VI.

RIGT TO SELF-ORGANIZATION
EAGLE RIDGE GOLF & COUNTRY CLUB vs.CA and EAGLE RIDGE EMPLOYEES UNION (EREU)
G.R. No. 178989|March 18, 2010|Velasco,J.
Nature: Rule 65. 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.
FACTS:
1. 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), elected a set of officers, and ratified their constitution and by-laws.
2. EREU formally applied for registration before DOLE Regional Office IV.
3. DOLE RO IV granted the application and issued EREU Registration Certificate.
4. EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club
5. Eagle Ridge opposed this petition and filed a petition for the cancellation of EREUs Reg Certificate. It
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.
EAGLE RIDGEs SPECIFIC ALLEGATIONS:
1.

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.
2. 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.
3. It also contends that 5 employees who attended the organizational meeting had manifested the desire to
withdraw from the union.
4. The five executed individual affidavits or Sinumpaang Salaysay on February 15, 2006, attesting that they
arrived late at said meeting which they claimed to be drinking spree; that they did not know that the
documents they signed on that occasion pertained to the organization of a union; and that they now
wanted to be excluded from the Union. The withdrawal of the five, Eagle Ridge maintained, effectively
reduced the union membership to 20 or 21, either of which is below the mandatory minimum 20%
membership requirement under Art. 234(c) of the Labor Code. Reckoned from 112 rank-and-file employees
of Eagle Ridge, the required number would be 22 or 23 employees.
EREU/UNIONs COUNTERARGUMENTS:
1.
2.
3.
a.
b.
c.
d.

Alleged discrepancies are not real for before filing of its application on December 19, 2005, 4 additional
employees joined the union on December 8, 2005, thus raising the union membership to 30 members as of
December 19, 2005;
Tthe 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;
The retraction of 5 union members should not be given any credence for the reasons that:
the sworn statements of the five retracting union members sans other affirmative evidence presented
hardly qualify as clear and credible evidence considering the joint affidavits of the other members
attesting to the orderly conduct of the organizational meeting;
the retracting members did not deny signing the union documents;
it can be presumed that "duress, coercion or valuable consideration" was brought to bear on the retracting
members; and
once the required percentage requirement has been reached, the employees withdrawal from union
membership taking place after the filing of the petition for certification election will not affect the petition.
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.

DOLE Regional Director: EREU misrepresented its application. Cancelled registration and
delisted EREU from the roster of legitimate labor organizations.
Bureau of Labor Relations: OIC AFFIRMED REGIONAL DIRECTOR BUT NEW BLR DIRECTOR
Reversed. EREU shall remain in the roster of legitimate organizations.
COURT OF APPEALS: AFFIRMED BLR
ISSUE#1 Whether EREU committed misrepresentation, false statement, or fraud to merit
cancellation of is registration.
HELD: NO
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. 1
Second. The members of the EREU totaled 30 employees when it applied on December 19, 2005 for
registration. The Union thereby complied with the mandatory minimum 20% membership requirement
under Art. 234(c).2 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.
Fourth. 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

It submitted the ff:

(a) the minutes of its organizational meeting held on December 6, 2005 showing 26 founding members who elected its union officers
by secret ballot;
(b) the list of rank-and-file employees of Eagle Ridge who attended the organizational meeting and the election of officers with their
individual signatures;
(c) the list of rank-and-file employees 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-laws as approved on December 6, 2005;
(e) the list of officers and their addresses;
(f) the list of union members showing a total of 30 members; and
(g) the Sworn Statement of the unions elected president and secretary. All the foregoing documents except the sworn statement of
the president and the secretary were accompanied by Certifications by the union secretary duly attested to by the union president.
2

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.
xxxx

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 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 which
provides:
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 affiantduring 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.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
Seventh. The fact that six union members, indeed, expressed the desire to withdraw their membership
through their affidavits of retraction will not cause the cancellation of registration on the ground of
violation of Art. 234(c) of the Labor Code requiring the mandatory minimum 20% membership of rank-andfile employees in the employees union.
Eighth. 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.
ISSUE#2: Whether the withdrawal of the 6 union members can detrimentally affect the
registration of the Union.
HELD: NO.
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.

Philippine Skylanders vs NLRC

GR 127374
Facts:
In November 1993 the Philippine Skylanders Employees Association (PSEA), a local labor union affiliated
with the Philippine Association of Free Labor Unions (PAFLU), won in the certification election conducted
among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the
Secretary of Labor.
Several months later, PSEA sent PAFLU a notice of disaffiliation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to
Philippine Skylanders Employees Association National Congress of Workers (PSEA-NCW), and to maintain
continuity within the organization, allowed the former officers of PSEA-PAFLU to continue occupying their
positions as elected officers in the newly-formed PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was
immediately registered with the Department of Labor and Employment.
Meanwhile, apparently oblivious to PSEAs shift of allegiance, PAFLU Secretary General Serafin Ayroso
wrote Mariles C. Romulo requesting a copy of PSIs audited financial statement. On 30 July 1994 PSI
through its personnel manager Francisco Dakila denied the request citing as reason PSEAs disaffiliation
from PAFLU and its subsequent affiliation with NCW.
Issue: WON PSEAs disaffiliation is legitimate.
Held:
At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of which
properly lies with the Bureau of Labor Relations (BLR) and not with the Labor Arbiter.
We upheld the right of local unions to separate from their mother federation on the ground that as
separate and voluntary associations, local unions do not owe their creation and existence to the national
federation to which they are affiliated but, instead, to the will of their members. Yet the local unions remain
the basic units of association, free to serve their own interests subject to the restraints imposed by the
constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms
laid down in the agreement which brought such affiliation into existence.
There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly
forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway.
As such, the pendency of an election protest involving both the mother federation and the local union did
not constitute a bar to a valid disaffiliation.
It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As
PSEA had validly severed itself from PAFLU, there would be no restrictions which could validly hinder it from
subsequently affiliating with NCW and entering into a collective bargaining agreement in behalf of its
members.
Policy considerations dictate that in weighing the claims of a local union as against those of a national
federation, those of the former must be preferred. Parenthetically though, the desires of the mother
federation to protect its locals are not altogether to be shunned. It will however be to err greatly against
the Constitution if the desires of the federation would be favored over those of its members. That, at any
rate, is the policy of the law. For if it were otherwise, instead of protection, there would be disregard and
neglect of the lowly workingmen.
Tanduay Distillery Labor Union v. NLRC
G.R. No. 75037
April 30, 1987

