G.R. No.
96566 January 6, 1992
ATLAS LITHOGRAPHIC SERVICES, INC., petitioner,
vs.
UNDERSECRETARY BIENVENIDO E. LAGUESMA (Department of Labor and
Employment) and ATLAS LITHOGRAPHIC SERVICES, INC. SUPERVISORY,
ADMINISTRATIVE, PERSONNEL, PRODUCTION, ACCOUNTING AND
CONFIDENTIAL EMPLOYEES ASSOCIATION-KAISAHAN NG MANGGAWANG
PILIPINO (KAMPIL-KATIPUNAN), respondents.
Romero, Lagman, Valdecantos & Arreza Law Offices for petitioner.
Esteban M. Mendoza for private respondent.
GUTIERREZ, JR., J.:p
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the
modification of the Order dated 14 December 1990 and the Resolution dated 21
November 1990 issued by the public respondents.
The antecedent facts of the case as gathered from the records are as follows:
On July 16, 1990, the supervisory, administrative personnel, production,
accounting and confidential employees of the petitioner Atlas Lithographic
Services, Inc. (ALSI) affiliated with private respondent Kaisahan ng
Manggagawang Pilipino, a national labor organization. The local union adopted
the name Atlas Lithographic Services, Inc. Supervisory, Administrative,
Personnel, Production, Accounting and Confidential Employees Association or
ALSI-SAPPACEA-KAMPIL in short and which we shall hereafter refer to as the
"supervisors" union.
Shortly thereafter, private respondent Kampil-Katipunan filed on behalf of the
"supervisors" union a petition for certification election so that it could be the
sole and exclusive bargaining agent of the supervisory employees.
The petitioners opposed the private respondent's petition claiming that under
Article 245 of the Labor bode the private respondent cannot represent the
supervisory employees for collective bargaining purposeless because the private
respondent also represents the rank-and-file employees' union.
On September 18, 1990, the Med-Arbiter issued an order in favor of the private
respondent, the dispositive portion of which provides:
WHEREFORE, premises considered, a certification election
among the supervisory employees belonging to the
Administrative, Personnel, Production, Accounting
Departments as well as confidential employees performing
supervisory functions of Atlas Lithographic Services,
Incorporated is hereby ordered conducted within 20 days
from receipt hereof, subject to usual pre-election With the enactment in 1974 of the Labor Code (Pres Decree No. 442), employees
conference, with the following choices:
1. KAMPIL (KATIPUNAN);
2. No union.
SO ORDERED. (Rollo, pp. 39-40)
The petitioners, as expected, appealed for the reversal of the above order. The
public respondent, however, issued a resolution affirming the Med-Arbiter's
order.
The petitioners, in turn, filed a motion for reconsideration but the same was
denied. Hence, this petition for certiorari.
The sole issue to be resolved in this case is whether or not, under Article 245 of
the Labor Code, a local union of supervisory employees may be allowed to
affiliate with a national federation of labor organizations of rank-and-file
employees and which national federation actively represents its affiliates in
collective bargaining negotiations with the same employer of the supervisors
and in the implementation of resulting collective bargaining agreements.
The petitioner argues that KAMPIL-KATIPUNAN already represents its rank-and-
file employees and, therefore, to allow the supervisors of those employees to
affiliate with the private respondent is tantamount to allowing the
circumvention of the principle of the separation of unions under Article 245 of
the Labor Code.
It further argues that the intent of the law is to prevent a single labor
organization from representing different classes of employees with conflicting
interests.
The public respondent, on the other hand, contends that despite affiliation with
a national federation, the local union does not lose its personality which is
separate, and distinct from the national federation. It cites as its legal basis the
case of Adamson & Adamson, Inc. v. CIR (127 SCRA 268 [1984]).
It maintains that Rep. Act No. 6715 contemplates the principle laid down by this
Court in the Adamson case interpreting Section 3 of Rep. Act No. 875 (the
Industrial Peace Act) on the right of a supervisor's union to affiliate. The private
respondent asserts that the legislature must have noted the Adamson ruling
then prevailing when it conceived the reinstatement in the present Labor Code
of a similar provision on the right of supervisors to organize.
Under the Industrial Peace Act of 1953, employees were classified into three
groups, namely: (1) managerial employees; (2) supervisors; and (3) rank-and file
employees. Supervisors, who were considered employees in relation to their
employer could join a union but not a union of rank-and-file employees.
were classified into managerial and rank-and-file employees. Neither the
category of supervisors nor their right to organize under the old statute were
recognized. So that, in Bulletin Publishing Corporation v. Sanchez (144 SCRA 628
[1986]), the Court interpreted the superseding labor law to have removed from
supervisors the right to unionize among themselves. The Court ruled:
In the light of the factual background of this case, We are
constrained to hold that the supervisory employees of
petitioner firm may not, under the law, form a supervisors
union, separate and distinct from the existing bargaining
unit (BEU), composed of the rank-and-file employees of
the Bulletin Publishing Corporation. It is evident that most
of the private respondents are considered managerial
employees. Also, it is distinctly stated in Section 11, Rule II,
of the Omnibus Rules Implementing the Labor Code, that
supervisory unions are presently no longer recognized nor
allowed to exist and operate as such. (pp. 633, 634)
In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres. Decree
No. 442, the supervisory unions existing since the effectivity of the New Code in
January 1, 1975 ceased to operate as such and the members who did not qualify
as managerial employees under this definition in Article 212 (k) therein became
eligible to form, to join or assist a rank-and-file union.
A revision of the Labor Code undertaken by the bicameral Congress brought
about the enactment of Rep. Act No. 6715 in March 1989 in which employees
were reclassified into three groups, namely: (1) the managerial employees; (2)
supervisors; and (3) the rank and file employees. Under the present law, the
category of supervisory employees is once again recognized. Hence, Art. 212 (m)
states:
(m) . . . Supervisory employees are those who, in the
interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use
of independent judgment. . . .
The rationale for the amendment is the government's recognition of the right of
supervisors to organize with the qualification that they shall not join or assist in
the organization of rank-and-file employees. The reason behind the Industrial
Peace Act provision on the same subject matter has been adopted in the present
statute. The interests of supervisors on the one hand, and the rank-and-file
employees on the other, are separate and distinct. The functions of supervisors,
being recommendatory in nature, are more identified with the interests of the
employer. The performance of those functions may, thus, run counter to the
interests of the rank-and-file.
This intent of the law is made clear in the deliberations of the legislators on then
Senate Bill 530 now enacted as Rep. Act No. 6715.
The definition of managerial employees was limited to those having authority to
hire and fire while those who only recommend effectively the hiring or firing or
transfers of personnel would be considered as closer to rank-and-file employees.
The exclusion, therefore, of middle level executives from the category of
managers brought about a third classification, the supervisory employees. These
supervisory employees are allowed to form their own union but they are not
allowed to join the rank-and-file union because of conflict of interest (Journal of
the Senate, First Regular Session, 1987, 1988, Volume 3,
p. 2245).
In terms of classification, however, while they are more closely identified with
the rank-and-file they are still not allowed to join the union of rank-and-file
employees. To quote the Senate Journal:
In reply to Sen. Guingona's query whether "supervisors"
are included in the term "employee", Sen. Herrera stated
that while they are considered as rank-and-file employees,
they cannot join the union and they would have to form
their own supervisors' union pursuant to Rep. Act 875.
(supra, p. 2288)
The peculiar role of supervisors is such that while they are not managers, when
they recommend action implementing management policy or ask for the
discipline or dismissal of subordinates, they identify with the interests of the
employer and may act contrary to the interests of the rank-and-file.
We agree with the petitioner's contention that a conflict of interest may arise in
the areas of discipline, collective bargaining and strikes.
Members of the supervisory union might refuse to carry out disciplinary
measures against their co-member rank-and-file employees.
In the area of bargaining, their interests cannot be considered identical. The
needs of one are different from those of the other. Moreover, in the event of a
strike, the national federation might influence the supervisors' union to conduct
a sympathy strike on the sole basis of affiliation.
More important, the factual issues in the Adamson case are different from the
present case. First, the rank-and-file employees in the Adamson case are not
directly under the supervisors who comprise the supervisors' union. In the case
at bar, the rank-and file employees are directly under the supervisors organized
by one and the same federation.
The contemplation of the law in Sec. 3 of the Industrial Peace Act is to prohibit
supervisors from joining a labor organization of employees under their
supervision. Sec. 3 of the Industrial Peace Act provides:
of their own choosing and to engage in concerted activities
for the purpose of collective bargaining and other mutual
aid or protection. Individuals employed as supervisors shall
not be eligible for membership in a labor organization of
employees under their supervision but may form separate
organizations of their own (Emphasis supplied).
This was not the consideration in the Adamson case because as mentioned
earlier, the rank-and-file employees in the Adamson case were not under the
supervision of the supervisors involved.
Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715
provides:
Art. 245. Ineligibility of managerial employees to join any
labor organization: right of supervisory employees.
Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees shall
not be eligible for membership in a labor organization of
the rank-and-file employees but may join, assist or form
separate labor organizations of their own.
The Court construes Article 245 to mean that, as in Section 3 of the Industrial
Peace Act, supervisors shall not be given an occasion to bargain together with
the rank-and-file against the interests of the employer regarding terms and
conditions of work
Second, the national union in the Adamson case did not actively represent its
local chapters. In the present case, the local union is actively represented by the
national federation. In fact, it was the national federation, the KAMPIL-
KATIPUNAN, which initially filed a petition for certification in behalf of the
respondent union.
Thus, if the intent of the law is to avoid a situation where supervisors would
merge with the rank and-file or where the supervisors' labor organization would
represent conflicting interests, then a local supervisors' union should not be
allowed to affiliate with the national federation of union of rank-and-file
employees where that federation actively participates in union activity in the
company.
The petitioner further contends that the term labor organization includes a
federation considering that Art. 212 (g) mentions "any union or association of
employees."
The respondent, however, argues that the phrase refers to a local union only in
which case, the prohibition in Art. 245 is inapplicable to the case at bar.
national federation the members of which include local unions of rank-and-file
employees. The intent of the law is clear especially where, as in the case at bar,
the supervisors will be co-mingling with those employees whom they directly
supervise in their own bargaining unit.
Technicalities should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. (Rapid Manpower
Consultants, Inc. v. NLRC, 190 SCRA 747 [1990]) What should be paramount is
the intent behind the law, not its literal construction. Where one interpretation
would result in mischievous consequences while another would bring about
equity, justice, and the promotion of labor peace, there can be no doubt as to
what interpretation shall prevail.
Finally, the respondent contends that the law prohibits the employer from
interfering with the employees' right to self-organization.
There is no question about this intendment of the law. There is, however, in the
present case, no violation of such a guarantee to the employee. Supervisors are
not prohibited from forming their own union. What the law prohibits is their
membership in a labor organization of rank-and-file employees (Art. 245, Labor
Code) or their joining a national federation of rank-and-file employees that
includes the very local union which they are not allowed to directly join.
In a motion dated November 15, 1991 it appears that the petitioner has
knuckled under to the respondents' pressures and agreed to let the national
federation KAMPIL-KATIPUNAN represent its supervisors in negotiating a
collective bargaining agreement. Against the advise of its own counsel and on
the basis of alleged "industrial peace", the petitioner expressed a loss of interest
in pursuing this action. The petitioner is, of course, free to grant whatever
concessions it wishes to give to its employees unilaterally or through
negotiations but we cannot allow the resulting validation of an erroneous ruling
and policy of the Department of Labor and Employment (DOLE) to remain on the
basis of the petitioner's loss of interest. The December 14, 1990 order and the
November 21, 1990 resolution of DOLE are contrary to law and must be declared
as such.
WHEREFORE, the petition is hereby GRANTED. The private respondent is
disqualified from affiliating with a national federation of labor organizations
which includes the petitioner's rank-and-file employees.
SO ORDERED.

