SECOND DIVISION
NCR, Nepomuceno Leao II, submitted
G.R. No. 96821 December 9, 1994
LA TONDEA WORKERS UNION,
petitioner,
vs.
THE HONORABLE SECRETARY OF
LABOR AND EMPLOYMENT, and HON.
PURA FERRER-CALLEJA, in her capacity
as Director, Bureau of Labor Relations,
respondents.
Amorito V. Canete for petitioner.
MENDOZA, J.:
This is a petition for certiorari to set
aside orders and the decision of
respondent Director of the Bureau of
Labor Relations (BLR) and Secretary of
Labor and Employment in BLR-AE-8-
18-89, finding Ramon de la Cruz and
Norma Marin, president and treasurer
respectively of petitioner La Tondea
Worker's Union (LTWU), accountable
for union funds in the amount of
P367,553.00.
Petitioner LTWU is a duly registered
labor organization. For more that thirty
years it was bargaining agent of the
rank-and-file workers of La Tondea
Inc. at its Tondo Plant. On May 31,
1989 it lost in a certification election
to the Ilaw at Buklod ng Manggagawa
(IBM).
It appears that, on March 14, 1989,
about 200, out of 1,015 members of
petitioner, petitioned the National
Capital Region Office of the
Department of Labor and Employment
(hereafter referred to as DOLE-NCR)
for an audit or examination of the
funds and financial records of the
union. Accordingly an audit was
ordered and, on April 17, 1989, the
acting auditing examiner of the DOLE-
a report finding Ramon de la Cruz and
Norma Marin accountable for
P367,553.00 for union dues remitted
by La Tondea Inc. to LTWU.
De la Cruz and Marin appealed to then
DOLE Secretary Franklin Drilon,
complaining that they had not been
heard before the report was made.
The case was indorsed to the
respondent Director of the Bureau of
Labor Relations, who, on August 7,
1989, directed the DOLE-NCR to
forward to the BLR the records of the
case.
In her order dated September 29,
1989, the respondent BLR Director
found that indeed De la Cruz and
Marin had not been heard before they
were held liable for union funds. For
this reason she set aside the findings
and recommendations of the DOLE-
NCR and ordered another
audit/examination to be conducted.
The dispositive portion of her order
stated:
WHEREFORE, premises considered, the
findings/recommendations of the
National Capital Region contained in
the letter of NCR Director Luna C.
Piezas to Teodoro Monleon, et al.
petitioners, dated 11 May 1989 are
hereby set aside.
Accordingly, the Labor Relations and
Reporting Division (LRRD), this Bureau
is hereby directed to conduct an
audit/examination of the books of
accounts and other financial records of
La Tondea Workers Union (LTWU) for
the period of 1986 to February 1989.
SO ORDERED.
Petitioner moved for a reconsideration
of the order insofar as it ordered an
audit/examination of books of
accounts and financial records. It
argued that certain requirements of
Art. 274 of the Labor Code, as
amended by R.A. 6715, must first be
complied with before an
audit/examination could be ordered, to
wit: (1) there must be a sworn written
complaint, (2) it must be supported by
at least 20% of the total membership
of the union and (3) it must not have
been conducted during the freedom
period nor within the 30 days
immediately preceding the date of
election of union officials.
Petitioner's motion was denied by the
BLR in a resolution dated December 1,
1989. Ramon de la Cruz, Danilo
Manrique, Arturo Bautista and Norma
Marin were ordered to submit "all
financial records and related
documents of the union for the period
1986 to February 1989 within ten (10)
days from receipt of this order."
The union, through its new president,
Danilo Manrique, again moved for a
reconsideration, this time raising a
jurisdictional question: That under Art.
274 of the Labor Code, as amended by
Republic Act No. 6715, the power to
order an examination of the books of
accounts and financial activities of a
union is vested in the Secretary of
Labor and Employment or his
representative and the BLR can not be
considered the Secretary's
representative. In its order of January
22, 1990, however, the BLR denied
petitioner's motion, even as it
reiterated its previous order of
December 1, 1989, with warning that
if the records and documents required
were not produced within five days
petitioner would be deemed to have
waived the right to present its
evidence.
The union filed a petition for review of
the orders of December 1, 1989 and
January 22, 1990 to the DOLE
Secretary. But the BLR proceeded with
its examination, and, as the union
officers refused to comply with its
orders, the BLR based the
audit/examination on the certification
of the company. In an order dated July
5, 1990, the BLR found the union
officers personally accountable and
liable for the total amount of
P367,553.00, which La Tondea Inc.
certified it had remitted to LTWU as
union dues.
The Secretary of Labor and
Employment did not act on the
petition for review of the union.
Instead, he referred the petition to the
BLR which denied the petition for
having become moot and academic.
The dispositive portion of its order,
dated November 21, 1990, states:
WHEREFORE, premises considered, the
petition for review is denied for lack of
merit. The Order of this Bureau dated
5 July 1990 issued in the exercise of its
appellate jurisdiction over
audit/examination case heard before
the Regional Office, this Department,
is hereby affirmed in toto.
Hence this petition, alleging grave
abuse of discretion by respondent
Secretary of Labor and Employment
and Director of the Bureau of Labor
Relations. Petitioner alleges several
grounds which raise the following
issues:
1. Whether under the law the
power to examine the books of
accounts of petitioner is vested in the
Secretary of Labor and Employment or
in the Bureau of Labor Relations.
