Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 77951 September 26, 1988
COOPERATIVE RURA !AN" O# $AVAO CIT%, INC., petitioner,
vs.
PURA #ERRER&CAE'A, $IRECTOR, !UREAU O# A!OR REATIONS, MOE, MANIA(
#EI)AR$O T. SERAPIO, ME$&AR!ITER $ESIGNATE, REGIONA O##ICE NO. *I, MOE,
$AVAO CIT%( +,- #E$ERATION O# #REE .OR"ERS, respondents.
Herbert P. Artes for petitioner.
The Solicitor General for Public respondent.

GANCA%CO, J.:
This is a Petition for certiorari under Rule ! of the Rules of "ourt #here the issue is #hether or not
the e$plo%ees of a cooperative can or&ani'e the$selves for purposes of collective bar&ainin&.
The record of the case discloses that the herein petitioner "ooperative Rural (an) of Davao "it%,
Inc. is a cooperative ban)in& corporation operatin& in Davao "it%. It is o#ned in part b% the
*overn$ent and its e$plo%ees are $e$bers and co+o#ners of the sa$e. The petitioner has around
, ran)+and+file e$plo%ees. -s of -u&ust, ,./, there #as no e0istin& collective bar&ainin&
a&ree$ent bet#een the said e$plo%ees and the establish$ent. On the other hand, the herein
private respondent Federation of Free 1or)ers is a labor or&ani'ation re&istered #ith the
Depart$ent of 2abor and 3$plo%$ent. It is interested in representin& the said e$plo%ees for
purposes of collective bar&ainin&.
On -u&ust 45, ,./, the private respondent filed #ith the Davao "it% Re&ional Office of the then
Ministr% of 2abor and 3$plo%$ent a verified Petition for certification election a$on& the ran)+and+file
e$plo%ees of the petitioner.
1
The sa$e #as doc)eted as "ase No. R+64! RO7I M3D+8R+56+/. On
Septe$ber ,/, ,./, the herein public respondent issued an Order &rantin& the Petition for
certification election.
On October 6, ,./, the petitioner filed an -ppeal Me$orandu$ and sou&ht a reversal of the Order
of the Med+-rbiter.
2
The petitioner ar&ues therein that, a$on& others, a cooperative is not covered
b% the Rules &overnin& certification elections inas$uch as it is not an institution operatin& for profit.
The petitioner also adds that t#o of the alle&ed ran)+and+file e$plo%ees see)in& the certification
election are $ana&erial e$plo%ees dis9ualified fro$ :oinin& concerted labor activities. In su$, the
petitioner insists that its e$plo%ees are dis9ualified fro$ for$in& labor or&ani'ations for purposes of
collective bar&ainin&.
On October /, ,./, the private respondent filed a ;Motion to Dis$iss the -ppeal.; On October ,!,
,./, the petitioner filed its opposition to the said Motion.
On Februar% ,,, ,./5, the herein public respondent (ureau of 2abor Relations Director Pura Ferrer+
"alle:a issued a Resolution affir$in& the Order of the Med+-rbiter and dis$issin& the -ppeal.
/
The
pertinent portions of the said Resolution are as follo#s<
It is be%ond doubt that respondent+appellant, "ooperative Rural (an) of Davao "it%
falls #ithin the purvie# of -rticle 4,4, para&raph " of the 2abor "ode, actin& as such
in the interest of an e$plo%er. To ar&ue other#ise #ould a$ount to closin& one=s
e%es to the realities of toda%=s cooperative ban)in& institutions. ....
Moreover, basic is the ri&ht of ever% #or)er in an% establish$ent #hether operated
for profit or not to or&ani'e and en&a&e in concerted activit%, $utuall% beneficial to
their interest. Such ri&ht is sacredl% enshrined and protected in our funda$ental la#,
&rantin& ever% #or)er the ri&ht to or&ani'e into a collective &roup and en&a&e in
concerted activities for purposes of pro$otin& their #ell bein&, sub:ect onl% to such
li$itations as $a% be provided for b% la#.
000 000 000
-s this Office has consistentl% ruled and applied in various cases, bein& a $e$ber of
a cooperative or&ani'ation does not preclude one fro$ for$in& or :oinin& a labor
union provided that such person or persons are not a$on& those dis9ualified b% la#.