Sec. 3 Employees' Right to Self Organization. Employees The prohibition against a supervisors' union joining a local union of rank-and-file
shall have the right to self-organization and to form, join is replete with jurisprudence. The Court emphasizes that the limitation is not
or assist labor organizations of their own choosing for the confined to a case of supervisors wanting to join a rank-and-file local union. The
purpose of collective bargaining through representatives prohibition extends to a supervisors' local union applying for membership in a
Diokno v. Cacdac
G.R. No. 168475/ July 4, 2007
This is a Petition for Review on Certiorari under Rule 45 of the 1997
Revised Rules of Civil Procedure, seeking the nullification of the Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 83061, dated 17 June 2004
and 10 June 2005, respectively, which dismissed petitioners Petition for
Certiorari and denied their Motion for Reconsideration thereon.
The Facts
The First Line Association of Meralco Supervisory Employees
(FLAMES) is a legitimate labor organization which is the supervisory union of
Meralco. Petitioners and private respondents are members of FLAMES.
On 1 April 2003, the FLAMES Executive Board created the Committee
on Election (COMELEC) for the conduct of its union elections scheduled on 7 May
2003. The COMELEC was composed of petitioner Dante M. Tong as its chairman,
and petitioners Jaime C. Mendoza and Romeo M. Macapulay as members.
Subsequently, private respondents Jimmy S. Ong, Nardito C. Alvarez, Alfredo J.
Escall, and Jaime T. Valeriano filed their respective certificates of candidacy. On
12 April 2003, the COMELEC rejected Jimmy S. Ongs candidacy on the ground
that he was not a member of FLAMES. Meanwhile, the certificates of candidacy
of Nardito C. Alvarez, Alfredo J. Escall, and Jaime T. Valeriano were similarly
rejected on the basis of the exclusion of their department from the scope of the
existing collective bargaining agreement (CBA). The employees assigned to the
aforesaid department are allegedly deemed disqualified from membership in the
union for being confidential employees.
On 24 April 2003, private respondents Jimmy S. Ong, Nardito C. Alvarez,
Alfredo J. Escall, Jaime T. Valeriano (Ong, et al.), and a certain Leandro M. Tabilog
filed a Petition before the Med-Arbitration Unit of the Department of Labor and
Employment (DOLE). They prayed, inter alia, for the nullification of the order of
the COMELEC which disallowed their candidacy. They further prayed that
petitioners be directed to render an accounting of funds with full and detailed
disclosure of expenditures and financial transactions; and that a representative
from the Bureau of Labor Relations (BLR) be designated to act as chairman of the
COMELEC in lieu of petitioner Dante M. Tong.
On 30 April 2003, DOLE-NCR Regional Director Alex E. Maraan issued an
Order directing DOLE personnel to observe the conduct of the FLAMES election
on 7 May 2003.
On 2 May 2003, petitioners filed a Petition with the COMELEC seeking the
disqualification of private respondents Edgardo Daya, Pablo Lucas, Leandro
Tabilog, Reynaldo Espiritu, Jose Vito, Antonio de Luna, Armando Yalung, Edwin
Layug, Nards Pabilona, Reynaldo Reyes, Evangeline Escall, Alberto Alcantara,
Rogelio Cervitillo, Marcelino Morelos, and Faustino Ermino (Daya, et al.).
Petitioners alleged that Daya, et al., allowed themselves to be assisted by non-
union members, and committed acts of disloyalty which are inimical to the
interest of FLAMES. In their campaign, they allegedly colluded with the officers
of the Meralco Savings and Loan Association (MESALA) and the Meralco Mutual
Aid and Benefits Association (MEMABA) and exerted undue influence on the
members of FLAMES.
On 6 May 2003, the COMELEC issued a Decision, declaring Daya, et al.,
officially disqualified to run and/or to participate in the 7 May 2003 FLAMES
elections. The COMELEC also resolved to exclude their names from the list of
candidates in the polls or precincts, and further declared that any vote cast in
their favor shall not be counted. According to the COMELEC, Daya, et al.,
violated Article IV, Section 4(a)(6) of the FLAMES Constitution and By-Laws (CBL)
by allowing non-members to aid them in their campaign. Their acts of
solicitation for support from non-union members were deemed inimical to the
interest of FLAMES.
On 7 May 2003, the COMELEC proclaimed the following candidates,
including some of herein petitioners as winners of the elections, to wit:
NAME POSITION
Emilio E. Diokno President
Vicente P. Alcantara Executive Vice President External
Antonio Z. Vergara, Jr. Executive Vice President Internal
Alberto L. Mabugat Vice-President Organizing
Roberto D. Masiglat, Jr. Vice-President Education
Leandro C. Atienza Vice-President Chief Steward
Felito C. Macasaet Secretary
Edgardo R. Villanueva Asst. Secretary
Romulo C. Aquino Treasurer
Jesus D. Samia Asst. Treasurer
Gaudencio C. Camit Auditor
Rodante B. [Parao] Asst. Auditor
Jose Z. Tullo Central Coordinator
Bernardo C. Sevilla North Coordinator
Francis B. Escoto South Coordinator
On 8 May 2003, private respondents Daya, et al., along with Ong, et
al., filed with the Med-Arbitration Unit of the DOLE-NCR, a Petition to: a) Nullify
Order of Disqualification; b) Nullify Election Proceedings and Counting of Votes;
c) Declare Failure of Election; and d) Declare Holding of New Election to be
Controlled and Supervised by the DOLE. The Petition was docketed as Case No.
NCR-OD-0304-002-LRD.
On 14 May 2003, another group led by private respondent
Gaudencio Jimenez, Jr., along with private respondents Johnson S. Reyes, Gavino
R. Vidanes, Arnaldo G. Tayao, Bonifacio F. Cirujano, Edgardo G. Cadavona,
Maximo A. Caoc, Jose O. Maclit, Jr., Luzmindo D. Acorda, Jr., Lemuel R. Ragasa
and Gil G. de Vera (Jimenez, et al.) filed a Petition with the Med-Arbitration Unit
of the DOLE-NCR against petitioners to nullify the 7 May 2003 election on the
ground that the same was not free, orderly, and peaceful. It was docketed as
Case No. NCR-OD-0305-004-LRD, which was subsequently consolidated with the
Petition of Daya, et al. and the earlier Petition of Ong, et al.
Meanwhile, the records show that a subsequent election was held on
30 June 2004, which was participated in and won by herein private respondents
Daya, et al. The validity of the 30 June 2004 elections was assailed by herein
petitioners before the DOLE and taken to the Court of Appeals in CA-G.R. SP No.
88264 on certiorari, which case does not concern us in the instant Petition. The
Court of Appeals, in the aforesaid case, rendered a Decision dated 12 January
2007, upholding the validity of the 30 June 2004 elections, and the declaration of
herein private respondents Daya, et al., as the duly elected winners therein.
The Decision of the Med-Arbiter
On 7 July 2003, Med-Arbiter Tranquilino B. Reyes, Jr. issued a
Decision in favor of private respondents, Daya, et al. However, the petition of
Jimenez, et al., was dismissed because it was premature, it appearing that the
COMELEC had not yet resolved their protest prior to their resort to the Med-
Arbiter. Finally, the Petition of Ong, et al., seeking to declare themselves as bona
fide members of FLAMES was ordered dismissed.
The Med-Arbiter noted in his decision that during a conference which
was held on 15 May 2003, the parties agreed that the issue anent the
qualifications of private respondents Ong, et al. had been rendered moot and
academic.
The Med-Arbiter reversed the disqualification imposed by the
COMELEC against private respondents Daya, et al. He said that the COMELEC
accepted all the allegations of petitioners against private respondents Daya, et
al., sans evidence to substantiate the same. Moreover, he found that the
COMELEC erred in relying on Article IV, Section 4(a) (6) of the CBL as basis for
their disqualification. The Med-Arbiter read the aforesaid provision to refer to
the dismissal and/or expulsion of a member from FLAMES, but not to the
disqualification of a member as a candidate in a union election. He rationalized
that the COMELEC cannot disqualify a candidate on the same grounds for
expulsion of members, which power is vested by the CBL on the Executive
Board. The Med-Arbiter also held that there was a denial of due process
because the COMELEC failed to receive private respondents Daya, et al.s motion
for reconsideration of the order of their disqualification. The COMELEC was also
found to have refused to receive their written protest in violation of the unions
CBL.
Lastly, the Med-Arbiter defended his jurisdiction over the case. He
concluded that even as the election of union officers is an internal affair of the
union, his office has the right to inquire into the merits and conduct of the
election when its jurisdiction is sought.
The decretal portion of the Med-Arbiters Decision states, viz:
WHEREFORE, premises considered, the [P]etition to Nullify the Order
of Disqualification; Nullify Election proceedings and counting of Votes; and
Declare a Failure of Elections is hereby granted. The disqualification of [private
respondent] Ed[gardo] Daya, et al., is hereby considered as null and void.
Perforce, the election of union officers of FLAMES on May 7, 2003 is declared a
failure and a new election is ordered conducted under the supervision of the
Department of Labor and Employment.
The [P]etition to conduct an accounting of union funds and to stop
the release of funds to [petitioner] Diokno, et al., is ordered dismissed for lack of
merit.
And the Petition to Declare [private respondents] Jimmy Ong, Alfredo
[E]scall, Nardito Alvarez, and Jaime Valeriano as members of FLAMES is hereby
ordered dismissed for lack of merit.
The [P]etition to Nullify the election filed by
[private respondents] Gaudencio Jimenez, et al., is likewise
ordered dismissed.
Petitioners elevated the case to the Court of Appeals via a Petition for
Aggrieved, petitioners filed an appeal before Certiorari.
the Director of the BLR.
The Ruling of the Court of Appeals
The Ruling of the BLR Director
The Court of Appeals found petitioners appeal to be bereft of merit.
On 3 December 2003, the Director of the BLR issued a Resolution,
affirming in toto the assailed Decision of the Med-Arbiter.
The appellate court held that the provision relied upon by the COMELEC
concerns the dismissal and/or expulsion of union members, which power is
Public respondent Director Hans Leo J. Cacdac ruled, inter alia, that the vested in the FLAMES Executive Board, and not the COMELEC. It affirmed the
COMELECs reliance on Article IV, Section 4(a) (6) of the CBL, as a ground for finding of the BLR Director that the COMELEC, in disqualifying private
disqualifying private respondents Daya, et al., was premature. He echoed the respondents Daya, et al., committed a procedural shortcut. It held:
interpretation of the Med-Arbiter that the COMELEC erroneously resorted to the
aforecited provision which refers to the expulsion of a member from the union
on valid grounds and with due process, along with the requisite 2/3 vote of the
Executive Board. Hence, the COMELEC cut short the expulsion proceedings in
Without the requisite two-thirds (2/3) vote of the
disqualifying private respondents Daya, et al. The BLR Director further held that
Executive Board dismissing and/or expelling private
the case involves a question of disqualification on account of the alleged
respondents for acts contemplated thereunder, the
commission by private respondents Daya, et al., of illegal campaign acts, which
COMELEC was clearly violating the unions constitution
acts were not specifically mentioned in the guidelines for the conduct of election
and bylaws (sic) by utilizing the aforequoted provision in
as issued by the COMELEC. Likewise, on the alleged refusal of private
its said May 6, 2003 decision and, in the process,
respondents Daya, et al., to submit to the jurisdiction of the COMELEC by failing
arrogating unto itself a power it did not possess. As the
to file a petition to nullify its order of disqualification, the BLR Director deemed
document embodying the covenant between a union and
the same as an exception to the rule on exhaustion of administrative remedies.
Thus: its members and the fundamental law governing the
members rights and obligations, it goes without saying
that the constitution and bylaws (sic) should be upheld for
By themselves, such acts could not be taken as repugnant of COMELECs
as long as they are not contrary to law, good morals or
authority. Sensing that they were prejudiced by the disqualification order, it was
public policy.
only incumbent upon [private respondents Daya, et al.] to seek remedy before a
body, which they thought has a more objective perspective over the situation. In
short, they opted to bypass the administrative remedies within the union. Such
a move could not be taken against [private respondents Daya, et al.] considering
that non-exhaustion of administrative remedies is justified in instances where it On the matter of the failure of private respondents Daya, et al. to
would practically amount to a denial of justice, or would be illusory or vain, as in come up with 30 percent (30%) members support in filing the Petition to Nullify
the present controversy. the COMELECs Decision before the Med-Arbiter, the Court of Appeals said that
the petition did not involve the entire membership of FLAMES, so there was no
need to comply with the aforesaid requirement. Furthermore, the appellate
The BLR Director disposed in this wise:
court applied the exception to the rule on exhaustion of administrative remedies
on the ground, inter alia, that resort to such a remedy would have been futile,
WHEREFORE, the appeal is DISMISSED for lack of merit. The Decision of illusory or vain. Indeed, the Court of Appeals emphasized that private
Med-Arbiter Tranquilino B. Reyes, DOLE-NCR, dated 7 July 2003 is AFFIRMED in respondents Daya, et al., were directed by the COMELEC to file their Answer to
its entirety. the petition for their disqualification only on 5 May 2003. Private respondents
Daya, et al., filed their Answer on 6 May 2003. On the same day, the COMELEC
issued its Decision disqualifying them. A day after, the 7 May 2003 election was
Let the records of this case be returned to the DOLE-NCR for the
held. The Court of Appeals further stressed that private respondents Daya, et
immediate conduct of election of officers of the First Line Association of Meralco
al.s efforts to have their disqualification reconsidered were rebuffed by the
Supervisory Employees (FLAMES) under the supervision of DOLE-NCR personnel.
COMELEC; hence, they were left with no choice but to seek the intervention of
the BLR, which was declared to have jurisdiction over intra-union disputes even
Subsequently, petitioners sought a reversal of the 3 at its own initiative under Article 226 of the Labor Code.
December 2003 Resolution, but the BLR Director issued a
Resolution dated 10 February 2003, refusing to reverse his
Petitioners sought a reconsideration of the 17 June 2004 Decision of
earlier Resolution for lack of merit.
the Court of Appeals, but the same was denied in a Resolution dated 10 June
2005.
 Hence, the instant Petition.
At the outset, petitioners contend that the instant Petition falls under the
exceptions to the rule that the Supreme Court is not a trier of facts. They
implore this Court to make factual determination anent the conduct of the 7
May 2003 elections. They also question the jurisdiction of the BLR on the case at
bar because of the failure of private respondents Daya, et al., to exhaust
administrative remedies within the union. It is the stance of petitioner that
Article 226 of the Labor Code which grants power to the BLR to resolve inter-
union and intra-union disputes is dead law, and has been amended by Section 14
of Republic Act No. 6715, whereby the conciliation, mediation and voluntary
arbitration functions of the BLR had been transferred to the National Conciliation
and Mediation Board.
Petitioners similarly assert that the 7 May 2003 election was
conducted in a clean, honest, and orderly manner, and that private respondents,
some of whom are not bona fide members of FLAMES, were validly disqualified
by the COMELEC from running in the election. They also rehashed their
argument that non-members of the union were allowed by private respondents
Daya, et al., to participate in the affair. They challenge the finding of the BLR
Director that the reliance by the COMELEC on Article IV, Section 4(a)(6) of the
CBL, was premature. Petitioners insist that the COMELEC had the sole and
exclusive power to pass upon the qualification of any candidate, and therefore, it
has the correlative power to disqualify any candidate in accordance with its
guidelines.
For their part, private respondents Daya, et al., maintain that the
Petition they filed before the DOLE-NCR Med-Arbiter questioning the
disqualification order of the COMELEC and seeking the nullification of the 7 May
2003 election involves an intra-union dispute which is within the jurisdiction of
the BLR. They further claim that the COMELEC, in disqualifying them, mistakenly
relied on a provision in the FLAMES CBL that addresses the expulsion of
members from the union, and no expulsion proceedings were held against
them. Finally, they underscore the finding of the appellate court that there was
disenfranchisement among the general membership of FLAMES due to their
wrongful disqualification which restricted the members choices of candidates.
They reiterate the conclusion of the Court of Appeals that had the COMELEC
tabulated the votes cast in their favor, there would have been, at least, a basis
for the declaration that they lost in the elections.
Issues
Petitioners attribute to the Court of Appeals several errors to substantiate
their Petition. They all boil down, though, to the question of whether the Court
of Appeals committed grave abuse of discretion when it affirmed the jurisdiction
of the BLR to take cognizance of the case and then upheld the ruling of the BLR
Director and Med-Arbiter, nullifying the COMELECs order of disqualification of
private respondents Daya et al., and annulling the 7 May 2003 FLAMES elections.
The Courts Ruling
The Petition is devoid of merit.
We affirm the finding of the Court of Appeals upholding the
jurisdiction of the BLR. Article 226 of the Labor Code is hereunder reproduced,
to wit:
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 nonagricultural, 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.
The amendment to Article 226, as couched in Republic Act No. 6715,
which is relied upon by petitioners in arguing that the BLR had been divested of
its jurisdiction, simply reads, thus:
Sec. 14. The second paragraph of Article 226 of
the same Code is likewise hereby amended to read as
follows:
"The Bureau shall have fifteen (15) calendar
days to act on labor cases before it, subject to extension
by agreement of the parties."
This Court in Bautista v. Court of Appeals, interpreting Article 226 of
the Labor Code, was explicit in declaring that the BLR has the original and
exclusive jurisdiction on all inter-union and intra-union conflicts. We said that
since Article 226 of the Labor Code has declared that the BLR shall have original
and exclusive authority to act on all inter-union and intra-union conflicts, there
should be no more doubt as to its jurisdiction. As defined, an intra-union conflict
would refer to a conflict within or inside a labor union, while an inter-union
controversy or dispute is one occurring or carried on between or among unions.
More specifically, an intra-union dispute is defined under Section (z), Rule I of
the Rules Implementing Book V of the Labor Code, viz:
(z) Intra-Union Dispute refers to any conflict
between and among union members, and includes all
disputes or grievances arising from any violation of or
disagreement over any provision of the constitution and
by-laws of a union, including cases arising from chartering
or affiliation of labor organizations or from any violation of
the rights and conditions of union membership provided
for in the Code.
The controversy in the case at bar is an intra-union dispute. There is no
question that this is one which involves a dispute within or inside FLAMES, a
labor union. At issue is the propriety of the disqualification of private
respondents Daya, et al., by the FLAMES COMELEC in the 7 May 2003 elections.
It must also be stressed that even as the dispute involves allegations that private
respondents Daya, et al., sought the help of non-members of the union in their
election campaign to the detriment of FLAMES, the same does not detract from
the real character of the controversy. It remains as one which involves the
grievance over the constitution and bylaws of a union, and it is a controversy
involving members of the union. Moreover, the non-members of the union who
were alleged to have aided private respondents Daya, et al., are not parties in
the case. We are, therefore, unable to understand petitioners persistence in
placing the controversy outside of the jurisdiction of the BLR. The law is very
clear. It requires no further interpretation. The Petition which was initiated by
private respondents Daya, et al., before the BLR was properly within its
cognizance, it being an intra-union dispute. Indubitably, when private
respondents Daya, et al., brought the case to the BLR, it was an invocation of the
power and authority of the BLR to act on an intra-union conflict.
 After having settled the jurisdiction of the BLR, we proceed to determine if
petitioners correctly raised the argument that private respondents Daya, et al.,
prematurely sought the BLRs jurisdiction on the ground that they failed to
exhaust administrative remedies within the union. On this matter, we affirm the
findings of the Court of Appeals which upheld the application by the BLR Director
of the exception to the rule of exhaustion of administrative remedies.
In this regard, this Court is emphatic that before a party is allowed to seek
the intervention of the court, it is a pre-condition that he should have availed of
all the means of administrative processes afforded him. Hence, if a remedy
within the administrative machinery can still be resorted to by giving the
administrative officer concerned every opportunity to decide on a matter that
comes within his jurisdiction when such remedy should be exhausted first before
the courts judicial power can be sought. The premature invocation of courts
judicial intervention is fatal to ones cause of action.
Verily, there are exceptions to the applicability of the doctrine.
Among the established exceptions are: 1) when the question raised is purely
legal; 2) when the administrative body is in estoppel; 3) when the act
complained of is patently illegal; 4) when there is urgent need for judicial
intervention; 5) when the claim involved is small; 6) when irreparable damage
will be suffered; 7) when there is no other plain, speedy, and adequate remedy;
8) when strong public interest is involved; 9) when the subject of the proceeding
is private land; 10) in quo warranto proceedings; and 11) where the facts show
that there was a violation of due process. As aptly determined by the BLR
Director, private respondents Daya, et al., were prejudiced by the
disqualification order of the COMELEC. They endeavored to seek
reconsideration, but the COMELEC failed to act thereon. The COMELEC was also
found to have refused to receive their written protest. The foregoing facts
sustain the finding that private respondents Daya, et al., were deprived of due
process. Hence, it becomes incumbent upon private respondents Daya, et al., to
seek the aid of the BLR. To insist on the contrary is to render their exhaustion of
remedies within the union as illusory and vain. These antecedent circumstances
convince this Court that there was proper application by the Med-Arbiter of the
exception to the rule of exhaustion of administrative remedies, as affirmed by
the BLR Director, and upheld by the Court of Appeals.
We cannot accept, and the Court of Appeals rightfully rejected, the
contention of petitioners that the private respondents Daya, et al.s complaint
filed before the Med-Arbiter failed to comply with the jurisdictional requirement
because it was not supported by at least thirty percent (30%) of the members of
the union. Section 1 of Rule XIV of the Implementing Rules of Book V mandates
the thirty percent (30%) requirement only in cases where the issue involves the
entire membership of the union, which is clearly not the case before us. The issue
is obviously limited to the disqualification from participation in the elections by
particular union members.
Having resolved the jurisdictional cobwebs in the instant case, it is now apt
for this Court to address the issue anent the disqualification of private
respondents and the conduct of the 7 May 2003 elections.
On this matter, petitioners want this Court to consider the instant case as
an exception to the rule that the Supreme Court is not a trier of facts; hence,
importuning that we make findings of fact anew. It bears stressing that in a
petition for review on certiorari, the scope of this Courts judicial review of
decisions of the Court of Appeals is generally confined only to errors of law, and
questions of fact are not entertained. We elucidated on our fidelity to this rule,
and we said:
Thus, only questions of law may be brought by the parties and
passed upon by this Court in the exercise of its power to review. Also, judicial
review by this Court does not extend to a reevaluation of the sufficiency of the
evidence upon which the proper labor tribunal has based its determination.
It is aphoristic that a re-examination of factual
findings cannot be done through a petition for review on
certiorari under Rule 45 of the Rules of Court because as
earlier stated, this Court is not a trier of facts; it reviews
only questions of law. The Supreme Court is not duty-
bound to analyze and weigh again the evidence
considered in the proceedings below. This is already
outside the province of the instant Petition for Certiorari.
While there may be exceptions to this rule, petitioners
miserably failed to show why the exceptions should be
applied here. With greater force must this rule be applied
in the instant case where the factual findings of the Med-
Arbiter were affirmed by the BLR Director, and then,
finally, by the Court of Appeals. The findings below had
sufficient bases both in fact and in law. The uniform
conclusion was that private respondents Daya, et al., were
wrongfully disqualified by the COMELEC; consequently,
the FLAMES election should be annulled.
On the issue of disqualification, there was a blatant misapplication by the
COMELEC of the FLAMES CBL. As has been established ad nauseam, the
provision relied upon by the COMELEC in disqualifying private respondents Daya,
et al., applies to a case of expulsion of members from the union.
In full, Article IV, Section 4 (a) (6) of the FLAMES CBL, provides, to wit:
Section 4(a). Any member may be DISMISSED and/or EXPELLED from the
UNION, after due process and investigation, by a two-thirds (2/3) vote of the
Executive Board, for any of the following causes:
xxxx
(6) Acting in a manner harmful to the interest
and welfare of the UNION and/or its MEMBERS.
We highlight five points, thus:
First, Article IV, Section 4(a)(6) of the FLAMES CBL, embraces exclusively
the case of dismissal and/or expulsion of members from the union. Even a
cursory reading of the provision does not tell us that the same is to be
automatically or directly applied in the disqualification of a candidate from union
elections, which is the matter at bar. It cannot be denied that the COMELEC
erroneously relied on Article IV, Section 4(a)(6) because the same does not
contemplate the situation of private respondents Daya, et al. The latter are not
sought to be expelled or dismissed by the Executive Board. They were brought
before the COMELEC to be disqualified as candidates in the 7 May 2003
elections.
Second, the aforecited provision evidently enunciates with clarity the procedural
course that should be taken to dismiss and expel a member from FLAMES. The
CBL is succinct in stating that the dismissal and expulsion of a member from the
union should be after due process and investigation, the same to be exercised by
two-thirds (2/3) vote of the Executive Board for any of the causes mentioned
therein. The unmistakable directive is that in cases of expulsion and dismissal,
due process must be observed as laid down in the CBL.
Third, nevertheless, even if we maintain a lenient stance and
consider the applicability of Article IV, Section 4(a)(6) in the disqualification of
private respondents Daya, et al., from the elections of 7 May 2003, still, the
disqualification made by the COMELEC pursuant to the subject provision was a
rank disregard of the clear due process requirement embodied therein.
Nowhere do we find that private respondents Daya, et al. were investigated by
the Executive Board. Neither do we see the observance of the voting
requirement as regards private respondents Daya, et al. In all respects, they
were denied due process.
Fourth, the Court of Appeals, the BLR Director, and the Med-Arbiter
uniformly found that due process was wanting in the disqualification order of the
COMELEC. We are in accord with their conclusion. If, indeed, there was a
violation by private respondents Daya, et al., of the FLAMES CBL that could be a
ground for their expulsion and/or dismissal from the union, which in turn could
possibly be made a ground for their disqualification from the elections, the
procedural requirements for their expulsion should have been observed. In any
event, therefore, whether the case involves dismissal and/or expulsion from the
union or disqualification from the elections, the proper procedure must be
observed. The disqualification ruled by the COMELEC against private
respondents Daya, et al., must not be allowed to abridge a clear procedural
policy established in the FLAMES CBL. If we uphold the COMELEC, we are
countenancing a clear case of denial of due process which is anathema to the
Constitution of the Philippines which safeguards the right to due process.
Fifth, from another angle, the erroneous disqualification of private
respondents Daya, et al., constituted a case of disenfranchisement on the part of
the member-voters of FLAMES. By wrongfully excluding them from the 7 May
2003 elections, the options afforded to the union members were clipped.
Hence, the mandate of the union cannot be said to have been rightfully
determined. The factual irregularities in the FLAMES elections clearly provide
proper bases for the annulment of the union elections of 7 May 2003.

On a final note, as it appears that the question of the qualifications of

private respondents Ong, et al. had been rendered moot and academic, we do
not find any reason for this Court to rule on the matter. As borne out by the
records, the question had been laid to rest even when the case was still before
the Med-Arbiter.

WHEREFORE, the Petition is DENIED. The Decision of the Court of

Appeals dated 17 June 2004, and its Resolution dated 10 June 2005 in CA-G.R. SP
No. 83061 are AFFIRMED. Costs against petitioners.
G.R. No. L-47775 July 5, 1980
JULIAN DUYAG, ARMANDO OLIVARES, JOSE ECHEVARIA, ALEJANDRO SEVILLA
and FELIMON GUINGON, petitioners,
vs.
HON. AMANDO G. INCIONG, as Acting Director of Labor Relation CARMELO C.
NORIEL, as Director of Labor Relations, RICA R. MANALAD, HONORATO K.
LEANO, EDUARDO AMPARO and SANTOS PUERTO, respondents.
AQUINO, J.:
This case is about the removal of private respondents as union officers due to
alleged irregularities and anomalies in the administration of the affairs of the
union.
On January 14, 1977, the five petitioners, who are arrastre checkers of E. Razon,
Inc. in the South Harbor, Port Area, Manila as well as bona fide members of the
Associated Port Checkers and Workers Union, filed with Regional Office No. 4 of
the Department of Labor a complaint containing several charges against the four
private respondents, who, respectively, are the president (for more than twenty
years), treasurer, vice-president and auditor of the union.
The record reveals the following facts, some of which are admitted or not denied
by the private respondents, whiny the other facts are supported by substantial
evidence which is summarized in the decisions of the med-arbiter and the
Director of Labor Relations:
Unauthorized increases in union dues. for arrastre checkers, the monthly
union dues amount to ten pesos, as fixed in section 2(b), article VI of the union's
constitution and bylaws approved on September 5,1969.
The monthly union dues were increased by two pesos in the resolution of
September 1, 1970 and by five pesos in the resolution of March 14, 1972.
However, those two resolutions are void because they were not approved by
three-fourths of all the members of the board of directors, as required in article
VII of the union's constitution and by-laws, dealing with amendments.
The med-arbiter concluded that the increases in union dues and the deduction
from the mid-year bonus are void because the same were collected in
contravention of the constitution and by-laws.
Moreover, their collection was not covered by any check-off authorization nor
evidenced by any receipt and was in contravention of the Labor Code. The
amounts collected were not duly accounted for. The Labor Code provides:
ART. 242. Rights and conditions of membership in a labor
organization. The following are the rights and
conditions of membership in a labor organization:
xxxxxxxxx
(g) No officer, agent or member of a labor organization
shall collect any fees, dues, or other contributions in its
behalf or make any disbursement of its money or funds
unless he is duly authorized pursuant to its constitution
and by-laws;
(h) Every payment of fees, dues or other contributions by a
member shall be evidenced by a receipt signed by the
officer or agent making the collection and entered into the
record of the organization to be kept and maintained for
the purpose;
xxx xxx xxx
(n) No special assessment or other extraordinary fees may
be levied upon the members of a labor organization unless
authorized by a written resolution of a majority of all the
members at a general membership meeting duly caned for
the purpose. The secretary of the organization shall record
the minutes of the meeting including the list of all
members present, the votes cast, the purpose of the
special assessment or fees and the recipient of such
assessments or fees. The record shall be attested to by the
president;
The foregoing legal provisions apply squarely to the unauthorized deductions
from the wages of the arrastre checkers.
For such unauthorized collection of union dues, the responsibility of respondent
Ricardo R. Manalad, as union president, is not denied.
Withholding of union members' share in the profits amounting to P18,640.09.
E. Razon, Inc., the arrastre operator, paid to the union on December 18. 1973 the
sum of P25,684.61 as its share of the profits (profit-share) for the period from
May to October, 1973. Instead of distributing the whole amount to the union
members, the dents paid to them only P19,974 and retained the of P5,710.61
which had not been accounted for.
The Labor Arbiter found that other amounts were withheld by the respondents
from the union's profit-shares for subsequent periods. The total amount
withheld is P18,640.09 or P18.570.63, as shown in page 8 of private respondents'
memorandum.
With specific reference to the profit-share amounting to P22,559.50 paid by E.
Razon, Inc. for the period from November, 1973 to February, 1974, the
respondents deposited the amount in the account of the union's Cooperative
Credit Union of which respondent Manalad was also the president. Later, the
respondents withdrew the said amount, distributed among the union members
the sum of P20,848 and withheld the balance of P1,711.50, which respondent
Manalad and the union treasurer, respondent Honorato K. Leano appropriated
as follows:
Manalad Filipinas Bank and Trust Com pany, Manila
Hilton Branch Chock No. 352966 dated March 22, 1975,
drawn to cash................. P1.000.00
Leao Filipinos Rank and Trust Company, Manila Hilton
Branch Chock No. 352967 dated March 22, 1975, drawn to
cash............................ 559.50
Leao Filipinos Bank and Trust Company Manila Hilton
Branch Check No. 352968 dated March 22,1975, drawn to
cash............................. 152.00

For March, April and May, 1973, the respondents without the benefit of any
board resolution caused to be collected an additional one peso, thus increasing
the union dues to eighteen pesos.
For April and May, 1975, the respondents caused to be collected monthly union
dues amounting to nineteen pesos or another increase of one peso.
And for the first semester of 1976, a deduction of eight pesos and fifty centavos
was made from the mid-year bonus without any board resolution authorizing
such deduction. In prior years, no deduction for union dues was made from the
mid-year bonus.
(o) Other than for mandatory activities under the Code, no TOTAL ......................................... P1, 711.50
special assessments, attorney's fees, negotiation fees or
any other extraordinary fees may be checked off from any
The med-arbiter found that the modus operandi resorted to by the respondents
amount due to an employee without an individual written
with respect to the profit-share amounting to P22,559.50 was followed by them
authorization duly signed by the employee. The
as to the deductions from the profit-shares for the other periods.
authorization should specifically state the amount,
purpose and beneficiary of the deduction; and
He surmised that the union officers must have deducted a considerable amount
from the profit-shares because they started that practice in 1966 when E. Razon,
xxx xxx xxx.
Inc. and Guacods Marine Terminals, Inc. commenced the profit-share program
However, during the pendency of the case in this Court, the private respondents The sum of P3,500 was paid to respondent Amparo pursuant to a resolution union, the respondents improperly channeled to the latter funds of the arrastre
submitted a resolution dated November 25, 1977 wherein more than ninety dated July 12, 1971 which was approved by only six members of the board of checkers' union.
percent of the union members allegedly ratified the deductions from the mid- directors, instead of fourteen members, as required in the constitution and by-
year bonus and profit-shares and authorized future deductions (pp. 921 and laws of the union.
Thus, on December 17, 1976 and March 29, June 9 and August 31, 1976,
1615-6, Rollo).
Manalad approved payments by the arrastre checkers' union to the other union
Maladministration of welfare fund. Respondent Manalad allowed the of the sums of P1,000, P250 and P1,250.
Although the said resolution rendered this aspect of the case moot, it cannot application of the funds of the union's Welfare Plan to the following extraneous
obliterate the violations of the constitution and by-laws and the Labor Code purposes:
Conflict of interest on the part of Manalad. Respondent Manalad organized a
already committed by respondents Manalad and Leano The deduction of union
family corporation known as the Comet Integrated Stevedoring Services, Inc.
dues from the mid-year bonus and the withholding of part of the profit-shares
1. On March 31, and April 6 and 14, 1973, the sum of whose rank-and-file employees are also members of the arrastre checkers'
were illegal and improper at the time they were made.
P5,000 was taken from the Pacific Memorial Plan union. Thus, Manalad has functioned in the dual capacity of labor leader and
collections and loaned to the union's Cooperative Credit employer, not to mention the fact that he is also an officer of another labor
Disbursements exceeding P500 which were not authorized by the board of Union, Inc. union, PTCCEA.
directors. Section 4(d), article IV of the union's constitution and by-laws
provides that the board of directors may "authorize and approve all
2. On October 7, 1973, the sum of P1,500 was loaned to As head of the arrastre checkers' union, he issued customs passes for the
disbursements from union fund where the amount involved is more than P500
the same cooperative for organizational expenses. checkers of his family-owned stevedoring firm to facilitate their rendition of
and without that authorization or approval in due form, no such disbursements
services to some shipping companies.
will be allowed by the Treasurer
3. On August 7, 1971, the sum of P200 was taken from the
welfare fund for advance representation expenses of The complainants contend that such a situation has involved Manalad in a
Respondent Manalad made the following disbursements of union funds in an
Manalad. conflict of interest: if he favors his stevedoring firm, he is bound to jeopardize
amount exceeding P500 without the requisite authorization of the board of
the interests of the arrastre checkers' union of which he is the president.
directors:
4. On December 18, 1971, the sum of P1,600 was taken
from the welfare fund to cover cash advances to Under these facts, the med-arbiter in his decision of August 29, 1977 ordered the
Evidence Date Marcelino
Amount Melegrito to be repaid upon the release of his
disbursed removal of the private respondents as officers of the union and directed them to
credit union loan on March 8, 1973. reimburse to the members thereof the amounts illegally collected from them.
Annex S March 26, 1969 P1,400.00
According to the complainants, those disbursements were not authorized by the The private respondents appealed to the Director of Labor Relations who in his
Annex T June 1, 1970 1,000.00
board of directors. decision of November 9, 1977 reversed the is not necessary and that the five
com tsn have the right and personality to institute the proceeding for the
Annexes U to W July 13, August 6 3,111.40 removal of the respondents, to recover the amounts illegally collective or
Respondents Manalad, Amparo and Puerto approved the payment of retirement
decision of the med-arbiter.
benefits amounting to (1) P3,500 to Miguel de Leon on June 21, 1976; (2) P7,000
and Sept. 24, 1971
to Eduardo Topacio on July 30, 1976 and (3) P7,000 to Roberto Victoria on
August 4, 1976. The Director held that resort to intra-union remedies is not necessary and that
Annexes Y,X,Z March 5 and 30 the five complainants have the rights and personality to institute the
proceedings for the removal of the respondents, to recover the amount illegally
and Z I and AA April 10, May 18 According to the complainants, the three employees did not deserve retirement
collected orwithheld from them and to question illegal disbursements and
benefits because they had been dismissed for prolonged absences and they had
expenditure of union funds.
to CC Aug. 30, Sept. 20 ceased to be members of the Welfare Plan.

and Dec. 31, 1973 7,028.00 However, the Director ruled that the power to remove the union officers rests in
Membership in another union. Respondents Manalad, Amparo and Puerto are
the members and that the Bureau of Labor Relations generally has nothing to do
also officers of the Philippine Technical Clerical Commercial Employees
with the tenure of union officers which "is a political question".
Annex D Dec. 6, 1974 Association, another labor union.
1,000.00