2. If it is vested in the Secretary of
Labor and Employment, whether the
power was not delegated by him in
this case to the Bureau of Labor
Relations.
3. Whether the examination of
petitioner's books was validly ordered
despite the fact that the requirements
of Art. 274 of the Labor Code had not
been complied with.
4. Whether the union officers were
properly held accountable for union
funds.
With regard to the first issue, the
petitioner cites Art. 274 of the Labor
Code and Rule VIII-A of the
implementing rules, in support of its
contention that the BLR had no
authority to conduct an examination of
the books of the LTWU and that such
authority is vested solely in the
Secretary of Labor or his duly
authorized representative. These
provision state:
Art. 274. Visitorial Powers. The
Secretary of Labor and Employment or
his duly authorized representative is
hereby empowered to inquire into the
financial activities of legitimate labor
organizations upon the filing of a
complaint under oath and duly
supported by the written consent of at
least twenty (20%) percent of the total
membership of the labor organization
concerned and to examine their books
of accounts and other records to
determine compliance or non-
compliance with the law and to
prosecute any violations of the law
and the union constitutions and
by-laws; Provided, that such inquiry or
examination shall not be conducted
during the sixty (60) day freedom
period nor within the thirty (30) days
immediately preceding the date of
election of union officials.
Rule VIII-A
VISITORIAL POWER
Sec. 1. Exercise of visitorial
power. The Secretary of Labor and
Employment or his duly authorized
representative shall inquire into the
financial activities of any legitimate
labor organization and examine their
books of accounts and other records to
determine compliance with the law
and the organization, constitution and
by-laws, upon the filing of a complaint
under oath and duly supported by the
written consent of at least 20% of the
total membership of the labor
organization concerned.
Sec. 2. Period of inquiry or
examination. No inquiry or
examination of the financial activities
and books of accounts as well as other
records of any legitimate labor
organization mentioned in the
preceding section shall be conducted
during the 60 day freedom period nor
within 30 days immediately preceding
the date of election of union officials.
The petitioner argues that although
Art. 274 authorizes the Secretary to
delegate the examination of accounts
to a representative, the BLR Director
cannot be considered a duly
authorized representative because the
power to examine the books of
accounts of a union has already been
delegated to union account officers
pursuant to the implementing rules,
Rule 1, sec. 1(ff) which provides:
"Union Accounts Examiners" are
officials of the Bureau or the Industrial
Relations Division in the Regional
Office empowered to audit books of
accounts of the union.
On the other hand, the public
respondents contend that union
accounts examiners are actually
officials of the BLR because the word
"Bureau" in sec.
1(ff) refers to the Bureau of Labor
Relations. At any rate, they contend
that by endorsing the case to the BLR,
the Secretary of Labor and
Employment clearly designated the
BLR to act on his behalf.
Respondent's contention is well taken.
The "union accounts examiners of the
Bureau" mentioned in Rule 1, sec. 1(ff)
of the implementing rules as having
the power to audit the books of
accounts of unions are actually
officials of the BLR because the word
"Bureau" is defined in Rule 1, sec. 1(b)
of the same rules as the Bureau of
Labor Relations.
Anyway, the delegation of authority to
union accounts examiners in Rule 1,
sec. 1(ff) is not exclusive. By indorsing
the case to the BLR, the Secretary of
Labor and Employment must be
presumed to have authorized the BLR
to act on his behalf. As already stated,
the Secretary made two indorsements:
first, when he referred to the BLR the
letter dated July 27, 1989 of Ramon de
la Cruz and Norma Marin seeking the
annulment of the audit report of the
DOLE NCR, and second, on September
4, 1990 when, instead of acting on the
petition for review of the union, he
indorsed it to the BLR.
Independently of any delegation, the
BLR had power of its own to conduct
the examination of accounts in this
case. Book IV, Title VII, Chapter 4, sec.
16 of the Administrative Code of 1987
provides:
Sec. 16. Bureau of Labor
Relations. The Bureau of Labor
Relations shall set policies, standards,
and procedures on the registration and
supervision of legitimate labor union
activities including denial, cancellation
and revocation of labor union permits.
It shall also set policies, standards,
and procedure relating to collective
bargaining agreements, and the
examination of financial records of
accounts of labor organizations to
determine compliance with relevant
laws.
The Bureau shall also provide proper
orientation to workers on their rights
and privileges under existing laws and
regulations, and develop schemes and
project for the improvement of the
standards of living of workers and their
families.
The Labor Code, as amended by RA
6715, likewise authorizes the BLR to
decide intra-union disputes. This
includes the examinations of accounts.
Thus, Art. 226 of the Code provides:
Art. 226. Bureau of Labor
Relations. The Bureau of Labor
Relations and the Labor Relations
Divisions in the regional offices of the
Department of Labor shall have
original and exclusive authority to act,
at their own initiative or upon request
of either or both parties, on all
inter-union and intra-union conflicts,
and all disputes, grievances or
problems arising from or affecting
labor-management relations in all
workplaces whether agricultural or
non-agricultural, except those arising
from the implementation or
interpretation of collective bargaining
agreements which shall be the subject
of grievance procedure and/or
voluntary arbitration.
The Bureau shall have fifteen (15)
working days to act on labor cases
before it, subject to extension by
agreement of the parties.
Petitioner's contention that the intra-
union dispute mentioned in this
provision does not include the
examination of accounts of the union
because it contemplates intra-union
conflicts affecting labor-management
relations is untenable. Conflicts
affecting labor-management relations
are apart from intra-union conflicts, as
is apparent from the text of Art. 226.
