special assessment
by: (1) presenting mere minutes of local membership meetings instead of a written resolution; (2) failing to call
a general membership meeting; (3) having the minutes of three (3) local membership meetings recorded by a
union director, and not by the union secretary as required; (4) failing to have the list of members present
included in the minutes of the meetings; and (5) failing to present a record of the votes cast. 7 Petitioners
concluded their argument by citingGalvadores.
After a careful review of the records of this case, We are convinced that the deduction of the 10% special
assessment by the Union was not made in accordance with the requirements provided by law.
Petitioners are correct in citing the ruling of this Court in Galvadores which is applicable to the instant case.
The principle "that employees are protected by law from unwarranted practices that diminish their
compensation without their known edge and consent" 8 is in accord with the constitutional principle of the
State affording full protection to labor. 9
The respondent-Union brushed aside the defects pointed out by petitioners in the manner of compliance with
the legal requirements as "insignificant technicalities." On the contrary, the failure of the Union to comply
strictly with the requirements set out by the law invalidates the questioned special assessment. Substantial
compliance is not enough in view of the fact that the special assessment will diminish the compensation of the
union members. Their express consent is required, and this consent must be obtained in accordance with the
steps outlined by law, which must be followed to the letter. No shortcuts are allowed.
The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o) of Article 241
apply. Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off" of a special assessment. Both
provisions must be complied with. Under paragraph (n), the Union must submit to the Company a written
resolution of a majority of all the members at a general membership meeting duly called for the purpose. In
addition, the secretary of the organization must record the minutes of the meeting which, in turn, must include,
among others, the list of all the members present as well as the votes cast.
As earlier outlined by petitioners, the Union obviously failed to comply with the requirements of paragraph (n).
It held local membership meetings on separate occasions, on different dates and at various venues, contrary
to the express requirement that there must be a general membership meeting. The contention of the Union
that "the local membership meetings are precisely the very general meetings required by law" 10 is untenable
because the law would not have specified a general membership meeting had the legislative intent been to
allow local meetings in lieu of the latter.
It submitted only minutes of the local membership meetings when what is required is a written resolution
adopted at the general meeting. Worse still, the minutes of three of those local meetings held were recorded
by a union director and not by the union secretary. The minutes submitted to the Company contained no list of
the members present and no record of the votes cast. Since it is quite evident that the Union did not comply
with the law at every turn, the only conclusion that may be made therefrom is that there was no valid levy of
the special assessment pursuant to paragraph (n) of Article 241 of the Labor Code.

Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in
order that a special assessment may be validly checked-off. Even assuming that the special assessment was
validly levied pursuant to paragraph (n), and granting that individual written authorizations were obtained by
the Union, nevertheless there can be no valid check-off considering that the majority of the union members
had already withdrawn their individual authorizations. A withdrawal of individual authorizations is equivalent to
no authorization at all. Hence, the ruling in Galvadores that "no check-offs from any amounts due employees
may be effected without an individual written authorization signed by the employees ... " is applicable.
The Union points out, however, that said disauthorizations are not valid for being collective in form, as they
are "mere bunches of randomly procured signatures, under loose sheets of paper." 11 The contention
deserves no merit for the simple reason that the documents containing the disauthorizations have the
signatures of the union members. The Court finds these retractions to be valid. There is nothing in the law
which requires that the disauthorization must be in individual form.
Moreover, it is well-settled that "all doubts in the implementation and interpretation of the provisions of the
Labor Code ... shall be resolved in favor of labor." 12 And as previously stated, labor in this case refers to the
union members, as employees of the Company. Their mere desire to establish a separate bargaining unit,
albeit unproven, cannot be construed against them in relation to the legality of the questioned special
assessment. On the contrary, the same may even be taken to reflect their dissatisfaction with their bargaining
representative, the respondent-Union, as shown by the circumstances of the instant petition, and with good
reason.
The Med-Arbiter correctly ruled in his Order that:
The mandate of the majority rank and file have (sic) to be respected considering they are the
ones directly affected and the realities of the high standards of survival nowadays. To ignore
the mandate of the rank and file would enure to destabilizing industrial peace and harmony
within the rank and file and the employer's fold, which we cannot countenance.
Moreover, it will be recalled that precisely union dues are collected from the union members to
be spent for the purposes alluded to by respondent. There is no reason shown that the regular
union dues being now implemented is not sufficient for the alleged expenses. Furthermore, the
rank and file have spoken in withdrawing their consent to the special assessment, believing that
their regular union dues are adequate for the purposes stated by the respondent. Thus, the
rank and file having spoken and, as we have earlier mentioned, their sentiments should be
respected.
Of the stated purposes of the special assessment, as embodied in the board resolution of the Union, only the
collection of a special fund for labor and education research is mandated, as correctly pointed out by the
Union. The two other purposes, namely, the purchase of vehicles and other items for the benefit of the union
officers and the general membership, and the payment of services rendered by union officers, consultants and
others, should be supported by the regular union dues, there being no showing that the latter are not sufficient
to cover the same.
The last stated purpose is contended by petitioners to fall under the coverage of Article 222 (b) of the Labor
Code. The contention is impressed with merit. Article 222 (b) prohibits attorney's fees, negotiations fees and
similar charges arising out of the conclusion of a collective bargaining agreement from being imposed on any

