60. METROLAB INDUSTRIES, INC., v.

CONFESOR
FIRST DIVISION
[G.R. No. 108855. February 28, 1996]
METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES ROLDAN-CONFESOR, in her
capacity as Secretary of the Department of Labor and Employment and METRO DRUG CORPORATION
EMPLOYEES ASSOCIATION-FEDERATION OF FREE WORKERS, respondents.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE AGENCIES; RULE;
CASE AT BAR. - We reaffirm the doctrine that considering their expertise in their respective fields, factual
findings of administrative agencies supported by substantial evidence are accorded great respect and
binds this Court. The Secretary of Labor ruled, thus: x x x Any act committed during the pendency of the
dispute that tends to give rise to further contentious issues or increase the tensions between the parties
should be considered an act of exacerbation. One must look at the act itself, not on speculative reactions.
A misplaced recourse is not needed to prove that a dispute has been exacerbated. For instance, the Union
could not be expected to file another notice of strike. For this would depart from its theory of the case
that the layoff is subsumed under the instant dispute, for which a notice of strike had already been filed.
On the other hand, to expect violent reactions, unruly behavior, and any other chaotic or drastic action
from the Union is to expect it to commit acts disruptive of public order or acts that may be illegal. Under
a regime of laws, legal remedies take the place of violent ones. x xx Protest against the subject layoffs
need not be in the form of violent action or any other drastic measure. In the instant case the Union
registered their dissent by swiftly filing a motion for a cease and desist order. Contrary to petitioners
allegations, the Union strongly condemned the layoffs and threatened mass action if the Secretary of
Labor fails to timely intervene: x x x 3. This unilateral action of management is a blatant violation of the
injunction of this Office against committing acts which would exacerbate the dispute. Unless such act is
enjoined the Union will be compelled to resort to its legal right to mass actions and concerted activities to
protest and stop the said management action. This mass layoff is clearly one which would result in a very
serious dispute unless this Office swiftly intervenes. x x x Metrolab and the Union were still in the process
of resolving their CBA deadlock when petitioner implemented the subject layoffs. As a result, motions and
oppositions were filed diverting the parties attention, delaying resolution of the bargaining deadlock and
postponing the signing of their new CBA, thereby aggravating the whole conflict.
2. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; EXERCISE OF
MANAGEMENT PREROGATIVES; NOT ABSOLUTE; SUBJECT TO EXCEPTIONS IMPOSED BY LAW. -
This Court recognizes the exercise of management prerogatives and often declines to interfere with the
legitimate business decisions of the employer. However, this privilege is not absolute but subject to
limitations imposed by law. In PAL vs. NLRC, (225 SCRA 301 [1993]), we issued this reminder: ... the
exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177
SCRA 565 [1989]), it was held that managements prerogatives must be without abuse of discretion ...All
this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is
circumscribed by limi(ations found in law, a collective bargaining agreement, or the general principles of
fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]).
3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench constitutes one of
the exceptions. The Secretary of Labor is expressly given the power under the Labor Code to assume
jurisdiction and resolve labor disputes involving industries indispensable to national interest. The disputed
injunction is subsumed under this special grant of authority. Art. 263 (g) of the Labor Code specifically
provides that: x x x (g) When, in his opinion, there exists a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission
for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining
the intended or impending strike or lockout as specified in the assumption or certification order. If one
has already taken place at the time of assumption or certification, all striking or locked out employees
shall immediately return to work and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of
Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure
compliance with this provision as well as with such orders as he may issue to enforce the same. . . . That
Metrolabs business is of national interest is not disputed. Metrolab is one of the leading manufacturers
and suppliers of medical and pharmaceutical products to the country. Metrolabs management
prerogatives, therefore, are not being unjustly curtailed but duly balanced with and tempered by the
limitations set by law, taking into account its special character and the particular circumstances in the
case at bench.
4. ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN, FORM
AND ASSIST ANY LABOR ORGANIZATION; PROHIBITION EXTENDED TO CONFIDENTIAL
EMPLOYEES. - Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any
labor organization to managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly
confidential records.
5. ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND FILE
BARGAINING UNIT; NOT TANTAMOUNT TO DISCRIMINATION. - Confidential employees cannot be
classified as rank and file. As previously discussed, the nature of employment of confidential employees is
quite distinct from the rank and file, thus, warranting a separate category. Excluding confidential
employees from the rank and file bargaining unit, therefore, is not tantamount to discrimination.
APPEARANCES OF COUNSEL
Bautista Picazo Buyco Tan & Fider for petitioner.
The Solicitor General for public respondent.
Perfecto V. Fernandez, Jose P. Fernandez & Cristobal P. Fernandez for Metro Drug Corporation.
D E C I S I O N
KAPUNAN, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the annulment of the
Resolution and Omnibus Resolution of the Secretary of Labor and Employment dated 14 April 1992 and 25
January 1993, respectively, in OS-AJ-04491-11 (NCMB-NCR-NS-08-595-9 1; NCMB-NCR-NS-09-678-91)
on grounds that these were issued with grave abuse of discretion and in excess of jurisdiction.
Private respondent Metro Drug Corporation Employees Association-Federation of Free Workers (hereinafter
referred to as the Union) is a labor organization representing the rank and file employees of petitioner
Metrolab Industries, Inc. (hereinafter referred to as Metrolab/MII) and also of Metro Drug, Inc.
On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and the Union
expired. The negotiations for a new CBA, however, ended in a deadlock.
Consequently, on 23 August 1991, the Union filed a notice of strike against Metrolab and Metro Drug Inc.
The parties failed to settle their dispute despite the conciliation efforts of the National Conciliation and
Mediation Board.
To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D. Torres, issued
an assumption order dated 20 September 1991, the dispositive portion of which reads, thus:
WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, as amended,
this Office hereby assumes jurisdiction over the entire labor dispute at Metro Drug, Inc. - Metro Drug
Distribution Division and Metrolab Industries Inc.
Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro Drug Corp.
Employees Association - FFW are likewise directed to cease and desist from committing any and all acts
that might exacerbate the situation.
Finally, the parties are directed to submit their position papers and evidence on the aforequoted
deadlocked issues to this office within twenty (20) days from receipt hereof.
SO ORDERED.i[1] (Italics ours.)
On 27 December 1991, then Labor Secretary Torres issued an order resolving all the disputed items in the
CBA and ordered the parties involved to execute a new CBA.
Thereafter, the Union filed a motion for reconsideration.
On 27 January 1992, during the pendency of the abovementioned motion for reconsideration, Metrolab
laid off 94 of its rank and file employees.
On the same date, the Union filed a motion for a cease and desist order to enjoin Metrolab from
implementing the mass layoff, alleging that such act violated the prohibition against committing acts that
would exacerbate the dispute as specifically directed in the assumption order.ii[2]
On the other hand, Metrolab contended that the layoff was temporary and in the exercise of its
management prerogative. It maintained that the company would suffer a yearly gross revenue loss of
approximately sixty-six (66) million pesos due to the withdrawal of its principals in the Toll and Contract
Manufacturing Department. Metrolab further asserted that with the automation of the manufacture of its
product Eskinol, the number of workers required its production is significantly reduced.iii[3]
Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary basis due to
availability of work in the production lines.
On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff of
Metrolabs 94 rank and file workers illegal and ordered their reinstatement with full backwages. The
dispositive portion reads as follows:
WHEREFORE, the Unions motion for reconsideration is granted in part, and our order of 28 December
1991 is affirmed subject to the modifications in allowances and in the close shop provision. The layoff of
the 94 employees at MII is hereby declared illegal for the failure of the latter to comply with our injunction
against committing any act which may exacerbate the dispute and with the 30-day notice requirement.
Accordingly, MII is hereby ordered to reinstate the 94 employees, except those who have already been
recalled, to their former positions or substantially equivalent, positions with full backwages from the date
they were illegally laid off on 27 January 1992 until actually reinstated without loss of seniority rights and
other benefits. Issues relative to the CBA agreed upon by the parties and not embodied in our earlier
order are hereby ordered adopted for incorporation in the CBA. Further, the dispositions and directives
contained in all previous orders and resolutions relative to the instant dispute, insofar as not inconsistent
herein, are reiterated. Finally, the parties are enjoined to cease and desist from committing any act which
may tend to circumvent this resolution.