Annex R June 12, 1976
Respondents Manalad and Leao, also without prior board authorization,
withdrew on twenty-three occasions union funds in the aggregate sum of
P43,026.80 deposited in Savings Account No. 5953 of the Manila Hilton Branch
of the Filipinos Bank and Trust Company (Annexes GG to GG-22).
The Director further ruled that his office has jurisdiction to look into the charge
Their membership900.00
in the latter union is manifestly violative of section 9, article III
of illegal disbursements of union funds. He directed the Labor Organization
of the constitution and by-laws of the arrastre checkers' union which provides
Division of the Bureau to examine the books of account and financial records of
that an elected officer shall be deemed disqualified if he becomes a member of
the union and to submit a report on such examination.
another organization.
The motions for reconsideration filed by the parties were denied by the
In this connection, the complainants presented evidence to prove that because
Undersecretary of Labor in his resolution of January 25, 1978 (he was then
of that interlocking stewardship of the arrastre checkers' union and the other
Acting Director of Labor Relations). He ruled that the expulsion of union officers
is the prerogative of the members of the union.
That decision of the Director is assailed in these special civil actions of certiorari
and prohibition filed on February 10, 1978. The petitioners pray that the four
union officers be expelled.
The case has been simplified by the admission of the private respondents in page
13 of their memorandum that the Bureau of Labor Relations has unquestionably
the power to remove erring union officers under the last paragraph of Article
242 of the Labor Code.
That paragraph provides that any violation of the rights and conditions of union
membership as enumerated in paragraphs (a) to (p) of Article 242, "shall be a
ground for cancellation of union registration or expulsion of officer from office,
whichever is appropriate. At least thirty percent (30%) of all the members of a
union or any member or members specially concerned may report such violation
to the Bureau (of labor Relations). The Bureau shall have the power to hear and
decide any reported violation to mete the appropriate penal
Nevertheless, the private respondents qualify their admission with the opinion
that the Bureau of Labor Relations should remove the guilty union officers only
when the members could not do so under the union's constitution and by-laws
and that the removal should be subject to review by the Minister of Labor.
The Office of the Solicitor General, as amicus curiae, has taken the unqualified
stand that the Bureau is empowered to expel from the union any officer found
guilty of violating any of the rights and conditions of union membership specified
in article 242.
In this appeal, the Director of Labor Relations maintains his view that the power
of removal belongs to the union members, since the power to choose the
officers belongs to them, and that the med-arbiter and the Director should
simply assist the union members in enforcing its constitution and by-laws.
We hold that the Labor Arbiter did not err in removing the respondents as union
officers. The membership of Manalad and Puerto in another union is a sufficient
ground for their removal under the constitution and by-laws of the union. In
Manalad's case, his organization of a family-owned corporation competing with.
the union headed by him renders it untenable that he should remain as union
president.
We hold further that Med Puerto and Leano violated the rights and conditions of
membership in the union within the meaning of Article 242. Hence, on that
ground their expulsion from office is also justified.
The petitioners are entitled to the refund of the union dues illegally collected
from them. The union should be the proper refund.
The Director of Labor Relations erred in holding that, as a matter of policy, the require the union to make the refund within twenty days from notice to his
tenure of union office being a "political question is, generally, a matter outside counsel of the entry of judgment in this case. Costs against the private
his Bureau's jurisdiction and should be pa upon by the union members respondents.
themselves.
SO ORDERED.
After hearing and even without submitting the matter to the union members, e
union officials may be removed by the Director of Labor decisions as clearly
provided him "we 242.
The Director should apply the law and not make policy considerations prevail
over its clear intent and meaning. "The majority of the laws need no
interpretation or construction. They require only application, and if there were
more application and less construction, there would be more stability in the law,
and more people would know what the law is." Lizarraga Hermanos vs. Yap Tico
24 Phil. 504, 513).
The labor officials should not hesitate to enforcement strictly the law and
regulations governing trade unions even if that course of action would curtail the
so-called union autonomy and freedom from government interference.
For the protection of union members and in order that the affairs of the union
may be administered honestly, labor officials should be vigilant and watchful in
monitoring and checking the administration of union affairs.
Laxity, permissiveness, neglect and apathy in supervising and regulating the
activities of union officials would result in corruption and oppression. Internal
safeguards within the union can easily be ignored or swept aside by abusive,
arrogant and unscrupulous union officials to the prejudice of the members.
It is necessary and desirable that the Bureau of Labor Relations and the Ministry
of Labor should exercise close and constant supervision over labor unions,
particularly the handling of their funds, so as to forestall abuses and venalities.
Hence, the Director acted correctly in ordering an examination of the books and
records of the union. The examination should include a verification of the charge
that the petty loans extended by the union to its members were usurious and
that the fee for the issuance of cheeks is unwarranted since the loans were made
in cash.
WHEREFORE, (1) that portion of the decision of the med-arbiter, removing
respondents Manalad, Leano and Puerto as union officers, is affirmed.
(Respondent Amparo is no longer an officer of the union.)
(2) We also affirm that portion of the decision of the Director of Labor Relations,
directing the Bureau's Labor Organization Division to examine the books of
accounts and records of the Associated Port Checkers and Workers Union and to
submit a report on such examination within a reasonable time.
(3) We declare that the five petitioners are entitled to a refund of the union dues
illegally collected from them. The Director of Labor Relations is ordered to
G.R. No. 171153 September 12, 2007
SAN MIGUEL CORPORATION EMPLOYEES UNIONPHILIPPINE TRANSPORT AND
GENERAL WORKERS ORGANIZATION (SMCEUPTGWO), petitioner,
vs.
SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA
NG MANGGAGAWANG PILIPINO (SMPPEUPDMP), respondent1.
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court, petitioner SAN MIGUEL CORPORATION EMPLOYEES UNION-PHILIPPINE
TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU-PTGWO) prays
that this Court reverse and set aside the (a) Decision2 dated 9 March 2005 of the
Court of Appeals in CA-G.R. SP No. 66200, affirming the Decision3 dated 19
February 2001 of the Bureau of Labor Relations (BLR) of the Department of Labor
and Employment (DOLE) which upheld the Certificate of Registration of
respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION
PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP); and (b)
the Resolution4 dated 16 January 2006 of the Court of Appeals in the same case,
denying petitioner's Motion for Reconsideration of the aforementioned Decision.
The following are the antecedent facts:
Petitioner is the incumbent bargaining agent for the bargaining unit comprised
of the regular monthly-paid rank and file employees of the three divisions of San
Miguel Corporation (SMC), namely, the San Miguel Corporate Staff Unit
(SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel Packaging
Products (SMPP), in all offices and plants of SMC, including the Metal Closure
and Lithography Plant in Laguna. It had been the certified bargaining agent for 20
years from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang
Pilipino (PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15
June 1999.5 In compliance with registration requirements, respondent submitted
the requisite documents to the BLR for the purpose of acquiring legal
personality.6 Upon submission of its charter certificate and other documents,
respondent was issued Certificate of Creation of Local or Chapter PDMP-01 by
the BLR on 6 July 1999.7 Thereafter, respondent filed with the Med-Arbiter of the
DOLE Regional Officer in the National Capital Region (DOLE-NCR), three separate
petitions for certification election to represent SMPP, SMCSU, and SMBP. 8 All
three petitions were dismissed, on the ground that the separate petitions
fragmented a single bargaining unit.9
On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the
cancellation of respondent's registration and its dropping from the rolls of
legitimate labor organizations. In its petition, petitioner accused respondent of
committing fraud and falsification, and non-compliance with registration
requirements in obtaining its certificate of registration. It raised allegations that
respondent violated Articles 239(a), (b) and (c)10 and 234(c)11 of the Labor Code.
Moreover, petitioner claimed that PDMP is not a legitimate labor organization,
but a trade union center, hence, it cannot directly create a local or chapter. The
petition was docketed as Case No. NCR-OD-9908-007-IRD.12
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order
dismissing the allegations of fraud and misrepresentation, and irregularity in the
submission of documents by respondent. Regional Director Lim further ruled
that respondent is allowed to directly create a local or chapter. However, he
found that respondent did not comply with the 20% membership requirement
and, thus, ordered the cancellation of its certificate of registration and removal
from the rolls of legitimate labor organizations.13 Respondent appealed to the
BLR. In a Decision dated 19 February 2001, it declared:
As a chartered local union, appellant is not required to submit the
number of employees and names of all its members comprising at
least 20% of the employees in the bargaining unit where it seeks to
operate. Thus, the revocation of its registration based on non-
compliance with the 20% membership requirement does not have
any basis in the rules.
Further, although PDMP is considered as a trade union center, it is a
holder of Registration Certificate No. FED-11558-LC issued by the BLR
on 14 February 1991, which bestowed upon it the status of a
legitimate labor organization with all the rights and privileges to act
as representative of its members for purposes of collective bargaining
agreement. On this basis, PDMP can charter or create a local, in
accordance with the provisions of Department Order No. 9.
WHEREFORE, the appeal is hereby GRANTED. Accordingly, the
decision of the Regional Director dated July 14, 2000, canceling the
registration of appellant San Miguel Packaging Products Employees
Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP)
is REVERSED and SET ASIDE. Appellant shall hereby remain in the
roster of legitimate labor organizations.14
While the BLR agreed with the findings of the DOLE Regional Director dismissing
the allegations of fraud and misrepresentation, and in upholding that PDMP can
directly create a local or a chapter, it reversed the Regional Director's ruling that
the 20% membership is a requirement for respondent to attain legal personality
as a labor organization. Petitioner thereafter filed a Motion for Reconsideration
with the BLR. In a Resolution rendered on 19 June 2001 in BLR-A-C-64-05-9-00
(NCR-OD-9908-007-IRD), the BLR denied the Motion for Reconsideration and
affirmed its Decision dated 19 February 2001.15
Invoking the power of the appellate court to review decisions of quasi-judicial
agencies, petitioner filed with the Court of Appeals a Petition for Certiorari under
Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 66200.
The Court of Appeals, in a Decision dated 9 March 2005, dismissed the petition
and affirmed the Decision of the BLR, ruling as follows:
In Department Order No. 9, a registered federation or national union
may directly create a local by submitting to the BLR copies of the
charter certificate, the local's constitution and by-laws, the principal
office address of the local, and the names of its officers and their
addresses. Upon complying with the documentary requirements, the
local shall be issued a certificate and included in the roster of
legitimate labor organizations. The [herein respondent] is an affiliate
of a registered federation PDMP, having been issued a charter
certificate. Under the rules we have reviewed, there is no need for
SMPPEU to show a membership of 20% of the employees of the
bargaining unit in order to be recognized as a legitimate labor union.
xxxx
In view of the foregoing, the assailed decision and resolution of the
BLR are AFFIRMED, and the petition is DISMISSED.16
Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals
denied petitioner's Motion for Reconsideration of the aforementioned Decision.
Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court
where petitioner raises the sole issue of:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN RULING THAT PRIVATE RESPONDENT IS NOT
REQUIRED TO SUBMIT THE NUMBER OF EMPLOYEES AND NAMES OF
ALL ITS MEMBERS COMPRISING AT LEAST 20% OF THE EMPLOYEES IN
THE BARGAINING UNIT WHERE IT SEEKS TO OPERATE.
The present petition questions the legal personality of respondent as a
legitimate labor organization.
Petitioner posits that respondent is required to submit a list of members
comprising at least 20% of the employees in the bargaining unit before it may
acquire legitimacy, citing Article 234(c) of the Labor Code which stipulates that
any applicant labor organization, association or group of unions or workers shall
acquire legal personality and shall be entitled to the rights and privileges granted
by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:
a. Fifty pesos (P50.00) registration fee;
b. The names of its officers, their addresses, the principal address of
the labor organization, the minutes of the organizational meetings
and the list of the workers who participated in such meetings;
c. The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate;
 d. If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
e. Four (4) copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification and the list of the
members who participated in it.17
Petitioner also insists that the 20% requirement for registration of respondent
must be based not on the number of employees of a single division, but in all
three divisions of the company in all the offices and plants of SMC since they are
all part of one bargaining unit. Petitioner refers to Section 1, Article 1 of the
Collective Bargaining Agreement (CBA),18 quoted hereunder:
ARTICLE 1
SCOPE
Section 1. Appropriate Bargaining Unit. The appropriate bargaining
unit covered by this Agreement consists of all regular rank and file
employees paid on the basis of fixed salary per month and employed
by the COMPANY in its Corporate Staff Units (CSU), San Miguel
Brewing Products (SMBP) and San Miguel Packaging Products (SMPP)
and in different operations existing in the City of Manila and suburbs,
including Metal Closure and Lithography Plant located at Canlubang,
Laguna subject to the provisions of Article XV of this Agreement
provided however, that if during the term of this Agreement, a plant
within the territory covered by this Agreement is transferred outside
but within a radius of fifty (50) kilometers from the Rizal Monument,
Rizal Park, Metro Manila, the employees in the transferred plant shall
remain in the bargaining unit covered by this Agreement. (Emphasis
supplied.)
Petitioner thus maintains that respondent, in any case, failed to meet this 20%
membership requirement since it based its membership on the number of
employees of a single division only, namely, the SMPP.
There is merit in petitioner's contentions.
A legitimate labor organization19 is defined as "any labor organization duly
registered with the Department of Labor and Employment, and includes any
branch or local thereof."20 The mandate of the Labor Code is to ensure strict
compliance with the requirements on registration because a legitimate labor
organization is entitled to specific rights under the Labor Code,21 and are
involved in activities directly affecting matters of public interest. Registration
requirements are intended to afford a measure of protection to unsuspecting
employees who may be lured into joining unscrupulous or fly-by-night unions
whose sole purpose is to control union funds or use the labor organization for
illegitimate ends.22 Legitimate labor organizations have exclusive rights under the
law which cannot be exercised by non-legitimate unions, one of which is the
right to be certified as the exclusive representative23 of all the employees in an
appropriate collective bargaining unit for purposes of collective bargaining.24 The
acquisition of rights by any union or labor organization, particularly the right to
file a petition for certification election, first and foremost, depends on whether
or not the labor organization has attained the status of a legitimate labor
organization.25
A perusal of the records reveals that respondent is registered with the BLR as a
"local" or "chapter" of PDMP and was issued Charter Certificate No. 112 on 15
June 1999. Hence, respondent was directly chartered by PDMP.
The procedure for registration of a local or chapter of a labor organization is
provided in Book V of the Implementing Rules of the Labor Code, as amended by
Department Order No. 9 which took effect on 21 June 1997, and again by
Department Order No. 40 dated 17 February 2003. The Implementing Rules as
amended by D.O. No. 9 should govern the resolution of the petition at bar since
respondent's petition for certification election was filed with the BLR in 1999;
and that of petitioner on 17 August 1999.26
The applicable Implementing Rules enunciates a two-fold procedure for the
creation of a chapter or a local. The first involves the affiliation of an
independent union with a federation or national union or industry union. The
second, finding application in the instant petition, involves the direct creation of
a local or a chapter through the process of chartering.27
A duly registered federation or national union may directly create a local or
chapter by submitting to the DOLE Regional Office or to the BLR two copies of
the following:
(a) A charter certificate issued by the federation or national union
indicating the creation or establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the
principal office of the local/chapter; and
(c) The local/chapter's constitution and by-laws; Provided, That where
the local/chapter's constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under
oath by the Secretary or the Treasurer of the local/chapter and
attested to by its President.28
The Implementing Rules stipulate that a local or chapter may be directly created
by a federation or national union. A duly constituted local or chapter created in
accordance with the foregoing shall acquire legal personality from the date of
filing of the complete documents with the BLR.29 The issuance of the certificate
of registration by the BLR or the DOLE Regional Office is not the operative act
that vests legal personality upon a local or a chapter under Department Order
No. 9. Such legal personality is acquired from the filing of the complete
documentary requirements enumerated in Section 1, Rule VI.30
Petitioner insists that Section 3 of the Implementing Rules, as amended by
Department Order No. 9, violated Article 234 of the Labor Code when it provided
for less stringent requirements for the creation of a chapter or local. This Court
disagrees.
Article 234 of the Labor Code provides that an independent labor organization
acquires legitimacy only upon its registration with the BLR:
Any applicant labor organization, association or group of unions or
workers shall acquire legal personality and shall be entitled to the
rights and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the following
requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of
the labor organization, the minutes of the organizational meetings
and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the
members who participated in it. (Italics supplied.)
It is emphasized that the foregoing pertains to the registration of an
independent labor organization, association or group of unions or workers.
However, the creation of a branch, local or chapter is treated differently. This
Court, in the landmark case of Progressive Development Corporation v. Secretary,
Department of Labor and Employment,31 declared that when an unregistered
union becomes a branch, local or chapter, some of the aforementioned
requirements for registration are no longer necessary or compulsory. Whereas
an applicant for registration of an independent union is mandated to submit,
among other things, the number of employees and names of all its members
comprising at least 20% of the employees in the bargaining unit where it seeks to
operate, as provided under Article 234 of the Labor Code and Section 2 of Rule
III, Book V of the Implementing Rules, the same is no longer required of a
branch, local or chapter.32 The intent of the law in imposing less requirements in
the case of a branch or local of a registered federation or national union is to
encourage the affiliation of a local union with a federation or national union in
order to increase the local union's bargaining powers respecting terms and
conditions of labor.33
Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of
Department Order No. 9 was directly put in issue, this Court was unequivocal in
finding that there is no inconsistency between the Labor Code and Department
Order No. 9.
As to petitioner's claims that respondent obtained its Certificate of Registration
through fraud and misrepresentation, this Court finds that the imputations are
not impressed with merit. In the instant case, proof to declare that respondent
committed fraud and misrepresentation remains wanting. This Court had,
indeed, on several occasions, pronounced that registration based on false and
fraudulent statements and documents confer no legitimacy upon a labor
organization irregularly recognized, which, at best, holds on to a mere scrap of
paper. Under such circumstances, the labor organization, not being a legitimate
labor organization, acquires no rights.35
This Court emphasizes, however, that a direct challenge to the legitimacy of a
labor organization based on fraud and misrepresentation in securing its
certificate of registration is a serious allegation which deserves careful scrutiny.
Allegations thereof should be compounded with supporting circumstances and
evidence. The records of the case are devoid of such evidence. Furthermore, this
Court is not a trier of facts, and this doctrine applies with greater force in labor
cases. Findings of fact of administrative agencies and quasi-judicial bodies, such
as the BLR, which have acquired expertise because their jurisdiction is confined
to specific matters, are generally accorded not only great respect but even
finality.36
Still, petitioner postulates that respondent was not validly and legitimately
created, for PDMP cannot create a local or chapter as it is not a legitimate labor
organization, it being a trade union center.
Petitioner's argument creates a predicament as it hinges on the legitimacy of
PDMP as a labor organization. Firstly, this line of reasoning attempts to predicate
that a trade union center is not a legitimate labor organization. In the process,
the legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same
contention premises that a trade union center cannot directly create a local or
chapter through the process of chartering.
Anent the foregoing, as has been held in a long line of cases, the legal personality
of a legitimate labor organization, such as PDMP, cannot be subject to a
collateral attack. The law is very clear on this matter. Article 212 (h) of the Labor
Code, as amended, defines a legitimate labor organization37 as "any labor
organization duly registered with the DOLE, and includes any branch or local
thereof."38 On the other hand, a trade union center is any group of registered
national unions or federations organized for the mutual aid and protection of its
members; for assisting such members in collective bargaining; or for
participating in the formulation of social and employment policies, standards,
and programs, and is duly registered with the DOLE in accordance with Rule III,
Section 2 of the Implementing Rules.39
The Implementing Rules stipulate that a labor organization shall be deemed
registered and vested with legal personality on the date of issuance of its
certificate of registration. Once a certificate of registration is issued to a union,
its legal personality cannot be subject to collateral attack.40 It may be questioned Culling from its definition as provided by Department Order No. 9, a trade union
only in an independent petition for cancellation in accordance with Section 5 of center is any group of registered national unions or federations organized for the
Rule V, Book V of the Implementing Rules. The aforementioned provision is mutual aid and protection of its members; for assisting such members in
enunciated in the following: collective bargaining; or for participating in the formulation of social and
employment policies, standards, and programs, and is duly registered with the
DOLE in accordance with Rule III, Section 2 of the Implementing Rules.46 The
Sec. 5. Effect of registration. The labor organization or workers'
same rule provides that the application for registration of an industry or trade
association shall be deemed registered and vested with legal
union center shall be supported by the following:
personality on the date of issuance of its certificate of registration.
Such legal personality cannot thereafter be subject to collateral
attack, but may be questioned only in an independent petition for (a) The list of its member organizations and their respective
cancellation in accordance with these Rules. presidents and, in the case of an industry union, the industry where
the union seeks to operate;
PDMP was registered as a trade union center and issued Registration Certificate
No. FED-11558-LC by the BLR on 14 February 1991. Until the certificate of (b) The resolution of membership of each member organization,
registration of PDMP is cancelled, its legal personality as a legitimate labor approved by the Board of Directors of such union;
organization subsists. Once a union acquires legitimate status as a labor
organization, it continues to be recognized as such until its certificate of
(c) The name and principal address of the applicant, the names of its
registration is cancelled or revoked in an independent action for cancellation.41 It
officers and their addresses, the minutes of its organizational
bears to emphasize that what is being directly challenged is the personality of
meeting/s, and the list of member organizations and their
respondent as a legitimate labor organization and not that of PDMP. This being a
representatives who attended such meeting/s; and
collateral attack, this Court is without jurisdiction to entertain questions
indirectly impugning the legitimacy of PDMP.
(d) A copy of its constitution and by-laws and minutes of its
ratification by a majority of the presidents of the member
Corollarily, PDMP is granted all the rights and privileges appurtenant to a
organizations, provided that where the ratification was done
legitimate labor organization,42 and continues to be recognized as such until its
simultaneously with the organizational meeting, it shall be sufficient
certificate of registration is successfully impugned and thereafter cancelled or
that the fact of ratification be included in the minutes of the
revoked in an independent action for cancellation.
organizational meeting.47
We now proceed to the contention that PDMP cannot directly create a local or a
Evidently, while a "national union" or "federation" is a labor organization with at
chapter, it being a trade union center.
least ten locals or chapters or affiliates, each of which must be a duly certified or
recognized collective bargaining agent;48 a trade union center, on the other
This Court reverses the finding of the appellate court and BLR on this ground, hand, is composed of a group of registered national unions or federations.49
and rules that PDMP cannot directly create a local or chapter.
The Implementing Rules, as amended by Department Order No. 9, provide that
After an exhaustive study of the governing labor law provisions, both statutory "a duly registered federation or national union" may directly create a local or
and regulatory,43 we find no legal justification to support the conclusion that a chapter. The provision reads:
trade union center is allowed to directly create a local or chapter through
chartering. Apropos, we take this occasion to reiterate the first and fundamental
Section 1. Chartering and creation of a local/chapter. A duly
duty of this Court, which is to apply the law. The solemn power and duty of the
registered federation or national union may directly create a
Court to interpret and apply the law does not include the power to correct by
local/chapter by submitting to the Regional Office or to the Bureau
reading into the law what is not written therein.44
two (2) copies of the following:
Presidential Decree No. 442, better known as the Labor Code, was enacted in
(a) A charter certificate issued by the federation or national union
1972. Being a legislation on social justice,45 the provisions of the Labor Code and
indicating the creation or establishment of the local/chapter;
the Implementing Rules have been subject to several amendments, and they
continue to evolve, considering that labor plays a major role as a socio-economic
force. The Labor Code was first amended by Republic Act No. 6715, and recently, (b) The names of the local/chapter's officers, their addresses, and the
by Republic Act No. 9481. Incidentally, the term trade union center was never principal office of the local/chapter; and
mentioned under Presidential Decree No. 442, even as it was amended by
Republic Act No. 6715. The term trade union center was first adopted in the
Implementing Rules, under Department Order No. 9.
 (c) The local/chapter's constitution and by-laws; provided that where
the local/chapter's constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under
oath by the Secretary or the Treasurer of the local/chapter and
attested to by its President.50
Department Order No. 9 mentions two labor organizations either of which is
allowed to directly create a local or chapter through chartering a duly
registered federation or a national union. Department Order No. 9 defines a
"chartered local" as a labor organization in the private sector operating at the
enterprise level that acquired legal personality through a charter certificate,
issued by a duly registered federation or national union and reported to the
Regional Office in accordance with Rule III, Section 2-E of these Rules.51
Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional
Right to Self-Organization, Amending for the Purpose Presidential Decree No.
442, As Amended, Otherwise Known as the Labor Code of the Philippines"
lapsed52 into law on 25 May 2007 and became effective on 14 June 2007.53 This
law further amends the Labor Code provisions on Labor Relations.
Pertinent amendments read as follows:
SECTION 1. Article 234 of Presidential Decree No. 442, as amended,
otherwise known as the Labor Code of the Philippines, is hereby
further amended to read as follows:
ART. 234. Requirements of Registration. A federation,
national union or industry or trade union center or an
independent union shall acquire legal personality and shall
be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the
certificate of registration based on the following
requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal
address of the labor organization, the minutes of the
organizational meetings and the list of the workers who
participated in such meetings;
(c) In case the applicant is an independent union, the
names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit
where it seeks to operate;
(d) If the applicant union has been in existence for one or
more years, copies of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the
applicant union, minutes of its adoption or ratification,
and the list of the members who participated in it.
SECTION 2. A new provision is hereby inserted into the Labor Code as
Article 234-A to read as follows:
ART. 234-A. Chartering and Creation of a Local Chapter.
A duly registered federation or national union may directly
create a local chapter by issuing a charter certificate
indicating the establishment of the local chapter. The
chapter shall acquire legal personality only for purposes of
filing a petition for certification election from the date it
was issued a charter certificate.
The chapter shall be entitled to all other rights and
privileges of a legitimate labor organization only upon the
submission of the following documents in addition to its
charter certificate:
(a) The names of the chapter's officers, their addresses,
and the principal office of the chapter; and
(b) The chapter's constitution and by-laws: Provided, That
where the chapter's constitution and by-laws are the same
as that of the federation or the national union, this fact
shall be indicated accordingly.
The additional supporting requirements shall be certified under oath
by the secretary or treasurer of the chapter and attested by its
president. (Emphasis ours.)
Article 234 now includes the term trade union center, but interestingly, the
provision indicating the procedure for chartering or creating a local or chapter,
namely Article 234-A, still makes no mention of a "trade union center."
Also worth emphasizing is that even in the most recent amendment of the
implementing rules,54 there was no mention of a trade union center as being
among the labor organizations allowed to charter.
This Court deems it proper to apply the Latin maxim expressio unius est exclusio
alterius. Under this maxim of statutory interpretation, the expression of one
thing is the exclusion of another. When certain persons or things are specified in
a law, contract, or will, an intention to exclude all others from its operation may
be inferred. If a statute specifies one exception to a general rule or assumes to
specify the effects of a certain provision, other exceptions or effects are
excluded.55 Where the terms are expressly limited to certain matters, it may not,
by interpretation or construction, be extended to other matters.56 Such is the
case here. If its intent were otherwise, the law could have so easily and
conveniently included "trade union centers" in identifying the labor
organizations allowed to charter a chapter or local. Anything that is not included
in the enumeration is excluded therefrom, and a meaning that does not appear
nor is intended or reflected in the very language of the statute cannot be placed
therein.57 The rule is restrictive in the sense that it proceeds from the premise
that the legislating body would not have made specific enumerations in a statute
if it had the intention not to restrict its meaning and confine its terms to those
expressly mentioned.58 Expressium facit cessare tacitum.59 What is expressed
puts an end to what is implied. Casus omissus pro omisso habendus est. A
person, object or thing omitted must have been omitted intentionally.
Therefore, since under the pertinent status and applicable implementing rules,
the power granted to labor organizations to directly create a chapter or local
through chartering is given to a federation or national union, then a trade union
center is without authority to charter directly.
The ruling of this Court in the instant case is not a departure from the policy of
the law to foster the free and voluntary organization of a strong and united labor
movement,60 and thus assure the rights of workers to self-organization.61 The
mandate of the Labor Code in ensuring strict compliance with the procedural
requirements for registration is not without reason. It has been observed that
the formation of a local or chapter becomes a handy tool for the circumvention
of union registration requirements. Absent the institution of safeguards, it
becomes a convenient device for a small group of employees to foist a not-so-
desirable federation or union on unsuspecting co-workers and pare the need for
wholehearted voluntariness, which is basic to free unionism.62 As a legitimate
labor organization is entitled to specific rights under the Labor Code and
involved in activities directly affecting public interest, it is necessary that the law
afford utmost protection to the parties affected.63 However, as this Court has
enunciated in Progressive Development Corporation v. Secretary of Department
of Labor and Employment, it is not this Court's function to augment the
requirements prescribed by law. Our only recourse, as previously discussed, is to
exact strict compliance with what the law provides as requisites for local or
chapter formation.64
In sum, although PDMP as a trade union center is a legitimate labor organization,
it has no power to directly create a local or chapter. Thus, SMPPEU-PDMP cannot
be created under the more lenient requirements for chartering, but must have
complied with the more stringent rules for creation and registration of an
independent union, including the 20% membership requirement.
WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March
2005 of the Court of Appeals in CA-GR SP No. 66200 is REVERSED and SET ASIDE.
The Certificate of Registration of San Miguel Packaging Products Employees
UnionPambansang Diwa ng Manggagawang Pilipino is ORDERED CANCELLED,
and SMPPEU-PDMP DROPPED from the rolls of legitimate labor organizations.
Costs against petitioner.
G.R. No. 157117 November 20, 2006
COASTAL SUBIC BAY TERMINAL, INC., Petitioner,
vs.
DEPARTMENT OF LABOR and EMPLOYMENT OFFICE OF THE SECRETARY,
COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY UNION-APSOTEU, and
COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP,
Respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Court of Appeals Decision 1 dated August 31,
2001, in CA-G.R. SP No. 54128 and the Resolution 2 dated February 5, 2003,
denying petitioners motion for reconsideration. The Court of Appeals had
affirmed the Decision 3 dated March 15, 1999 of the Secretary of the
Department of Labor and Employment (DOLE) reversing the Mediator Arbiters
dismissal of private respondents petitions for certification election.
The facts are as follows:
On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-
File Union (CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union
(CSBTI-SU) filed separate petitions for certification election before Med-Arbiter
Eladio de Jesus of the Regional Office No. III. The rank-and-file union insists that
it is a legitimate labor organization having been issued a charter certificate by
the Associated Labor Union (ALU), and the supervisory union by the Associated
Professional, Supervisory, Office and Technical Employees Union (APSOTEU).
Private respondents also alleged that the establishment in which they sought to
operate was unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for
certification election alleging that the rank-and-file union and supervisory union
were not legitimate labor organizations, and that the proposed bargaining units
were not particularly described.
Without ruling on the legitimacy of the respondent unions, the Med-Arbiter
dismissed, without prejudice to refiling, both petitions which had been
consolidated. The Med-Arbiter held that the ALU and APSOTEU are one and the
same federation having a common set of officers. Thus, the supervisory and the
rank-and-file unions were in effect affiliated with only one federation. 4
The Med-Arbiter ruled as follows:
Viewed in the light of all the foregoing, this Office finds the simultaneous filing of
the instant petitions to be invalid and unwarranted. Consequently, this Office
has no recourse but to dismiss both petitions without prejudice to the refiling of
either.
WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are
hereby DISMISSED.
SO ORDERED. 5
Both parties appealed to the Secretary of Labor and Employment, who reversed
the decision of the Med-Arbiter. The Secretary thru Undersecretary R. Baldoz,
ruled that CSBTI-SU and CSBTI-RFU have separate legal personalities to file their
separate petitions for certification election. The Secretary held that APSOTEU is a
legitimate labor organization because it was properly registered pursuant to the
1989 Revised Rules and Regulations implementing Republic Act No. 6715, the
rule applicable at the time of its registration. It further ruled that ALU and
APSOTEU are separate and distinct labor unions having separate certificates of
registration from the DOLE. They also have different sets of locals. The Secretary
declared CSBTI-RFU and CSBTI-SU as legitimate labor organizations having been
chartered respectively by ALU and APSOTEU after submitting all the
requirements with the Bureau of Labor Relations (BLR). Accordingly, the
Secretary ordered the holding of separate certification election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby
REVERSED. Let separate certification elections be conducted immediately among
the appropriate employees of CSBTI, after the usual pre-election conference,
with the following choices:
I. For all rank and file employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP; and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-
APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last three months
immediately preceding the issuance of this decision, shall be the basis for
determining the qualified list of voters.
SO DECIDED. 6
The motion for reconsideration was also denied. 7
On appeal, the Court of Appeals affirmed the decision of the Secretary. 8 It held
that there was no grave abuse of discretion on the part of the Secretary; its
findings are supported by evidence on record; and thus should be accorded with
respect and finality. 9
The motion for reconsideration was likewise denied. 10 Hence, the instant
petition by the company anchored on the following grounds:
I
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989 REVISED
RULES AND REGULATIONS IMPLEMENTING RA 6715" AS BASIS TO RECOGNIZE
PRIVATE RESPONDENT APSOTEUS REGISTRATION BY THE DOLE REGIONAL
DIRECTOR.
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC
RESPONDENTS APPLICATION OF THE PRINCIPLE OF STARE DECISIS TO HASTILY
DISPOSE OF THE LEGAL PERSONALITY ISSUE OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW
AND JURISPRUDENCE WHEN IT AFFIRMED PUBLIC RESPONDENTS APPLICATION
OF THE "UNION AUTONOMY" THEORY.
IV
IN AFFIRMING PUBLIC RESPONDENTS FINDING THAT PRIVATE RESPONDENTS
ARE "SEPARATE FEDERATIONS," THE HONORABLE COURT OF APPEALS:
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF A MED-
ARBITERS FACTUAL FINDINGS; AND
(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL COMMINGLING." 11
Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file
separate petitions for certification election?; (2) Was the Secretarys decision
based on stare decisis correct?; and (3) Were private respondents engaged in
commingling?
The issue on the status of the supervisory union CSBTI-SU depends on the status
of APSOTEU, its mother federation.
Petitioner argues that APSOTEU improperly secured its registration from the
DOLE Regional Director and not from the BLR; that it is the BLR that is authorized
to process applications and issue certificates of registration in accordance with
our ruling in Phil. Association of Free Labor Unions v. Secretary of Labor; 12 that
the certificates of registration issued by the DOLE Regional Director pursuant to
the rules are questionable, and possibly even void ab initio for being ultra vires;
and that the Court of Appeals erred when it ruled that the law applicable at the
time of APSOTEUs registration was the 1989 Revised Implementing Rules and
Regulations of Rep. Act No. 6715.
Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate
CSBTI-SU cannot attain the status of a legitimate labor organization to file a
petition for certification election. It relies on Villar v. Inciong, 13 where we held
therein that Amigo Employees Union was not a duly registered independent
union absent any record of its registration with the Bureau.
Pertinent is Article 235 14 of the Labor Code which provides that applications for
registration shall be acted upon by the Bureau. "Bureau" as defined under the
Labor Code means the BLR and/or the Labor Relations Division in the Regional
Offices of the Department of Labor. 15 Further, Section 2, Rule II, Book V of the
1989 Revised Implementing Rules of the Labor Code (Implementing Rules)
provides that:
Section 2. Where to file application; procedure Any national labor organization
or labor federation or local union may file an application for registration with the
Bureau or the Regional Office where the applicants principal offices is located.
The Bureau or the Regional Office shall immediately process and approve or
deny the application. In case of approval, the Bureau or the Regional Office shall
issue the registration certificate within thirty (30) calendar days from receipt of
the application, together with all the requirements for registration as hereinafter
provided. 16
The Implementing Rules specifically Section 1, Rule III of Book V, as amended by
Department Order No. 9, thus:
SECTION 1. Where to file applications. The application for registration of any
federation, national or industry union or trade union center shall be filed with
the Bureau. Where the application is filed with the Regional Office, the same
shall be immediately forwarded to the Bureau within forty-eight (48) hours from
filing thereof, together with all the documents supporting the registration.
The applications for registration of an independent union shall be filed with and
acted upon by the Regional Office where the applicants principal office is
located .
xxxx
The DOLE issued Department Order No. 40-03, which took effect on March 15,
2003, further amending Book V of the above implementing rules. The new
implementing rules explicitly provide that applications for registration of labor
organizations shall be filed either with the Regional Office or with the BLR. 17
Even after the amendments, the rules did not divest the Regional Office and the
BLR of their jurisdiction over applications for registration by labor organizations.
The amendments to the implementing rules merely specified that when the
application was filed with the Regional Office, the application would be acted
upon by the BLR.
The records in this case showed that APSOTEU was registered on March 1, 1991.
Accordingly, the law applicable at that time was Section 2, Rule II, Book V of the
Implementing Rules, and not Department Order No. 9 which took effect only on
June 21, 1997. Thus, considering further that APSOTEUs principal office is
located in Diliman, Quezon City, and its registration was filed with the NCR
Regional Office, the certificate of registration is valid.
The petitioner misapplied Villar v. Inciong. 18 In said case, there was no record in
the BLR that Amigo Employees Union was registered. 19
Did the Court of Appeals err in its application of stare decisis when it upheld the
Secretarys ruling that APSOTEU is a legitimate labor organization and its
personality cannot be assailed unless in an independent action for cancellation
of registration certificate? 20
We think not.
Section 5, Rule V, Book V of the Implementing Rules states:
Section 5. Effect of registration The labor organization or workers association
shall be deemed registered and vested with legal personality on the date of
issuance of its certificate of registration. Such legal personality cannot thereafter
be subject to collateral attack, but maybe questioned only in an independent
petition for cancellation in accordance with these Rules. 21
Thus, APSOTEU is a legitimate labor organization and has authority to issue
charter to its affiliates. 22 It may issue a local charter certificate to CSBTI-SU and
correspondingly, CSBTI-SU is legitimate.
Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the
same because of the commonalities between them? Are they commingled?
The petitioner contends that applying by analogy, the doctrine of piercing the
veil of corporate fiction, APSOTEU and ALU are the same federation. Private
respondents disagree.
First, as earlier discoursed, once a labor union attains the status of a legitimate
labor organization, it continues as such until its certificate of registration is
cancelled or revoked in an independent action for cancellation. 23 In addition, the
legal personality of a labor organization cannot be collaterally attacked. 24 Thus,
when the personality of the labor organization is questioned in the same manner
the veil of corporate fiction is pierced, the action partakes the nature of a
collateral attack. Hence, in the absence of any independent action for
cancellation of registration against either APSOTEU or ALU, and unless and until
their registrations are cancelled, each continues to possess a separate legal
personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct
and separate federations, despite the commonalities of APSOTEU and ALU.
Under the rules implementing the Labor Code, a chartered local union acquires
legal personality through the charter certificate issued by a duly registered
federation or national union, and reported to the Regional Office in accordance
with the rules implementing the Labor Code. 25 A local union does not owe its
existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. Mere
affiliation does not divest the local union of its own personality, neither does it
give the mother federation the license to act independently of the local union. It
only gives rise to a contract of agency, where the former acts in representation
of the latter. 26 Hence, local unions are considered principals while the federation
is deemed to be merely their agent. 27 As such principals, the unions are entitled
to exercise the rights and privileges of a legitimate labor organization, including
the right to seek certification as the sole and exclusive bargaining agent in the
appropriate employer unit.
A word of caution though, under Article 245 of the Labor Code, 28 supervisory
employees are not eligible for membership in a labor union of rank-and-file
employees. The supervisory employees are allowed to form their own union but
they are not allowed to join the rank-and-file union because of potential conflicts
of interest. 29 Further, to avoid a situation where supervisors would merge with
the rank-and-file or where the supervisors labor union would represent
conflicting interests, a local supervisors union should not be allowed to affiliate
with the national federation of unions of rank-and-file employees where that
federation actively participates in the union activity within the company. 30 Thus,
the limitation is not confined to a case of supervisors wanting to join a rank-and-
file union. The prohibition extends to a supervisors local union applying for
membership in a national federation the members of which include local unions
of rank-and-file employees. 31 In De La Salle University Medical Center and
College of Medicine v. Laguesma, we reiterated the rule that for the prohibition
to apply, it is not enough that the supervisory union and the rank-and-file union
are affiliated with a single federation. In addition, the supervisors must have
direct authority over the rank-and-file employees. 32
In the instant case, the national federations that exist as separate entities to
which the rank-and-file and supervisory unions are separately affiliated with, do
have a common set of officers. In addition, APSOTEU, the supervisory federation,
actively participates in the CSBTI-SU while ALU, the rank-and-file federation,
actively participates in the CSBTI-RFU, giving occasion to possible conflicts of
interest among the common officers of the federation of rank-and-file and the
federation of supervisory unions. For as long as they are affiliated with the
APSOTEU and ALU, the supervisory and rank-and-file unions both do not meet
the criteria to attain the status of legitimate labor organizations, and thus could
not separately petition for certification elections.
The purpose of affiliation of the local unions into a common enterprise is to
increase the collective bargaining power in respect of the terms and conditions
of labor. 33 When there is commingling of officers of a rank-and-file union with a
supervisory union, the constitutional policy on labor is circumvented. Labor
organizations should ensure the freedom of employees to organize themselves
for the purpose of leveling the bargaining process but also to ensure the
freedom of workingmen and to keep open the corridor of opportunity to enable
them to do it for themselves.
WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated
August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution dated February 5,
2003 are SET ASIDE. The decision of the Med-Arbiter is hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
[G.R. No. 116194. February 2, 2000]
SUGBUANON RURAL BANK, INC., petitioner, vs. HON. UNDERSECRETARY
BIENVENIDO E. LAGUESMA, DEPARTMENT OF LABOR AND EMPLOYMENT,
MED-ARBITER ACHILLES MANIT, DEPARTMENT OF LABOR AND EMPLOYMENT,
REGIONAL OFFICE NO. 7, CEBU CITY, AND SUGBUANON RURAL BANK, INC. -
ASSOCIATION OF PROFESSIONAL, SUPERVISORY, OFFICE, AND TECHNICAL
EMPLOYEES UNION-TRADE UNIONS CONGRESS OF THE PHILIPPINES,
respondents.
DECISION
QUISUMBING, J.:
In this special civil action for certiorari and prohibition, petitioner seeks the
annulment of the April 27, 1994 Resolution of the Department of Labor and
Employment, affirming the order of the Med-Arbiter, dated December 9, 1993,
which denied petitioner's motion to dismiss respondent union's petition for
certification election. Esmmis
Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-registered
banking institution with principal office in Cebu City and a branch in Mandaue
City. Private respondent SRBI-Association of Professional, Supervisory, Office,
and Technical Employees Union (APSOTEU) is a legitimate labor organization
affiliated with the Trade Unions Congress of the Philippines (TUCP).
On October 8, 1993, the DOLE Regional Office in Cebu City granted Certificate of
Registration No. R0700-9310-UR-0064 to APSOTEU- TUCP, hereafter referred to
as the union.
descriptions of the employees concerned to its motion. Second, the Association
of Labor Unions-Trade Unions Congress of the Philippines or ALU-TUCP was
representing the union. Since ALU- TUCP also sought to represent the rank-and-
file employees of SRBI, there was a violation of the principle of separation of
unions enunciated in Atlas Lithographic Services, Inc. v. Laguesma.
The union filed its opposition to the motion to dismiss on December 1, 1993. It
argued that its members were not managerial employees but merely supervisory
employees. The members attached their affidavits describing the nature of their
respective duties. The union pointed out that Article 245 of the Labor Code
expressly allowed supervisory employees to form, join, or assist their own
unions.
On December 9, 1993, the Med-Arbiter denied petitioner's motion to dismiss. He
scheduled the inclusion-exclusion proceedings in preparation for the certification
election on December 16, 1993. Esmso
SRBI appealed the Med-Arbiter's decision to the Secretary of Labor and
Employment. The appeal was denied for lack of merit. The certification election
was ordered.
On June 16, 1994, the Med-Arbiter scheduled the holding of the certification
election for June 29, 1994. His order identified the following SRBI personnel as
the voting supervisory employees in the election: the Cashier of the Main office,
the Cashier of the Mandaue Branch, the Accountant of the Mandaue Branch, and
the Acting Chief of the Loans Department.
On June 17, 1994, SRBI filed with the Med-Arbiter an urgent motion to suspend
proceedings The Med-Arbiter denied the same on June 21, 1994. SRBI then filed
a motion for reconsideration. Two days later, the Med- Arbiter cancelled the
certification election scheduled for June 29, 1994 in order to address the motion
for reconsideration.
petition for certification election but best threshed out in other appropriate
proceedings.
On May 25, 1994, SRBI moved for reconsideration of the Undersecretary's
decision which was denied on July 7, 1994. The Med- Arbiter scheduled the
holding of certification elections on August 12, 1994.
Hence the instant petition grounded on the following assignments of error:
I
RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH
GRAVE ABUSE OF DISCRETION AND PALPABLY ERRED:
A. IN HOLDING THAT ART. 257 OF THE LABOR CODE
REQUIRES THE MED-ARBITER TO CONDUCT A
CERTIFICATION ELECTION IN ANY UNORGANIZED
ESTABLISHMENT EVEN WHEN THE PETITIONING UNION
DOES NOT POSSESS THE QUALIFICATION FOR AN
APPROPRIATE BARGAINING AGENT; AND
B. IN REFUSING TO ASSUME JURISDICTION OVER THE
PETITIONER'S APPEAL AND TO DISMISS THE RESPONDENT
UNION'S PETITION FOR CERTIFICATION ELECTION.
II
RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH
GRAVE ABUSE OF DISCRETION AND PALPABLY ERRED IN
DENYING THE PETITIONER'S APPEAL DESPITE THE FACT
THAT:

On October 26, 1993, the union filed a petition for certification election of the
supervisory employees of SRBI. It alleged, among others, that: (1) APSOTEU-
TUCP was a labor organization duly-registered with the Labor Department; (2)
SRBI employed 5 or more supervisory employees; (3) a majority of these
employees supported the petition; (4) there was no existing collective bargaining
agreement (CBA) between any union and SRBI; and (5) no certification election
had been held in SRBI during the past 12 months prior to the petition.
On October 28, 1993, the Med-Arbiter gave due course to the petition. The pre-
certification election conference between SRBI and APSOTEU- TUCP was set for
November 15, 1993.
On November 12, 1993, SRBI filed a motion to dismiss the union's petition. It
sought to prevent the holding of a certification election on two grounds: First,
that the members of APSOTEU-TUCP were in fact managerial or confidential
employees. Thus, following the doctrine in Philips Industrial Development
Corporation v. National Labor Relations Commission, they were disqualified from
forming, joining, or assisting any labor organization. Petitioner attached the job
The Med-Arbiter later denied petitioner's motion for reconsideration. SRBI A. THE ALLEGED MEMBERS OF RESPONDENT UNION ARE
appealed the order of denial to the DOLE Secretary on December 16, 1993. MANAGERIAL EMPLOYEES WHO ARE LEGALLY
DISQUALIFIED FROM JOINING ANY LABOR ORGANIZATION.
On December 22, 1993, petitioner proceeded to file a petition with the DOLE
Regional Office seeking the cancellation of the respondent union's registration. It B. AT THE VERY LEAST, THE ALLEGED MEMBERS OF
averred that the APSOTEU-TUCP members were actually managerial employees RESPONDENT UNION ARE OCCUPYING HIGHLY
who were prohibited by law from joining or organizing unions. CONFIDENTIAL POSITIONS IN PETITIONER AND, THUS, THE
LEGAL DISQUALIFICATION OF MANAGERIAL EMPLOYEES
On April 22, 1994, respondent DOLE Undersecretary denied SRBI's appeal for EQUALLY APPLY TO THEM. Msesm
lack of merit. He ruled that APSOTEU- TUCP was a legitimate labor organization.
As such, it was fully entitled to all the rights and privileges granted by law to a III
legitimate labor organization, including the right to file a petition for certification
election. He also held that until and unless a final order is issued canceling
APSOTEU- TUCP's registration certificate, it had the legal right to represent its IN ANY EVENT, THE CONCLUSIONS REACHED IN THE
members for collective bargaining purposes. Furthermore, the question of SUBJECT RESOLUTIONS ARE CONTRARY TO LAW AND ARE
whether the APSOTEU- TUCP members should be considered as managerial or DIAMETRICALLY OPPOSED TO RESPONDENT UNION'S
confidential employees should not be addressed in the proceedings involving a RECORDED ADMISSIONS AND REPRESENTATIONS.
Considering petitioner's assigned errors, we find two core issues for immediate
resolution:
(1) Whether or not the members of the respondent union
are managerial employees and/or highly-placed
confidential employees, hence prohibited by law from
joining labor organizations and engaging in union
activities?
(2) Whether or not the Med-Arbiter may validly order the
holding of a certification election upon the filing of a
petition for certification election by a registered union,
despite the petitioners appeal pending before the DOLE
Secretary against the issuance of the unions registration?
The other issues based on the assigned errors could be resolved easily after the
core issues are settled.
Respecting the first issue, Article 212 (m) of the Labor Code defines the terms
"managerial employee" and "supervisory employees" as follows:
"Art. 212. Definitions-
xxx
(m) 'Managerial employee is one who is vested with
powers or prerogatives to lay down and execute
management policies and/or hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within
any of the above definitions are considered rank-and-file
employees for purposes of this Book (Italic supplied)."
Petitioner submitted detailed job descriptions to support its contention that the
union members are managerial employees and/or confidential employees
proscribed from engaging in labor activities. Petitioner vehemently argues that
the functions and responsibilities of the employees involved constitute the "very
core of the bank's business, lending of money to clients and borrowers,
evaluating their capacity to pay, approving the loan and its amount, scheduling
the terms of repayment, and endorsing delinquent accounts to counsel for
collection." Hence, they must be deemed managerial employees. Petitioner cites
Tabacalera Insurance Co. v. National Labor Relations Commission, and Panday v.
National Labor Relations Commission, to sustain its submission. In Tabacalera,
we sustained the classification of a credit and collection supervisor by
management as a managerial/supervisory personnel. But in that case, the credit
and collection supervisor "had the power to recommend the hiring and
appointment of his subordinates, as well as the power to recommend any
promotion and/or increase." For this reason he was deemed to be a managerial
employee. In the present case, however, petitioner failed to show that the
employees in question were vested with similar powers. At best they only had
recommendatory powers subject to evaluation, review, and final decision by the
bank's management. The job description forms submitted by petitioner clearly
show that the union members in question may not transfer, suspend, lay-off,
recall, discharge, assign, or discipline employees. Moreover, the forms also do
not show that the Cashiers, Accountants, and Acting Chiefs of the loans
Department formulate and execute management policies which are normally
expected of management officers. Exsm
Petitioner's reliance on Panday is equally misplaced. There, we held that a
branch accountant is a managerial employee because the said employee had
managerial powers, similar to the supervisor in Tabacalera. Their powers
included recommending the hiring and appointment of his subordinates, as the
power to recommend any promotion and/or increase.
Here, we find that that the Cashiers, Accountant, and Acting Chief of the Loans
Department of the petitioner did not possess managerial powers and duties. We
are, therefore, constrained to conclude that they are not managerial employees.
Now may the said bank personnel be deemed confidential employees?
Confidential employees are those who (1) assist or act in a confidential capacity,
in regard (2) to persons who formulate, determine, and effectuate management
policies [specifically in the field of labor relations]. The two criteria are
cumulative, and both must be met if an employee is to be considered a
confidential employee-that is, the confidential relationship must exist between
the employee and his superior officer; and that officer must handle the
prescribed responsibilities relating to labor relations.
Article 245 of the Labor Code does not directly, prohibit confidential employees
from engaging in union activities. However, under the doctrine of necessary
implication, the disqualification of managerial employees equally applies to
confidential employees. The confidential-employee rule justifies exclusion of
confidential employees because in the normal course of their duties they
become aware of management policies relating to labor relations. It must be
stressed, however, that when the employee does not have access to confidential
labor relations information, there is no legal prohibition against confidential
employees from forming, assisting, or joining a union.
Petitioner contends that it has only 5 officers running its day-to-day affairs. They
assist in confidential capacities and have complete access to the bank's
confidential data. They form the core of the bank's management team.
Petitioner explains that:
"...Specifically: (1) the Head or the Loans Department
initially approves the loan applications before they are
passed on to the Board for confirmation. As such, no loan
application is even considered by the Board and approved
by petitioner without his stamp of approval based upon his
interview of the applicant and determination of his
(applicant's) credit standing and financial capacity. The
same holds true with respect to renewals or restructuring
of loan accounts. He himself determines what account
should be collected, whether extrajudicially or judicially,
and settles the problem or complaints of borrowers
regarding their accounts;
"(2) the Cashier is one of the approving officers and
authorized signatories of petitioner. He approves the
opening of accounts, withdrawals and encashment, and
acceptance of check deposits, He deals with other banks
and, in the absence of the regular Manager, manages the
entire office or branch and approves disbursements of
funds for expenses; and
"(3) the Accountant, who heads the Accounting
Department, is also one of the authorized signatories of
petitioner and, in the absence of the Manager or Cashier,
acts as substitute approving officer and assumes the
management of the entire office. She handles the financial
reports and reviews the debit/credit tickets submitted by
the other departments."Kyle
Petitioner's explanation, however, does not state who among the employees has
access to information specifically relating to its labor relations policies. Even
Cashier Patricia Maluya, who serves as the secretary of the bank's Board of
Directors may not be so classified. True, the board of directors is responsible for
corporate policies, the exercise of corporate powers, and the general
management of the business and affairs of the corporation. As secretary of the
bank's governing body, Patricia Maluya serves the bank's management, but
could not be deemed to have access to confidential information specifically
relating to SRBI's labor relations policies, absent a clear showing on this matter.
Thus, while petitioner's explanation confirms the regular duties of the concerned
employees, it shows nothing about any duties specifically connected to labor
relations.
As to the second issue. One of the rights of a legitimate labor organization under
Article 242(b) of the Labor Code is the right to be certified as the exclusive
representative of all employees in an appropriate bargaining unit for purposes of
collective bargaining. Having complied with the requirements of Art. 234, it is
our view that respondent union is a legitimate labor union. Article 257 of the
Labor Code mandates that a certification election shall automatically be
conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor
organization. Nothing is said therein that prohibits such automatic conduct of
the certification election if the management appeals on the issue of the validity
of the union's registration. On this score, petitioner's appeal was correctly
dismissed.
Petitioner argues that giving due course to respondent union's petition for
certification election would violate the separation of unions doctrine. Note that
the petition was filed by APSOTEU- TUCP, a legitimate labor organization. It was
not, filed by ALU. Nor was it filed by TUCP, which is a national labor federation of
with which respondent union is affiliated. Petitioner says that respondent union
is a mere alter ego of ALU. The records show nothing to this effect. What the
records instead reveal is that respondent union was initially assisted by ALU
during its preliminary stages of organization. A local union maintains its separate
personality despite affiliation with a larger national federation. Petitioner alleges
that ALU seeks to represent both respondent union and the rank-and-file union.
Again, we find nothing in the records to support this bare assertion.