individual union member. The collection of the special assessment partly for the payment for services
rendered by union officers, consultants and others may not be in the category of "attorney's fees or
negotiations fees." But there is no question that it is an exaction which falls within the category of a "similar
charge," and, therefore, within the coverage of the prohibition in the aforementioned article. There is an
additional proviso giving the Union President unlimited discretion to allocate the proceeds of the special
assessment. Such a proviso may open the door to abuse by the officers of the Union considering that the total
amount of the special assessment is quite considerable P1,027,694.33 collected from those union
members who originally authorized the deduction, and P1,267,863.39 from those who did not authorize the
same, or subsequently retracted their authorizations. 13 The former amount had already been remitted to the
Union, while the latter is being held in trust by the Company.
The Court, therefore, stakes down the questioned special assessment for being a violation of Article 241,
paragraphs (n) and (o), and Article 222 (b) of the Labor Code.
WHEREFORE, the instant petition is hereby GRANTED. The Order of the Director of the Bureau of Labor
Relations dated August 19, 1988 is hereby REVERSED and SET ASIDE, while the order of the Med-Arbiter
dated February 17, 1988 is reinstated, and the respondent Coca-Cola Bottlers (Philippines), Inc. is hereby
ordered to immediately remit the amount of P1,267,863.39 to the respective union members from whom the
said amount was withheld. No pronouncement as to costs. This decision is immediately executory.
G.R. No. 106518 March 11, 1999
ABS-CBN SUPERVISORS EMPLOYEES UNION MEMBERS, petitioner,
vs.
ABS-CBN BROADCASTING CORP., HERBERT RIVERA, ALBERTO BERBON, CINDY MUNOZ, CELSO
JAMBALOS, SALVADOR DE VERA, ARNULFO ALCAZAR, JAKE MADERAZO, GON CARPIO, OSCAR
LANDRITO, FRED GARCIA, CESAR LOPEZ and RUBEN BARRAMEDA, respondents.

PURISIMA, J.:
At bar is a special civil action for Certiorari 1 seeking the reversal of the Order 2 dated July 31, 1992 of public
respondent Department of Labor and Employment Undersecretary Bienvenido E. Laguesma 3 in Case No.
NCR OD-M -90 -07-037.
From the records on hand, it can be gathered, that:
On December 7, 1989, the ABS-CBN Supervisors Employees Union ("the Union"), represented by respondent
Union Officers, and ABS-CBN Broadcasting Corporation ("the Company") signed and concluded a Collective
Bargaining Agreement with the following check-off provision, to wit:
Art. XII The [C]ompany agrees to advance to the Union a sum equivalent to 10% of the sum
total of all the salary increases and signing bonuses granted to the Supervisors under this
collective Bargaining Agreement and upon signing hereof to cover the Union's incidental
expenses, including attorney's fees and representation expenses for its organization and (sic)

preparation and conduct hereof, and such advance shall be deducted from the benefits granted
herein as they accrue.
On September 19, 1990, Petitioners 4 filed with the Bureau of Labor Relations, DOLE-NCR, Quezon City, a
Complaint against the Union Officers 5 and ABS-CBN Broadcasting corporation, praying that (1) the special
assessment of ten percent (10%) of the sum total of all salary increases and signing bonuses granted by
respondent Company to the members of the Union be declared illegal for failure to comply with the Labor
Code, as amended, particularly Article 241, paragraphs (g), (n), and (o); and in utter violation of the
Constitution and By-Laws of the ABS-CBN Supervisors Employees Union; (2) respondent Company be
ordered to suspend further deductions from petitioners' salaries for their shares thereof.
In their Answers, respondent Union Officers and Company prayed for the dismissal of the Complaint for lack
of merit. They argued that the check-off provision is in accordance with law as majority of the Union members
individually executed a written authorization giving the Union officers and the Company a blanket authority to
deduct subject amount.
On January 21, 1991, Med-Arbiter Rasidali C. Abdullah issued the following Order: 6
WHEREFORE, premises considered judgment is hereby rendered:
a) declaring the special assessment of 10% of the sum total of CBA benefits as illegal;
b) ordering respondents union officers to refund to the complainants and other union members
the amount of Five Hundred Thousand Pesos (P500,000.00) advanced by the respondent
Company as part of the 10% sum total of CBA benefits without unnecessary delay;
c) ordering the respondent company to stop and desist from further making advances and
deductions from the union members' salaries their share in the advances already made to the
union;
d) ordering the respondent Company to remit directly to the complainants and other union
members the amount already deducted from the union members' salaries as part of their share
advances already made to the union and which it had kept in trust during the pendency of this
case; and
e) directing the respondents union officers and respondent Company to submit report on the
compliance thereof.
SO ORDERED.
On appeal, respondent DOLE Undersecretary Bienvenido E. Laguesma handed down a Decision 7 on July 1,
1991, disposing as follows:
WHEREFORE, the appeals are hereby denied, the Order of the Med-Arbiter is affirmed en toto.
On July 5, 1991, the aforesaid Decision was received by the respondent Union Officers and respondent
Company. On July 13, 1991, they filed their Motion for Reconsideration stating, inter alia that the questioned