No#here in the records can #e find an% piece of evidence sho#in& that the
si&natories in the petition are a$on& those dis9ualified to for$ or :oin a union.
Finall%, #e cannot &ive credence to >the? e$plo%er=s alle&ation that t#o of the
si&natories thereof, are $ana&erial e$plo%ees, since no evidence sho#in& such fact
can be found fro$ the records.
000 000 000
In a Motion dated March 4, ,./5, the petitioner as)ed for a reconsideration of the said
Resolution.
0
The petitioner reiterated therein its vie# that its e$plo%ees are dis9ualified fro$
for$in& the labor or&ani'ation so conte$plated. The petitioner also called attention to an Opinion
rendered b% then Solicitor *eneral and Minister of @ustice 3stelito P. Mendo'a dated -u&ust ,A,
,./,.
5
The Opinion states that e$plo%ees of anelectric cooperative #ho are the$selves
$e$bersBco+o#ners of the sa$e cannot for$ or :oin labor or&ani'ations for purposes of collective
bar&ainin&. The Opinion also states that the dut% to bar&ain e0ists onl% bet#een an e$plo%er and
hisBits e$plo%ees, and that an e$plo%er has no dut% to bar&ain #ith his co+o#ners of a corporation
#ho are also its e$plo%ees. The petitioner sub$its that the said Opinion calls for application in the
present controvers%.
On March 4, ,./5, director "alle:a issued a Resolution den%in& the reconsideration sou&ht b% the
petitioner.
6
Thus, the certification election #as scheduled in the $ornin& of -pril 46, ,./5.
Findin& the action ta)en b% the (ureau unsatisfactor%, the petitioner brou&ht the case directl% to this
"ourt on -pril ., ,./5 b% #a% of the instant Petition for certiorari. The petitioner $aintains that the
public respondents both acted #ithout :urisdiction or in e0cess thereof, or #ith &rave abuse of
discretion a$ountin& to lac) of :urisdiction, in allo#in& the certification election sou&ht b% the private
respondent despite the ar&u$ents of the petitioner in opposition thereto. The petitioner reiterates its
ar&u$ent that e$plo%ees of cooperatives #ho are $e$bers and co+o#ners of the sa$e cannot for$
and :oin labor or&ani'ations for purposes of collective bar&ainin&.
On -pril ,!, ,./5, this "ourt issued a te$porar% restrainin& order en:oinin& the (ureau of 2abor
Relations fro$ proceedin& #ith the certification election scheduled on -pril 46, ,./5.
7
The
certification election nonetheless pushed throu&h as scheduled for the alle&ed reason that the
te$porar% restrainin& order #as not seasonabl% trans$itted to Davao "it%.
8
This court also re9uired the respondents to file their "o$$ent on the Petition. The respondents
co$plied as instructed. The Office of the Solicitor *eneral represented the public respondents.
The Solicitor *eneral inti$ated to this "ourt that the instant Petition has been rendered $oot and
acade$ic inas$uch as the certification election sou&ht to be en:oined had alread% been conducted.
The Solicitor *eneral added that the public respondents did not co$$it an% :urisdictional error.
11
In due ti$e, the parties sub$itted other pleadin&s. On @anuar% , ,.//, the case #as dee$ed
sub$itted for decision.
-fter a careful e0a$ination of the entire record of the case, 1e find the instant Petition $eritorious.
"ontrar% to the vie# espoused b% the Solicitor *eneral, this case cannot be considered $oot and
acade$ic si$pl% because the certification election sou&ht to be en:oined #ent on as scheduled. The
instant Petition is one for certiorari as a special civil action. 3rrors of :urisdiction on the part of the
public respondents are alle&ed in the Petition itself. If the public respondents had indeed co$$itted
:urisdictional errors, the action ta)en b% both the Med+-rbiter and the (ureau Director #ill be
dee$ed null and void ab initio.
11
-nd if this #ere so, the certification election #ould, necessaril%,
have no le&al :ustification. The ar&u$ents raised in the instant Petition stri)e at the ver% heart of the
validit% of the certification election itself.
1e co$e no# to the $ain aspect of the case.