SO RESOLVED.iv[4]
On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did not
aggravate the dispute since no untoward incident occurred as a result thereof. It, likewise, filed a motion
for clarification regarding the constitution of the bargaining unit covered by the CBA.
On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The execution,
however, was without prejudice to the outcome of the issues raised in the reconsideration and clarification
motions submitted for decision to the Secretary of Labor.v[5]
Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73 of its
employees on grounds of redundancy due to lack of work which the Union again promptly opposed on 5
October 1992.
On 15 October 1992, Labor Secretary Confesor again issued a cease and desist order. Metrolab moved for
a reconsideration.vi[6]
On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containing the
following orders:
xxx xxx xxx.
1. MIIs motion for partial reconsideration of our 14 April 1992 resolution specifically that portion thereof
assailing our ruling that the layoff of the 94 employees is illegal, is hereby denied. MII is hereby ordered
to pay such employees their full backwages computed from the time of actual layoff to the time of actual
recall;
2. For the parties to incorporate in their respective collective bargaining agreements the clarifications
herein contained; and
3. MIIs motion for reconsideration with respect to the consequences of the second wave of layoff affecting
73 employees, to the extent of assailing our ruling that such layoff tended to exacerbate the dispute, is
hereby denied. But inasmuch as the legality of the layoff was not submitted for our resolution and no
evidence had been adduced upon which a categorical finding thereon can be based, the same is hereby
referred to the NLRC for its appropriate action.
Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this dispute are
hereby lifted.
SO RESOLVED.vii[7]
Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shop
provision of the CBA, not from the bargaining unit.
On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the present
petition for certiorari with application for issuance of a Temporary Restraining Order.
On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of Labor from
enforcing and implementing the assailed Resolution and Omnibus Resolution dated 14 April 1992 and 25
January 1993, respectively.
In its petition, Metrolab assigns the following errors:
A
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT COMMITTED GRAVE ABUSE OF
DISCRETION AND EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF ILLEGAL AND
ORDERING THE REINSTATEMENT AND PAYMENT OF BACKWAGES TO THE AFFECTED EMPLOYEES.*
B
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT GRAVELY ABUSED HER
DISCRETION IN INCLUDING EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK AND
FILE EMPLOYEES.viii[8]
Anent the first issue, we are asked to determine whether or not public respondent Labor Secretary
committed grave abuse of discretion and exceeded her jurisdiction in declaring the subject layoffs
instituted by Metrolab illegal on grounds that these unilateral actions aggravated the conflict between
Metrolab and the Union who were, then, locked in a stalemate in CBA negotiations.
Metrolab argues that the Labor Secretarys order enjoining the parties from committing any act that might
exacerbate the dispute is overly broad, sweeping and vague and should not be used to curtail the
employers right to manage his business and ensure its viability.
We cannot give credence to Metrolabs contention.
This Court recognizes the exercise of management prerogatives and often declines to interfere with the
legitimate business decisions of the employer. However, this privilege is not absolute but subject to
limitations imposed by law.ix[9]
In PAL v. NLRC,x[10] we issued this reminder:
xxx xxx xxx
. . .the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (
177 SCRA 565 [1989]), it was held that managements prerogatives must be without abuse of
discretion....
xxx xxx xxx
All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is
circumscribed by limitations found in law, a collective bargaining agreement, or the general principles of
fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . . . (Italics ours.)
xxx xxx xxx.
The case at bench constitutes one of the exceptions. The Secretary of Labor is expressly given the power
under the Labor Code to assume jurisdiction and resolve labor disputes involving industries indispensable
to national interest. The disputed injunction is subsumed under this special grant of authority. Art. 263
(g) of the Labor Code specifically provides that:
xxx xxx xxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended
or impending strike or lockout as specified in the assumption or certification order. If one has already
taken place at the time of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of
Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure
compliance with this provision as well as with such orders as he may issue to enforce the same. . . (Italics
ours.)
xxx xxx xxx.
That Metrolabs business is of national interest is not disputed. Metrolab is one of the leading
manufacturers and suppliers of medical and pharmaceutical products to the country.
Metro labs management prerogatives, therefore, are not being unjustly curtailed but duly balanced with
and tempered by the limitations set by law, taking into account its special character and the particular
circumstances in the case at bench.