ten percent (10%) special assessment is valid pursuant to the ruling in Bank of the Philippine Islands
Employee Union - ALU vs. NLRC. 8
On July 31, 1992, Undersecretary B. E. Laguesma issued an Order 9; resolving, thus:
WHEREFORE, the Decision dated 01 July 1991 is hereby SET ASIDE, In lieu thereof, a new
one is hereby entered DISMISSING the Complaint/Petition for lack of merit.
Hence, the present petition seeking to annul and set aside the above-cited Order of public respondent
Undersecretary B. E. Laguesma, for being allegedly tainted with grave abuse of discretion amounting to lack
of jurisdiction.
Did the public respondent act with grave abuse of discretion in issuing the challenged Order reversing his own
Decision of July 1,1991? Such is the sole issue posited, which we resolve in the negative. The petition is
unmeritorious.
Petitioners claim 10 that the Decision of the Secretary of Labor and Employment dated July 1, 1991,
affirming in toto the Order of Med-Arbiter Rasidali Abdullah dated January 31, 1991, cannot be a subject of a
motion for reconsideration because it is final and unappealable pursuant to Section 8, Rule VIII, Book V of the
Omnibus Rule Implementing the Labor Code. It is further argued that the only remedy of the respondent Union
Officers' is to file a petition for certiorari with this Court.
Sec. 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code, provides:
The Secretary shall have fifteen (15) calendar days within which to decide the appeal from
receipt of the records of the case. The decision of the Secretary shall be final and inappealable.
[Underscoring supplied]. (Comment, p. 101)
The aforecited provision cannot be construed to mean that the Decision of the public respondent cannot be
reconsidered since the same is reviewable by writ of certiorari under Rule 65 of the Rules of Court. As a rule,
the law requires a motion for reconsideration to enable the public respondent to correct his mistakes, if any. In
Pearl S. Buck Foundation, Inc., vs. NLRC, 11 this Court held:
Hence, the only way by which a labor case may reach the Supreme Court is through a petition
forcertiorari under Rule 65 of the Rules of Court alleging lack or excess of jurisdiction or grave
abuse of discretion. Such petition may be filed within a reasonable time from receipt of the
resolution denying the motion for reconsideration of the NLRC decision. [Emphasis supplied].
Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing
of a motion for reconsideration is a condition sine qua non to afford an opportunity for the correction of
the error or mistake complained of.
So also, considering that a decision of the Secretary of Labor is subject to judicial review only through a
special civil action of certiorari and, as a rule, cannot be resorted to without the aggrieved party having
exhausted administrative remedies through a motion for reconsideration, the aggrieved party, must be allowed
to move for a reconsideration of the same so that he can bring a special civil action for certiorari before the
Supreme Court. 12

Furthermore, it appears that the petitioners filed with the public respondent a Motion for Early
Resolution 13 dated June 24, 1992, averring that private respondents' Motion for Reconsideration did not
contain substantial factual or legal grounds for the reversal of subject decision. Consequently, petitioners are
now estopped from raising the issue sought for resolution. In Alfredo Marquez vs. Secretary of Labor 14 the
Court said:
. . . The active participation of the party against whom the action was brought, coupled with his
failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending,
is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of
the case and will bar said party from later on impugning the court or body's jurisdiction.
What is more, it was only when the public respondent issued the Order adverse to them that the petitioners
raised the question for the first time before this Court. Obviously, it is a patent afterthought which must be
abhorred.
Petitioners also argued that the check-off provision in question is illegal because it was never submitted for
consideration and approval to "all the members at a general membership meeting called for the purpose"; and
further alleged that the formalities mandated by Art. 241, paragraphs (n) and (o) of the Labor Code, as
amended, were not complied with.
"A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the
proper bargaining representative, or on prior authorization from its employees, deducts union dues or agency
fees from the latter's wages and remits them directly to the union." 15 Its desirability in a labor organization is
quite evident. It is assured thereby of continuous funding. As this Court has acknowledged, the system of
check-off is primarily for the benefit of the Union and only indirectly, for the individual employees.
The legal basis of check-off is found in statutes or in contracts. 16 The statutory limitations on check-offs are
found in Article 241, Chapter II, Title IV, Book Five of the Labor Code, which reads:
Rights and conditions of membership in a labor organization The following are the rights and
conditions of membership in a labor organization:
xxx xxx xxx
(g) No officer, agent, or member of a labor organization shall collect any fees, dues, or other
contributions in its behalf to make any disbursement of its money or funds unless he is duly
authorized pursuant to its constitution and by-laws.
xxx xxx xxx
(n) No special assessement or other extraordinary fees may be leavied upon the members of a
labor organization unless authorized by a written resolution of a majority of all the members of a
general membership meeting duly called for the purpose. The secretary of the organization
shall record the minutes of the meeting including the list of all members present, the votes cast,
the purpose of the special assessment or fees and the recipient of such assessment or fees.
The record shall be attested to by the president.

(o) Other than for mandatory activities under the Code, no special assessments, attorney's fees
negotiation fees or any other extraordinary fees may be checked off from any amount due to an
employee without an individual written authorization duly signed by the employee. The
authorization should specifically state the amount, purpose and beneficiary of the deductions.
[Emphasis; supplied]
Art. 241 of the Labor Code, as amended, must be read in relation to Article 222, paragraph (b) of the same
law, which states:
No attorney's fees, negotiation fees or similar charges of any kind arising from collective
bargaining negotiations or conclusion of the collective agreement shall be imposed on any
individual member of the contracting union: Provided, however, that attorney's fees may be
charged against union funds in an amount to be agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the contrary shall be null and void. [Emphasis;
supplied]
And this court elucidated the object and import of the said provision of law in Bank of Philippine Islands
Employees Union - Association Labor Union (BPIEU-ALU) vs. National Labor Relations Commission: 17
The Court reads the afore-cited provision (Article 222 [b] of the Labor Code) as prohibiting the
payment of attorney's fees only when it is effected through forced contributions from the
workers from their own funds as distinguished from the union funds. . . .
Noticeably, Article 241 speaks of three (3) requisites that must be complied with in order that the special
assessment for Union's incidental expenses, attorney's fees and representation expenses, as stipulated in
Article XII of the CBA, be valid and upheld namely: 1) authorization by a written resolution of the majority of all
the members at the general membership meeting duly called for the purpose; (2) secretary's record of the
minutes of the meeting; and (3) individual written authorization for check-off duly signed by the employee
concerned.
After a thorough review of the records on hand, we find that the three (3) requisites for the validity of the ten
percent (10%) special assessment for Union's incidental expenses, attorney's fees and representation
expenses were met.
It can be gleaned that on July 14, 1989, the ABS-CBN Supervisors Employee Union held its general meeting,
whereat it was agreed that a ten percent (10%) special assessment from the total economic package due to
every member would be checked-off to cover expenses for negotiation, other miscellaneous expenses and
attorney's fees. The minutes of the said meeting were recorded by the Union's Secretary, Ma. Carminda M.
Munoz, and noted by its President, Herbert Rivera. 18
On May 24, 1991, said Union held its General Membership Meeting, wherein majority of the members agreed
that "in as much as the Union had already paid Atty. P. Pascual the amount of P500,000.00, the same must
be shared by all the members until this is fully liquidated. 19
Eighty-five (85) members of the same Union executed individual written authorizations for check-off, thus:

Towards that end, I hereby authorize the Management and/or Cashier of ABS-CBN
BROADCASTING CORPORATION to deduct from my salary the sum of P30.00 per month as
my regular union dues and said Management and/or Cashier are further authorize (sic) to
deduct a sum equivalent to10% of all and whatever benefits that will become due to me under
the COLLECTIVE BARGAINING AGREEMENT (CBA) that may be agreed upon by the UNION
and MANAGEMENT and to apply the said sum to the advance that Management will make to
our Union for incidental expenses such as attorney's fees, representations and other
miscellaneous expenses pursuant to Article XII of the proposed CBA. 20
Records do not indicate that the aforesaid check-off authorizations were executed by the eighty-five (85)
Union members under the influence of force or compulsion. There is, then, the presumption that such checkoff authorizations were executed voluntarily by the signatories thereto. Petitioner's contention that the amount
to be deducted is uncertain 21 is not persuasive because the check-off authorization clearly stated that the sum
to be deducted is equivalent to ten percent (10%) of all and whatever benefits may accrue under the CBA. In
other words, although the amount is not fixed, it is determinable.
Petitioners further contend that Article 241 (n) of the Labor Code, as amended, on special assessments,
contemplates a general meeting after the conclusion of the collective bargaining agreement.
Subject Article does not state that the general membership meeting should be called after the conclusion of a
collective bargaining agreement. Even granting ex gratia argumenti that the general meeting should be held
after the conclusion of the CBA, such requirement was complied with since the May 24, 1991 General
Membership Meeting was held after the conclusion of the Collective Bargaining Agreement, which was signed
and concluded on December 7, 1989.
Considering that the three requisites afforesaid for the validity of a special assessment were observed or met,
we uphold the validity of the ten percent (10%) special assessment authorized in Article XII of the CBA.
We also concur in the finding by public respondent that the Bank of the Philippine Islands Employees Union ALU vs. NLRC 22 is apposite in this case. In BPIEU-ALU, the petitioners, impugned the Order of the NLRC,
holding that the validity of the five percent (5%) special assessment for attorney's fees is contrary to Article
222, paragraph (b) of the Labor Code, as amended. The court ratiocinated, thus:
The Court reads the aforecited provision as prohibiting the payment of attorney's fees only
when it is effected through forced contributions from the workers from their own funds as
distinguished from the union funds. The purpose of the provision is to prevent imposition on the
workers of the duty to individually contribute their respective shares in the fee to be paid the
attorney for his services on behalf of the union in its negotiations with the management. . . .
[Emphasis supplied]
However, the public respondent overlooked the fact that in the said case, the deduction of the stipulated five
percent (5%) of the total economic benefits under the new collective bargaining agreement was applied only
to workers who gave their individual signed authorizations. The Court explained:
. . . And significantly, the authorized deductions affected only the workers who adopted and
signed the resolution and who were the only ones from whose benefits the deductions were

made by BPI. No similar deductions were taken from the other workers who did not sign the
resolution and so were not bound by it. [Underscoring; supplied]
While the court also finds merit in the finding by the public respondent that Palacol vs. Ferrer-Calleja 23 is
inapropos in the case under scrutiny, it does not subscribe to public respondent's reasoning
that Palacol should not be retroactively applied to the present case in the interest of justice, equity and
fairplay. 24 The inapplicability of Palacol lies in the fact that it has a different factual milieu from the present
case. In Palacol, the check-off authorization was declared invalid because majority of the Union members had
withdrawn their individual authorizations, to wit:
Paragraph (o) on the other hand requires an individual written authorization duly signed by
every employee in order that special assessment may be validly checked-off. Even assuming
that the special assessment was validly levied pursuant to paragraph (n), and granting that
individual written authorizations were obtained by the Union, nevertheless there can be no valid
check-off considering that the majority of the Union members had already withdrawn their
individual authorizations. A withdrawal of individual authorization is equivalent to no
authorization at all. . . . [Emphasis; supplied]
In this case, majority of the Union members gave their individual written check-off authorizations for
the ten percent (10%) special assessment. And they have never withdrawn their individual written
authorizations for check-off.
There is thus cogent reason to uphold the assailed Order, it appearing from the records of the case that
twenty (20) 25 of the forty-two (42) petitioners executed a Compromise Agreement 26 ratifying the controversial
check-off provision in the CBA.
Premises studiedly considered, we are of the irresistible conclusion and, so find, that the ruling in BPIEU-ALU
vs. NLRC that (1) the prohibition against attorney's fees in Article 222, paragraph (b) of the Labor Code
applies only when the payment of attorney's fees is effected through forced contributions from the workers;
and (2) that no deductions must be taken from the workers who did not sign the check-off authorization,
applies to the case under consideration.
WHEREFORE, the assailed Order, dated July 31, 1992, of DOLE Undersecretary B. E. Laguesma is
AFFIRMED except that no deductions shall be taken from the workers who did not give their individual written
check-off authorization. No pronouncement as to costs.
G.R. No. 157086