Doctrine: It cannot be said that the stipulation providing that the employer may dismiss an employee
whenever the union recommends his expulsion either for disloyalty or for any violation of its by-laws and
constitution is illegal or constitute of unfair labor practice. It is an indirect restriction on the right of an
employee to self-organization. It is a solemn pronouncement of a policy that while an employee is given
the right to join a labor organization, such right should only be asserted in a manner that will not spell the
destruction of the same organization.
Facts: Private respondents were all employees of Tanduay Distillery, Inc., (TDI) and members of the
Tanduay Distillery Labor Union (TDLU), a duly organized and registered labor organization and the
exclusive bargaining agent of the rank and file employees of the petitioner company. A CBA was executed
between TDI and TDLU. The CBA was duly ratified by a majority of the workers in TDI including herein
private respondents. The CBA had a term of three (3) years and also contained a union security clause,
which provides: All workers who are or may during the effectivity of this Contract, become members of the
Union in accordance with its Constitution and By-Laws shall, as a condition of their continued employment,
maintain membership in good standing in the Union for the duration of the agreement. While the CBA was
in effect and within the contract bar period the private respondents joined another union, the Kaisahan Ng
Manggagawang Pilipino KAMPIL) and organized its local chapter in TDI, with private respondents Pedro
Esteral and Lamberts Santos being elected President and Vice-President, respectively. KAMPIL filed a
petition for certification election to determine union representation in TDI, which compelled TDI to file a
grievance with TDLU based on their CBA. TDLU conducted an investigation of its erring members in
accordance with its by-laws wherein herein private respondents were present and given a chance to
explain their side. A resolution was ordered by TDLU wherein they expelled the private respondents from
TDLU for disloyalty to the TDLU, whereby the latter notified TDI that private respondents had been expelled
from TDLU and demanded that TDI terminate the employment of private, respondents because they had
lost their membership with TDLU. The private respondents then filed with the MOLE a complaint for illegal
dismissal against TDI and Benjamin Agaloos, in his capacity as President of TDLU. The cases were jointly
heard and tried by the Labor Arbiter.
The Med-Arbiter granted the private respondents' petition calling for a certification election among the
rank and file employees of TDI. The Med-Arbiter's Order stated, inter-alia that the existence of an
uncertified CBA cannot be availed of as a bar to the holding of a certification election. On appeal of TDI and
TDLU to the Bureau of Labor Relations (BLR), the order for the holding of a certification election was
reversed and set aside.
Kampil filed a motion for reconsideration whereby the BLR ruled that it should be given due course,
because CBA has now expired, there appears to be no more obstacle in allowing a certification election to
be conducted among the rank and file of respondent. The contract bar rule will no longer apply in view of
the supervening event, that is, the expiration of the contract. TDLU filed a petition for review of the BLR
decision the SC but it denied the same. Labor Arbiter rendered a decision denying TDI's application to
terminate the private respondents and ordering TDI to reinstate the complainants with backwages. This
decision of the arbiter was upheld by the respondent NLRC.
TDI and TDLU moved for reconsideration but NLRC denied the same, hence this petition.
Issue: WON TDI was justified in terminating private respondents' employment due to TDLU's demand for
the enforcement of the Union Security Clause of the CBA between TDI and TDLU.
Held: Article 249 (e) of the Labor Code recognizes the closed shop arrangement as a form of union
security. They do not constitute unfair labor practice nor are they violations of the freedom of association
clause of the Constitution. There is no showing in these petitions of any arbitrariness or a violation of the
safeguards enunciated in the decisions of this Court interpreting union security arrangements brought to
us for review. The action of the respondent company in enforcing the terms of the closed-shop agreement
is a valid exercise of its rights and obligations under the contract. The dismissal by virtue thereof cannot
constitute an unfair labor practice, as it was in pursuance of an agreement that has been found to be
regular and of a closed-shop agreement which under our laws is valid and binding. As members of the
TDLU, the private respondents owe fealty and are required under the Union Security Clause to maintain
their membership in good standing with it during the term thereof, a requirement which ceases to be
binding only during the 60-day freedom period immediately preceding the expiration of the CBA. When the
private respondents organized and joined the KAMPIL Chapter in TDI and filed the corresponding petition
for certification election in November 1980, there was no freedom period to speak of yet.