-rticle 4A6 of the 2abor "ode
12
enu$erates #ho are eli&ible to for$, :oin, or assist labor
or&ani'ations for purposes of collective bar&ainin&, to #it <
-RT. 4A6. Coverage and employees' right to self-organiation. < -ll persons
e$plo%ed in co$$ercial, industrial and a&ricultural enterprises and in reli&ious,
charitable, $edical or educational institutions #hether operatin& for profit or not, shall
have the ri&ht to self+or&ani'ation and to for$, :oin, or assist labor or&ani'ations of
their o#n choosin& for purposes of collective bar&ainin&. ....
The reco&ni'ed e0ception to this enu$eration is found in -rticle 4A! of the sa$e code, #hich
provides for the ineli&ibilit% of $ana&erial e$plo%ees to :oin an% labor reor&ani'ation, vi'+
-RT. 4A!. Ineli&ibilit% of $ana&erial e$plo%ees to :oin an% labor or&ani'ation.
Mana&erial e$plo%ees are not eli&ible to :oin, assist or for$ an% labor or&ani'ation.
Fro$ the fore&oin& provisions of la# it #ould appear at first blush that all the ran) and file
e$plo%ees of a cooperative #ho are not $ana&erial e$plo%ees are eli&ible to for$, :oin or assist
an% labor or&ani'ation of their o#n choosin& for the purpose of collective bar&ainin&.
Co#ever, under Section 4 of P.D. No. ,5!, a cooperative is defined to $ean ;or&ani'ations
co$posed pri$aril% of s$all producers and of consu$ers #ho voluntaril% :oin to&ether to for$
business enterprises #hich the% the$selves o#n, control, and patroni'e.; Its creation and &ro#th
#ere declared as a polic% of the State as a $eans of increasin& the inco$e and purchasin& po#er of
the lo#+inco$e sector of the population in order to attain a $ore e9uitable distribution of inco$e and
#ealth .
1/
The principles &overnin& it areD
a? !pen membership<;Should be voluntar% and available #ithout artificial
restriction, or an% social, political, racial or reli&ious discri$ination, to all persons #ho
can $a)e use of its services and are #illin& to accept responsibilities of
$e$bershipE;
b? "emocratic control.#;Irrespective of the nu$ber of shares o#ned, each $e$ber
can onl% cast one vote in decidin& upon the affairs of the cooperativeE;
c? $imited interests to capital.# ;Share capital shall earn onl% li$ited interest, the
$a0i$u$ rate of interest to be established b% the Depart$ent of 2ocal *overn$ent
and "o$$unit% Develop$ent fro$ ti$e to ti$eE; and
d? Patronage refund < ;Net inco$e after the interest on capital has been paid shall be
redistributed a$on& the $e$bers in proposition to their patrona&e.;
10
1hile cooperatives $a% e0ercise the sa$e ri&hts and privile&es &iven to persons, partnership and
corporations provided under e0istin& la#s, operate business enterprises of all )inds, establish rural
ban)s, en:o% all the privile&es and incentives &ranted b% the N-"ID- -ct and other &overn$ent
a&encies to business or&ani'ations under e0istin& la#s, to e0propriate idle urban or rural lands for its
purposes, to o#n and dispose of properties, enter into contracts, to sue and be sued and perfor$
other acts necessar% to pursue its ob:ectives,
15
such cooperatives en:o% such privile&es asD
a? 30e$ption fro$ inco$e ta0 and sales ta0esE
b? Preferential ri&ht to suppl% rice, corn and other &rains, and other co$$odities produced b% the$
to State a&encies ad$inisterin& price stabili'ation pro&ra$E and
c? In appropriate cases, e0e$ption fro$ application of $ini$u$ #a&e la# upon reco$$endation of
the (ureau of "ooperative Develop$ent sub:ect to the approval of the Secretar% of 2abor.
16
- cooperative develop$ent loan fund has been created for the develop$ent of the cooperative
$ove$ent.
17
It $a% be, further stated that the Depart$ent of 2ocal *ove$$ent and "o$$unit% Develop$ent
throu&h the (ureau of "ooperative Develop$ent is vested #ith full authorit% to pro$ul&ate rules and
re&ulations to cover the pro$otion, or&ani'ation, re&istration, re&ulation and supervision of all t%pes
of cooperatives.
18
3lectric cooperatives, ho#ever, are under the re&ulation and supervision of the
National 3lectrification -d. -d$inistration,
19
#hile it is the Monetar% (oard of the "entral (an) that
has e0clusive responsibilit% and authorit% over the ban)in& functions and operations of cooperative
ban)s .