The law frowns on a union where the membership is composed of both

supervisors and rank-and-file employees, for fear that conflicts of interest may
arise in the areas of discipline, collective bargaining, and strikes. However, in the
present case, none of the members of the respondent union came from the
rank-and-file employees of the bank.

Taking into account the circumstances in this case, it is our view that respondent
Undersecretary committed no reversible error nor grave abuse of discretion
when he found the order of the Med-Arbiter scheduling a certification election in
order. The list of employees eligible to vote in said certification election was also
found in order, for none was specifically disqualified from membership.

WHEREFORE, the instant petition is hereby DISMISSED. No pronouncement as to

costs.
G.R. No. 115180 November 16, 1999 On April 8, 1986, petitioner company interposed before the Arbitration Branch I
of the then Ministry of Labor and Employment, a petition to declare the strike
illegal with prayer for damages against FPWU-NLU, NLU-TUCP and its national
FILIPINO PIPE AND FOUNDRY CORPORATION, petitioner, PUBLIC RESPONDENT NATIONAL
president, Atty. Eulogio Lerum.
vs. LABOR RELATIONS COMMISSION
NATIONAL LABOR RELATIONS COMMISSION, NATIONAL LABOR UNION ERRED IN LAW, CAPRICIOUSLY AND
TUCP, and EULOGIO LERUM, respondents. On December 23, 1988, petitioner company moved for the partial dismissal of WHIMSICALLY DISREGARDED THE
the Complaint against forty-three (43) officers and members of FPWU-NLU, but EVIDENCE SUBMITTED IN THE CASE
maintained the action against the NLU-TUCP and Atty. Eulogio Lerum. 8 AND GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK
AND/OR EXCESS OF JURISDICTION
On August 31, 1992, the Labor Arbiter came out with a decision for petitioner
PURISIMA, J.: WHEN IT HELD THAT PRIVATE
company, ruling as follows:
RESPONDENTS NATIONAL LABOR
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court UNION (NLU)-TUCP AND ATTY.
WHEREFORE, judgment is hereby rendered declaring that EULOGIO LERUM ARE NOT
seeking to annul and set aside the Decision 1 of the National Labor Relations
the strike staged by respondents from March 3, 1986 to PRIMARILY RESPONSIBLE AND,
Commission, 2 dated September 29, 1993, in NLRC NCR CA No. 003806-92, which
June 13, 1986 was ILLEGAL. Accordingly and in conformity THEREFORE, NOT LIABLE FOR
reversed the Decision 3 of the Labor Arbiter, 4 dated August 31, 1992, in NLRC
with the Return-to-Work Agreement, respondent National DAMAGES SUFFERED BY PETITIONER
Case No. 4-1309-86, disposing thus:
Labor Union-TUCP is hereby directed to pay the ON ACCOUNT OF THE ILLEGAL
complainant company the following: STRIKE THEY HAD DIRECTLY AIDED,
WHEREFORE, premises considered, the appeal of ASSISTED, ABETTED AND
complainant corporation is hereby dismissed for lack of PARTICIPATED IN.
a) Actual damages in the form of loss of revenue during
merit; the appeal of Atty. Lerum and NLU is hereby
the duration of the strike which lasted for 100 days or in
granted, and the Decision dated August 31, 1992 is hereby
the amount of ONE MILLION PESOS (P1,000, 000. 00); II
annulled and set side, and a new judgment is hereby
entered declaring the complaint below dismissed for lack
of merit insofar as respondent NLU and Atty. Lerum are b) Damages to the good business standing and commercial PUBLIC RESPONDENT NATIONAL
concerned. credit of the company in the amount of THREE HUNDRED LABOR RELATIONS COMMISSION
FIFTY THOUSAND PESOS (P350,000.00); and GRAVELY ABUSED ITS DISCRETION
SO ORDERED. 5 AMOUNTING TO LACK AND/OR
c) Exemplary damages to deter others similarly inclined EXCESS OF JURISDICTION AND
from committing similar acts and to serve as an example ACTED CAPRICIOUSLY AND
The antecedent facts can be culled as follows: WHIMSICALLY IN TOTAL DISREGARD
for the public good, in the amount of TWO HUNDRED
FIFTY THOUSAND PESOS (P250,000.00). OF THE EVIDENCE PRESENTED IN
On February 10, 1986, respondent National Labor Union-Trade Union Trade THE CASE WHEN IT HELD THAT
Union Congress of the Philippines (NLU-TUCP), a national federation of labor PRIVATE RESPONDENTS MERELY
Further, respondent NLU is hereby directed to pay the ASSISTED THE LOCAL CHAPTER AND
unions, filed with the then Ministry of Labor and Employment, in behalf of its
attorney's fees equivalent to 10% of the actual damages, ITS MEMBERS IN STAGING A STRIKE
local chapter, the Filipino Pipe Workers Union-National Labor Union (FPWU-NLU,
or the amount of ONE HUNDRED THOUSAND PESOS AGAINST PETITIONER AND THAT
hereinafter referred to as Union), a notice of strike signed by its national
(P100,000.00). SUCH ASSISTANCE WAS NOT THE
president, Atty. Eulogio R. Lerum, against the petitioner, Filipino Pipe and
Foundry Corporation, alleging as grounds therefor union busting and non- CAUSE NOR WAS IT AN
implementation of the Collective Bargaining Agreement. 6 For lack of showing that respondent Lerum acted in his INDESPENSABLE ELEMENT OF THE
personal capacity, he is hereby ABSOLVED from any STRIKE.
liability.
The initial conciliation conference was set on February 24, 1986 but due to lack
of notice thereof to petitioner company, as well as the failure of FPWU-NLU to III
furnish the latter a copy of the notice of strike, the initial conciliation conference Pursuant to the Agreement, the complaint against all the
was re-set to March 3, 1986. other individual respondents are hereby DISMISSED. PUBLIC RESPONDENT NATIONAL
LABOR RELATIONS COMMISSION
In the early morning of March 3, 1986, however, without waiting for the SO ORDERED. 9 GRAVELY ERRED IN LAW AND
outcome of the conciliation conference scheduled on said date, the FPWU-NLU GRAVELY ABUSED ITS DISCRETION
staged the strike in question which lasted until June 13, 1986, when a return to AMOUNTING TO LACK AND/OR
Therefrom, both parties appealed to the NLRC which on September 29, 1993, EXCESS OF JURISDICTION WHEN IT
work agreement was reached by the union and petitioner company. 7
rendered the assailed decision. Dissatisfied therewith, the petitioner company CONCLUDED THAT PETITIONER LOST
found its way to this Court via the present petition; theorizing that: ITS CAUSE OF ACTION AGAINST
PRIVATE RESPONDENTS AFTER THE
 LOCAL UNION HIRED A NEW
COUNSEL AND PETITIONER MOVED
FOR PARTIAL DISMISSAL OF ITS
COMPLAINT AGAINST THE STRIKING
WORKERS INASMUCH AS PRIVATE
RESPONDENTS ARE MERE THIRD
PARTIES. 10
Rule XXII, Book V, of the Rules Implementing the Labor Code, provides:
Sec. 1. Grounds for strike and lockout. A strike or
lockout may be declared in cases of bargaining deadlocks
and unfair labor practices. Violations of collective
bargaining agreements, except flagrant and/or malicious
refusal to comply with its economic provisions, shall not
be considered unfair labor practice and shall not be
strikeable. No strike or lockout may be declared on
grounds involving inter-union and intra-union disputes or
on issues brought to voluntary or compulsory arbitration.
xxx xxx xxx
Sec. 3. Notice of strike or lockout. In cases of
bargaining deadlocks, a notice of strike or lockout shall be
filed with the regional branch of the Board at least thirty
(30) days before the intended date thereof, a copy of said
notice having been served on the other party concerned. .
..
xxx xxx xxx
Sec. 6. Conciliation. Upon receipt of the notice, the
regional branch of the Board shall exert all efforts at
mediation and conciliation to enable the parties to settle
the dispute amicably. The regional branch of the Board
may, upon consultation, recommend to the parties that
the notice be treated as a preventive mediation case. It
shall also encourage the parties to submit the dispute to
voluntary arbitration.
During the proceedings, the parties shall not do any act
which may disrupt or impede the early settlement of the
dispute. They are obliged as part of the duty to bargain
collectively in good faith, to participate fully and promptly
in the conciliation meetings called by the regional branch
of the board. The regional branch of the Board shall have
the power to issue subpoenas requiring the attendance of
the parties to the meetings. . . .
Applying the aforecited provision of law in point to the case under consideration,
the Court is of the finding and conclusion that the strike staged by FPWU-NLU
was illegal for want of any legal basis. Contrary to the grounds advanced by the of this stance, petitioner cited the following letter of Atty. Lerum to the
union in the notice of strike, it turned out during the March 3, 1986 conciliation company, to wit:
conference that the purpose of the strike was to pressure the petitioner
company to:
NATIONAL LABOR UNION
1) include in the salary of the strikers the P3.00 wage
An Affiliate of the Trade Union of the Philippines
increase 11 effective March 1, 1986.
3199 RAMON MAGSAYSAY BLVD., MANILA, PHILIPPINES
2) compute their backwages covering the period from
December 1, 1980 to February 28, 1986, including vacation
leave and sick leave. Tel. 61-42-65
March 29, 1983
A thorough sifting of the pertinent records discloses that the alleged
union busting was not substantiated and the supposed non-
implementation of the collective bargaining agreement was Dear Sirs:
groundless because the demands of FPWU-NLU, at the time the
notice of strike was filed and at the time the by the union actually
Please be informed that we have formed a local union in
struck, were the subject of a pending application for a writ of
your company and the officers thereof are the following:
execution filed by the union in Case No. AB-7933-80 (NCR-CA-8-674-
80), which application was granted on April 4, 1986 by the Labor
Arbiter. 12 Verily, the strike staged by FPWU-NLU was baseless since it President Virgilio Bernal
was still pre-mature then for the union to insist on the
implementation of the adverted provision of the collective bargaining
Vice-Pres. Ramon Alborte
agreement, which was the subject of a pending writ of execution.
Then too, the failure of the union to serve petitioner company a copy of the Secretary Ernesto Ballesteros
notice of strike is a clear violation of Section 3 of the aforestated Rules. The
constitutional precepts of due process mandate that the other party be notified Treasure Arsenio Agustin
of the adverse action of the opposing party. So also, the same Section provides
for a mandatory thirty (30) day cooling-off period which the union ignored when
Auditor Genaro Gabule
it struck on March 3, 1986, before the 30th day from the time the notice of strike
was filed on February 10, 1986.
Board Members:
What is more, the same strike blatantly disregarded the prohibition on the doing
of any act which may impede or disrupt the conciliation proceedings, when the 1. Eduardo Cenina 4. Felimon Simborio
union staged the strike in the early morning of March 3, 1986, the very same day
the conciliation conference was scheduled by the former Ministry of Labor. 2. Dante Canete 5. Joseph Olazo
In light of the foregoing, it is beyond cavil that subject strike staged by the union 3. Reynaldo Adelante 6. Virgilio Elnar
was illegal.
Shop Stewards:
Anent the responsibility for the damages allegedly sustained by petitioner
company on account of the illegal strike, the latter theorized that the liability
therefor should be borne by NLU-TUCP and its national president, Atty. Eulogio 1. Pablito Fajardo
Lerum, for having directly participated in aiding and abetting the illegal strike. It
is argued that FPWU-NLU is a mere agent of respondent NLU-TUCP, because 2. Ruperto Manlangit
FPWU-NLU, which was formed by respondent NLU-TUCP is not registered as a
local unit or chapter but directly affiliated with the latter and therefore, could
not have acted on its own. Otherwise stated, petitioner is of the view that 3. Ruben Bongaos
FPWU-NLU, a local union, cannot act as the principal of respondent NLU-TUCP, a
mother federation, because it is not a legitimate labor organization. 13 In support We have given them full authority to deal with you on all
matters covered by our authority as sole collective
 bargaining representative of your rank and file Evidently, direct and primary responsibility for the damages allegedly caused by
workers.Very truly yours,(Sgd) the illegal strike sued upon fall on the local union FPWU, being the principal, and
not on respondent NLU-TUCP, a mere agent of FPWU-NLU which assisted the
latter in filing the notice of strike. Being just an agent, the notice of strike filed by
In Progressive Development Corporation vs. Secretary, Department of Labor and
Atty. Eulogio Lerum, the national president of NLU-TUCP, is deemed to have
Employment, 15 the Court explained the nature of the relationship between a
been filed by its principal, the FPWU-NLU. Having thus dismissed the claim for
mother union/federation and a local union, thus:
damages against the principal, FPWU-NLU, the action for damages against its
agent, respondent NLU-TUCP, and Atty. Lerum, has no more leg to stand on and
At this juncture, it is important to clarify the relationship should also be dismissed.
between the mother union and the local union. In the case
of Liberty Cotton Mills Workers Union v. Liberty Cotton
Premises studiedly considered, the Court is of the ineluctable conclusion, and so
Mills, Inc., 66 SCRA 512 [1975], the Court held that the
holds, that the National Labor Relations Commission did not act with grave
mother union, acting for and in behalf of its affiliate, had
abuse of discretion in reversing the Decision of the Labor Arbiter in NLRC CASE
the status of an agent while the local union remained the
No. 4-1309-86.
basic unit of the association free to serve the common
interest of all its members subject only to the restraints
imposed by the constitution and by-laws of the WHEREFORE, for lack of merit, the Petition is DISMISSED, and the Decision of the
association. . . . 16 National Labor Relations Commission in NLRC NCR CA No. 003806-92 AFFIRMED.
No pronouncement as to costs.
The same is true even if the local union is not a legitimate labor
organization. Conformably, in the abovecited case the Court ruled SO ORDERED.
that the mother federation was a mere agent and the local
chapter/union was the principal, notwithstanding the failure of the
local union to comply with the procedural requirements that would
make it a legitimate labor organization.

Evidently, in the case under scrutiny, whether or not FPWU, the local chapter,
complied with the procedural requirements that would make it a legitimate
labor organization is immaterial. It would not affect its status as the principal and
basic unit of the association. The requirement laid down in the Progressive
Development case, that the local union must be a legitimate labor organization,
pertains to the conditions before a union may file a petition for certification
election and to be certified as sole and exclusive bargaining agent. In the present
case, there is no dispute that FPWU-NLU is the sole and exclusive bargaining
representative of the rank and file employees of petitioner company. The union's
status as a legitimate labor organization is therefore of no moment in the
resolution of the controversy here. As the local union, it is considered as the
principal; the entity which staged the illegal strike and the one responsible for
the resulting damages allegedly sustained by petitioner company.