The Labor Code mandates that "no certification election shall be entertained if a Collective Bargaining
Agreement which has been submitted in accordance with Article 231 of the Code exists between the
employer and a legitimate labor organization except within sixty (60) days prior to the expiration of the life
of such collective agreement (Art. 257). The members ignorance of nor their dissatisfaction with the terms
and condition would not justify breach thereof or the formation by them of a union of their own.
It cannot be said that the stipulation providing that the employer may dismiss an employee whenever the
union recommends his expulsion either for disloyalty or for any violation of its by-laws and constitution is
illegal or constitute of unfair labor practice, for such is one of the matters on which management and labor
can agree in order to bring about harmonious relations between them and the union, and cohesion and
integrity of their organization And as an act of loyalty a union may certainly require its members not to
affiliate with any other labor union and to consider its infringement as a reasonable cause for separation. It
is an indirect restriction on the right of an employee to self-organization. It is a solemn pronouncement of a
policy that while an employee is given the right to join a labor organization, such right should only be
asserted in a manner that will not spell the destruction of the same organization. The law requires loyalty
to the union on the part of its members in order to obtain to the full extent its cohesion and integrity. It is
clear that BLRs order which this Court upheld did not pass upon the question of legality or illegality of the
dismissal of private respondents from TDI by reason of their expulsion from TDLU for disloyalty. Hence, no
inference could be derived from the dismissal of said petition that either the BLR or this Court has decided
in favor of private respondents insofar as the question of union disloyalty and their suspension and
termination from employment of TDI is concerned.
Simply put, the BLR ordered the holding of a certification election because the CBA in question had already
expired, its expiry date being June 30, 1982. Consequently, there appears to be no more obstacle in
allowing a certification election. "... [T]he contract bar rule will not apply in view of the supervening event,
that is, the expiration of the CBA."
But the fact that the CBA had expired and the BLR ordering the holding of a certification election could not
and did not wipe out or cleanse private respondents from the acts of disloyalty.
WHEREFORE the decision of NLRC is SET ASIDE. The expulsion of private respondents are hereby
SUSTAINED.
Villar vs. Inciong
L-50283-84
April 20, 1983
FACTS:
AEU under FUR attempted to have a certification election but due to the opposition of AEU-PAFLU, the
petition was denied by the Med-Arbiter.
AEU-PAFLU then called a special meeting among members and it was there decided that an investigation
of certain people would be held pursuant to the constitution and by-laws of the Federation, of all of the
petitioners and one Felipe Manlapao, for "continuously maligning, libelling and slandering not only the
incumbent officers but even the union itself and the federation;" spreading 'false propaganda' that the
union officers were 'merely appointees of the management', and for causing divisiveness in the union.
A Trial Committee was then formed to investigate the local union's charges against the petitioners for acts
of disloyalty. AEU-PAFLU and the Company concluded a new CBA which, besides granting
additional benefits to the workers, also reincorporated the same provisions of the existing CBA, including
the union security clause reading, to wit:
All members of the UNION as of the signing of this Agreement shall remain members thereof in good
standing. Therefore, any members who shall resign, be expelled, or shall in any manner cease to be a
member of the UNION, shall be dismissed from his employment upon written request of the UNION to the
Company.

The petitioners were summoned to appear before the PAFLU Trial Committee for the aforestated
investigation of the charges filed against them but they did not attend and instead requested for a "Bill of
Particulars" of the charges which had been formalized by the AEU-PAFLU officers; they contend that their
actions were merely exercise of the right to freedom of association.
Not recognizing PAFLU's jurisdiction over their case, petitioners again refused to participate in the
investigation rescheduled and conducted. Instead, they merely appeared to file their Answer to the
charges and moved for a dismissal.
Based on the findings and recommendations of the PAFLU trial committee, the PAFLU President found the
petitioners guilty of the charges against them and it was requested that they be terminated in conformity
with the security clause in the CBA. Meanwhile, they were placed under preventive suspension and denied
access to the workplace.
ISSUE:
Whether or not the Minister acted with grave abuse of discretion when he affirmed the decision of the RO4Officer-in-Charge allowing the preventive suspension and subsequent dismissal of petitioners by reason of
the exercise of their right to freedom of association.
HELD:
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. However, a closed shop is a valid form of union security, and
such provision in a CBA is not a restriction of the right of freedom of association guaranteed by the
Constitution.
Here, the Company and the AEU-PAFLU entered into a CBA with a union security clause and the 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 nonunion membership.
Petitioners became non-union members upon their expulsion from the general membership of the AEUPAFLU pursuant to the Decision of the PAFLU national president.
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 under the
constitution of the PAFLU to which the local union was affiliated.
According to the OIC: dtripped 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 AMIGOEMPLOYEES 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.
When 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.
'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.
Inherent in every labor union, or any organization, is the right of self-preservation. 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.

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.
Ferrer, et al. vs. NLRC,
G.R. No. 100898, promulgated on July 5, 1993:
FACTS:
Petitioners Ferrer and others were regular and permanent employees of the Occidental Foundry
Corporation (OFC). They had been in the employe of OFC for about ten years at the time of their dismissal
in 1989.
On May 6, 1989, petitioner Ferrer and companions filed with the Department of Labor and Employment a
complaint seeking the expulsion from SAMAHAN of its officers headed by president Capitle. The complaint
was founded on the said officers' alleged lack of attention to the economic demands of the workers.
However, on September 4, 1989, petitioners Diaz and Ferrer withdrew the petition.
On September 10, 1989, petitioners conducted a special election of officers of the SAMAHAN. FFW, to
which SAMAHAN was affiliated, questioned the election. Nonetheless, the elected set of officers tried to
dissuade the OFC from remitting union dues to the officers led by Capitle.
The intra-union squabble came to a head when, on September 11, 1989, the union officials headed by
Capitle expelled Ferrer, et al. from the union.
Ferrer and his four companions turned to the Federation of Democratic Labor Unions (FEDLU). They
volunteered 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.
Thereafter, on various dates, petitioners sent individual letters to the Company professing innocence of
the charges levelled against them by the SAMAHAN and the FFW and pleading that they be reinstated.
Their letters 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, M.S. Velasco (as representative of the FFW), the FFW, and the
SAMAHAN officers headed by Capitle.
RULING:
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
pamamgitan (sic) ng tatlo't ikaapat (3/4) na bahagi ng dami ng bilang ng Pamunuang
Tagapapaganap. 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 maaring 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 itinadhana 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.
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 petititioners' 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.
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."
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 intra-union controversy was such that petitioners even requested the FFW to intervene to
facilitate the enforcement of the said wage increase.
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 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 Workers 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])