21
- cooperative, therefore, is b% its nature different fro$ an ordinar% business concern, bein& run
either b% persons, partnerships, or corporations. Its o#ners andBor $e$bers are the ones #ho run
and operate the business #hile the others are its e$plo%ees. -s above stated, irrespective of the
nu$ber of shares o#ned b% each $e$ber the% are entitled to cast one vote each in decidin& upon
the affairs of the cooperative. Their share capital earn li$ited interests. The% en:o% special privile&es
as < e0e$ption fro$ inco$e ta0 and sales ta0es, preferential ri&ht to suppl% their products to State
a&encies and even e0e$ption fro$ the $ini$u$ #a&es la#s.
-n e$plo%ee therefore of such a cooperative #ho is a $e$ber and co+o#ner thereof cannot invo)e
the ri&ht to collective bar&ainin& for certainl% an o#ner cannot bar&ain #ith hi$self or his co+o#ners.
In the opinion of -u&ust ,A, ,./, of the Solicitor *eneral he correctl% opined that e$plo%ees of
cooperatives #ho are the$selves $e$bers of the cooperative have no ri&ht to for$ or :oin labor
or&ani'ations for purposes of collective bar&ainin& for bein& the$selves co+o#ners of the
cooperative.
21
Co#ever, in so far as it involves cooperatives #ith e$plo%ees #ho are not $e$bers or co+o#ners
thereof, certainl% such e$plo%ees are entitled to e0ercise the ri&hts of all #or)ers to or&ani'ation,
collective bar&ainin&, ne&otiations and others as are enshrined in the "onstitution and e0istin& la#s
of the countr%.
22
The 9uestioned rulin& therefore of public respondent Pura Ferrer+"alle:a $ust be upheld insofar as it
refers to the e$plo%ees of petitioner #ho are not $e$bers or co+o#ners of petitioner. It cannot
e0tend to the other e$plo%ees #ho are at the sa$e ti$e its $e$bers or co+o#ners.
The "ourt upholds the findin&s of said public respondent that no persuasive evidence has been
presented to sho# that t#o of the si&natories in the petition for certification election are $ana&erial
e$plo%ees #ho under the la# are dis9ualified fro$ pursuin& union activities.
1C3R3FOR3, the herein petition is hereb% *R-NT3D and the resolution of public respondent Pura
Ferrer+"alle:a, Director, (ureau of 2abor Relations, of Februar% ,,, ,./5 is hereb% MODIFI3D to the
effect that onl% the ran) and file e$plo%ees of petitioner #ho are not its $e$bers or co+o#ners are
entitled to self+or&ani'ation, collective bar&ainin&, and ne&otiations, #hile the other e$plo%ees #ho
are $e$bers or co+o#ners thereof can not en:o% such ri&ht.
SO ORD3R3D.
%arvasa& Cru& Gri'o-A(uino and )edialdea& **.& concur.

#oot,ote2
, Pa&es .6 and .A, Rollo.
4 Pa&es , to 4F, Rollo.
6 Pa&es ,6 to ,!, Rollo.
A Pa&es 4, to 4!, Rollo.
! Pa&es 4 to 45, Rollo.
Pa&es 6F to 4,, Rollo.
5 Pa&es 65 and 6/, Rollo.
/ Pa&es A! to A5, Rollo.
. Pa&e 65, Rollo.
,F Pa&es 65 and 6/, Rollo.
,, -n& 2a$ v. Rosillosa, / Phil. AA5 >,.!F?.
,4 Presidential Decree No. AA4, as a$ended. The codal provisions cited herein have
been renu$bered pursuant to 30ecutive Order No. III issued b% President -9uino on
Dece$ber 4A,,./.
,6 Section ,, P.D. No. ,5!.
,A Section 6, supra.
,! Section A, supra.
, Section !, supra.
,5 Section , supra.
,/ Section /, supra.
,. P.D. No. !F,. Section ,, a$endin& Section / of P.D. No. ,5!.
4F P.D. No. ,4/6, a$endin& P.D. No. ,5!.
4, -nne0 D to Petition, pa&es 4+45.
44 Section /, -rt. II, Section 6, -rt. 7III, ,./A "onstitutionE 2abor "ode of the
Philippines and other related la#s.