February 18, 2013

LEPANTO CONSOLIDATED MINING COMPANY, Petitioner,

vs.
THE LEPANTO CAPATAZ UNION, Respondent.
DECISION
BERSAMIN, J.:

Capatazes are not rank-and-file employees because they perform supervisory functions for the management;
hence, they may form their own union that is separate and distinct from the labor organization of rank-and-file
employees.
The CaseLepanto Consolidated Mining Company (Lepanto) assails the Resolution promulgated on December 18,
2002,1whereby the Court of Appeals (CA) dismissed its petition for certiorari on the ground of its failure to first
file a motion for reconsideration against the decision rendered by the Secretary of the Department of Labor
and Employment (DOLE); and the resolution promulgated on January 31, 2003,2 whereby the CA denied
Lepanto's motion for reconsideration.
Antecedents
As a domestic corporation authorized to engage in large-scale mining, Lepanto operated several mining
claims in Mankayan, Benguet. On May 27, 1998, respondent Lepanto Capataz Union (Union), a labor
organization duly registered with DOLE, filed a petition for consent election with the Industrial Relations
Division of the Cordillera Regional Office (CAR) of DOLE, thereby proposing to represent 139 capatazes of
Lepanto.3
In due course, Lepanto opposed the petition,4 contending that the Union was in reality seeking a certification
election, not a consent election, and would be thereby competing with the Lepanto Employees Union (LEU),
the current collective bargaining agent. Lepanto pointed out that the capatazes were already members of
LEU, the exclusive representative of all rank-and-file employees of its Mine Division.
On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect that
the capatazescould form a separate bargaining unit due to their not being rank-and-file employees,5 viz:
xxxx
We agree with petitioner that its members perform a function totally different from the rank-and-file employees.
The word capataz is defined in Websters Third International Dictionary, 1986 as "a boss", "foreman" and "an
overseer". The employer did not dispute during the hearing that the capatazes indeed take charge of the
implementation of the job orders by supervising and instructing the miners, mackers and other rankand-file workers under them, assess and evaluate their performance, make regular reports and
recommends (sic) new systems and procedure of work, as well as guidelines for the discipline of
employees. As testified to by petitioners president, the capatazes are neither rank-and-file nor
supervisory and, more or less, fall in the middle of their rank. In this respect, we can see that indeed
the capatazes differ from the rank-and-file and can by themselves constitute a separate bargaining
unit.
While it is claimed by the employer that historically, the capatazes have been considered among the rank-andfile and that it is only now that they seek a separate bargaining unit such history of affiliation with the rank-andfile association of LEU cannot totally prevent the capatazes from disaffiliating and organizing themselves
separately. The constitutional right of every worker to self-organization essentially gives him the freedom to
join or not to join an organization of his own choosing.

The fact that petitioner seeks to represent a separate bargaining unit from the rank-and-file employees
represented by the LEU renders the contract bar rule inapplicable. While the collective bargaining agreement
existing between the LEU and the employer covering the latters rank-andfile employee covers likewise the
capatazes, it was testified to and undisputed by the employer that the capatazes did not anymore participate
in the renegotiation and ratification of the new CBA upon expiration of their old one on 16 November 1998.
Their nonparticipation was apparently due to their formation of the new bargaining unit. Thus, while the instant
petition was filed on 27 May 1998, prior to the freedom period, in the interest of justice and in consonance with
the constitutional right of workers to self-organization, the petition can be deemed to have been filed at the
time the 60-day freedom period set in. After all, the petition was still pending and unresolved during this
period.
WHEREFORE, the petition is hereby granted and a certification election among the capataz employees of the
Lepanto Consolidated Mining Company is hereby ordered conducted, subject to the usual preelection and
inclusion/exclusion proceedings, with the following choices:
1.Lepanto Capataz Union; and
2.No Union.
The employer is directed to submit to this office within ten (10) days from receipt hereof a copy of the certified
list of its capataz employees and the payroll covering the said bargaining unit for the last three (3) months
prior to the issuance hereof.
SO DECIDED. 6
Lepanto appealed to the DOLE Secretary.7
On July 12, 2000, then DOLE Undersecretary Rosalinda Dimapilis- Baldoz (Baldoz), acting by authority of the
DOLE Secretary, affirmed the ruling of Med-Arbiter Lontoc,8 pertinently stating as follows:
xxxx
The bargaining unit sought to be represented by the appellee are the capataz employees of the appellant.
There is no other labor organization of capatazes within the employer unit except herein appellant. Thus,
appellant is an unorganized establishment in so far as the bargaining unit of capatazes is concerned. In
accordance with the last paragraph of Section 11, Rule XI, Department Order No. 9 which provides that "in a
petition filed by a legitimate labor organization involving an unorganized establishment, the Med-Arbiter shall,
pursuant to Article 257 of the Code, automatically order the conduct of certification election after determining
that the petition has complied with all requirements under Section 1, 2 and 4 of the same rules and that none
of the grounds for dismissal thereof exists", the order for the conduct of a certification election is proper.
Finally, as to the issue of whether the Med-Arbiter exhibited ignorance of the law when she directed the
conduct of a certification election when appellee prays for the conduct of a consent election, let it be stressed
that appellee seeks to be recognized as the sole and exclusive bargaining representative of all capataz
employees of appellant. There are two modes by which this can be achieved, one is by voluntary recognition
and two, by consent or certification election. Voluntary recognition under Rule X, Department Order No. 9 is a
mode whereby the employer voluntarily recognizes the union as the bargaining representative of all the