This brings us to the second question,
whether the examination of accounts
in this case is valid considering that it
was not initiated through a sworn
written complaint by at least 20% of
the total membership of the LTWU. As
already stated, the case arose from a
letter written by 200, out of a total
membership force of 1,015 of the
LTWU. These represented 19.70% of
the total membership of the union,
just a little less than the required
number.
The requirements referred to were
inserted in Art. 274 by way of an
amendment by R.A. 6715 which took
effect on March 21, 1989. On the other
hand, the letter of the union members
petitioning for an examination of the
financial records of the union was
made on March 14, 1989, i.e., seven
days before the effectivity of the
amendments. At the time the letter
was made, Art. 274 merely provided:
Art. 274. Visitorial power. The
Secretary of Labor or his duly
authorized representative is hereby
empowered to inquire, from time to
time, into the financial activities of
legitimate labor organizations and to
examine their books of accounts and
other records to determine compliance
or non-compliance with the law and to
prosecute any violations of the law
and the union constitution and by-
laws.
The validity of the request for
examination of union accounts must
be determined as of the time of its
filing. Hence we hold that the request
of the 200 union members in this case
was validly made and conferred
jurisdiction on the DOLE-NCR to
conduct the examination of the books
of accounts of the petitioners.
It is indeed true that, in setting aside
the audit report of the DOLE-NCR, the
BLR cited the fact that the
examination of accounts had been
made within the so-called "freedom
period." But as the BLR pointed out in
its order dated September 29, 1989,
the ban on examination or audit of
union funds within 60 days of the
expiration of the collective bargaining
agreement had been a policy of the
Department of Labor and Employment
even before R.A. 6715 took effect.
There is, therefore, nothing
inconsistent in holding that the
examination of accounts by the DOLE-
NCR as void for having been
conducted within the freedom period
and saying now that since the letter
requesting such an examination was
made before the effectivity of R.A.
6715, the requirements of sworn
written complaint and support of at
least 20% of the total membership of
the union do not apply.
The examination subsequently ordered
by the BLR, although made after the
effectivity of R.A. 6715, was validly
conducted because it was simply a
continuation of proceedings already
began in the DOLE-NCR. As a matter of
fact the petitioners, in elevating the
matter to the Secretary of Labor,
specifically requested that their letter
be treated as a motion for
reconsideration or as an appeal from
the audit report of the DOLE-NCR.
Finally, it is claimed that petitioners
Ramon de la Cruz and Norma Marin
were denied due process by the BLR.
As already shown, however, they were
given every opportunity to defend
themselves, including a warning that if
they persisted in their refusal to
submit the books of accounts of the
union they would be considered to
have waived the right to present their
evidence. As they did not heed the
warning, we think the BLR was
justified in using, as basis of its
examination, the certification of La
Tondea, Inc. as to the amount
remitted by it to the LTWU as union
dues. This, at any rate, is a factual
matter and the rule is that the findings
of facts of administrative agencies,
when supported by substantial
evidence, will not be disturbed.
WHEREFORE, the petition for certiorari
is DISMISSED.
SO ORDERED.
ATTY. ALLAN S. MONTAO,
G.R. No. 168583
Petitioner,
- versus -
ATTY. ERNESTO C. VERCELES,
Promulgated:
Respondent.
July 26, 2010
DECISION
DEL CASTILLO, J.:
The Federation/Unions Constitution
and By-Laws govern the relationship
between and among its members.
They are akin to ordinary contracts in
that their provisions have obligatory
force upon the federation/ union and
its member. What has been expressly
stipulated therein shall be strictly
binding on both.
By this Petition for Review on
Certiorari,[1] petitioner Atty. Allan S.
Montao (Atty. Montao) assails the
Decision[2] dated May 28, 2004 and
Resolution[3] dated June 28, 2005 of
the Court of Appeals (CA) in CA-G.R.
SP No. 71731, which declared as null
and void his election as the National
Vice-President of Federation of Free
Workers (FFW), thereby reversing the
May 8, 2002 Decision[4] of the Bureau
of Labor Relations (BLR) in BLR-O-TR-
66-7-13-01.
Factual Antecedents
Atty. Montao worked as legal assistant
of FFW Legal Center on October 1,
1994.[5] Subsequently, he joined the
union of rank-and-file employees, the
FFW Staff Association, and eventually
became the employees union
president in July 1997. In November
1998, he was likewise designated
officer-in-charge of FFW Legal Center.
[6]
During the 21st National Convention
and Election of National Officers of
FFW, Atty. Montao was nominated for
the position of National Vice-President.
In a letter dated May 25, 2001,[7]
however, the Commission on Election
(FFW COMELEC), informed him that he
is not qualified for the position as his
candidacy violates the 1998 FFW
Constitution and By-Laws, particularly
Section 76 of Article XIX[8] and
Section 25 (a) of Article VIII,[9] both in
Chapter II thereof. Atty. Montao thus
filed an Urgent Motion for
Reconsideration[10] praying that his
name be included in the official list of
candidates.
Election ensued on May 26-27, 2001 in
the National Convention held at Subic
International Hotel, Olongapo City.
Despite the pending motion for
reconsideration with the FFW
COMELEC, and strong opposition and
protest of respondent Atty. Ernesto C.
Verceles (Atty. Verceles), a delegate to
the convention and president of
University of the East Employees
Association (UEEA-FFW) which is an
affiliate union of FFW, the convention
delegates allowed Atty. Montaos
candidacy. He emerged victorious and
was proclaimed as the National Vice-
President.