PHILIPPINE DIAMOND HOTEL AND RESORT, INC. (MANILA DIAMOND HOTEL) v. MANILA
DIAMOND HOTEL EMPLOYEES UNION CASE DIGEST
494 SCRA 195 (2006)
FACTS: The Diamond Hotel Employee's Union (the union) filed a petition for Certification Election before
the DOLE-National Capital Region (NCR) seeking certification as the exclusive bargaining representative of
its members. The DOLE-NCR denied said petition as it failed to comply with the legal requirements.
The Union later notified petitioner hotel of its intention to negotiate for collective bargaining agreement
(CBA). The Human Resource Department of Diamond Hotel rejected the notice and advised the union since
it was not certified by the DOLE as the exclusive bargaining agent, it could not be recognized as such.
Since there was a failure to settle the dispute regarding the bargaining capability of the union, the union
went on to file a notice of strike due to unfair labor pracritce (ULP) in that the hotel refused to bargain with
it and the rank-and-file employees were being harassed and prevented from joining it. In the meantime,
Kimpo filed a complaint for ULP against petitioner hotel.
After several conferences, the union suddenly went on strike. The following day, the National Union of
Workers in the Hotel, Restaurant and Allied Industries (NUWHRAIN) joined the strike and openly extended
its support to the union. The some of the entrances were blocked by the striking employees. The National
Labour Relations Commission (NLRC) representative who conducted an ocular inspection of the Hotel
premises confirmed in his Report that the strikers obstructed the free ingress to and egress from the Hotel.
The NLRC thus issued a Temporary Restraining Order (TRO) directing the strikers to immediately "cease
and desist from obstructing the free ingress and egress from the Hotel premises. During the
implementation of the order, the striking employees resisted and some of the guards tasked to remove the

barricades were injured. The NLRC declared that the strike was illegal and that the union officers and
members who participated were terminated on the grounds of participating in an illegal strike.
The union contended that the strike was premised on valid ground and that it had the capacity to
negotiate the CBA as the representatives of the employees of Diamond Hotel. The union contended that
their dismissal is tantamount to an unfair labour practice and union busting.
On appeal, the Court of Appeals affirmed the NLRC Resolution dismissing the complaints of Mary Grace,
Agustin and Rowena and of the union. It modified the NLRC Resolution, however, by ordering the
reinstatement with back wages of union members.
ISSUE: Whether or not the dismissal of the union members is valid on the grounds of participating in an
illegal strike
HELD: Even if the purpose of a strike is valid, the strike may still be held illegal where the means
employed are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out
concerted activities which are injurious to the rights to property renders a strike illegal. And so is picketing
or the obstruction to the free use of property or the comfortable enjoyment of life or property, when
accompanied by intimidation, threats, violence, and coercion as to constitute nuisance.
As the appellate court correctly held, the union officers should be dismissed for staging and participating in
the illegal strike, following paragraph 3, Article 264(a) of the Labor Code which provides that ". . .any union
officer who knowingly participates in an illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during strike may be declared to have lost his employment
status . . ."
An ordinary striking worker cannot, thus be dismissed for mere participation in an illegal strike. There
must be proof that he committed illegal acts during a strike, unlike a union officer who may be dismissed
by mere knowingly participating in an illegal strike and/or committing an illegal act during a strike.
Hence, while petitioner's act of holding a special election to oust Capitles, 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.

INSULAR HOTEL EMPLOYEES UNION V. WATERFRONT HOTEL DAVAO (2010)

Peralta, J.
- Nov 2000: the Hotel sent DOLE a Notice of Suspension of Operations for 6 months due to severe and
serious business losses.
- During the suspension, Rojas, Pres. of Davao insular Hotel Free Employees Union (DIHFEU-NFL) the
recognized labor org in the Hotel, sent the Hotel several letters asking it to reconsider its decision. The
Union members wanted to keep their jobs and to help the Hotel, so it suggested several ideas in its
Manifesto to solve the high cost on payroll, such as: downsize manpower structure to 100 rank-and-file
EEs, a new pay scale, etc.
- DIHFEU-NFL signed a MOA where the Hotel agreed to re-open the hotel. The retained EEs individually
signed a reconfirmation of Employment. In June 2001, the Hotel resumed its business operations.
- Aug 2002: Darius Joves and Debbie Planas, local officers of the National Federation of Labor (NFL), filed a
Notice of Mediation before the NCMB, stating that the Union involved was "DARIUS JOVES/DEBBIE PLANAS
ET. AL, National Federation of Labor." The issue was the diminution of wages and benefits through unlawful
MOA. In support of his authority to file the complaint, Joves, assisted by Atty. Cullo, presented several SPAs
which were, undated and unnotarized.