members in the bargaining unit sought to be represented. Consent and certification election under Rules XI
and XII of Department Order No. 9 is a mode whereby the members of the bargaining unit decide whether
they want a bargaining representative and if so, who they want it to be. The difference between a consent
election and a certification election is that the conduct of a consent election is agreed upon by the parties to
the petition while the conduct of a certification election is ordered by the Med-Arbiter. In this case, the
appellant withdrew its consent and opposed the conduct of the election. Therefore, the petition necessarily
becomes one of a petition for certification election and the Med-Arbiter was correct in granting the same.9
xxxx
In the ensuing certification election held on November 28, 2000, the Union garnered 109 of the 111 total valid
votes cast.10
On the day of the certification election, however, Lepanto presented an opposition/protest. 11 Hence, on
February 8, 2001, a hearing was held on Lepantos opposition/protest. Although the parties were required in
that hearing to submit their respective position papers, Lepanto later opted not to submit its position
paper,12 and contended that the issues identified during the hearing did not pose any legal issue to be
addressed in a position paper.13
On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered a decision certifying
the Union as the sole and exclusive bargaining agent of all capatazes of Lepanto.14
On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-Ulep to the DOLE Secretary.
By her Resolution dated September 17, 2002,15 DOLE Secretary Patricia A. Sto. Tomas affirmed the decision
dated April 26, 2001, holding and disposing thus:
Appellant accused Med-Arbiter Ulep of grave abuse of discretion amounting to lack of jurisdiction based on
her failure to resolve appellants motion to modify order to submit position papers and on rendering judgment
on the basis only of appellees position paper.
We deny.
Section 5, Rule XXV of Department Order No. 9, otherwise known as the New Rules Implementing Book V of
the Labor Code, states that "in all proceedings at all levels, incidental motions shall not be given due course,
but shall remain as part of the records for whatever they may be worth when the case is decided on the
merits".
Further, the motion to modify order to submit position papers filed by appellant is without merit. Appellant
claimed that the issues over which Med-Arbiter Ulep directed the submission of position papers were: (1)
failure to challenge properly; (2) failure (especially of LEU) to participate actively in the proceedings before the
decision calling for the conduct of certification election; and (3) validity of earlier arguments. According to
appellant, the first issue was for appellee LCU to reply to in its position paper, the second issue was for the
LEU and the third issue for appellant company to explain in their respective position paper. It was the position
of appellant company that unless the parties filed their position paper on each of their respective issues, the
other parties cannot discuss the issues they did not raise in the same position papers and have to await
receipt of the others position paper for their appropriate reply.

Section 9, Rule XI of Department Order No. 9, which is applied with equal force in the disposition of protests
on the conduct of election, states that "the Med-Arbiter shall in the same hearing direct all concerned parties,
including the employer, to simultaneously submit their respective position papers within a non-extendible
period of ten days". The issues as recorded in the minutes of 28 February 2001 hearing before the MedArbiter are clear. The parties, including appellant company were required to submit their respective positions
on whether there was proper challenge of the voters, whether LEU failed to participate in the proceedings, if
so, whether it should be allowed to participate at this belated stage and whether the arguments raised during
the pre-election conferences and in the protests are valid. The parties, including appellant company were
apprised of these issues and they agreed thereto. The minutes of the hearing even contained the statement
that "no order will issue" and that "the parties are informed accordingly". If there is any matter that had to be
clarified, appellant should have clarified the same during the said hearing and refused to file its position paper
simultaneously with LCU and LEU. It appears that appellant did not do so and acquiesced to the filing of its
position paper within fifteen days from the date of said hearing.
Neither is there merit in appellants contention that the Med- Arbiter resolved the protest based solely on
appellee LCUs position paper. Not only did the Med-Arbiter discuss the demerits of appellants motion to
modify order to submit position papers but likewise the demerits of its protest. We do not, however, agree with
the Med-Arbiter that the protest should be dismissed due to appellants failure to challenge the individual
voters during the election. We take note of the minutes of the pre-election conference on 10 November 2000,
thus:
"It was also agreed upon (by union and managements legal officer) that all those listed will be allowed to vote
during the certification election subject to challenge by management on ground that none of them belongs to
the bargaining unit". (Underscoring supplied)
It is therefore, not correct to say that there was no proper challenge made by appellant company. The
challenge was already manifested during the pre-election conference, specifying that all listed voters were
being challenged because they do not belong to the bargaining unit of capatazes. Likewise, the formal protest
filed by appellant company on the day of the election showed its protest to the conduct of the election on the
grounds that (1) none of the names submitted and included (with pay bracket 8 and 9) to vote qualifies as
capataz under the five-point characterization made in 02 May 2000 decision calling for the conduct of
certification election; (2) the characterization made in the 02 May 2000 decision pertains to shift bosses who
constitutes another union, the Lepanto Local Staff Union; and (3) the names listed in the voters list are
members of another union, the Lepanto Employees Union. This constitutes proper challenge to the eligibility
of all the voters named in the list which includes all those who cast their votes. The election officer should
have not canvassed the ballots and allowed the Med-Arbiter to first determine their eligibility.
Notwithstanding the premature canvass of the votes, we note that appellant company failed to support its
grounds for challenge with sufficient evidence for us to determine the validity of its claim. No job description of
the challenged voters was submitted by appellant from which we can verify whether the said voters are indeed
disqualified from the alleged five-point characterization made in the 02 May 2000 decision, either before the
Med-Arbiter or on appeal. Neither was the job description of the shift bosses whom appellant company claims
pertain to the alleged five-point characterization submitted for our perusal. The challenge must perforce fail for
lack of evidence.