On May 28, 2001, through a letter[11]
to the Chairman of FFW COMELEC,
Atty. Verceles reiterated his protest
over Atty. Montaos candidacy which he
manifested during the plenary session
before the holding of the election in
the Convention. On June 18, 2001,
Atty. Verceles sent a follow-up
letter[12] to the President of FFW
requesting for immediate action on his
protest.
Proceedings before the Bureau of
Labor Relations
On July 13, 2001, Atty. Verceles, as
President of UEEA-FFW and officer of
the Governing Board of FFW, filed
before the BLR a petition[13] for the
nullification of the election of Atty.
Montao as FFW National Vice-
President. He alleged that, as already
ruled by the FFW COMELEC, Atty.
Montao is not qualified to run for the
position because Section 76 of Article
XIX of the FFW Constitution and By-
Laws prohibits federation employees
from sitting in its Governing Board.
Claiming that Atty. Montaos premature
assumption of duties and formal
induction as vice-president will cause
serious damage, Atty. Verceles likewise
prayed for injunctive relief.[14]
Atty. Montao filed his Comment with
Motion to Dismiss[15] on the grounds
that the Regional Director of the
Department of Labor and Employment
(DOLE) and not the BLR has
jurisdiction over the case; that the
filing of the petition was premature
due to the pending and unresolved
protest before the FFW COMELEC; and
that, Atty. Verceles has no legal
standing to initiate the petition not
being the real party in interest.
Meanwhile, on July 16, 2001, the FFW
COMELEC sent a letter to FFW National
President, Bro. Ramon J. Jabar, in
reference to the election protest filed
before it by Atty. Verceles. In this
correspondence, which was used by
Atty. Verceles as an additional annex
to his petition before the BLR, the FFW
COMELEC intimated its firm stand that
Atty. Montaos candidacy contravenes
the FFWs Constitution, by stating:
At the time Atty. Verceles lodged his
opposition in the floor before the
holding of the election, we, the
Comelec unanimously made the
decision that Atty. Montao and others
are disqualified and barred from
running for any position in the election
of the Federation, in view of pertinent
provisions of the FFW Constitution.
Our decision which we repeated
several times as final was however
further deliberated upon by the body,
which then gave the go signal for Atty.
Montaos candidacy notwithstanding
our decision barring him from running
and despite the fact that several
delegates took the floor [stating] that
the convention body is not a
constitutional convention body and as
such could not qualify to amend the
FFWs present constitution to allow
Atty. Montao to run.
We would like to reiterate what we
stated during the plenary session that
our decision was final in view of the
cited pertinent provisions of the FFW
Constitution and we submit that the
decision of the convention body in
allowing Atty. Montaos candidacy is
not valid in view of the fact that it runs
counter to the FFW Constitution and
the body at that time was not acting
as a Constitutional Convention body
empowered to amend the FFW
Constitution on the spot.
Our having conducted the election
does not depart from the fact that we
did not change our decision
disqualifying candidates such as Atty.
Allan S. Montao, and others from
running. The National Convention as a
co-equal constitutional body of the
Comelec was not given the license nor
the authority to violate the
Constitution. It therefore, cannot
reverse the final decision of the
Comelec with regard to the candidacy
of Atty. Allan Montao and other
disqualified candidates.[16]
The BLR, in its Order dated August 20,
2001,[17] did not give due course to
Atty. Montaos Motion to Dismiss but
ordered the latter to submit his answer
to the petition pursuant to the rules.
The parties thereafter submitted their
respective pleadings and position
papers.
On May 8, 2002, the BLR rendered a
Decision[18] dismissing the petition
for lack of merit. While it upheld its
jurisdiction over the intra-union
dispute case and affirmed, as well,
Atty. Verceles legal personality to
institute the action as president of an
affiliate union of FFW, the BLR ruled
that there were no grounds to hold
Atty. Montao unqualified to run for
National Vice-President of FFW. It held
that the applicable provision in the
FFW Constitution and By-Laws to
determine whether one is qualified to
run for office is not Section 76 of
Article XIX[19] but Section 26 of Article
VIII[20] thereof. The BLR opined that
there was sufficient compliance with
the requirements laid down by this
applicable provision and, besides, the
convention delegates unanimously
decided that Atty. Montao was
qualified to run for the position of
National Vice-President.
Atty. Verceles filed a Motion for
Reconsideration but it was denied by
the BLR.
Proceedings before the Court of
Appeals
Atty. Verceles thus elevated the matter
to the CA via a petition for certiorari,
[21] arguing that the Convention had
no authority under the FFW
Constitution and By-Laws to overrule
and set aside the FFW COMELECs
Decision rendered pursuant to the
latters power to screen candidates.
On May 28, 2004, the CA set aside the
BLRs Decision. While it agreed that
jurisdiction was properly lodged with
the BLR, that Atty. Verceles has legal
standing to institute the petition, and
that the applicable provision of FFW
Constitution and By-Laws is Section 26
of Article VIII and not Section 76 of
Article XIX, the CA however ruled that
Atty. Montao did not possess the
qualification requirement under
paragraph (d) of Section 26 that
candidates must be an officer or
member of a legitimate labor
organization. According to the CA,
since Atty. Montao, as legal assistant
employed by FFW, is considered as
confidential employee, consequently,
he is ineligible to join FFW Staff
Association, the rank-and-file union of
FFW. The CA, thus, granted the
petition and nullified the election of
Atty. Montao as FFW National Vice-
President.