Furthermore, the petitioner company is now estopped from reneging on the

recognition it extended to the FPUW-NLU as the bargaining representative of its
rank and file workers, by belatedly attacking its status which petitioner company
had voluntarily recognized. It should be noted that even as early as 1981, when
the collective bargaining agreement sought to be implemented by the union was
entered into, the latter was already the bargaining representative of the
employees concerned. It is not, therefore, true that it was respondent NLU-TUCP
which formed FPWU. At most, the entry into the picture of the private
respondent on March 23, 1983, merely affirmed the status of FPWU as the
recognized bargaining representative of the rank and file employees of
petitioner company.
[G.R. No. 113907. February 28, 2000]
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-
UWP), v. Ramos, NLRC G.R.No. 113907 February 28,2000
DECISION
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to
annul the decision of the National Labor Relations Commission in an unfair labor
practice case instituted by a local union against its employer company and the
officers of its national federation.
The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc.,
(B) (MSMG), hereinafter referred to as the "local union", is an affiliate of the
private respondent, United Lumber and General Workers of the Philippines
(ULGWP), referred to as the "federation". The collective bargaining agreement
between MSMG and M. Greenfield, Inc. names the parties as follows:
"This agreement made and entered into by and between:
M. GREENFIELD, INC. (B) a corporation duly
organized in accordance with the laws of the
Republic of the Philippines with office address
at Km. 14, Merville Road, Paraaque, Metro
Manila, represented in this act by its General
manager, Mr. Carlos T. Javelosa, hereinafter
referred to as the Company;
-and-
MALAYANG SAMAHAN NG MGA
MANGGAGAWA SA M. GREENFIELD (B)
(MSMG)/UNITED LUMBER AND GENERAL
WORKERS OF THE PHILIPPINES (ULGWP), a
legitimate labor organization with address at
Suite 404, Trinity Building, T.M. Kalaw Street,
Manila, represented in this act by a Negotiating
Committee headed by its National President,
Mr. Godofredo Paceno, Sr., referred to in this
Agreement as the UNION."
The CBA includes, among others, the following pertinent provisions:
Article II-Union Security
Section 1. Coverage and Scope. All employees who are
covered by this Agreement and presently members of the
UNION shall remain members of the UNION for the
duration of this Agreement as a condition precedent to
continued employment with the COMPANY.
xxxxxx
xxxxxx
Section 4. Dismissal. Any such employee mentioned in
Section 2 hereof, who fails to maintain his membership in
the UNION for non-payment of UNION dues, for
resignation and for violation of UNIONs Constitution and
By-Laws and any new employee as defined in Section 2 of
this Article shall upon written notice of such failure to join
or to maintain membership in the UNION and upon
written recommendation to the COMPANY by the UNION,
be dismissed from the employment by the COMPANY;
provided, however, that the UNION shall hold the
COMPANY free and blameless from any and all liabilities
that may arise should the dismissed employee question, in
any manner, his dismissal; provided, further that the
matter of the employees dismissal under this Article may
be submitted as a grievance under Article XIII and,
provided, finally, that no such written recommendation
shall be made upon the COMPANY nor shall COMPANY be
compelled to act upon any such recommendation within
the period of sixty (60) days prior to the expiry date of this
Agreement conformably to law."
it to deduct the union fines from the wages/salaries of those union members
Article IX
Section 4. Program Fund - The Company shall provide the
amount of P10, 000.00 a month for a continuing labor
education program which shall be remitted to the
Federation x x x."
On September 12, 1986, a local union election was held under the auspices of
the ULGWP wherein the herein petitioner, Beda Magdalena Villanueva, and the
other union officers were proclaimed as winners. Minutes of the said election
were duly filed with the Bureau of Labor Relations on September 29, 1986.
On March 21, 1987, a Petition for Impeachment was filed with the national
federation ULGWP by the defeated candidates in the aforementioned election.
On June 16, 1987, the federation conducted an audit of the local union funds.
The investigation did not yield any unfavorable result and the local union officers
were cleared of the charges of anomaly in the custody, handling and disposition
of the union funds.
The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the
local union officers with the DOLE NCR on November 5, 1987, docketed as NCR-
OD-M-11-780-87. However, the same was dismissed on March 2, 1988, by Med-
Arbiter Renato Parungo for failure to substantiate the charges and to present
evidence in support of the allegations.
On April 17, 1988, the local union held a general membership meeting at the
Caruncho Complex in Pasig. Several union members failed to attend the meeting,
prompting the Executive Board to create a committee tasked to investigate the
non-attendance of several union members in the said assembly, pursuant to
Sections 4 and 5, Article V of the Constitution and By-Laws of the union, which
read:
"Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi
paglahok sa lahat ng hakbangin ng unyon ng sinumang
kasapi o pinuno ay maaaring maging sanhi ng pagtitiwalag
o pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat
araw na nagkulang.
Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa
natatapos ang pulong ay ituturing na pagliban at
maparusahan ito ng alinsunod sa Article V, Seksyong 4 ng
Saligang Batas na ito. Sino mang kasapi o pisyales na
mahuli and dating sa takdang oras ng di lalampas sa isang
oras ay magmumulta ng P25.00 at babawasin sa sahod sa
pamamagitan ng salary deduction at higit sa isang oras ng
pagdating ng huli ay ituturing na pagliban.
On June 27, 1988, the local union wrote respondent company a letter requesting
who failed to attend the general membership meeting. A portion of the said
letter stated:
"xxx xxx xxx
In connection with Section 4 Article II of our existing
Collective Bargaining Agreement, please deduct the
amount of P50.00 from each of the union members named
in said annexes on the payroll of July 2-8, 1988 as fine for
their failure to attend said general membership meeting."
In a Memorandum dated July 3, 1988, the Secretary General of the national
federation, Godofredo Paceo, Jr. disapproved the resolution of the local union
imposing the P50.00 fine. The union officers protested such action by the
Federation in a Reply dated July 4, 1988.
On July 11, 1988, the Federation wrote respondent company a letter advising the
latter not to deduct the fifty-peso fine from the salaries of the union members
requesting that:
" x x x any and all future representations by MSMG
affecting a number of members be first cleared from the
federation before corresponding action by the Company."
The following day, respondent company sent a reply to petitioner unions
request in a letter, stating that it cannot deduct fines from the employees salary
without going against certain laws. The company suggested that the union refer
the matter to the proper government office for resolution in order to avoid
placing the company in the middle of the issue.
The imposition of P50.00 fine became the subject of bitter disagreement
between the Federation and the local union culminating in the latters
declaration of general autonomy from the former through Resolution No. 10
passed by the local executive board and ratified by the general membership on
July 16, 1988.
In retaliation, the national federation asked respondent company to stop the
remittance of the local unions share in the education funds effective August
1988. This was objected to by the local union which demanded that the
education fund be remitted to it in full.
The company was thus constrained to file a Complaint for Interpleader with a
Petition for Declaratory Relief with the Med-Arbitration Branch of the
Department of Labor and Employment, docketed as Case No. OD-M-8-435-88.
This was resolved on October 28, 1988, by Med-Arbiter Anastacio Bactin in an
Order, disposing thus:
"WHEREFORE, premises considered, it is hereby ordered:
1. That the United Lumber and General Workers of the
Philippines (ULGWP) through its local union officers shall
administer the collective bargaining agreement (CBA).
2. That petitioner company shall remit the P10,000.00
monthly labor education program fund to the ULGWP
subject to the condition that it shall use the said amount
for its intended purpose.
3. That the Treasurer of the MSMG shall be authorized to
collect from the 356 union members the amount of P50.00
as penalty for their failure to attend the general
membership assembly on April 17, 1988.
However, if the MSMG Officers could present the
individual written authorizations of the 356 union
members, then the company is obliged to deduct from the
salaries of the 356 union members the P50.00 fine."
On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February 7,
1989, which modified in part the earlier disposition, to wit:
"WHEREFORE, premises considered, the appealed portion
is hereby modified to the extent that the company should
remit the amount of five thousand pesos (P5,000.00) of
the P10,000.00 monthly labor education program fund to
ULGWP and the other P5,000.00 to MSMG, both unions to
use the same for its intended purpose."
Meanwhile, on September 2, 1988, several local unions (Top Form, M.
Greenfield, Grosby, Triumph International, General Milling, and Vander Hons
chapters) filed a Petition for Audit and Examination of the federation and
education funds of ULGWP which was granted by Med-Arbiter Rasidali Abdullah
on December 25, 1988 in an Order which directed the audit and examination of
the books of account of ULGWP.
On September 30, 1988, the officials of ULGWP called a Special National
Executive Board Meeting at Nasipit, Agusan del Norte where a Resolution was
passed placing the MSMG under trusteeship and appointing respondent Cesar
Clarete as administrator.
On October 27, 1988, the said administrator wrote the respondent company
informing the latter of its designation of a certain Alfredo Kalingking as local
union president and "disauthorizing" the incumbent union officers from
representing the employees. This action by the national federation was
protested by the petitioners in a letter to respondent company dated November
11, 1988.
On November 13, 1988, the petitioner union officers received identical letters
from the administrator requiring them to explain within 72 hours why they
should not be removed from their office and expelled from union membership.
On November 26, 1988, petitioners replied:
(a) Questioning the validity of the alleged National
Executive Board Resolution placing their union under
trusteeship;
(b) Justifying the action of their union in declaring a
general autonomy from ULGWP due to the latters inability
to give proper educational, organizational and legal
services to its affiliates and the pendency of the audit of
the federation funds;
(c) Advising that their union did not commit any act of
disloyalty as it has remained an affiliate of ULGWP;
(d) Giving ULGWP a period of five (5) days to cease and
desist from further committing acts of coercion,
intimidation and harrassment.
However, as early as November 21, 1988, the officers were expelled from the
ULGWP. The termination letter read:
"Effective today, November 21, 1988, you are hereby
expelled from UNITED LUMBER AND GENERAL WORKERS
OF THE PHILIPPINES (ULGWP) for committing acts of
disloyalty and/or acts inimical to the interest and violative
to the Constitution and by-laws of your federation.
You failed and/or refused to offer an explanation inspite of
the time granted to you.
Since you are no longer a member of good standing,
ULGWP is constrained to recommend for your termination
from your employment, and provided in Article II Section
4, known as UNION SECURITY, in the Collective Bargaining
agreement."
On the same day, the federation advised respondent company of the expulsion
of the 30 union officers and demanded their separation from employment
pursuant to the Union Security Clause in their collective bargaining agreement.
This demand was reiterated twice, through letters dated February 21 and March
4, 1989, respectively, to respondent company.
Thereafter, the Federation filed a Notice of Strike with the National Conciliation
and Mediation Board to compel the company to effect the immediate
termination of the expelled union officers.
On March 7, 1989, under the pressure of a threatened strike, respondent
company terminated the 30 union officers from employment, serving them
identical copies of the termination letter reproduced below:
We received a demand letter dated 21 November 1988
from the United Lumber and General Workers of the
Philippines (ULGWP) demanding for your dismissal from
employment pursuant to the provisions of Article II,
Section 4 of the existing Collective Bargaining Agreement
(CBA). In the said demand letter, ULGWP informed us that
as of November 21, 1988, you were expelled from the said
federation "for committing acts of disloyalty and/or acts
inimical to the interest of ULGWP and violative to its
Constitution and By-laws particularly Article V, Section 6,
9, and 12, Article XIII, Section 8."
In subsequent letters dated 21 February and 4 March
1989, the ULGWP reiterated its demand for your dismissal,
pointing out that notwithstanding your expulsion from the
federation, you have continued in your employment with
the company in violation of Sec. 1 and 4 of Article II of our
CBA, and of existing provisions of law.
In view thereof, we are left with no alternative but to
comply with the provisions of the Union Security Clause of
our CBA. Accordingly, we hereby serve notice upon you
 that we are dismissing you from your employment with M.
Greenfield, Inc., pursuant to Sections 1 and 4, Article II of
the CBA effective immediately."
On that same day, the expelled union officers assigned in the first shift were
physically or bodily brought out of the company premises by the companys
security guards. Likewise, those assigned to the second shift were not allowed to
report for work. This provoked some of the members of the local union to
demonstrate their protest for the dismissal of the said union officers. Some
union members left their work posts and walked out of the company premises.
On the other hand, the Federation, having achieved its objective, withdrew the
Notice of Strike filed with the NCMB.
On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE,
Manila, docketed as Case No. NCMB-NCR-NS-03-216-89, alleging the following
grounds for the strike:
(a) Discrimination
(b) Interference in union activities
(c) Mass dismissal of union officers and shop stewards
(d) Threats, coercion and intimidation
(e) Union busting
The following day, March 9, 1989, a strike vote referendum was conducted and
out of 2, 103 union members who cast their votes, 2,086 members voted to
declare a strike.
On March 10, 1989, the thirty (30) dismissed union officers filed an urgent
petition, docketed as Case No. NCMB-NCR-NS-03-216-89, with the Offfice of the
Secretary of the Department of Labor and Employment praying for the
suspension of the effects of their termination from employment. However, the
petition was dismissed by then Secretary Franklin Drilon on April 11, 1989, the
pertinent portion of which stated as follows:
"At this point in time, it is clear that the dispute at M.
Greenfield is purely an intra-union matter. No mass lay-off
is evident as the terminations have been limited to those
allegedly leading the secessionist group leaving MSMG-
ULGWP to form a union under the KMU. xxx
xxx xxx xxx
WHEREFORE, finding no sufficient jurisdiction to warrant
the exercise of our extraordinary authority under Article
277 (b) of the Labor Code, as amended, the instant
Petition is hereby DISMISSED for lack of merit.
SO ORDERED."
On March 13 and 14, 1989, a total of 78 union shop stewards were placed under
preventive suspension by respondent company. This prompted the union
members to again stage a walk-out and resulted in the official declaration of
strike at around 3:30 in the afternoon of March 14, 1989. The strike was
attended with violence, force and intimidation on both sides resulting to physical
injuries to several employees, both striking and non-striking, and damage to
company properties.
The employees who participated in the strike and allegedly figured in the violent
incident were placed under preventive suspension by respondent company. The
company also sent return-to-work notices to the home addresses of the striking
employees thrice successively, on March 27, April 8 and April 31, 1989,
respectively. However, respondent company admitted that only 261 employees
were eventually accepted back to work. Those who did not respond to the
return-to-work notice were sent termination letters dated May 17, 1989,
reproduced below:
M. Greenfield Inc., (B)
Km. 14, Merville Rd., Paraaque, M.M.
May 17, 1989
xxx
On March 14, 1989, without justifiable cause and without
due notice, you left your work assignment at the prejudice
of the Companys operations. On March 27, April 11, and
April 21, 1989, we sent you notices to report to the
Company. Inspite of your receipt of said notices, we have
not heard from you up to this date.
Accordingly, for your failure to report, it is construed that
you have effectively abandoned your employment and the
Company is, therefore, constrained to dismiss you for said
cause.
Very truly yours,
M. GREENFIELD, INC., (B)
By:
WENZEL STEPHEN LIGOT
Asst. HRD Manager"
On August 7, 1989, the petitioners filed a verified complaint with the Arbitration
Branch, National Capital Region, DOLE, Manila, docketed as Case No. NCR-00-09-
04199-89, charging private respondents of unfair labor practice which consists of
union busting, illegal dismissal, illegal suspension, interference in union
activities, discrimination, threats, intimidation, coercion, violence, and
oppresion.
After the filing of the complaint, the lease contracts on the respondent
companys office and factory at Merville Subdivision, Paraaque expired and
were not renewed. Upon demand of the owners of the premises, the company
was compelled to vacate its office and factory.
Thereafter, the company transferred its administration and account/client
servicing department at AFP-RSBS Industrial Park in Taguig, Metro Manila. For
failure to find a suitable place in Metro Manila for relocation of its factory and
manufacturing operations, the company was constrained to move the said
departments to Tacloban, Leyte. Hence, on April 16, 1990, respondent company
accordingly notified its employees of a temporary shutdown. in operations.
Employees who were interested in relocating to Tacloban were advised to enlist
on or before April 23, 1990.
The complaint for unfair labor practice was assigned to Labor Arbiter Manuel
Asuncion but was thereafter reassigned to Labor Arbiter Cresencio Ramos when
respondents moved to inhibit him from acting on the case.
On December 15, 1992, finding the termination to be valid in compliance with
the union security clause of the collective bargaining agreement, Labor Arbiter
Cresencio Ramos dismissed the complaint.
Petitioners then appealed to the NLRC. During its pendency, Commissioner
Romeo Putong retired from the service, leaving only two commissioners,
Commissioner Vicente Veloso III and Hon. Chairman Bartolome Carale in the First
Division. When Commissioner Veloso inhibited himself from the case,
Commissioner Joaquin Tanodra of the Third Division was temporarily designated
to sit in the First Division for the proper disposition of the case.
The First Division affirmed the Labor Arbiters disposition. With the denial of
their motion for reconsideration on January 28, 1994, petitioners elevated the
case to this Court, attributing grave abuse of discretion to public respondent
NLRC in:
I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS BY
RESPONDENT COMPANY AS VALID;
II. HOLDING THAT THE STRIKE STAGED BYTHE PETITIONERS
AS ILLEGAL;
 III. HOLDING THAT THE PETITIONER EMPLOYEES WERE
DEEMED TO HAVE ABANDONED THEIR WORK AND HENCE,
VALIDLY DISMISSED BY RESPONDENT COMPANY; AND
IV. NOT FINDING RESPONDENT COMPANY AND
RESPONDENT FEDERATION OFFICERS GUILTY OF ACTS OF
UNFAIR LABOR PRACTICE.
Notwithstanding the several issues raised by the petitioners and respondents in
the voluminous pleadings presented before the NLRC and this Court, they
revolve around and proceed from the issue of whether or not respondent
company was justified in dismissing petitioner employees merely upon the labor
federations demand for the enforcement of the union security clause embodied
in their collective bargaining agreement.
Before delving into the main issue, the procedural flaw pointed out by the
petitioners should first be resolved.
Petitioners contend that the decision rendered by the First Division of the NLRC
is not valid because Commissioner Tanodra, who is from the Third Division, did
not have any lawful authority to sit, much less write the ponencia, on a case
pending before the First Division. It is claimed that a commissioner from one
division of the NLRC cannot be assigned or temporarily designated to another
division because each division is assigned a particular territorial jurisdiction.
Thus, the decision rendered did not have any legal effect at all for being
irregularly issued.
Petitioners argument is misplaced. Article 213 of the Labor Code in enumerating
the powers of the Chairman of the National Labor Relations Commission
provides that:
"The concurrence of two (2) Commissioners of a division
shall be necessary for the pronouncement of a judgment
or resolution. Whenever the required membership in a
division is not complete and the concurrence of two (2)
commissioners to arrive at a judgment or resolution
cannot be obtained, the Chairman shall designate such
number of additional Commissioners from the other
divisions as may be necessary."
It must be remembered that during the pendency of the case in the First Division
of the NLRC, one of the three commissioners, Commissioner Romeo Putong,
retired, leaving Chairman Bartolome Carale and Commissioner Vicente Veloso III.
Subsequently, Commissioner Veloso inhibited himself from the case because the
counsel for the petitioners was his former classmate in law school. The First
Division was thus left with only one commissioner. Since the law requires the
concurrence of two commisioners to arrive at a judgment or resolution, the
Commission was constrained to temporarily designate a commissioner from
another division to complete the First Division. There is nothing irregular at all in
such a temporary designation for the law empowers the Chairman to make
temporary assignments whenever the required concurrence is not met. The law
does not say that a commissioner from the first division cannot be temporarily
assigned to the second or third division to fill the gap or vice versa. The territorial
divisions do not confer exclusive jurisdiction to each division and are merely
designed for administrative efficiency.
Going into the merits of the case, the court finds that the Complaint for unfair
labor practice filed by the petitioners against respondent company which
charges union busting, illegal dismissal, illegal suspension, interference in union
activities, discrimination, threats, intimidation, coercion, violence, and
oppression actually proceeds from one main issue which is the termination of
several employees by respondent company upon the demand of the labor
federation pursuant to the union security clause embodied in their collective
bargaining agreement.
Petitioners contend that their dismissal from work was effected in an arbitrary,
hasty, capricious and illegal manner because it was undertaken by the
respondent company without any prior administrative investigation; that, had
respondent company conducted prior independent investigation it would have
found that their expulsion from the union was unlawful similarly for lack of prior
administrative investigation; that the federation cannot recommend the
dismissal of the union officers because it was not a principal party to the
collective bargaining agreement between the company and the union; that
public respondents acted with grave abuse of discretion when they declared
petitioners dismissals as valid and the union strike as illegal and in not declaring
that respondents were guilty of unfair labor practice.
Private respondents, on the other hand, maintain that the thirty dismissed
employees who were former officers of the federation have no cause of action
against the company, the termination of their employment having been made
upon the demand of the federation pursuant to the union security clause of the
CBA; the expelled officers of the local union were accorded due process of law
prior to their expulsion from their federation; that the strike conducted by the
petitioners was illegal for noncompliance with the requirements; that the
employees who participated in the illegal strike and in the commission of
violence thereof were validly terminated from work; that petitioners were
deemed to have abandoned their employment when they did not respond to the
three return to work notices sent to them; that petitioner labor union has no
legal personality to file and prosecute the case for and on behalf of the individual
employees as the right to do so is personal to the latter; and that, the officers of
respondent company cannot be liable because as mere corporate officers, they
acted within the scope of their authority.
Public respondent, through the Labor Arbiter, ruled that the dismissed union
officers were validly and legally terminated because the dismissal was effected in
compliance with the union security clause of the CBA which is the law between
the parties. And this was affimed by the Commission on appeal. Moreover, the
Labor Arbiter declared that notwithstanding the lack of a prior administrative
investigation by respondent company, under the union security clause provision
in the CBA, the company cannot look into the legality or illegality of the
recommendation to dismiss by the union nd the obligation to dismiss is
ministerial on the part of the company.
This ruling of the NLRC is erroneous. Although this Court has ruled that union
security clauses embodied in the collective bargaining agreement may be validly
enforced and that dismissals pursuant thereto may likewise be valid, this does
not erode the fundamental requirement of due process. The reason behind the
enforcement of union security clauses which is the sanctity and inviolability of
contracts cannot override ones right to due process.
In the case of Cario vs. National Labor Relations Commission, this Court
pronounced that while the company, under a maintenance of membership
provision of the collective bargaining agreement, is bound to dismiss any
employee expelled by the union for disloyalty upon its written request, this
undertaking should not be done hastily and summarily. The company acts in bad
faith in dismissing a worker without giving him the benefit of a hearing.
"The power to dismiss is a normal prerogative of the
employer. However, this is not without limitation. The
employer is bound to exercise caution in terminating the
services of his employees especially so when it is made
upon the request of a labor union pursuant to the
Collective Bargaining Agreement, xxx. Dismissals must not
be arbitrary and capricious. Due process must be observed
in dismissing an employee because it affects not only his
position but also his means of livelihood. Employers should
respect and protect the rights of their employees, which
include the right to labor."
In the case under scrutiny, petitioner union officers were expelled by the
federation for allegedly commiting acts of disloyalty and/or inimical to the
interest of ULGWP and in violation of its Constitution and By-laws. Upon demand
of the federation, the company terminated the petitioners without conducting a
separate and independent investigation. Respondent company did not inquire
into the cause of the expulsion and whether or not the federation had sufficient
grounds to effect the same. Relying merely upon the federations allegations,
respondent company terminated petitioners from employment when a separate
inquiry could have revealed if the federation had acted arbitrarily and
capriciously in expelling the union officers. Respondent companys allegation
that petitioners were accorded due process is belied by the termination letters
received by the petitioners which state that the dismissal shall be immediately
effective.
As held in the aforecited case of Cario, "the right of an employee to be
informed of the charges against him and to reasonable opportunity to present
his side in a controversy with either the company or his own union is not wiped
away by a union security clause or a union shop clause in a collective bargaining
agreement. An employee is entitled to be protected not only from a company
which disregards his rights but also from his own union the leadership of which
could yield to the temptation of swift and arbitrary expulsion from membership
and mere dismissal from his job."
While respondent company may validly dismiss the employees expelled by the
union for disloyalty under the union security clause of the collective bargaining
agreement upon the recommendation by the union, this dismissal should not be
done hastily and summarily thereby eroding the employees right to due process,
self-organization and security of tenure. The enforcement of union security
clauses is authorized by law provided such enforcement is not characterized by
arbitrariness, and always with due process. Even on the assumption that the
federation had valid grounds to expell the union officers, due process requires
that these union officers be accorded a separate hearing by respondent
company.
In its decision, public respondent also declared that if complainants (herein
petitioners) have any recourse in law, their right of action is against the
federation and not against the company or its officers, relying on the findings of
the Labor Secretary that the issue of expulsion of petitioner union officers by the
federation is a purely intra-union matter.
Again, such a contention is untenable. While it is true that the issue of expulsion
of the local union officers is originally between the local union and the
federation, hence, intra-union in character, the issue was later on converted into
a termination dispute when the company dismissed the petitioners from work
without the benefit of a separate notice and hearing. As a matter of fact, the
records reveal that the the termination was effective on the same day that the
the termination notice was served on the petitioners.
In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.,
the Court held the company liable for the payment of backwages for having
acted in bad faith in effecting the dismissal of the employees.
"xxx Bad faith on the part of the respondent company may
be gleaned from the fact that the petitioner workers were
dismissed hastily and summarily. At best, it was guilty of a
tortious act, for which it must assume solidary liability,
since it apparently chose to summarily dismiss the workers
at the unions instance secure in the unions contractual
undertaking that the union would hold it free from any
liability arising from such dismissal."
Thus, notwithstanding the fact that the dismissal was at the instance of the
federation and that it undertook to hold the company free from any liability
resulting from such a dismissal, the company may still be held liable if it was
remiss in its duty to accord the would-be dismissed employees their right to be
heard on the matter.
Anent petitioners contention that the federation was not a principal party to the
collective bargaining agreement between the company and the union, suffice it
to say that the matter was already ruled upon in the Interpleader case filed by
respondent company. Med-Arbiter Anastacio Bactin thus ruled:
After a careful examination of the facts and evidences
presented by the parties, this Officer hereby renders its
decision as follows:
1.) It appears on record that in the Collective Bargaining
Agreement (CBA) which took effect on July 1, 1986, the
contracting parties are M. Greenfield, Inc. (B) and
Malayang Samahan ng Mga Manggagawa sa M.
Greenfield, Inc. (B) (MSMG)/United Lumber and General "xxx is to increase by collective action the bargaining
Workers of the Philippines (ULGWP). However, MSMG was power in respect of the terms and conditions of labor. Yet
not yet a registered labor organization at the time of the the locals remained the basic units of association, free to
signing of the CBA. Hence, the union referred to in the CBA serve their own and the common interest of all, subject to
is the ULGWP." the restraints imposed by the Constitution and By-Laws of
the Association, and free also to renounce the affiliation
for mutual welfare upon the terms laid down in the
Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as follows:
agreement which brought it into existence."
It is undisputed that ULGWP is the certified sole and
Thus, a local union which has affiliated itself with a federation is free to sever
exclusive collective bargaining agent of all the regular
such affiliation anytime and such disaffiliation cannot be considered disloyalty. In
rank-and-file workers of the company, M. Greenfield, Inc.
the absence of specific provisions in the federations constitution prohibiting
(pages 31-32 of the records).
disaffiliation or the declaration of autonomy of a local union, a local may
dissociate with its parent union.
It has been established also that the company and ULGWP
signed a 3-year collective bargaining agreement effective
The evidence on hand does not show that there is such a provision in ULGWPs
July 1, 1986 up to June 30, 1989.
constitution. Respondents reliance upon Article V, Section 6, of the federations
constitution is not right because said section, in fact, bolsters the petitioner
Although the issue of whether or not the federation had reasonable grounds to unions claim of its right to declare autonomy:
expel the petitioner union officers is properly within the original and exclusive
jurisdiction of the Bureau of Labor Relations, being an intra-union conflict, this
Section 6. The autonomy of a local union affiliated with
Court deems it justifiable that such issue be nonetheless ruled upon, as the
ULGWP shall be respected insofar as it pertains to its
Labor Arbiter did, for to remand the same to the Bureau of Labor Relations
internal affairs, except as provided elsewhere in this
would be to intolerably delay the case.
Constitution.
The Labor Arbiter found that petitioner union officers were justifiably expelled
There is no disloyalty to speak of, neither is there any violation of the
from the federation for committing acts of disloyalty when it "undertook to
federations constitution because there is nothing in the said constitution which
disaffiliate from the federation by charging ULGWP with failure to provide any
specifically prohibits disaffiliation or declaration of autonomy. Hence, there
legal, educational or organizational support to the local. x x x and declared
cannot be any valid dismissal because Article II, Section 4 of the union security
autonomy, wherein they prohibit the federation from interfering in any internal
clause in the CBA limits the dismissal to only three (3) grounds, to wit: failure to
and external affairs of the local union."
maintain membership in the union (1) for non-payment of union dues, (2) for
resignation; and (3) for violation of the unions Constitution and By-Laws.
It is well-settled that findings of facts of the NLRC are entitled to great respect
and are generally binding on this Court, but it is equally well-settled that the
To support the finding of disloyalty, the Labor Arbiter gave weight to the fact
Court will not uphold erroneous conclusions of the NLRC as when the Court finds
that on February 26, 1989, the petitioners declared as vacant all the responsible
insufficient or insubstantial evidence on record to support those factual findings.
positions of ULGWP, filled these vacancies through an election and filed a
The same holds true when it is perceived that far too much is concluded,
petition for the registration of UWP as a national federation. It should be pointed
inferred or deduced from the bare or incomplete facts appearing of record.
out, however, that these occurred after the federation had already expelled the
union officers. The expulsion was effective November 21, 1988. Therefore, the
In its decision, the Labor Arbiter declared that the act of disaffiliation and act of establishing a different federation, entirely separate from the federation
declaration of autonomy by the local union was part of its "plan to take over the which expelled them, is but a normal retaliatory reaction to their expulsion.
respondent federation." This is purely conjecture and speculation on the part of
public respondent, totally unsupported by the evidence.
With regard to the issue of the legality or illegality of the strike, the Labor Arbiter
held that the strike was illegal for the following reasons: (1) it was based on an
A local union has the right to disaffiliate from its mother union or declare its intra-union dispute which cannot properly be the subject of a strike, the right to
autonomy. A local union, being a separate and voluntary association, is free to strike being limited to cases of bargaining deadlocks and unfair labor practice (2)
serve the interests of all its members including the freedom to disaffiliate or it was made in violation of the "no strike, no lock-out" clause in the CBA, and (3)
declare its autonomy from the federation to which it belongs when it was attended with violence, force and intimidation upon the persons of the
circumstances warrant, in accordance with the constitutional guarantee of company officials, other employees reporting for work and third persons having
freedom of association. legitimate business with the company, resulting to serious physical injuries to
several employees and damage to company property.
The purpose of affiliation by a local union with a mother union or a federation
On the submission that the strike was illegal for being grounded on a non-
strikeable issue, that is, the intra-union conflict between the federation and the
local union, it bears reiterating that when respondent company dismissed the
union officers, the issue was transformed into a termination dispute and brought
respondent company into the picture. Petitioners believed in good faith that in
dismissing them upon request by the federation, respondent company was guilty
of unfair labor pratice in that it violated the petitioners right to self-
organization. The strike was staged to protest respondent companys act of
dismissing the union officers. Even if the allegations of unfair labor practice are
subsequently found out to be untrue, the presumption of legality of the strike
prevails.
Another reason why the Labor Arbiter declared the strike illegal is due to the
existence of a no strike no lockout provision in the CBA. Again, such a ruling is
erroneous. A no strike, no lock out provision can only be invoked when the strike
is economic in nature, i.e. to force wage or other concessions from the employer
which he is not required by law to grant. Such a provision cannot be used to
assail the legality of a strike which is grounded on unfair labor practice, as was
the honest belief of herein petitioners. Again, whether or not there was indeed
unfair labor practice does not affect the strike.
On the allegation of violence committed in the course of the strike, it must be
remembered that the Labor Arbiter and the Commission found that "the parties
are agreed that there were violent incidents x x x resulting to injuries to both
sides, the union and management." The evidence on record show that the
violence cannot be attributed to the striking employees alone for the company
itself employed hired men to pacify the strikers. With violence committed on
both sides, the management and the employees, such violence cannot be a
ground for declaring the strike as illegal.
With respect to the dismissal of individual petitioners, the Labor Arbiter declared
that their refusal to heed respondents recall to work notice is a clear indication
that they were no longer interested in continuing their employment and is
deemed abandonment. It is admitted that three return to work notices were
sent by respondent company to the striking employees on March 27, April 11,
and April 21, 1989 and that 261 employees who responded to the notice were
admittted back to work.
However, jurisprudence holds that for abandonment of work to exist, it is
essential (1) that the employee must have failed to report for work or must have
been absent without valid or justifiable reason; and (2) that there must have
been a clear intention to sever the employer-employee relationship manifested
by some overt acts. Deliberate and unjustified refusal on the part of the
employee to go back to his work post amd resume his employment must be
established. Absence must be accompanied by overt acts unerringly pointing to
the fact that the employee simply does not want to work anymore. And the
burden of proof to show that there was unjustified refusal to go back to work
rests on the employer.
In the present case, respondents failed to prove that there was a clear intention
on the part of the striking employees to sever their employer-employee
relationship. Although admittedly the company sent three return to work notices
to them, it has not been substantially proven that these notices were actually
sent and received by the employees. As a matter of fact, some employees deny WHEREFORE, the Petition is GRANTED; the decision of the National Labor
that they ever received such notices. Others alleged that they were refused entry Relations Commission in case No. NCR-00-09-04199-89 is REVERSED and SET
to the company premises by the security guards and were advised to secure a ASIDE; and the respondent company is hereby ordered to immediately reinstate
clearance from ULGWP and to sign a waiver. Some employees who responded to the petitioners to their respective positions. Should reinstatement be not
the notice were allegedly told to wait for further notice from respondent feasible, respondent company shall pay separation pay of one month salary for
company as there was lack of work. every year of service. Since petitioners were terminated without the requisite
written notice at least 30 days prior to their termination, following the recent
ruling in the case of Ruben Serrano vs. National Labor Relations Commission and
Furthermore, this Court has ruled that an employee who took steps to protest
Isetann Department Store, the respondent company is hereby ordered to pay full
his lay-off cannot be said to have abandoned his work. The filing of a complaint
backwages to petitioner-employees while the Federation is also ordered to pay
for illegal dismissal is inconsistent with the allegation of abandonment. In the
full backwages to petitioner-union officers who were dismissed upon its
case under consideration, the petitioners did, in fact, file a complaint when they
instigation. Since the dismissal of petitioners was without cause, backwages shall
were refused reinstatement by respondent company.
be computed from the time the herein petitioner employees and union officers
were dismissed until their actual reinstatement. Should reinstatement be not
Anent public respondents finding that there was no unfair labor practice on the feasible, their backwages shall be computed from the time petitioners were
part of respondent company and federation officers, the Court sustains the terminated until the finality of this decision. Costs against the respondent
same. As earlier discussed, union security clauses in collective bargaining company.
agreements, if freely and voluntarily entered into, are valid and binding.
Corrolarily, dismissals pursuant to union security clauses are valid and legal
SO ORDERED.
subject only to the requirement of due process, that is, notice and hearing prior
to dismissal. Thus, the dismissal of an employee by the company pursuant to a
labor unions demand in accordance with a union security agreement does not
constitute unfair labor practice.
However, the dismissal was invalidated in this case because of respondent
companys failure to accord petitioners with due process, that is, notice and
hearing prior to their termination. Also, said dismissal was invalidated because
the reason relied upon by respondent Federation was not valid. Nonetheless, the
dismissal still does not constitute unfair labor practice.
Lastly, the Court is of the opinion, and so holds, that respondent company
officials cannot be held personally liable for damages on account of the
employees dismissal because the employer corporation has a personality
separate and distinct from its officers who merely acted as its agents.
It has come to the attention of this Court that the 30-day prior notice
requirement for the dismissal of employees has been repeatedly violated and
the sanction imposed for such violation enunciated in Wenphil Corporation vs.
NLRC has become an ineffective deterrent. Thus, the Court recently promulgated
a decision to reinforce and make more effective the requirement of notice and
hearing, a procedure that must be observed before termination of employment
can be legally effected.
In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No. 117040,
January 27, 2000), the Court ruled that an employee who is dismissed, whether
or not for just or authorized cause but without prior notice of his termination, is
entitled to full backwages from the time he was terminated until the decision in
his case becomes final, when the dismissal was for cause; and in case the
dismissal was without just or valid cause, the backwages shall be computed from
the time of his dismissal until his actual reinstatement. In the case at bar, where
the requirement of notice and hearing was not complied with, the aforecited
doctrine laid down in the Serrano case applies.
[G.R. No. 102084. August 12, 1998]
DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE,
petitioner, vs. HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and
Employment; ROLANDO S. DE LA CRUZ, Med-Arbiter Regional Office No. IV, DE
LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE
SUPERVISORY UNION-FEDERATION OF FREE WORKERS, respondents.
DECISION
MENDOZA, J.:
Petitioner De La Salle University Medical Center and College of Medicine
(DLSUMCCM) is a hospital and medical school at Dasmarias, Cavite. Private
respondent Federation of Free WorkersDe La Salle University Medical Center
and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), on
the other hand, is a labor organization composed of the supervisory employees
of petitioner DLSUMCCM.
On April 17, 1991, the Federation of Free Workers (FFW), a national federation
of labor unions, issued a certificate to private respondent FFW-DLSUMCCMSUC
recognizing it as a local chapter. On the same day, it filed on behalf of private
respondent FFW-DLSUMCCMSUC a petition for certification election among the
supervisory employees of petitioner DLSUMCCM. Its petition was opposed by
petitioner DLSUMCCM on the grounds that several employees who signed the
petition for certification election were managerial employees and that the FFW-
DLSUMCCMSUC was composed of both supervisory and rank-and-file employees
in the company.
In its reply dated May 22, 1991, private respondent FFW-DLSUMCCMSUC denied
petitioners allegations. It contended that
2. Herein petition seeks for the holding of a certification election among the
supervisory employees of herein respondent. It does not intend to include
managerial employees.
....
6. It is not true that supervisory employees are joining the rank-and-file
employees union. While it is true that both regular rank-and-file employees and
supervisory employees of herein respondent have affiliated with FFW, yet there
are two separate unions organized by FFW. The supervisory employees have a
separate charter certificate issued by FFW.
On July 5, 1991, respondent Rolando S. de la Cruz, med-arbiter of the
Department of Labor and Employment Regional Office No. IV, issued an order
granting respondent unions petition for certification election. He said:
. . . . [petitioner] . . . claims that based on the job descriptions which will be
presented at the hearing, the covered employees who are considered managers
occupy the positions of purchasing officers, personnel officers, property officers,
cashiers, heads of various sections and the like.
[Petitioner] also argues that assuming that some of the employees concerned
are not managerial but mere supervisory employees, the Federation of Free
Workers (FFW) cannot extend a charter certificate to this group of employees
without violating the express provision of Article 245 which provides that
supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own because the FFW had similarly issued a charter
certificate to its rank-and-file employees.
....
In its position paper, [petitioner] stated that most, if not all, of the employees
listed in . . . the petition are considered managerial employees, thereby
admitting that it has supervisory employees who are undoubtedly qualified to
join or form a labor organization of their own. The record likewise shows that
[petitioner] promised to present the job descriptions of the concerned
employees during the hearing but failed to do so. Thus, this office has no basis in
determining at this point in time who among them are considered managerial or
supervisory employees. At any rate, there is now no question that [petitioner]
has in its employ supervisory employees who are qualified to join or form a labor
union. Consequently, this office is left with no alternative but to order the
holding of certification election pursuant to Article 257 of the Labor Code, as
amended, which mandates the holding of certification election if a petition is
filed by a legitimate labor organization involving an unorganized establishment,
as in the case of herein respondent.
As to the allegation of [petitioner] that the act of the supervisory employees in
affiliating with FFW to whom the rank-and-file employees are also affiliated is
violative of Article 245 of the Labor Code, suffice it to state that the two groups
are considered separate bargaining units and local chapters of FFW. They are,
for all intents and purposes, separate with each other and their affiliation with
FFW would not make them members of the same labor union. This must be the
case because it is settled that the locals are considered the basic unit or principal
with the labor federation assuming the role of an agent. The mere fact,
therefore, that they are represented by or under the same agent is of no
moment. They are still considered separate with each other.
On July 30, 1991, petitioner DLSUMCCM appealed to the Secretary of Labor and
Employment, citing substantially the same arguments it had raised before the
med-arbiter. However, its appeal was dismissed. In his resolution, dated August
30, 1991, respondent Undersecretary of Labor and Employment Bienvenido E.
Laguesma found the evidence presented by petitioner DLSUMCCM concerning
the alleged managerial status of several employees to be insufficient. He also
held that, following the ruling of this Court in Adamson & Adamson, Inc. v. CIR,
unions formed independently by supervisory and rank-and-file employees of a
company may legally affiliate with the same national federation.
Petitioner moved for a reconsideration but its motion was denied. In his order
dated September 19, 1991, respondent Laguesma stated:
We reviewed the records once more, and find that the issues and arguments
adduced by movant have been squarely passed upon in the Resolution sought to
be reconsidered. Accordingly, we find no legal justification to alter, much less
set aside, the aforesaid resolution. Perforce, the motion for reconsideration
must fail.
WHEREFORE, the instant motion for reconsideration is hereby denied for lack of
merit and the resolution of this office dated 30 August 1991 STANDS.
No further motions of a similar nature shall hereinafter be entertained.
Hence, this petition for certiorari.
Petitioner DLSUMCCM contends that respondent Laguesma gravely abused his
discretion. While it does not anymore insist that several of those who joined the
petition for certification election are holding managerial positions in the
company, petitioner nonetheless pursues the question whether unions formed
independently by supervisory and rank-and-file employees of a company may
validly affiliate with the same national federation. With respect to this question,
it argues:
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA,
UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS,
ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO ACTING
WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED THE
PETITIONERS APPEAL AND ORDERED THE HOLDING OF A CERTIFICATION
ELECTION AMONG THE MEMBERS OF THE SUPERVISORY UNION EMPLOYED
IN PETITIONERS COMPANY DESPITE THE FACT THAT SAID SUPERVISORY
UNION WAS AFFILIATED WITH THE FEDERATION OF FREE WORKERS TO
WHICH THE RANK-AND-FILE EMPLOYEES OF THE SAME COMPANY ARE
LIKEWISE AFFILIATED, CONTRARY TO THE EXPRESS PROVISIONS OF ARTICLE
245 OF THE LABOR CODE, AS AMENDED.
The contention has no merit.
Supervisory employees have the right to self-organization as do other classes of
employees save only managerial ones. The Constitution states that the right of
the people, including those employed in the public and private sectors, to form
unions, associations or societies for purposes not contrary to law, shall not be
abridged. As we recently held in UnitedPepsi-Cola Supervisory Union v.
Laguesma, the framers of the Constitution intended, by this provision, to restore
the right of supervisory employees to self-organization which had been
withdrawn from them during the period of martial law. Thus:
Commissioner Lerum sought to amend the draft of what was later to become
Art. III, 8 of the present Constitution:
....
MR. LERUM. . . . Also, we have unions of supervisory employees and of security
guards. But what is tragic about this is that after the 1973 Constitution was
approved and in spite of an express recognition of the right to organize in P.D.
No. 442, known as the Labor Code, the right of government workers, supervisory
employees and security guards to form unions was abolished.
....
We are afraid that without any corresponding provision covering the private
sector, the security guards, the supervisory employees ... will still be excluded
and that is the purpose of this amendment.
....
In sum, Lerums proposal to amend Art. III, 8 of the draft Constitution by
including labor unions in the guarantee of organizational right should be taken in
the context of statements that his aim was the removal of the statutory ban
against security guards and supervisory employees joining labor organizations.
The approval by the Constitutional Commission of his proposal can only mean,
therefore, that the Commission intended the absolute right to organize of
government workers, supervisory employees, and security guards to be
constitutionally guaranteed.
Conformably with the constitutional mandate, Art. 245 of the Labor Code now
provides for the right of supervisory employees to self-organization, subject to
the limitation that they cannot join an organization of rank-and-file employees:
Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.
The reason for the segregation of supervisory and rank-and-file employees of a
company with respect to the exercise of the right to self-organization is the
difference in their interests. Supervisory employees are more closely identified
with the employer than with the rank-and-file employees. If supervisory and
rank-and-file employees in a company are allowed to form a single union, the
conflicting interests of these groups impair their relationship and adversely
affect discipline, collective bargaining, and strikes. These consequences can
obtain not only in cases where supervisory and rank-and-file employees in the
same company belong to a single union but also where unions formed
independently by supervisory and rank-andfile employees of a company are
allowed to affiliate with the same national federation. Consequently, this Court
has held in Atlas Lithographic Services Inc. v. Laguesma that -
To avoid a situation where supervisors would merge with the rank-and-file or
where the supervisors labor organization would represent conflicting interests,
then a local supervisors union should not be allowed to affiliate with a national
federation of unions of rank-and-file employees where that federation actively
participates in union activities in the company.
As we explained in that case, however, such a situation would obtain only where supervisors and rank-andfile employees with one labor organization; that there
two conditions concur: First, the rank-and-file employees are directly under the would be a merging of the two bargaining units; and that the respondent union
authority of supervisory employees. Second, the national federation is actively will lose its independence because it becomes an alter ego of the federation.
involved in union activities in the company. Indeed, it is the presence of these
two conditions which distinguished Atlas Lithographic Services, Inc. v. Laguesma
Mention has already been made of the fact that the petition for certification
from Adamson & Adamson, Inc. v. CIR where a different conclusion was
election in this case was filed by the FFW on behalf of the local union. This
reached.
circumstance, while showing active involvement by the FFW in union activities at
the company, is by itself insufficient to justify a finding of violation of Art. 245
The affiliation of two local unions in a company with the same national since there is no proof that the supervisors who compose the local union have
federation is not by itself a negation of their independence since in relation to direct authority over the rank-and-file employees composing the other local
the employer, the local unions are considered as the principals, while the union which is also affiliated with the FFW. This fact differentiates the case from
federation is deemed to be merely their agent. This conclusion is in accord with Atlas Lithographic Services, Inc. v. Laguesma, in which, in addition to the fact
the policy that any limitation on the exercise by employees of the right to self- that the petition for certification election had been filed by the national
organization guaranteed in the Constitution must be construed strictly. Workers federation, it was shown that the rank-and-file employees were directly under
should be allowed the practice of this freedom to the extent recognized in the the supervisors organized by the same federation.
fundamental law. As held in Liberty Cotton Mills Workers Union v. Liberty Cotton
Mills, Inc.:
It follows that respondent labor officials did not gravely abuse their discretion.
The locals are separate and distinct units primarily designed to secure and
WHEREFORE, the petition is DISMISSED.
maintain an equality of bargaining power between the employer and their
employee members in the economic struggle for the fruits of the joint
productive effort of labor and capital; and the association of locals into the
national unionwas in furtherance of the same end. These associations are
consensual entities capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the local unions into a
common enterprise to increase by collective action the common bargaining
power in respect of the terms and conditions of labor. Yet the locals remained
the basic units of association, free to serve their own and the common interest
of all, and free also to renounce the affiliation for mutual welfare upon the
terms laid down in the agreement which brought it to existence.
The questions in this case, therefore, are whether the rank-and-file employees of
petitioner DLSUMCCM who compose a labor union are directly under the
supervisory employees whose own union is affiliated with the same national
federation (Federation of Free Workers) and whether such national federation is
actively involved in union activities in the company so as to make the two unions
in the same company, in reality, just one union.
Although private respondent FFW-DLSUMCCMSUC and another union composed
of rank-and-file employees of petitioner DLSUMCCM are indeed affiliated with
the same national federation, the FFW, petitioner DLSUMCCM has not presented
any evidence showing that the rank-and-file employees composing the other
union are directly under the authority of the supervisory employees. As held in
Adamson & Adamson, Inc. v. CIR, the fact that the two groups of workers are
employed by the same company and the fact that they are affiliated with a
common national federation are not sufficient to justify the conclusion that their
organizations are actually just one. Their immediate professional relationship
must be established. To borrow the language of Adamson & Adamson, Inc. v.
CIR:
We find without merit the contention of petitioner that if affiliation will be
allowed, only one union will in fact represent both supervisors and rank-and-file
employees of the petitioner; that there would be an indirect affiliation of
[G.R. No. 127374. January 31, 2002]
PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO DAKILA,
petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER
EMERSON TUMANON, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS
(PAFLU) SEPTEMBER (now UNIFIED PAFLU) and SERAFIN AYROSO, respondents.
[G.R. No. 127431. January 31, 2002]
PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, MACARIO
CABANIAS, PEPITO RODILLAS, SHARON CASTILLO, DANILO CARBONEL, MANUEL
EDA, ROLANDO FELIX, JOCELYN FRONDA, RICARDO LUMBA, JOSEPH MARISOL,
NERISA MORTEL, TEOFILO QUIRONG, LEONARDO REYES, MANUEL CADIENTE
and HERMINIA RIOSA, petitioners, vs. PHILIPPINE ASSOCIATION OF FREE LABOR
UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and NATIONAL LABOR
RELATIONS COMMISSION, SECOND DIVISION, respondents.
DECISION
BELLOSILLO, J.:
This is a petition for certiorari seeking to set aside the 31 July 1996 Decision of
the National Labor Relations Commission affirming the 30 June 1995 Decision of
the Labor Arbiter holding petitioners Philippine Skylanders, Inc., Mariles C.
Romulo and Francisco Dakila as well as the elected officers of the Philippine
Skylanders Employees and Workers Association-PAFLU guilty of unfair labor
practice and ordering them to pay private respondent Philippine Association of
Free Labor Union (PAFLU) September P150,000.00 as damages. Petitioners
likewise seek the reversal of the 31 October 1996 Resolution of the NLRC
denying their Motion for Reconsideration.
In November 1993 the Philippine Skylanders Employees Association (PSEA), a
local labor union affiliated with the Philippine Association of Free Labor Unions
(PAFLU) September (PAFLU), won in the certification election conducted among
the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union,
Philippine Skylanders Employees Association-WATU (PSEA-WATU) immediately
protested the result of the election before the Secretary of Labor.
Several months later, pending settlement of the controversy, PSEA sent PAFLU a
notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual
dereliction of duty toward its members. Attached to the notice was a copy of
the resolution adopted and signed by the officers and members of PSEA
authorizing their local union to disaffiliate from its mother federation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW),
changed its name to Philippine Skylanders Employees Association - National
Congress of Workers (PSEA-NCW), and to maintain continuity within the
organization, allowed the former officers of PSEA-PAFLU to continue occupying
their positions as elected officers in the newly-forged PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement
with PSI which was immediately registered with the Department of Labor and
Employment.
Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary
General Serafin Ayroso wrote Mariles C. Romulo requesting a copy of PSI's
audited financial statement. Ayroso explained that with the dismissal of PSEA-
WATUs election protest the time was ripe for the parties to enter into a
collective bargaining agreement.
On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the
request citing as reason PSEA's disaffiliation from PAFLU and its subsequent
affiliation with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a
complaint for unfair labor practice against PSI, its president Mariles Romulo and
personnel manager Francisco Dakila. PAFLU alleged that aside from PSIs refusal
to bargain collectively with its workers, the company through its president and
personnel manager, was also liable for interfering with its employees' union
activities.
Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf
of PAFLU for unfair labor practice against Francisco Dakila. Through Ayroso
PAFLU claimed that Dakila was present in PSEA's organizational meeting thereby
confirming his illicit participation in union activities. Ayroso added that the
members of the local union had unwittingly fallen into the manipulative
machinations of PSI and were lured into endorsing a collective bargaining
agreement which was detrimental to their interests. The two (2) complaints
were thereafter consolidated.
On 1 February 1995 PAFLU amended its complaint by including the elected
officers of PSEA-PAFLU as additional party respondents. PAFLU averred that the
local officers of PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon
Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo
Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel
Cadiente, and Herminia Riosa, were equally guilty of unfair labor practice since
they brazenly allowed themselves to be manipulated and influenced by
petitioner Francisco Dakila.
PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for
the dismissal of the complaint on the ground that the issue of disaffiliation was
an inter-union conflict which lay beyond the jurisdiction of the Labor Arbiter. On
the other hand, PSEA-NCW took the cudgels for its officers who were being sued
in their capacities as former officers of PSEA-PAFLU and asserted that since PSEA
was no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no
personality to file the instant complaint. In support of this assertion, PSEA-NCW
submitted in evidence a Katunayan signed by 111 out of 120 rank and file
employees of PSI disauthorizing Ayroso or PAFLU from instituting any action in
their behalf.
In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's
disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respective
officers guilty of unfair labor practice. The Decision explained that despite PSEA-
PAFLU's status as the sole and exclusive bargaining agent of PSI's rank and file
employees, the company knowingly sanctioned and confederated with Dakila in
actively assisting a rival union. This, according to the Labor Arbiter, was a classic
case of interference for which PSI could be held responsible. As PSEA-NCW's
personality was not accorded recognition, its collective bargaining agreement
with PSI was struck down for being invalid. Ayroso's legal personality to file the
complaint was sustained on the ratiocination that under the Labor Code no
petition questioning the majority status of the incumbent bargaining agent shall
be entertained outside of the sixty (60)-day period immediately before the
expiry date of such five (5)-year term of the collective bargaining agreement that
the parties may enter into. Accordingly, judgment was rendered ordering PSI,
PSEA-PAFLU and their officers to pay PAFLU P150,000.00 in damages.
PSI, PSEA and their respective officers appealed to the National Labor Relations
Commission (NLRC). But the NLRC upheld the Decision of the Labor Arbiter and
conjectured that since an election protest questioning PSEA-PAFLU's certification
as the sole and exclusive bargaining agent was pending resolution before the
Secretary of Labor, PSEA could not validly separate from PAFLU, join another
national federation and subsequently enter into a collective bargaining
agreement with its employer-company.
Petitioners separately moved for reconsideration but both motions were
denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW
together with their respective officers pleading for a reversal of the NLRC's
Decision which they claimed to have been rendered in excess of jurisdiction. In
due time, both petitions were consolidated.
In these petitions, petitioner PSEA together with its officers argued that by virtue
of their disaffiliation PAFLU as a mere agent had no authority to represent them
before any proceedings. They further asserted that being an independent labor
union PSEA may freely serve the interest of all its members and readily
disaffiliate from its mother federation when circumstances so warrant. This
right, they averred, was consistent with the constitutional guarantee of freedom
of association.
For their part, petitioners PSI, Romulo and Dakila alleged that their decision to
bargain collectively with PSEA-NCW was actuated, to a large extent, by PAFLU's
behavior. Having heard no objections or protestations from PAFLU relative to
PSEA's disaffiliation, they reckoned that PSEA's subsequent association with NSW
was done bona fide.
The Solicitor General filed a Manifestation in Lieu of Comment recommending
that both petitions be granted. In his Manifestation, the Solicitor General argued
against the Labor Arbiter's assumption of jurisdiction citing the following as
reasons: first, there was no employer-employee relationship between
complainant Ayroso and PSI over which the Labor Arbiter could rightfully assert
his jurisdiction; second, since the case involved a dispute between PAFLU as
mother federation and PSEA as local union, the controversy fell within the
jurisdiction of the Bureau of Labor Relations; and lastly, the relationship of
principal-agent between PAFLU and PSEA had been severed by the local union
through the lawful exercise of its right of disaffiliation.
Stripped of non-essentials, the fundamental issue tapers down to the legitimacy
of PSEA's disaffiliation. To be more precise, may PSEA, which is an independent
and separate local union, validly disaffiliate from PAFLU pending the settlement
of an election protest questioning its status as the sole and exclusive bargaining
agent of PSI's rank and file employees?
At the outset, let it be noted that the issue of disaffiliation is an inter-union
conflict the jurisdiction of which properly lies with the Bureau of Labor Relations
(BLR) and not with the Labor Arbiter. Nonetheless, with due recognition of this
fact, we deem it proper to settle the controversy at this instance since to remand
the case to the BLR would only mean intolerable delay for the parties.
There is a further consideration that likewise argues for the granting of the
petitions. It stands unchallenged that PAFLU instituted the complaint for unfair
labor practice against the wishes of workers whose interests it was supposedly
protecting. The mere act of disaffiliation did not divest PSEA of its own
personality; neither did it give PAFLU the license to act independently of the
local union. Recreant to its mission, PAFLU cannot simply ignore the demands of
the local chapter and decide for its welfare. PAFLU might have forgotten that as
an agent it could only act in representation of and in accordance with the
interests of the local union. The complaint then for unfair labor practice lodged
by PAFLU against PSI, PSEA and their respective officers, having been filed by a
party which has no legal personality to institute the complaint, should have been
dismissed at the first instance for failure to state a cause of action.