As to the alleged membership of appellee LCUs member with another union LEU, the issue has been
resolved in the 02 May 200[0] decision of Med-Arbiter Lontoc which we affirmed on 12 July 2000.
WHEREFORE, the appeal is hereby DENIED for lack of merit and the decision of the Med-Arbiter dated 26
April 2001, certifying Lepanto Capataz Union as the sole and exclusive bargaining agent of all capataz
workers of Lepanto Consolidated Mining Company, is AFFIRMED.
SO RESOLVED.16
Ruling of the CA
Still dissatisfied with the result, but without first filing a motion for reconsideration, Lepanto challenged in the
CA the foregoing decision of the DOLE Secretary through a petition for certiorari.
On December 18, 2002, the CA dismissed Lepantos petition for certiorari, stating in its first assailed
resolution:
Considering that the petitioner failed to file a prior motion for reconsideration of the Decision of the public
respondent before instituting the present petition as mandated by Section 1 of Rule 65 of the 1997 Rules of
Civil Procedure, as amended, the instant "Petition for Certiorari Under Rule 65 with Prayer for Temporary
Restraining Order and Injunction" is hereby DISMISSED.
Well-settled is the rule that the "filing of a petition for certiorari under Rule 65 without first moving for
reconsideration of the assailed resolution generally warrants the petitions outright dismissal. As we
consistently held in numerous cases, a motion for reconsideration by a concerned party is indispensable for it
affords the NLRC an opportunity to rectify errors or mistakes it might have committed before resort to the
courts can be had.
It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate remedy in
the ordinary course of law against acts of public respondents. Here, the plain and adequate remedy expressly
provided by law was a motion for reconsideration of the impugned resolution, based on palpable or patent
errors, to be made under oath and filed within ten (10) days from receipt of the questioned resolution of the
NLRC, a procedure which is jurisdictional. Further, it should be stressed that without a motion for
reconsideration seasonably filed within the ten-day reglementary period, the questioned order, resolution or
decision of NLRC, becomes final and executory after ten (10) calendar days from receipt
thereof." (Association of Trade Unions (ATU), Rodolfo Monteclaro and Edgar Juesan vs. Hon.
Commissioners Oscar N. Abella, Musib N. Buat, Leon Gonzaga, Jr., Algon Engineering Construction
Corp., Alex Gonzales and Editha Yap. 323 SCRA 50).
SO ORDERED.17
Lepanto moved to reconsider the dismissal, but the CA denied its motion for reconsideration through the
second assailed resolution.18
Issues
Hence, this appeal by Lepanto based on the following errors, namely:

I
THE COURT OF APPEALS ERRED IN SUMMARILY DISMISSING THE PETITION FOR
CERTIORARI ON THE GROUND THAT NO PRIOR MOTION FOR RECONSIDERATION WAS
FILED. THE DECISION OF THE SECRETARY BEING FINAL AND EXECUTORY, A MOTION FOR
RECONSIDERATION WAS NOT AN AVAILABLE REMEDY FOR PETITIONER.
II
ON THE MERITS, THE SECRETARY OF LABOR ACTED WITHOUT OR IN EXCESS OF
JURISDICTION, [O]R WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN ISSUNG THE DECISION DATED SEPTEMBER 17, 2002, WHEN SHE
DELIBERATELY IGNORED THE FACTS AND RULED IN FAVOR OF THE RESPONDENT UNION,
DESPITE HER OWN FINDING THAT THERE HAD BEEN A PREMATURE CANVASS OF VOTES. 19
Lepanto argues that a motion for reconsideration was not an available remedy due to the decision of the
DOLE Secretary being already classified as final and executory under Section 15, Rule XI, Book V of
Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 9, series of 1997; 20 that
the Unions petition for consent election was really a certification election; that the Union failed to give a
definite description of the bargaining unit sought to be represented; and that the capatazes should be
considered as rank-and-file employees.
The issues to be resolved are, firstly, whether a motion for reconsideration was a pre-requisite in the filing of
its petition for certiorari; and, secondly, whether the capatazes could form their own union independently of the
rank-and-file employees.
Ruling
The petition for review has no merit.
I.
The filing of the motion for reconsideration is a pre-requisite to the filing of a petition for certiorari to
assail the decision of the DOLE Secretary
We hold to be untenable and not well taken Lepantos submissions that: (1) a motion for reconsideration was
not an available remedy from the decision of the DOLE Secretary because of Section 15, Rule XI, Book V of
the Omnibus Rules Implementing the Labor Code, as amended; and (2) the ruling in National Federation of
Labor v. Laguesma21 (recognizing the remedy of certiorari against the decision of the DOLE Secretary to be
filed initially in the CA) actually affirms its position that an immediate recourse to the CA on certiorari is proper
even without the prior filing of a motion for reconsideration.
To start with, the requirement of the timely filing of a motion for reconsideration as a precondition to the filing
of a petition for certiorari accords with the principle of exhausting administrative remedies as a means to afford
every opportunity to the respondent agency to resolve the matter and correct itself if need be. 22