Atty. Montao moved for
reconsideration claiming that the CA
seriously erred in granting Atty.
Verceles petition on the ground that
FFW Staff Association, of which he is
an officer and member, is not a
legitimate labor organization. He
asserted that the legitimacy of the
union was never raised as an issue.
Besides, the declaration of the CA that
FFW Staff Association is not a
legitimate labor organization amounts
to a collateral attack upon its legal
personality, which is proscribed by law.
Atty. Montao also reiterated his
allegations of lack of jurisdiction and
lack of cause of action due to a
pending protest. In addition, he
claimed violation of the mandatory
requirement on certification against
forum shopping and mootness of the
case due to the appointment of Atty.
Verceles as Commissioner of the
National Labor Relations Commission
(NLRC), thereby divesting himself of
interest in any matters relating to his
affiliation with FFW.
Believing that it will be prejudiced by
the CA Decision since its legal
existence was put at stake, the FFW
Staff Association, through its
president, Danilo A. Laserna, sought
intervention.
On June 28, 2005, the CA issued a
Resolution[22] denying both Atty.
Montaos motion for
reconsideration[23] and FFW Staff
Associations motion for
intervention/clarification.[24]
Issues
Hence, this petition anchored on the
following grounds:
I.
THE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK AND/OR EXCESS
OF JURISDICTION, IN RENDERING THE
ASSAILED DECISION, IN THAT:
A.) THE SOLE GROUND USED
AND/OR INVOKED IN GRANTING THE
PETITION A QUO WAS NOT EVEN
RAISED AND/OR INVOKED BY
PETITIONER;
B.) THE DECLARATION THAT
FFW STAFF ASSOCIATION IS NOT A
LEGITIMATE LABOR ORGANIZATION,
WITHOUT GIVING SAID ORGANIZATION
A DAY IN COURT AMOUNTS TO A
COLLATERAL ATTACK PROSCRIBED
UNDER THE LAW; AND
C.) THE COURT OF APPEALS
FAILED AND/OR REFUSED TO PASS
UPON OTHER LEGAL ISSUES WHICH
HAD BEEN TIMELY RAISED,
SPECIFICALLY ON THE PREMATURITY
OF THE COMPLAINT AND THE LACK OF
CERTIFICATION AGAINST FORUM
SHOPPING OF THE PETITION A QUO.
II.
THE COURT OF APPEALS ERRED IN
UPHOLDING THE EXERCISE OF
JURISDICTION BY HEREIN RESPONDENT
BUREAU AND IN NOT ORDERING THE
DISMISSAL OF THE CASE, DESPITE
EXPRESS PROVISION OF LAW
GRANTING SAID JURISDICTION OVER
CASES INVOLVING PROTESTS AND
PETITIONS FOR ANNULMENT OF
RESULTS OF ELECTIONS TO THE
REGIONAL DIRECTORS OF THE
DEPARTMENT OF LABOR AND
EMPLOYMENT.
III.
IN THE ALTERNATIVE, THE COURT OF
APPEALS LIKEWISE ERRED IN NOT
ORDERING THE DISMISSAL OF THE
PETITION A QUO, IN THAT:
A.) THE FILING
OF THE PETITION FOR NULLIFICATION
OF THE RESULT OF ELECTION IS
PREMATURE, IN VIEW OF PENDENCY
OF HEREIN RESPONDENT ATTY.
VERCELES PROTEST BEFORE THE
COMMISSION ON ELECTION OF THE
FEDERATION OF FREE WORKERS (FFW
COMELEC) AT THE TIME OF THE FILING
OF THE SAID PETITION, HENCE, HE
HAS NO CAUSE OF ACTION; AND
B.) HEREIN
RESPONDENT ATTY. VERCELES HAS
VIOLATED SECTION 5, RULE 7 OF THE
1997 RULES ON CIVIL PROCEDURE, AS
HIS PETITION A QUO HAS NO
CERTIFICATION AGAINST FORUM
SHOPPING, WHICH IS A MANDATORY
REQUIREMENT. IT IS ALSO IN UTTER
DISREGARD AND IN GROSS VIOLATION
OF SUPREME COURT CIRCULAR NO.
04-94.
IV.
FINALLY, ASSUMING ARGUENDO THAT
HEREIN RESPONDENT BUREAU ACTED
WITH JURISDICTION OVER THE CASE;
AND ASSUMING FURTHER THAT
HEREIN RESPONDENT ATTY. VERCELES
HAS A CAUSE OF ACTION, DESPITE
THE PENDENCY OF HIS PROTEST
BEFORE FFWS COMELEC AT THE TIME
HE FILED HIS PETITION A QUO; AND
ASSUMING FINALLY, THAT HEREIN
RESPONDENT ATTY. VERCELES BE
EXCUSED IN DISREGARDING THE
MANDATORY REQUIREMENT ON
CERTIFICATION AGAINST FORUM
SHOPPING WHICH WAS TIMELY
OBJECTED TO, THE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF
DISCRETION, AMOUNTING TO LACK
AND/OR EXCESS OF JURISDICTION, IN
NOT ORDERING THE DISMISSAL OF
THE CASE FOR HAVING BEEN
RENDERED MOOT AND ACADEMIC BY A
SUPERVENING EVENT THAT WAS,
WHEN HEREIN RESPONDENT ATTY.