10

- Petitioner and respondent signed a Submission Agreement, where the union stated was "INSULAR HOTEL
EMPLOYEES UNION-NFL."
- The Hotel filed with the NCMB a Manifestation with Motion for a Second Preliminary Conference, alleging
that the persons who filed the complaint in the name of the Insular Hotel Employees Union-NFL have no
authority to represent the Union.
- Cullo confirmed that the case was filed not by the IHEU-NFL but by the NFL. When asked to present his
authority from NFL, Cullo admitted that the case was filed by individual employees named in the SPAs.
- The Hotel argued that the persons who signed the complaint were not the authorized representatives of
the Union indicated in the Submission Agreement nor were they parties to the MOA. It filed a Motion to
Withdraw, which Cullo then filed an Opposition to where the same was captioned:
NATIONAL FEDERATION OF LABOR And 79 Individual Employees, Union Members, Complainants,
-versusWaterfront Insular Hotel Davao, Respondent.
Cullo reiterated that the complainants were not representing IHEU-NFL.
- The Accredited Voluntary Arbitrator (AVA) denied the Motion to Withdraw.
- The Hotel submitted its MR and stressed that the Submission Agreement was void because the Union did
not consent thereto.
- Cullo filed a Comment/Opposition to the Hotel's MR. Again, Cullo admitted that the case was not initiated
by the IHEU-NFL, saying that the individual complainants are not representing the union but filing the
complaint through their appointed attorneys-in-fact to assert their individual rights as workers who are
entitled to the benefits granted by law and stipulated in the collective bargaining agreement. There is no
mention there of Insular Hotel Employees Union, but only National Federation of Labor (NFL). The local
union was not included as party-complainant considering that it was a party to the assailed MOA.
- The AVA denied the MR. He, however, ruled that the Hotel was correct when it objected to NFL as proper
party-complainant, as the proper one is INSULAR HOTEL EMPLOYEES UNION-NFL. In the submission
agreement, the party complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL and not the
NATIONAL FEDERATION OF LABOR and 79 other members. However, since the NFL is the mother federation
of the local union, and signatory to the existing CBA, it can represent the union.
- Cullo, in subsequent documents, started using the caption "Insular Hotel Employees Union-NFL,
Complainant."
- The case was remanded to the NCMB. The Hotel reiterated to the NCMB that the individual union
members have no standing. The Hotel did not appear before the NCMB to select a new AVA. The new AVA
decided in favor of Cullo, declaring the MOA invalid.
- The Hotel appealed to the CA, questioning among others the jurisdiction of the NCMB. The CA ruled in
favor of the Hotel, declaring the MOA VALID and ENFORCEABLE.
Issues:
1. Did CA err in finding that the AVA has no jurisdiction over the case because the notice of mediation does
not mention the name of the local union but only the affiliate federation -- NO.
2. Do the individual members of the Union have the requisite standing to question the MOA before the
NCMB? -- NO.
3. If the individual members of the Union have no authority to file the case, does the federation to which
the local union is affiliated have the standing to do so? -- NO.
4. (moot issue) W/N IHEU-NFL is a non-entity as DIHEU-NFL is the only recognized bargaining unit -- YES,
but Hotel is estopped from questioning the same as it did not raise the said issue in the proceedings before
the NCMB and the Voluntary Arbitrators.
Ratio:
1. In the Notice of Mediation filed before the NCMB, it stated that the union involved was "DARIUS
JOVES/DEBBIE PLANAS ET. AL., National Federation of Labor." In the Submission Agreement, however, it
stated that the union involved was "INSULAR HOTEL EMPLOYEES UNION-NFL." Cullo clarified in subsequent
documents captioned as "National Federation of Labor and 79 Individual Employees, Union Members,
Complainants" that the individual complainants are not representing the union, but filing the complaint
through their appointed attorneys-in-fact.
- While it is undisputed that a submission agreement was signed by respondent and "IHEU-NFL," then
represented by Joves and Cullo, this Court finds that there are two circumstances which affect its validity:
first, the Notice of Mediation was filed by a party who had no authority to do so; second, that the Hotel had
persistently questioned the authority of Joves, Cullo and the individual members of the Union to file the
complaint before the NCMB.

11

- Procedurally, the first step to submit a case for mediation is to file a notice of preventive mediation with
the NCMB. It is only after this step that a submission agreement may be entered into by the parties
concerned.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive
mediation, to wit: Any certified or duly recognized bargaining representative may file a notice or request
for preventive mediation... In the absence of a certified or duly recognized bargaining representative, any
legitimate labor organization in the establishment may file a notice, request preventive mediation or
declare a strike, but only on grounds of unfair labor practice.
- It is clear that only a certified or duly recognized bargaining agent may file a notice or request for
preventive mediation. It is curious that even Cullo himself admitted that the case was filed not by the
Union but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the
notice filed before it.
- Even though the Hotel signed a Submission Agreement, it had immediately manifested its desire to
withdraw from the proceedings after it became apparent that the Union had no part in the complaint. Only
4 days had lapsed after the signing of the Submission Agreement when the Hotel called the attention of
the AVA that the persons who filed the instant complaint in the name of Insular Hotel Employees Union-NFL
had no authority to represent the Union. The Hotel cannot be estopped in raising the jurisdictional issue,
because it is basic that the issue of jurisdiction may be raised at any stage of the proceedings, even on
appeal, and is not lost by waiver or by estoppel.
2. Petitioners have not been duly authorized to represent the union.
In Atlas Farms v. NLRC:
x x x Pursuant to Art 260, the parties to a CBA shall name or designate their respective representatives to
the grievance machinery and if the grievance is unsettled in that level, it shall automatically be referred to
the voluntary arbitrators designated in advance by parties to a CBA.
- The CBA recognizes that DIHFEU-NFL is the exclusive bargaining representative of all permanent
employees. The inclusion of the word "NFL" after the name of the local union merely stresses that the local
union is NFL's affiliate. It does not, however, mean that the local union cannot stand on its own. The local
union owes its creation and continued existence to the will of its members and not to the federation to
which it belongs.
3. Coastal Subic Bay Terminal v. DOLE:
x x x A local union does not owe its existence to the federation with which it is affiliated. It is a separate
and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not
divest the local union of its own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where the former acts in
representation of the latter. Hence, local unions are considered principals while the federation is deemed to
be merely their agent. x x x
- The NFL had no authority to file the complaint in behalf of the individual employees.
4. In its Memorandum, the Hotel contends that IHEU-NFL is a non-entity. While DOLE states that "IHEU-NFL"
is not a registered labor organization, the Hotel is estopped from questioning the same as it did not raise
the said issue in the proceedings before the NCMB and the Voluntary Arbitrators. The main theory posed
by the Hotel was W/N the individual employees had the authority to file the complaint notwithstanding the
apparent non-participation of the union. It never put in issue the fact that DIHFEU-NFL was not the same as
IHEU-NFL.
Dispositive: CA AFFIRMED.
Palacol v. Calleja
Facts:

Manila CCBPI Sales Force Union is the CB agent of all regular salesmen, regular helpers, and relief
helpers of the Manila Plant and Sales Office of Coca-Cola Bottlers Phils.
Under the new CBA, employees were granted a general salary increase to be given in lump sum

12

The Union President submitted to Coca-Cola the ratification by the union members of the new CBA
and authorization for the company to deduct union dues equivalent to Php 20/month + 10% by way
of special assessment from the CBA lump-sum pay granted
As per the Unions Board resolution, the special assessment was for putting up a cooperative and
credit union, purchase vehicles and other items needed for the officers and the general
membership, and payment for services rendered by union officers, consultants. However, there was
a proviso stating that the matter of allocation shall be at the discretion of the incumbent
President
The Authorization and CBA ratification was obtained through a secret referendum, with 672
members authorizing the 10% special assessment (170 opposed). However, two more groups of
members (170 and 185) subsequently manifested their intention of withdrawing or disauthorizing
the deduction of any amount from their CBA lump sum
At this point, there were a total of 528 objectors, with the remainder of 272 supporters
Coca-Cola filed with the BLR an action for interpleader in order to resolve the conflicting claims of
the parties
Palacol et al, filed a motion/complaint for intervention, claiming to be among those union members
who either did not sign any individual written authorization or those who subsequently withdrew
their signatures
o 10% special assessment was a violation of Art. 241(o)3 in relation to Art. 222(b)4
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 Art. 241(n) 5 and (o) since
the board resolution had been duly approved in a general membership meeting and that the
collection of a special fund for labor education and research is mandated
Med-Arbiter: return the amount to personnel, deduction was unauthorized
BLR, on appeal: special assessment was authorized

Issue(s):
w/n the deduction of the special assessment by the Union was made in accordance with the LC
Held:
No. Union has failed to comply with the procedure to legitimize the special assessment under Art. 241(n). It
did not 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, it had the minutes recorded by a union
director instead of the union secretary. Neither did those minutes list the members present as well as the
votes cast.
What the Union did holding 3 local membership meetings on separate occasions, on different dates, and
at various venues was contrary to the requirements of a general membership meeting. Likewise, merely
submitting the minutes of the local membership meetings to the company to authorize the deduction
instead of the written resolution adopted at the general meeting fell short of the legal requirements.
Therefore, the levy of the special assessment under (n) is invalid.
3

Art. 241. Rights and conditions of membership in a labor organization.

(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;
4
Art. 222. Appearances and Fees.
(b) No attorneys 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.
5
Art. 241. Rights and conditions of membership in a labor organization .
(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;

13

On the purpose of the levy:

Only the collection of a special fund for labor and education research is mandated. The two other purposes
(purchase of vehicles and other items, and payment of services rendered by union officers) should be
supported by the regular union dues. Moreover, the payment of services is prohibited by Art. 222(b), falling
under the category of similar charge. The additional proviso giving the President unlimited discretion to
allocate the proceeds is also susceptible of abuse and must be disallowed.
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?
No. Even assuming that it was validly levied, and granting that individual written authorizations were
obtained by the Union, 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 (cf. Galvadores v. Trajano).
Re: the form of the withdrawals:
Union disauthorizations are not valid for being collective in form
SC there is nothing in the law which requires that the disauthorization must be in individual form

SOUTHERN PHILIPPINES FEDERATION OF LABOR vs. HON. FERRER-CALLEJA (1989)

FACTS:
Petitioner SPF filed with the DOLE a petition for certification election among the rank-and-file employees of
private respondent Apex Minong Co. The Med-Arbiter granted the petition and directed the holding of the
certification election. During the pre-election conference, petitioner union objected to the inclusion in the
list of workers prepared by Apex the following: (1) employees occupying the positions of Supervisor I, II and
III; (2) employees under confidential/special payrolls; and (3) employees who were not paying dues.
According to petitioner, the mentioned employees were disqualified from participating in the certification
election since the Supervisors were managerial employees while the last two were disqualified by virtue of
their non-membership in the Union and their exclusion from the benefits of the collective bargaining
agreement. After the certification of election was conducted, respondent Union filed an urgent motion to
open the challenged ballots. The Med-Arbiter granted the motion and directed the challenged ballots be
opened and inventoried. Petitioner appealed to the BLR wherein respondent Director Ferrer-Calleja
dismissed said appeal and affirmed the decision of the Med-Arbiter and ordered that the 197 ballots should
be opened and canvassed. As a consequence of the opening and canvass of the challenged ballots, the
Med-Arbiter
Issue: Whether respondent Director committed grave abuse of discretion in not excluding the 197
employees from voting in the certification election
Held: NO
The functions of the questioned positions are not managerial in nature because they only execute
approved and established policies leaving little or no discretion at all whether to implement the said
policies or not. The respondent Director, therefore, did not commit grave abuse of discretion in dismissing
the petitioner's appeal from the Med-Arbiter's Order to open and count the challenged ballots in denying
the petitioner's motion for reconsideration and in certifying the respondent Union as the sole and exclusive
bargaining representative of the rank-and-file employees of respondent Apex .
As regards the employees in the confidential payroll, the petitioner has not shown that the nature of their
jobs is classified as managerial except for its allegation that they are considered by management as
occupying managerial positions and highly confidential. Neither can payment or non-payment of union
dues be the determining factor of whether the challenged employees should be excluded from the