The right of a local union to disaffiliate from its mother federation is not a novel
Policy considerations dictate that in weighing the claims of a local union as
thesis unillumined by case law. In the landmark case of Liberty Cotton Mills
against those of a national federation, those of the former must be preferred.
Workers Union vs. Liberty Cotton Mills, Inc. we upheld the right of local unions to
Parenthetically though, the desires of the mother federation to protect its locals
separate from their mother federation on the ground that as separate and
are not altogether to be shunned. It will however be to err greatly against the
voluntary associations, local unions do not owe their creation and existence to
Constitution if the desires of the federation would be favored over those of its
the national federation to which they are affiliated but, instead, to the will of
members. That, at any rate, is the policy of the law. For if it were otherwise,
their members. The sole essence of affiliation is to increase, by collective action,
instead of protection, there would be disregard and neglect of the lowly
the common bargaining power of local unions for the effective enhancement
workingmen.
and protection of their interests. Admittedly, there are times when without
succor and support local unions may find it hard, unaided by other support
groups, to secure justice for themselves. WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine
Skylanders and Workers Association-NCW, together with their respective
officers, are GRANTED. The Decision of the National Labor Relations
Yet the local unions remain the basic units of association, free to serve their own
Commission of 31 July 1996 affirming the Decision of the Labor Arbiter of 30
interests subject to the restraints imposed by the constitution and by-laws of the
June 1995 holding petitioners Philippine Skylanders and Workers Association-
national federation, and free also to renounce the affiliation upon the terms laid
NCW, Philippine Skylanders, Inc. and their respective officers, guilty of unfair
down in the agreement which brought such affiliation into existence.
labor practice and ordering them to pay damages to private respondent
Philippine Association of Free Labor Unions (PAFLU) September (now UNIFIED
Such dictum has been punctiliously followed since then. PAFLU) as well as the Resolution of 31 October 1996 denying reconsideration is
REVERSED and SET ASIDE. No costs.
Upon an application of the aforecited principle to the issue at hand, the
impropriety of the questioned Decisions becomes clearly apparent. There is SO ORDERED.
nothing shown in the records nor is it claimed by PAFLU that the local union was
expressly forbidden to disaffiliate from the federation nor were there any
conditions imposed for a valid breakaway. As such, the pendency of an election
protest involving both the mother federation and the local union did not
constitute a bar to a valid disaffiliation. Neither was it disputed by PAFLU that
111 signatories out of the 120 members of the local union, or an equivalent of
92.5% of the total union membership supported the claim of disaffiliation and
had in fact disauthorized PAFLU from instituting any complaint in their behalf.
Surely, this is not a case where one (1) or two (2) members of the local union
decided to disaffiliate from the mother federation, but it is a case where almost
all local union members decided to disaffiliate.