VERCELES SOUGHT APPOINTMENT
AND WAS APPOINTED AS
COMMISSIONER OF THE NATIONAL
LABOR RELATIONS COMMISSION
(NLRC), THUS, DIVESTING HIMSELF
WITH ANY INTEREST WITH MATTERS
RELATING TO HIS FORMER
MEMBERSHIP AND AFFILIATION WITH
THE FEDERATION OF FREE WORKERS
(FFW), HENCE, HE IS NO LONGER A
REAL PARTY IN INTEREST, AS HE DOES
NOT STAND TO BE INJURED OR
BENEFITED BY THE JUDGMENT IN THE
INSTANT CASE.[25]
Atty. Montao contends that the CA
gravely erred in upholding the
jurisdiction of the BLR; in not declaring
as premature the petition in view of
the pending protest before FFW
COMELEC; in not finding that the
petition violated the rule on non-forum
shopping; in not dismissing the case
for being moot in view of the
appointment of Atty. Verceles as NLRC
Commissioner; and in granting the
petition to annul his election as FFW
National Vice-President on the ground
that FFW Staff Association is not a
legitimate labor organization.
Our Ruling
The petition is devoid of merit.
The BLR has jurisdiction over intra-
union disputes involving a federation.
We find no merit in petitioners claim
that under Section 6 of Rule
XV[26] in relation to Section 1 of Rule
XIV[27] of Book V of the Omnibus
Rules Implementing the Labor Code, it
is the Regional Director of the DOLE
and not the BLR who has jurisdiction
over election protests.
Section 226 of the Labor Code[28]
clearly provides that the BLR and the
Regional Directors of DOLE have
concurrent jurisdiction over inter-union
and intra-union disputes. Such
disputes include the conduct or
nullification of election of union and
workers association officers.[29] There
is, thus, no doubt as to the BLRs
jurisdiction over the instant dispute
involving member-unions of a
federation arising from disagreement
over the provisions of the federations
constitution and by-laws.
We agree with BLRs observation that:
Rule XVI lays down the decentralized
intra-union dispute settlement
mechanism. Section 1 states that any
complaint in this regard shall be filed
in the Regional Office where the union
is domiciled. The concept of domicile
in labor relations regulation is
equivalent to the place where the
union seeks to operate or has
established a geographical presence
for purposes of collective bargaining or
for dealing with employers concerning
terms and conditions of employment.
The matter of venue becomes
problematic when the intra-union
dispute involves a federation, because
the geographical presence of a
federation may encompass more than
one administrative region. Pursuant to
its authority under Article 226, this
Bureau exercises original jurisdiction
over intra-union disputes involving
federations. It is well-settled that FFW,
having local unions all over the
country, operates in more than one
administrative region. Therefore, this
Bureau maintains original and
exclusive jurisdiction over disputes
arising from any violation of or
disagreement over any provision of its
constitution and by-laws.[30]
The petition to annul Atty. Montaos
election as VP was not prematurely
filed.
There is likewise no merit to
petitioners argument that the petition
should have been immediately
dismissed due to a pending and
unresolved protest before the FFW
COMELEC pursuant to Section 6, Rule
XV, Book V of the Omnibus Rules
Implementing the Labor Code.[31]
It is true that under the Implementing
Rules, redress must first be sought
within the organization itself in
accordance with its constitution and
by-laws. However, this requirement is
not absolute but yields to exception
under varying circumstances.[32] In
the case at bench, Atty. Verceles made
his protest over Atty. Montaos
candidacy during the plenary session
before the holding of the election
proceedings. The FFW COMELEC,
notwithstanding its reservation and
despite objections from certain
convention delegates, allowed Atty.
Montaos candidacy and proclaimed
him winner for the position. Under the
rules, the committee on election shall
endeavor to settle or resolve all
protests during or immediately after
the close of election proceedings and
any protest left unresolved shall be
resolved by the committee within five
days after the close of the election
proceedings.[33] A day or two after
the election, Atty. Verceles made his
written/formal protest over Atty.
Montaos candidacy/proclamation with
the FFW COMELEC. He exhausted the
remedies under the constitution and
by-laws to have his protest acted upon
by the proper forum and even asked
for a formal hearing on the matter.
Still, the FFW COMELEC failed to timely
act thereon. Thus, Atty. Verceles had
no other recourse but to take the next
available remedy to protect the
interest of the union he represents as
well as the whole federation,
especially so that Atty. Montao,
immediately after being proclaimed,
already assumed and started to
perform the duties of the position.
Consequently, Atty. Verceles properly
sought redress from the BLR so that
the right to due process will not be
violated. To insist on the contrary is to
render the exhaustion of remedies
within the union as illusory and vain.
[34]
The allegation regarding certification
against forum shopping was belatedly
raised.
Atty. Montao accuses Atty. Verceles of
violating the rules on forum shopping.
We note however that this issue was
only raised for the first time in Atty.
Montaos motion for reconsideration of
the Decision of the CA, hence, the
same deserves no merit. It is settled
that new issues cannot be raised for
the first time on appeal or on motion
for reconsideration.[35] While this
allegation is related to the ground of
forum shopping alleged by Atty.
Montao at the early stage of the
proceedings, the latter, as a ground
for the dismissal of actions, is separate
and distinct from the failure to submit
a proper certificate against forum
shopping.[36]
There is necessity to resolve the case
despite the issues having become
moot.
During the pendency of this case, the
challenged term of office held and
served by Atty. Montao expired in
2006, thereby rendering the issues of
the case moot. In addition, Atty.