14

bargaining unit since the union shop provision in the CBA applies only to newly hired employees but not to
members of the bargaining unit who were not members of the union at the time of the signing of the CBA.
It is, therefore, not impossible for employees to be members of the bargaining unit even though they are
non-union members or not paying union dues.

G.R. No. 77231 May 31, 1989

SAN JOSE CITY ELECTRIC SERVICE COOPERATIVE, INC. (SAJELCO),petitioner vs MINISTRY OF LABOR
FACTS: July 29, 1986, private respondent Manggagawang Nagkakaisa ng SAJELCO-Association of
Democratic Labor Organization (MAGKAISA-ADLO) filed a petition for direct certification election with the
Regional Office No. 111 of the Department of Labor and Employment in San Fernando, Pampanga. The
petition alleged that MAGKAISAADLO is a legitimate labor organization duly registered with the Ministry of
Labor and Employment; that there are more or less fifty-four (54) rank and file employees in SAJELCO; that
almost 62% of the employees sought to be represented have supported the filing of the petition; that there
has been no valid certification election held in SAJELCO during the twelve (12) month period prior to the
filing of the petitionand that there is no other union in the bargaining unit.
SAJELCO opposed the petition for direct certification election contending,inter alia, that the employees who
sought to be represented by private respondent are members-consumers of the Cooperative itself and at
the same time composed the General Assembly which, pursuant to the By-laws is also the final arbiter of
any dispute arising in the Cooperative.
Med Arbiter granted the direct certification election. Reason: while some of the members of petitioner
union are members of the cooperative, it cannot be denied that they are also employees within the
contemplation of the Labor Code and are therefore entitled to enjoy all the benefits of employees,
including the right to self-organization.
Appealed to BLR. Dismissed the appeal and affirmed the decision of the med arbiter.
manifested that a direct certification election was conducted in SAJELCO, there being no restraining order
from this Court enjoining the holding thereof Likewise, Atty. Soto was of the opinion that in view of the
direct certification election conducted, the petition brought before this Court by SAJELCO has become moot
and academic. Attached to his letter is a copy of the minutes of the certification election held on April 13,
1987 showing that of forty three (43) employees who voted, thirty (30) voted for respondent union and
thirteen (13) voted for no union
RULING: mentions two types of employees, namely: the members-consumers and the members of their
immediate families. As regards employees of SAJELCOwho are members-consumers, the rule is settled that
they are not qualified to form, join or assist labor organizations for purposes of collective bargaining. The
reason for withholding from employees of a cooperative who are members-co-owners the right tocollective
bargaining is clear: an owner cannot bargain with himself. However, employees who are not membersconsumers may form, join or assist labor organizations for purposes of collective bargaining
notwithstanding the fact that employees of SAJELCO who are not members-consumers were employed

15

ONLY because they are members of the immediate family of membersconsumers. The fact remains that
they are not themselves members-consumers, and as such, they are entitled to exercise the rights of all
workers to organization, collective bargaining, negotiations and others as are enshrined in Section 8,
Article III and Section 3, Article XIII of the 1987 Constitution, Labor Code of the Philippines and other
related laws.
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU),
vs.
HON. BIENVENIDO E. LAGUESMA

FACTS: Petitioner is a union of supervisory employees. It appears that on March 20, 1995 the union filed a
petition for certification election on behalf of the route managers at Pepsi-Cola Products Philippines, Inc.
However, its petition was denied by the med-arbiter and, on appeal, by the Secretary of Labor and
Employment, on the ground that the route managers are managerial employees and, therefore, ineligible
for union membership under the first sentence of Art. 245 of the Labor Code, which provides:
Ineligibility of managerial employees to join any labor organization; right of supervisory employees.
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their own.
Petitioner filed a motion for reconsideration, pressing for resolution its contention that the first sentence of
Art. 245 of the Labor Code, so far as it declares managerial employees to be ineligible to form, assist or
join unions, contravenes Art. III, 8 of the Constitution which provides:
The right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law shall not be abridged.
ISSUES:
1) whether or not the route managers at Pepsi-Cola Products Philippines, Inc. are managerial employees
and
2) whether or not Art. 245, insofar as it prohibits managerial employees from forming, joining or assisting
labor unions, violates Art. III, 8 of the Constitution.
RULING:
1) YES. The route managers cannot thus possibly be classified as mere supervisors because their work
does not only involve, but goes far beyond, the simple direction or supervision of operating
employees to accomplish objectives set by those above them. They are not mere functionaries with
simple oversight functions but business administrators in their own right.
supervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment." Thus, their only power is to recommend. Certainly, the
route managers in this case more than merely recommend effective management action. They perform
operational, human resource, financial and marketing functions for the company, all of which involve
the laying down of operating policies for themselves and their teams
The term "manager" generally refers to "anyone who is responsible for subordinates and other
organizational resources." Managers constitute three levels of a pyramid:

16

FIRST-LINE MANAGERS: The lowest level in an organization at which individuals are responsible for
the work of others is called first-line or first-level management. First-line managers direct operating
employees only; they do not supervise other managers
MIDDLE MANAGERS: Middle managers direct the activities of other managers and sometimes also
those of operating employees. Middle managers' principal responsibilities are to direct the activities
that implement their organizations' policies and to balance the demands of their superiors with the
capacities of their subordinates
TOP MANAGERS: Composed of a comparatively small group of executives, top management is
responsible for the overall management of the organization. It establishes operating policies and
guides the organization's interactions with its environment
In the Case, entitled Worker's Alliance Trade Union (WATU) v. Pepsi-Cola Products Philippines, Inc., decided
on November 13, 1991, the Secretary of Labor found: we find that only those employees occupying the
position of route manager and accounting manager are managerial employees.
2) NO. The real intent of Art. III, 8 is evident in Lerums proposal. The Commission intended the
absolute right to organize of government workers, supervisory employees, and security guards to
be constitutionally guaranteed. By implication, no similar absolute constitutional right to organize
for labor purposes should be deemed to have been granted to top-level and middle managers.
Nor is the guarantee of organizational right in Art. III, 8 infringed by a ban against managerial
employees forming a union. The right guaranteed in Art. III, 8 is subject to the condition that its
exercise should be for purposes "not contrary to law." In the case of Art. 245, there is a rational basis
for prohibiting managerial employees from forming or joining labor organizations
In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this rationale,
thus:
The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be
assured of their loyalty to the Union in view of evident conflict of interests. The Union
can also become company-dominated with the presence of managerial employees in
Union membership. 32

PABLO ARIZALA, SERGIO MARIBAO, LEONARDO JOVEN, and FELINO BULANDUS

vs.
THE COURT OF APPEALS

FACTS: Under the Industrial Peace Act, 1 government-owned or controlled corporations had the duty to
bargain collectively and were otherwise subject to the obligations and duties of employers in the private
sector. 2 The Act also prohibited supervisors to become, or continue to be, members of labor organizations
composed of rank-and-file employees, 3 and prescribed criminal sanctions for breach of the prohibition. 4
Under the regime of said Industrial Peace Act that the Government Service Insurance System (GSIS, for
short) became bound by a collective bargaining agreement executed between it and the labor organization
representing the majority of its employees, the GSIS Employees Association. The agreement contained a
"maintenance-of-membership" clause
The petitioners occupied supervisory positions in the GSIS. Pablo Arizala and Sergio Maribao were,
respectively, the Chief of the Accounting Division, and the Chief of the Billing Section of said Division, in
the Central Visayas Regional Office of the GSIS. Leonardo Joven and Felino Bulandus were, respectively, the
Assistant Chief of the Accounting Division (sometimes Acting Chief in the absence of the Chief) and the

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Assistant Chief of the Field Service and Non-Life Insurance Division (and Acting Division Chief in the
absence of the Chief), of the same Central Visayas Regional Office of the GSIS. Demands were made on all
four of them to resign from the GSIS Employees Association, in view of their supervisory positions.

They refused to do so. Consequently, two (2) criminal cases for violation of the Industrial Peace Act were
lodged against them in the City Court of Cebu: one involving Arizala and Maribao 6 and the other, Joven
and Bulandus. Which resulted to their conviction.
They argued that when the so called "1973 Constitution" took effect on January 17, 1973 pursuant to
Proclamation No. 1104, the case of Arizala and Maribao was still pending in the Court of Appeals and that
of Joven and Bulandus, pending decision in the City Court of Cebu; that since the provisions of that
constitution and of the Labor Code subsequently promulgated (eff., November 1, 1974), repealing the
Industrial Peace Act-placed employees of all categories in government-owned or controlled corporations
without distinction within the Civil Service, and provided that the terms and conditions of their
employment were to be "governed by the Civil Service Law, rules and regulations" and hence, no longer
subject of collective bargaining, the appellants ceased to fall within the coverage of the Industrial Peace
Act and should thus no longer continue to be prosecuted and exposed to punishment for a violation
thereof. They pointed out further that the criminal sanction in the Industrial Peace Act no longer appeared
in the Labor Code
ISSUE: whether or not the petitioners' criminal liability for a violation of the Industrial Peace Act may be
deemed to have been obliterated in virtue of subsequent legislation and the provisions of the 1973 and
1987 Constitutions.
RULING: YES. the right of self-organization and collective bargaining had been withdrawn by the Labor
Code from government employees including those in government-owned and controlled corporationschiefly for the reason that the terms and conditions of government employment, all embraced in civil
service, may not be modified by collective bargaining because set by law. It is therefore immaterial, they
say, whether supervisors are members of rank-and-file unions or not; after all, the possibility of the
employer's control of the members of the union thru supervisors thus rendering collective bargaining
illusory, which is the main reason for the prohibition, is no longer of any consequence.

the disappearance from the law of the prohibition on supervisors being members of labor organizations
composed of employees under their supervision. The Labor Code (PD 442) allowed supervisors (if not
managerial) to join rank-and-file unions. And under the Implementing Rules of RA 6715, supervisors who
were members of existing labor organizations on the effectivity of said RA 6715 were explicitly authorized
to "remain therein."
that the maintenance by supervisors of membership in a rank-and-file labor organization even after the
enactment of a statute imposing a prohibition on such membership, is not only not a crime, but is explicitly
allowed, under present law.
The repeal of a penal law deprives the courts of jurisdiction to punish persons charged with a violation of
the old penal law prior to its repeal

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