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SECOND DIVISION acting auditing examiner of the DOLE-

NCR, Nepomuceno Leao II, submitted


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

Petitioner, The case stemmed from the following


antecedents:
- versus -
On October 11, 1995, respondent filed
NATIONAL UNION OF WORKERS IN with the Department of Labor and
THE HOTEL, RESTAURANT AND Employment-National Capital Region
ALLIED INDUSTRIES-HERITAGE (DOLE-NCR) a petition for certification
HOTEL MANILA SUPERVISORS election.[2] The Med-Arbiter granted
CHAPTER (NUWHRAIN-HHMSC), the petition on February 14, 1996 and
ordered the holding of a certification
election.[3] On appeal, the DOLE petition for cancellation of registration.
Secretary, in a Resolution dated Petitioner maintained that the
August 15, 1996, affirmed the Med- resolution of the issue of whether
Arbiters order and remanded the case respondent is a legitimate labor
to the Med-Arbiter for the holding of a organization is crucial to the issue of
preelection conference on February whether it may exercise rights of a
26, 1997. Petitioner filed a motion for legitimate labor organization, which
reconsideration, but it was denied on include the right to be certified as the
September 23, 1996. bargaining agent of the covered
employees.
The preelection conference was not
held as initially scheduled; it was held Nevertheless, the certification election
a year later, or on February 20, 1998. pushed through on June 23, 2000.
Petitioner moved to archive or to Respondent emerged as the winner.[6]
dismiss the petition due to alleged
On June 28, 2000, petitioner filed a
repeated non-appearance of
Protest with Motion to Defer
respondent. The latter agreed to
Certification of Election Results and
suspend proceedings until further
Winner,[7] stating that the certification
notice. The preelection conference
election held on June 23, 2000 was an
resumed on January 29, 2000.
exercise in futility because, once
Subsequently, petitioner discovered respondents registration is cancelled,
that respondent had failed to submit it would no longer be entitled to be
to the Bureau of Labor Relations (BLR) certified as the exclusive bargaining
its annual financial report for several agent of the supervisory employees.
years and the list of its members since Petitioner also claimed that some of
it filed its registration papers in 1995. respondents members were not
Consequently, on May 19, 2000, qualified to join the union because
petitioner filed a Petition for they were either confidential
Cancellation of Registration of employees or managerial employees.
respondent, on the ground of the non- It then prayed that the certification of
submission of the said documents. the election results and winner be
Petitioner prayed that respondents deferred until the petition for
Certificate of Creation of Local/Chapter cancellation shall have been resolved,
be cancelled and its name be deleted and that respondents members who
from the list of legitimate labor held confidential or managerial
organizations. It further requested the positions be excluded from the
suspension of the certification election supervisors bargaining unit.
proceedings.[4]
Meanwhile, respondent filed its
On June 1, 2000, petitioner reiterated Answer[8] to the petition for the
its request by filing a Motion to cancellation of its registration. It
Dismiss or Suspend the [Certification averred that the petition was filed
Election] Proceedings,[5] arguing that primarily to delay the conduct of the
the dismissal or suspension of the certification election, the respondents
proceedings is warranted, considering certification as the exclusive
that the legitimacy of respondent is bargaining representative of the
seriously being challenged in 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, the appeal than the DOLE Secretary.
DOLE Secretary Sto. Tomas took The CA brushed aside the allegation of
cognizance of the appeal. In a bias and partiality on the part of the
resolution[18] dated February 21, DOLE Secretary, considering that such
2003, she dismissed the appeal, allegation was not supported by any
holding that the constitutionally evidence.
guaranteed freedom of association
The CA also found that the DOLE
and right of workers to self-
Secretary did not commit grave abuse
organization outweighed respondents
of discretion when she affirmed the
noncompliance with the statutory
dismissal of the petition for
requirements to maintain its status as
cancellation of respondents
a legitimate labor organization.
registration as a labor organization.
Petitioner filed a motion for Echoing the DOLE Secretary, the CA
reconsideration,[19] but the motion held that the requirements of
was likewise denied in a resolution[20] registration of labor organizations are
dated May 30, 2003. DOLE Secretary an exercise of the overriding police
Sto. Tomas admitted that it was the power of the State, designed for the
BLR which had jurisdiction over the protection of workers against potential
appeal, but she pointed out that the abuse by the union that recruits them.
BLR Director had voluntarily inhibited These requirements, the CA opined,
himself from the case because he should not be exploited to work
used to appear as counsel for against the workers constitutionally
respondent. In order to maintain the protected right to self-organization.
integrity of the decision and of the
Petitioner filed a motion for
BLR, she therefore accepted the
reconsideration, invoking this Courts
motion to inhibit and took cognizance
ruling in Abbott Labs. Phils., Inc. v.
of the appeal.
Abbott Labs. Employees Union,[21]
Petitioner filed a petition for certiorari which categorically declared that the
with the CA, raising the issue of DOLE Secretary has no authority to
whether the DOLE Secretary acted review the decision of the Regional
with grave abuse of discretion in Director in a petition for cancellation
taking cognizance of the appeal and of union registration, and Section 4,
affirming the dismissal of its petition [22] Rule VIII, Book V of the Omnibus
for cancellation of respondents Rules Implementing the Labor Code.
registration.
In its Resolution[23] dated June 4,
In a Decision dated May 30, 2005, the 2007, the CA denied petitioners
CA denied the petition. The CA opined motion, stating that the BLR Directors
that the DOLE Secretary may legally inhibition from the case was a
assume jurisdiction over an appeal peculiarity not present in the Abbott
from the decision of the Regional case, and that such inhibition justified
Director in the event that the Director the assumption of jurisdiction by the
of the BLR inhibits himself from the DOLE Secretary.
case. According to the CA, in the
In this petition, petitioner argues that:
absence of the BLR Director, there is
no person more competent to resolve I.
But as pointed out by the CA, the
present case involves a peculiar
The Court of Appeals seriously erred in
circumstance that was not present or
ruling that the Labor Secretary
covered by the ruling in Abbott. In this
properly assumed jurisdiction over
case, the BLR Director inhibited
Petitioners appeal of the Regional
himself from the case because he was
Directors Decision in the Cancellation
a former counsel of respondent. Who,
Petition x x x.
then, shall resolve the case in his
place?