Verceles appointment in 2003 as NLRC
Commissioner rendered the case moot
as such supervening event divested
him of any interest in and affiliation
with the federation in accordance with
Article 213 of the Labor Code.
However, in a number of cases,[37] we
still delved into the merits
notwithstanding supervening events
that would ordinarily render the case
moot, if the issues are capable of
repetition, yet evading review, as in
this case.
As manifested by Atty. Verceles, Atty.
Montao ran and won as FFW National
President after his challenged term as
FFW National Vice-President had
expired. It must be stated at this
juncture that the legitimacy of Atty.
Montaos leadership as National
President is beyond our jurisdiction
and is not in issue in the instant case.
The only issue for our resolution is
petitioners qualification to run as FFW
National Vice-President during the May
26-27, 2001 elections. We find it
necessary and imperative to resolve
this issue not only to prevent further
repetition but also to clear any
doubtful interpretation and application
of the provisions of FFW Constitution &
By-laws in order to ensure credible
future elections in the interest and
welfare of affiliate unions of FFW.
Atty. Montao is not qualified to run as
FFW National Vice-President in view of
the prohibition established in Section
76, Article XIX of the 1998 FFW
Constitution and By-Laws.
Section 76, Article XIX of the FFW
Constitution and By-laws provides that
no member of the Governing Board
shall at the same time be an employee
in the staff of the federation. There is
no dispute that Atty. Montao, at the
time of his nomination and election for
the position in the Governing Board, is
the head of FFW Legal Center and the
President of FFW Staff Association.
Even after he was elected, albeit
challenged, he continued to perform
his functions as staff member of FFW
and no evidence was presented to
show that he tendered his resignation.
[38] On this basis, the FFW COMELEC
disqualified Atty. Montao. The BLR,
however, overturned FFW COMELECs
ruling and held that the applicable
provision is Section 26 of Article VIII.
The CA subsequently affirmed this
ruling of the BLR but held Atty. Montao
unqualified for the position for failing
to meet the requirements set forth
therein.
We find that both the BLR and CA
erred in their findings.
To begin with, FFW COMELEC is vested
with authority and power, under the
FFW Constitution and By-Laws, to
screen candidates and determine their
qualifications and eligibility to run in
the election and to adopt and
promulgate rules concerning the
conduct of elections.[39] Under the
Rules Implementing the Labor Code,
the Committee shall have the power to
prescribe rules on the qualification and
eligibility of candidates and such other
rules as may facilitate the orderly
conduct of elections.[40] The
Committee is also regarded as the
final arbiter of all election protests.[41]
From the foregoing, FFW COMELEC,
undeniably, has sufficient authority to
adopt its own interpretation of the
explicit provisions of the federations
constitution and by-laws and unless it
is shown to have committed grave
abuse of discretion, its decision and
ruling will not be interfered with. The
FFW Constitution and By-laws are clear
that no member of the Governing
Board shall at the same time perform
functions of the rank-and-file staff. The
BLR erred in disregarding this clear
provision. The FFW COMELECs ruling
which considered Atty. Montaos
candidacy in violation of the FFW
Constitution is therefore correct.
We, thus, concur with the CA that Atty.
Montao is not qualified to run for the
position but not for failure to meet the
requirement specified under Section
26 (d) of Article VIII of FFW
Constitution and By-Laws. We note
that the CAs declaration of the
illegitimate status of FFW Staff
Association is proscribed by law, owing
to the preclusion of collateral attack.
[42] We nonetheless resolve to affirm
the CAs finding that Atty. Montao is
disqualified to run for the position of
National Vice-President in view of the
proscription in the FFW Constitution
and By-Laws on federation employees
from sitting in its Governing Board.
Accordingly, the election of Atty.
Montao as FFW Vice-President is null
and void.
WHEREFORE, the petition is DENIED.
The assailed May 28, 2004 Decision of
the Court of Appeals in CA-G.R. SP No.
71731 nullifying the election of Atty.
Allan S. Montao as FFW National Vice-
President and the June 28, 2005
Resolution denying the Motion for
Reconsideration are AFFIRMED.
THE HERITAGE HOTEL MANILA,
acting through its owner, GRAND
PLAZA HOTEL CORPORATION,
Petitioner,
- versus -
NATIONAL UNION OF WORKERS IN
THE HOTEL, RESTAURANT AND
ALLIED INDUSTRIES-HERITAGE
HOTEL MANILA SUPERVISORS
CHAPTER (NUWHRAIN-HHMSC),
Respondent.
G.R. No. 178296
Present:
CARPIO, J.,
Chairperson,
NACHURA,
LEONARDO-DE CASTRO,*
ABAD, and
MENDOZA, JJ.