And, secondly, the ruling in National Federation of Labor v. Laguesma reiterates St. Martins Funeral Home v.
National Labor Relations Commission,23 where the Court has pronounced that the special civil action
of certiorariis the appropriate remedy from the decision of the National Labor Relations Commission (NLRC) in
view of the lack of any appellate remedy provided by the Labor Code to a party aggrieved by the decision of
the NLRC. Accordingly, any decision, resolution or ruling of the DOLE Secretary from which the Labor
Code affords no remedy to the aggrieved party may be reviewed through a petition for certiorari initiated only
in the CA in deference to the principle of the hierarchy of courts.
Yet, it is also significant to note that National Federation of Labor v. Laguesma also reaffirmed the dictum
issued inSt. Martins Funeral Homes v. National Labor Relations Commission to the effect that "the remedy of
the aggrieved party is to timely file a motion for reconsideration as a precondition for any further or
subsequent remedy, and then seasonably avail of the special civil action of certiorari under Rule 65 x x x."24
Indeed, the Court has consistently stressed the importance of the seasonable filing of a motion for
reconsideration prior to filing the certiorari petition. In SMC Quarry 2 Workers Union-February Six Movement
(FSM) Local Chapter No. 1564 v. Titan Megabags Industrial Corporation 25 and Manila Pearl Corporation v.
Manila Pearl Independent Workers Union,26 the Court has even warned that a failure to file the motion for
reconsideration would be fatal to the cause of the petitioner. 27 Due to its extraordinary nature as a
remedy, certiorari is to be availed of only when there is no appeal, or any plain, speedy or adequate remedy in
the ordinary course of law.28 There is no question that a motion for reconsideration timely filed by Lepanto was
an adequate remedy in the ordinary course of law in view of the possibility of the Secretary of Justice
reconsidering her disposition of the matter, thereby according the relief Lepanto was seeking.1wphi1
Under the circumstances, Lepantos failure to timely file a motion for reconsideration prior to filing its petition
forcertiorari in the CA rendered the September 17, 2002 resolution of the DOLE Secretary beyond challenge.
II.
Capatazes are not rank-and-file employees; hence, they could form their own union
Anent the second issue, we note that Med-Arbiter Lontoc found in her Decision issued on May 2, 2000 that
thecapatazes were performing functions totally different from those performed by the rank-and-file employees,
and that the capatazes were "supervising and instructing the miners, mackers and other rank-and-file workers
under them, assess[ing] and evaluat[ing] their performance, mak[ing] regular reports and recommend[ing] new
systems and procedure of work, as well as guidelines for the discipline of employees." 29 Hence, Med-Arbiter
Lontoc concluded, the capatazes "differ[ed] from the rank-and-file and [could] by themselves constitute a
separate bargaining unit."30
Agreeing with Med-Arbiter Lontocs findings, then DOLE Undersecretary Baldoz, acting by authority of the
DOLE Secretary, observed in the resolution dated July 12, 2000, thus:31
The bargaining unit sought to be represented by the appellee are the capataz employees of the appellant.
There is no other labor organization of capatazes within the employer unit except herein appellant. Thus,
appellant is an unorganized establishment in so far as the bargaining unit of capatazes is concerned. In
accordance with the last paragraph of Section 11, Rule XI, Department Order No. 9 which provides that "in a
petition filed by a legitimate labor organization involving an unorganized establishment, the Med-Arbiter shall,
pursuant to Article 257 of the Code, automatically order the conduct of certification election after determining

that the petition has complied with all requirements under Section 1, 2 and 4 of the same rules and that none
of the grounds for dismissal thereof exists", the order for the conduct of a certification election is proper. 32
We cannot undo the affirmance by the DOLE Secretary of the correct findings of her subordinates in the
DOLE, an office that was undeniably possessed of the requisite expertise on the matter in issue. In dealing
with the matter, her subordinates in the DOLE fairly and objectively resolved whether the Union could lawfully
seek to be the exclusive representative of the bargaining unit of capatazes in the company. Their factual
findings, being supported by substantial evidence, are hereby accorded great respect and finality. Such
findings cannot be made the subject of our judicial review by petition under Rule 45 of the Rules of Court,
because:
x x x [T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires that it shall
raise only questions of law. The factual findings by quasi-judicial agencies, such as the Department of Labor
and Employment, when supported by substantial evidence, are entitled to great respect in view of their
expertise in their respective field. Judicial review of labor cases does not go far as to evaluate the sufficiency
of evidence on which the labor officials findings rest. It is not our function to assess and evaluate all over
again the evidence, testimonial and documentary, adduced by the parties to an appeal, particularly where the
findings of both the trial court (here, the DOLE Secretary) and the appellate court on the matter coincide, as in
this case at bar. The Rule limits that function of the Court to review or revision of errors of law and not to a
second analysis of the evidence. Here, petitioners would have us re-calibrate all over again the factual basis
and the probative value of the pieces of evidence submitted by the Company to the DOLE, contrary to the
provisions of Rule 45. Thus, absent any showing of whimsical or capricious exercise of judgment, and unless
lack of any basis for the conclusions made by the appellate court may be amply demonstrated, we may not
disturb such factual findings.33
In any event, we affirm that capatazes or foremen are not rank-andfile employees because they are an
extension of the management, and as such they may influence the rank-and-file workers under them to
engage in slowdowns or similar activities detrimental to the policies, interests or business objectives of the
employers.34
WHEREFORE, the Court DENIES the petition for review for lack of merit, and AFFIRMS the resolutions the
Court of Appeals promulgated on December 18, 2002 and January 31, 2003. Petitioner to pay the costs of
suit.