A. Jurisdiction is conferred only In Abbott, the appeal from the


by law. The Labor Secretary had no Regional Directors decision was
jurisdiction to review the decision of directly filed with the Office of the
the Regional Director in a petition for DOLE Secretary, and we ruled that the
cancellation. Such jurisdiction is latter has no appellate jurisdiction. In
conferred by law to the BLR. the instant case, the appeal was filed
by petitioner with the BLR, which,
undisputedly, acquired jurisdiction
B. The unilateral inhibition by over the case. Once jurisdiction is
the BLR Director cannot justify the acquired by the court, it remains with
Labor Secretarys exercise of it until the full termination of the case.
jurisdiction over the Appeal. [25]
Thus, jurisdiction remained with the
BLR despite the BLR Directors
C. The Labor Secretarys inhibition. When the DOLE Secretary
assumption of jurisdiction over the resolved the appeal, she merely
Appeal without notice violated stepped into the shoes of the BLR
Petitioners right to due process. Director and performed a function that
the latter could not himself perform.
She did so pursuant to her power of
II. supervision and control over the BLR.
[26]
Expounding on the extent of the power
The Court of Appeals gravely erred in of control, the Court, in Araneta, et al.
affirming the dismissal of the v. Hon. M. Gatmaitan, et al.,[27]
Cancellation Petition despite the pronounced that, if a certain power or
mandatory and unequivocal provisions authority is vested by law upon the
of the Labor Code and its Department Secretary, then such
Implementing Rules.[24] power or authority may be exercised
The petition has no merit. directly by the President, who
exercises supervision and control over
Jurisdiction to review the decision of the departments. This principle was
the Regional Director lies with the BLR. incorporated in the Administrative
This is clearly provided in the Code of 1987, which defines
Implementing Rules of the Labor Code supervision and control as including
and enunciated by the Court in Abbott. 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 members in order to verify if it is still
REGISTRATION; APPEAL viable and financially sustainable as
an organization so as to protect the
The certificate of registration of any
employer and employees from
legitimate labor organization, whether
fraudulent or fly-by-night unions. With
national or local, shall be canceled by
the submission of the required
the Bureau if it has reason to believe,
documents by respondent, the
after due hearing, that the said labor
purpose of the law has been achieved,
organization no longer meets one or
though belatedly.
more of the requirements herein
prescribed.[34] We cannot ascribe abuse of discretion
to the Regional Director and the DOLE
Secretary in denying the petition for
ART. 239. GROUNDS FOR cancellation of respondents
CANCELLATION OF UNION registration. The union members and,
REGISTRATION. in fact, all the employees belonging to
the appropriate bargaining unit should
The following shall constitute grounds not be deprived of a bargaining agent,
for cancellation of union registration: merely because of the negligence of
xxxx the union officers who were
responsible for the submission of the
(d) Failure to submit the annual documents to the BLR.
financial report to the Bureau within
thirty (30) days after the closing of Labor authorities should, indeed, act
every fiscal year and with circumspection in treating
misrepresentation, false entries or petitions for cancellation of union
fraud in the preparation of the registration, lest they be accused of
financial report itself; interfering with union activities. In
resolving the petition, consideration
xxxx must be taken of the fundamental
rights guaranteed by Article XIII,
(i) Failure to submit list of individual
Section 3 of the Constitution, i.e., the
members to the Bureau once a year or
rights of all workers to self-
whenever required by the Bureau.[35]
organization, collective bargaining and
These provisions give the Regional negotiations, and peaceful concerted
Director ample discretion in dealing activities. Labor authorities should
with a petition for cancellation of a bear in mind that registration confers
unions registration, particularly, upon a union the status of legitimacy
determining whether the union still and the concomitant right and
meets the requirements prescribed by privileges granted by law to a
law. It is sufficient to give the Regional legitimate labor organization,
Director license to treat the late filing particularly the right to participate in
of required documents as sufficient or ask for certification election in a
compliance with the requirements of bargaining unit.[36] Thus, the
the law. After all, the law requires the cancellation of a certificate of
labor organization to submit the registration is the equivalent of
annual financial report and list of snuffing out the life of a labor
organization. For without such (c) Voluntary dissolution by the
registration, it loses - as a rule - its members.
rights under the Labor Code.[37]
R.A. No. 9481 also inserted in the
It is worth mentioning that the Labor Labor Code Article 242-A, which
Codes provisions on cancellation of provides:
union registration and on reportorial
ART. 242-A. Reportorial
requirements have been recently
Requirements.The following are
amended by Republic Act (R.A.) No.
documents required to be submitted