Promulgated:
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,[7] stating 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
Answer[8] 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 Petitioner moved for reconsideration,
negotiations. Respondent prayed for but the motion was also denied.[14]
the dismissal of the petition for the
In the meantime, Regional Director
following reasons: (a) petitioner is
Alex E. Maraan (Regional Director
estopped from questioning
Maraan) of DOLE-NCR finally resolved
respondents status as a legitimate
the petition for cancellation of
labor organization as it had already
registration. While finding that
recognized respondent as such during
respondent had indeed failed to file
the preelection conferences; (b)
financial reports and the list of its
petitioner is not the party-in-interest,
members for several years, he,
as the union members are the ones
nonetheless, denied the petition,
who would be disadvantaged by the
ratiocinating that freedom of
non-submission of financial reports; (c)
association and the employees right to
it has already complied with the
self-organization are more substantive
reportorial requirements, having
considerations. He took into account
submitted its financial statements for
the fact that respondent won the
1996, 1997, 1998, and 1999, its
certification election and that it had
updated list of officers, and its list of
already been certified as the exclusive
members for the years 1995, 1996,
bargaining agent of the supervisory
1997, 1998, and 1999; (d) the petition
employees. In view of the foregoing,
is already moot and academic,
Regional Director Maraanwhile
considering that the certification
emphasizing that the non-compliance
election had already been held, and
with the law is not viewed with
the members had manifested their will
favorconsidered the belated
to be represented by respondent.
submission of the annual financial
Citing National Union of Bank reports and the list of members as
Employees v. Minister of Labor, et al. sufficient compliance thereof and
[9] and Samahan ng Manggagawa sa considered them as having been
Pacific Plastic v. Hon. Laguesma,[10] submitted on time. The dispositive
the Med-Arbiter held that the portion of the decision[15] dated
pendency of a petition for cancellation December 29, 2001 reads:
of registration is not a bar to the
WHEREFORE, premises considered, the
holding of a certification election.
instant petition to delist the National
Thus, in an Order[11] dated January
Union of Workers in the Hotel,
26, 2001, the Med-Arbiter dismissed
Restaurant and Allied Industries-
petitioners protest, and certified
Heritage Hotel Manila Supervisors
respondent as the sole and exclusive
Chapter from the roll of legitimate
bargaining agent of all supervisory
labor organizations is hereby DENIED.
employees.
SO ORDERED.[16]
Petitioner subsequently appealed the
said Order to the DOLE Secretary.[12] Aggrieved, petitioner appealed the
The appeal was later dismissed by decision to the BLR.[17] BLR Director
DOLE Secretary Patricia A. Sto. Tomas Hans Leo Cacdac inhibited himself
(DOLE Secretary Sto. Tomas) in the from the case because he had been a
Resolution of August 21, 2002.[13] former counsel of respondent.
In view of Director Cacdacs inhibition,
DOLE Secretary Sto. Tomas took
cognizance of the appeal. In a
resolution[18] 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 resolution[20]
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 Resolution[23] 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.,[27]
pronounced 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 that the essence of due process is
or regulation to a subordinate.[28] simply an opportunity to be heard, or,
Applying the foregoing to the present as applied to administrative
case, it is clear that the DOLE proceedings, an opportunity to explain
Secretary, as the person exercising the ones side or an opportunity to seek a
power of supervision and control over reconsideration of the action or ruling
the BLR, has the authority to directly complained of.[32] Petitioner had the
exercise the quasi-judicial function opportunity to question the BLR
entrusted by law to the BLR Director. Directors inhibition and the DOLE
Secretarys taking cognizance of the
It is true that the power of control and
case when it filed a motion for
supervision does not give the
reconsideration of the latters decision.
Department Secretary unbridled
It would be well to state that a critical
authority to take over the functions of
component of due process is a hearing
his or her subordinate. Such authority
before an impartial and disinterested
is subject to certain guidelines which
tribunal, for all the elements of due
are stated in Book IV, Chapter 8,
process, like notice and hearing, would
Section 39(1)(a) of the Administrative
be meaningless if the ultimate
Code of 1987.[29] However, in the
decision would come from a partial
present case, the DOLE Secretarys act
and biased judge.[33] It was precisely
of taking over the function of the BLR
to ensure a fair trial that moved the
Director was warranted and
BLR Director to inhibit himself from the
necessitated by the latters inhibition
case and the DOLE Secretary to take
from the case and the objective to
over his function.
maintain the integrity of the decision,
as well as the Bureau itself.[30] Petitioner also insists that respondents
registration as a legitimate labor union
Petitioner insists that the BLR
should be cancelled. Petitioner posits
Directors subordinates should have
that once it is determined that a
resolved the appeal, citing the
ground enumerated in Article 239 of
provision under the Administrative
the Labor Code is present, cancellation
Code of 1987 which states, in case of
of registration should follow; it
the absence or disability of the head of
becomes the ministerial duty of the
a bureau or office, his duties shall be
Regional Director to cancel the
performed by the assistant head.[31]
registration of the labor organization,
The provision clearly does not apply
hence, the use of the word shall.
considering that the BLR Director was
Petitioner points out that the Regional
neither absent nor suffering from any
Director has admitted in its decision
disability; he remained as head of the
that respondent failed to submit the
BLR. Thus, to dispel any suspicion of
required documents for a number of
bias, the DOLE Secretary opted to
years; therefore, cancellation of its
resolve the appeal herself.
registration should have followed as a
Petitioner was not denied the right to matter of course.
due process when it was not notified in
We are not persuaded.
advance of the BLR Directors inhibition
and the DOLE Secretarys assumption Articles 238 and 239 of the Labor Code
of the case. Well-settled is the rule 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 self-organization
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. 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, L-53406, 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 self-organization
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 1996-
1999. With this submission, appellee submission. Punctuality on the part of
has substantially complied with its the union and its officers could have
duty to submit its financial report for prevented this petition.[41]
the said period. To rule differently
WHEREFORE, premises considered, the
would be to preclude the union, after
Court of Appeals Decision dated May
having failed to meet its periodic
30, 2005 and Resolution dated June 4,
obligations promptly, from taking
2007 are AFFIRMED.
appropriate measures to correct its
omissions. For the record, we do not SO ORDERED
view with favor appellees late