It was entirely reasonable then for PSI to enter into a collective bargaining
agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU,
there would be no restrictions which could validly hinder it from subsequently
affiliating with NCW and entering into a collective bargaining agreement in
behalf of its members.
G.R. No. L-41288 January 31, 1977
PHILIPPINES LABOR ALLIANCE COUNCIL (PLAC), petitioner,
vs.
BUREAU OF LABOR RELATIONS, FEDERATION OF FREE WORKERS-ORION
CHAPTER, GERARDO ROSANA and ORION MANILA, INC. respondents.
Fortunato Gupit, Jr. for petitioner.
Solicitor General Estelito P Mendoza, Assistant Solicitor General Reynato S. Puno
and Solicitor Romeo C. de la Cruz for respondent Bureau of Labor Relations.
F. F. Bonifacio, Jr. for respondent Union and Gerardo Rosana.
Cesar C. Cruz & Associates for respondent Orion Manila,
FERNANDO, J:
It would be to frustrate the hopes that inspired the present Labor Code 1 to
minimize judicial participation in the solution of employer- employee disputes
resort to the courts would remain unabated. Nevertheless, in view of the
certiorari jurisdiction of this Tribunal, 2 a grave abuse of discretion may be
alleged as a grievance thus calling for remedial action. So petitioner Philippine
Labor Alliance Council did hope to achieve in this certiorari and prohibition
proceeding against respondent Bureau of Labor Relations. 3 It would indict an
order 4 for a certification election by respondent Bureau as tainted by a
jurisdictional infirmity in view of what is contended to be an existing duly
certified collective bargaining contract between it and private respondent Orion
Manila, Inc., the employer. It would thus ignore the withdrawal in the same
order of such certification based on a finding that there was a failure on the part
of the majority of the employees in the bargaining unit to ratify the collective
contract, renewed nine months before the termination of the previous
agreement. Apparently, the difficulty confronting it was due to the disaffiliation
of many of its members. The order complained of recognized that there was
such a sentiment on the part of sizable number of employees in the collective
bargaining unit, thus making patent the desirability of conducting a certification
election. That was the method to determine the exclusive bargaining
representative followed even under the previous labor legislation .5 It would thus
appear rather obvious that the attempt to impute arbitrariness to respondent
Bureau cannot be attended with success. The petition must be dismissed.
It was a detailed narration of facts set forth in the petition, starting with the
allegation that there was a renewal of the collective bargaining agreement with
a union shop clause on March 9,1974 between petitioner union and respondent
company to last for another period of three (3) years incorporating therein new
economic benefits to expire on December 31, 1977. 6 The claim was that at that
time it was the only bargaining agent of the respondent company unchallenged
by any labor organization. 7 Then came the assertion that on May 27, 1974, with
due notice to all the members of the petitioner union, and with more than 1,500
of them present, such collective bargaining agreement was ratified by a
unanimous vote .8 It was then so certified by the former National Labor Relations
Commission on June 4, 1974. 9 It was further alleged that at the time of such
certification, there was no pending request for union recognition by any other
labor organization with management.10 Thereafter, on June 20, 1974,
respondent Federation of Free Workers, setting forth that its members
represent more than 60% out of 1,500 members, more or less, rank-and-file
employees of respondent company, sought a certification election. 11 Petitioner
union, as could be expected, opposed such a move as in its view the collective
bargaining agreement entered into with the respondent company had been
certified. 12 It was sustained, the Secretary of Labor to whom an appeal was
taken concurring with the former National Labor Relations Commission affirming
the dismissal of such petition for certification, on the ground of the existence of
a certified collective bargaining agreement.13 That did not end the dispute, "
respondent Federation on January 15, 1975, filed a complaint with the
respondent Bureau of Labor Relations, the present Labor Code having become
effective, alleging that some employees, numbering 848 in all, in a resolution
attached to the complaint disaffiliated from petitioner union and affiliated with
it, characterizing the certified agreement as having been entered into allegedly
to thwart such disaffiliation and seeking a declaration of the nullity thereof. 14
After both petitioner union and respondent Federation of Free Workers had filed
their pleadings, 15 the Med-Arbiter, on March 20, 1975, dismissed the
complaint.16 There was a motion for reconsideration, then an opposition.17 On
April 8, 1975, respondent Bureau of Labor Relations issued an order setting aside
the certification of the collective bargaining agreement and ordering a
certification election within 20 days from receipt of the order, upon the
following declaration: "In the instant case, it is not disputed that the collective
bargaining agreement certified by the National Labor Relations Commission was
not ratified by the majority of the employees within the bargaining unit. This is
defective. It is blatant non- observance of the basic requirement necessary to
certification. ... With respect to the complaint of the confirmation of disaffiliation
of the members of respondent Philippine Labor Alliance Council, the same
should be resolved in the most expedient and simple method of determining the
exclusive bargaining representativethe holding of a certification election"18
There was a motion for reconsideration as well as a verified urgent petition filed
with the Secretary of Labor by respondent Company, but the order was affirmed
on July 31, 1975, the motion to consider being denied. 19
From the very petition with its annexes, it is undisputed that there was a finding
in the challenged order by respondent Bureau of Labor Relations of the non-
ratification by the majority of the employees of the certified collective bargaining
agreement, thus calling for its decertification. It is also noteworthy that in the
comment of respondent labor union, considered as its answer, the allegation
that there was such a ratification was specifically denied. It cannot be taken as
having proven. There is nothing in the exhaustive memorandum of petitioner
either that would justify the imputation that respondent Bureau, in ordering
decertification of the collective bargaining agreement with petitioner to be
followed by a certification election, committed a transgression of the present
Labor Code, much less one of such grievous character as to taint its actuation
with a jurisdictional infirmity. It is quite apparent therefore that with due
recognition of the ability and scholarship evident in the pleadings of Attorney
Fortunate Gupit, Jr. for the petitioner, the attempt to invoke our certiorari
jurisdiction cannot succeed..20 So it was noted at the outset.
1. It is indisputable that the present controversy would not have arisen if there
were no mass disaffiliation from petitioning Union. Such a phenomenon is
nothing new in the Philippine labor movement.21 Nor is it open to any legal
objection. It is implicit in the freedom of association explicitly ordained by the
Constitution.22 There is then the incontrovertible right of any individual to join an
organization of his choice. That option belongs to him. A workingman is not to be
denied that liberty. 23 He may be, as a matter of fact, more in need of it if the
institution of collective bargaining as an aspect of industrial democracy is to
succeed. No obstacle that may possible thwart the desirable objective of
militancy in labor's struggle for better terms and conditions is then to be placed
on his way. Once the fact of disaffiliation has been demonstrated beyond doubt,
as in this case, a certification election is the most expeditious way of determining
which labor organization is to be the exclusive bargaining representative. It is as
simple as that. There is relevance to this excerpt from a recent decision,
Philippine Association of Free Labor Unions v. Bureau of Labor Relations: 24
"Petitioner thus appears to be woefully lacking in awareness of the significance
of a certification election for the collective bargaining process. It is the fairest
and most effective way of determining which labor organization can truly
represent the working force. It is a fundamental postulate that the will of the
majority, if given expression in an honest election with freedom on the part of
the voters to make their choice, is controlling. No better device can assure the
institution of industrial democracy with the two parties to a business enterprise,
managment and labor, establishing a regime of self-rule. As was pointed out by
Chief Justice Castro in Rivera v. San Miguel Brewery Corporation, Inc., "a
collective bargaining agreement is the law of the plant." To the same effect is
this explicit pronouncement in Mactan Workers Union v. Aboitiz: 'The terms and
conditions of a collective bargaining contract constitute the law between the
parties.' What could be aptly stressed then, as was done in Compania Maritima
v. Compania Maritima Labor Union, is "the primacy to which the decision
reached by the employees themselves is entitled." Further, it was therein stated:
'That is in the soundest tradition of industrial democracy. For collective
bargaining implies that instead of a unilateral imposition by management, the
terms and conditions of employment should be the subject of negotiation
between it and labor. Thus the two parties indispensable to the economy are
supposed to take care of their respective interests. Moreover, the very notion of
industrial self-rule negates the assumption that what is good for either party
should be left to the will of the other. On the contrary, there is an awareness
that labor can be trusted to promote its welfare through the bargaining process.
To it then must be left the choice of its agent for such purpose.' To paraphrase
an observation of the recently retired Chief Justice Makalintal in Seno v.
Mendoza, it is essential that there be an agreement to govern the relations
between labor marked by confusion, with resulting breaches of the law by either
party. There is, it would appear, a decidedly unsympathetic approach to the
institution of collective bargaining at war with what has so often and so
consistently decided by this Tribunal." 25
2. A different conclusion could have been reached had there been no
qqqdecertification The contract-bar rule could then be invoked by petitioner. It
is, as pointed out by Justice Fernandez in Confederation of Citizens Labor Unions
v. National Labor Relations Commission, 26 "a principle in labor law that a
collective bargaining agreement of reasonable duration is, in the interest of the
stability of industrial relations, a bar to certification elections." 27 Even then, as
was pointed out in the just-cited Philippine Association of Free Labor Unions
decision, it "is not to be applied with rigidity. ... The element of flexibility in its
operation cannot be ignored." 28 In this controversy, however, such a principle is
not applicable. The collective bargaining agreement entered into by petitioner
with management on March 9, 1974 was decertified in the chiallenged order of
April 8, 1975 .29 The power to decertify by respondent Bureau is not disputed. It
was the exercise thereof that is now assailed. If done arbitrarily, there is valid
ground for complaint. The due process clause is a guarantee against any
actuation of that sort. lt stands for fairness and justice, That standard was not
ignored. It suffices to read the petition to disprove any allegation of such failing,
whether in its procedural or substantive aspect. Petitioner was heard by
respondent Bureau before the order of decertification was issued on April 8,
1975. The denial of its motion for reconsideration came also after it had an
opportunity to present its side. Procedural due process was thus observed. Nor
was there any denial of substantive due process in the sense of such
decertification being an act of arbitrariness and caprice.
Tribunal, to set forth the correct legal norm applicable to the controversy. With
specific reference to the agencies at present dealing with labor relations, there is
this excerpt from Justice Aquino's opinion in Antipolo Highway Lines, Inc. v.
Inciong: 33 "A dispassionate scrutiny of the proceedings in the NLRC does not
sustain petitioners' view that they were denied due process and that the NLRC
committed a grave abuse of discretion. (See Maglasang v. Ople, L-38813, April
29, 1975 per Justice Fernando). We found no justification for setting aside the
factual findings of the NLRC, which like those of any other administrative agency,
are generally binding on the courts (Timbancaya v. Vicente. 62 O.G. 9424, 9 SCRA
852). " 34
WHEREFORE, this petition for certiorari and prohibition is dismissed. The
restraining order issued by this Court in its resolution of September 8, 1975 is
hereby lifted. No costs.

In the order of April 8, 1975, it was specifically pointed out; "In the instant case,
it is not disputed that the collective bargaining agreement certified by the
National Labor Relations Commission was not ratified by the majority of the
employees within the bargaining unit. This is defective. It is blatant non-
observance of the basic requirement necessary to certification. To allow it to
remain uncorrected would allow circumvention of what the law specifically
ordained. We cannot countenance irregularities of the highest order to exist in
our very own eyes to be perpetuated. With respect to the complaint of the
confirmation of disaffiliation of the members of respondent Philippine Labor
Alliance counsel the same should be resolved in the most expedient and simple
method of determining the exclusive bargaining representative the holding of
a certification election." 30 In the order denying the motion for reconsideration
dated July 31, 1975, it was first noted: "On January 20, 1975, FFW and 848 Orion
employees filed with the Bureau a petition for the annulment of the 1974
collective bargaining agreement and for the confirmation of the disaffiliation of
the 848 employees from PLAC and their affiliation with FFW. The petition alleged
among others, that the new agreement was concluded about ten months before
the expiry date of the old purposely to defeat the right of the covered employees
to choose their bargaining representative at the proper time appointed by law. It
appears, indeed, that there qqqas no urgency. for the premature renegotiations
considering that the new agreement provides for a 50-centavo salary increase
effective yet on January 1, 1976." 31 Then, there was further clarification of the
decision reached as to the holding of a certification election being the
appropriate mode of solving the dispute: "With the decertification of the
collective agreement, the representation issue comes back to the fore. Petitioner
wants this resolved by ruling on the affiliation and disaffiliation of the union, The
Bureau holds, however, that certification election can better reolve the issue.
parenthetically, it should be stated that a certification election can still be held
even if the collective agreement were certified, considering the peculiar facts of
the case. Good policy and equity demand that when an agreement is
renegotiated before the appointed 60-day period, its certification must still give
way to any representation issue that may be raised within 60-day period so that
the right of employees to choose a bargaining unit agent and the right, of unions
to be chosen shall be preserved." 32

3. There is, finally, another insuperable obstacle success of this petition. There is
no need for a citation of authorities to show how well-settled and firmly-rooted
is the doctrine of the well- nigh conclusive respect for the findings of facts of
administrative tribunals, leaving to the judiciary, in the ultimate analysis, this
[G.R. No. 118562. July 5, 1996]
ALLIANCE OF NATIONALIST AND GENUINE LABOR ORGANIZATION (ANGLO-KMU),
petitioner, vs. SAMAHAN NG MGA MANGAGAWANG NAGKAKAISA SA MANILA
BAY SPINNING MILLS AT J.P. COATS (SAMANA BAY), GILBERT SUNGAYANN,
FERNANDO MELARPIS, ET. AL, respondents.
RESOLUTION
FRANCISCO, J.:
Petitioner Alliance of Nationalist and Genuine Labor Organization (ANGLO for
brevity) is a duly registered labor organization while respondent union Samahan
Ng Mga Mangagawang Nagkakaisa sa Manila Bay Spinning Mills and J.P. Coats
(SAMANA BAY for brevity) is its affiliate. In representation of SAMANA BAY,
ANGLO entered and concluded a Collective Bargaining Agreement (CBA) with
Manila Bay Spinning Mills and J.P. Coats Manila Bay, Inc. (hereinafter referred to
as the corporations) on November 1, 1991. On December 4, 1993, the Executive
Committee of SAMANA BAY decided to disaffiliate from ANGLO in view of the
latter's dereliction of its duty to promote and advance the welfare of SAMANA
BAY and the alleged cases of corruption involving the federation officers. Said
disaffiliation was unanimously confirmed by the members of SAMANA BAY.
On April 4, 1994, a petition to stop remittance of federation dues to ANGLO was
filed by SAMANA BAY with the Bureau of Labor Relations on the ground that the
corporations, despite having been furnished copies of the union resolution
relating to said disaffiliation, refused to honor the same. ANGLO counteracted
by unseating all officers and board members of SAMANA BAY and appointing, in
their stead, a new set of officers who were duly recognized by the corporations.
In its position paper, ANGLO contended that the disaffiliation was void
considering that a collective bargaining agreement is still existing and the
freedom period has not yet set in. The Med-Arbiter resolved that the
disaffiliation was void but upheld the illegality of the ouster officers of SAMANA
BAY. Both parties filed their respective appeals with the Department of Labor
and Employment. In a resolution dated September 23, 1994, herein public
respondent modified the order and ruled in favor of respondent union, disposing
as follows:
"WHEREFORE, the appeal of respondent ANGLO is hereby denied for lack of
merit while the appeal of petitioners is hereby granted. Accordingly, the order
of the Med-Arbiter is modified by:
1) declaring the disaffiliation of petitioner union from respondent ANGLO as
valid;
2) directing respondent Manila Bay Spinning Mills, Inc. and J.P. Coats to stop
remitting to ANGLO federation dues and instead to remit the whole amount of
union dues to the treasurer of petitioner union; and
3) enjoining ANGLO-KMU from interfering in the affairs of petitioner union.
SO ORDERED."
ANGLO filed a motion for reconsideration but the same was denied for lack of
merit. Hence, this petition for certiorari under Rule 65.
The petition calls upon us to resolve two issues, to wit:
1) whether the disaffiliation was valid; and
2) whether petitioner can validly oust individual private respondents from their
positions.
We rule for the respondents.
For clarity, we shall first consider the issue respecting the validity of the
disaffiliation.
Petitioner ANGLO wants to impress on us that the disaffiliation was invalid for
two reasons, namely: that the procedural requirements for a valid disaffiliation
were not followed; and that it was made in violation of P.D. 1391.
Anent the first ground, we reiterate the rule that all employees enjoy the right to
self-organization and to form and join labor organizations of their own choosing
for the purpose of collective bargaining. This is a fundamental right of labor and
derives its existence from the Constitution. In interpreting the protection to
labor and social justice provisions of the Constitution and the labor laws, rules or
regulations, we have always adopted the liberal approach which favors the
exercise of labor rights.
This Court is not ready to bend this principle to yield to a mere procedural
defect, to wit: failure to observe certain procedural requirements for a valid
disaffiliation. Non-compliance with the procedure on disaffiliation, being
premised on purely technical grounds cannot rise above the fundamental right
of self- organization.
We quote, with approval, the findings of herein public respondent, that:
"x x x the resolution of the general membership ratifying the disaffiliation action
initiated by the Board, substantially satisfies the procedural requirements for
disaffiliation. No doubt was raised on the support of the majority of the union
members on the decision to disaffiliate."
This, to our mind, is clearly supported by the evidence. ANGLO's alleged acts
inimical to the interests of respondent union have not been sufficiently
rebutted. It is clear under the facts that respondent union's members have
unanimously decided to disaffiliate from the mother federation and ANGLO has
nothing to offer in dispute other than the law prohibiting the disaffiliation
outside the freedom period.
In the same wise, We find no ground for ruling against the validity of the
disaffiliation in the light of recent jurisprudential rules.
Although P.D. 1391 provides:
"Item No. 6. No petition for certification election, for intervention and
disaffiliation shall be entertained or given due course except within the 60-day
freedom period immediately preceding the expiration of a collective bargaining
agreement,"
said law is definitely not without exceptions. Settled is the rule that a local union
has the right to disaffiliate from its mother union when circumstances warrant.
Generally, a labor union may disaffiliate from the mother union to form a local or
independent union only during the 60-day freedom period immediately
preceding the expiration of the CBA. However, even before the onset of the
freedom period, disaffiliation may be carried out when there is a shift of
allegiance on the part of the majority of the members of the union.
Coming now to the second issue, ANGLO contends that individual private
respondents were validly ousted as they have ceased to be officers of the
incumbent union (ANGLO-KMU) at the time of disaffiliation. In order to fill the
vacuum, it was deemed proper to appoint the individual replacements so as not
to put in disarray the organizational structure and to prevent chaos and
confusion among the general membership and within the company.
The contention is bereft of merit. A local labor union is a separate and distinct
unit primarily designed to secure and maintain an equality of bargaining power
between the employer and their employee-members. A local union does not
owe its existence to the federation with which it is affiliated. It is a separate and
distinct voluntary association owing its creation to the will of its members. The
mere act of affiliation does not divest the local union of its own personality,
neither does it give the mother federation the license to act independently of
the local union. It only gives rise to a contract of agency where the former acts
in representation of the latter.
By SAMANA BAY's disaffiliation from ANGLO, the vinculum that previously bound
the two entities was completely severed. ANGLO was divested of any and all
power to act in representation of SAMANA BAY. Thus, any act performed by
ANGLO affecting the interests and affairs of SAMANA BAY, including the ouster
of herein individual private respondents, is rendered without force and effect.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
SO ORDERED.