9481, An Act Strengthening the
to the Bureau by the legitimate labor
Workers Constitutional Right to Self-
organization concerned:
Organization, Amending for the
Purpose Presidential Decree No. 442, (a) Its constitution and by-laws, or
As Amended, Otherwise Known as the amendments thereto, the minutes of
Labor Code of the Philippines, which ratification, and the list of members
lapsed into law on May 25, 2007 and who took part in the ratification of the
became effective on June 14, 2007. constitution and by-laws within thirty
The amendment sought to strengthen (30) days from adoption or ratification
the workers right to self-organization of the constitution and by-laws or
and enhance the Philippines amendments thereto;
compliance with its international
obligations as embodied in the (b) Its list of officers, minutes of the
International Labour Organization (ILO) election of officers, and list of voters
Convention No. 87,[38] pertaining to within thirty (30) days from election;
the non-dissolution of workers (c) Its annual financial report within
organizations by administrative thirty (30) days after the close of
authority.[39] Thus, R.A. No. 9481 every fiscal year; and
amended Article 239 to read:
(d) Its list of members at least once a
ART. 239. Grounds for Cancellation of year or whenever required by the
Union Registration.The following may Bureau.
constitute grounds for cancellation of
union registration: Failure to comply with the above
requirements shall not be a ground for
(a) Misrepresentation, false statement cancellation of union registration but
or fraud in connection with the shall subject the erring officers or
adoption or ratification of the members to suspension, expulsion
constitution and by-laws or from membership, or any appropriate
amendments thereto, the minutes of penalty.
ratification, and the list of members
who took part in the ratification; ILO Convention No. 87, which we have
ratified in 1953, provides that workers
(b) Misrepresentation, false and employers organizations shall not
statements or fraud in connection with be liable to be dissolved or suspended
the election of officers, minutes of the by administrative authority. The ILO
election of officers, and the list of has expressed the opinion that the
voters; cancellation of union registration by
the registrar of labor unions, which in
our case is the BLR, is tantamount to guaranteed freedom of association
dissolution of the organization by and right of workers to self-
administrative authority when such organization. Also involved is the
measure would give rise to the loss of public policy to promote free trade
legal personality of the union or loss of unionism and collective bargaining as
advantages necessary for it to carry instruments of industrial peace and
out its activities, which is true in our democracy. An overly stringent
jurisdiction. Although the ILO has interpretation of the statute governing
allowed such measure to be taken, cancellation of union registration
provided that judicial safeguards are in without regard to surrounding
place, i.e., the right to appeal to a circumstances cannot be allowed.
judicial body, it has nonetheless Otherwise, it would lead to an
reminded its members that dissolution unconstitutional application of the
of a union, and cancellation of statute and emasculation of public
registration for that matter, involve policy objectives. Worse, it can render
serious consequences for occupational nugatory the protection to labor and
representation. It has, therefore, social justice clauses that pervades
deemed it preferable if such actions the Constitution and the Labor Code.
were to be taken only as a last resort
Moreover, submission of the required
and after exhausting other possibilities
documents is the duty of the officers
with less serious effects on the
of the union. It would be unreasonable
organization.[40]
for this Office to order the cancellation
The aforesaid amendments and the of the union and penalize the entire
ILOs opinion on this matter serve to union membership on the basis of the
fortify our ruling in this case. We negligence of its officers. In National
therefore quote with approval the Union of Bank Employees vs. Minister
DOLE Secretarys rationale for denying of Labor, L-53406, 14 December 1981,
the petition, thus: 110 SCRA 296, the Supreme Court
ruled:
It is undisputed that appellee failed to
submit its annual financial reports and As aptly ruled by respondent Bureau of
list of individual members in Labor Relations Director Noriel: The
accordance with Article 239 of the rights of workers to self-organization
Labor Code. However, the existence of finds general and specific
this ground should not necessarily constitutional guarantees. x x x Such
lead to the cancellation of union constitutional guarantees should not
registration. Article 239 recognizes the be lightly taken much less nullified. A
regulatory authority of the State to healthy respect for the freedom of
exact compliance with reporting association demands that acts
requirements. Yet there is more at imputable to officers or members be
stake in this case than merely not easily visited with capital
monitoring union activities and punishments against the association
requiring periodic documentation itself.
thereof.
At any rate, we note that on 19 May
The more substantive considerations 2000, appellee had submitted its
involve the constitutionally 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