As aptly declared by public respondent Secretary of Labor in its assailed resolution:
xxx xxx xxx.
MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of management
prerogatives such as layoffs. But it may nevertheless be appropriate to mention here that one of the
substantive evils which Article 263 (g) of the Labor Code seeks to curb is the exacerbation of a labor
dispute to the further detriment of the national interest. When a labor dispute has in fact occurred and a
general injunction has been issued restraining the commission of disruptive acts, management
prerogatives must always be exercised consistently with the statutory objective.xi[11]
xxx xxx xxx.
Metrolab insists that the subject layoffs did not exacerbate their dispute with the Union since no untoward
incident occurred after the layoffs were implemented. There were no work disruptions or stoppages and
no mass actions were threatened or undertaken. Instead, petitioner asserts, the affected employees
calmly accepted their fate as this was a matter which they had been previously advised would be
inevitable.xii[12]
After a judicious review of the record, we find no compelling reason to overturn the findings of the
Secretary of Labor.
We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of
administrative agencies supported by substantial evidence are accorded great respect and binds this
Court.xiii[13]
The Secretary of Labor ruled, thus:
xxx xxx xxx.
Any act committed during the pendency of the dispute that tends to give rise to further contentious issues
or increase the tensions between the parties should be considered an act of exacerbation. One must look
at the act itself, not on speculative reactions. A misplaced recourse is not needed to prove that a dispute
has been exacerbated. For instance, the Union could not be expected to file another notice of strike. For
this would depart from its theory of the case that the layoff is subsumed under the instant dispute, for
which a notice of strike had already been filed. On the other hand, to expect violent reactions, unruly
behavior, and any other chaotic or drastic action from the Union is to expect it to commit acts disruptive
of public order or acts that may be illegal. Under a regime of laws, legal remedies take the place of
violent ones.xiv[14]
xxx xxx xxx.
Protest against the subject layoffs need not be in the form of violent action or any other drastic measure.
In the instant case the Union registered their dissent by swiftly filing a motion for a cease and desist
order. Contrary to petitioners allegations, the Union strongly condemned the layoffs and threatened mass
action if the Secretary of Labor fails to timely intervene:
xxx xxx xxx.
3. This unilateral action of management is a blatant violation of the injunction of this Office against
committing acts which would exacerbate the dispute. Unless such act is enjoined the Union will be
compelled to resort to its legal right to mass actions and concerted activities to protest and stop the said
management action. This mass layoff is clearly one which would result in a very serious labor dispute
unless this Office swiftly intervenes.xv[15]
xxx xxx xxx.
Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner
implemented the subject layoffs. As a result, motions and oppositions were filed diverting the parties
attention, delaying resolution of the bargaining deadlock and postponing the signing of their new CBA,
thereby aggravating the whole conflict.
We, likewise, find untenable Metrolabs contention that the layoff of the 94 rank-and-file employees was
temporary, despite the recall of some of the laid off workers.
If Metrolab intended the layoff of the 94 workers to be temporary, it should have plainly stated so in the
notices it sent to the affected employees and the Department of Labor and Employment. Consider the
tenor of the pertinent portions of the layoff notice to the affected employees:
xxx xxx xxx.
Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng lay-off ng mga empleyado
sa Rank & File dahil nabawasan ang trabaho at puwesto para sa kanila. Marami sa atin ang kasama sa
lay-off dahil wala nang trabaho para sa kanila. Mahirap tanggapin ang mga bagay na ito subalit
kailangan nating gawin dahil hindi kaya ng kumpanya ang magbayad ng suweldo kung ang empleyado ay
walang trabaho. Kung tayo ay patuloy na magbabayad ng suweldo, mas hihina ang ating kumpanya at
mas marami ang maaring maapektuhan.
Sa pagpapatupad ng lay-off susundin natin ang LAST IN-FIRST OUT policy. Ang mga empleyadong may
pinakamaikling serbisyo sa kumpanya ang unang maaapektuhan. Ito ay batay na rin sa nakasaad sa
ating CBA na ang mga huling pumasok sa kumpanya ang unang masasama sa lay-off kapag nagkaroon
ng ganitong mga kalagayan.
Ang mga empleyado na kasama sa lay-off ay nakalista sa sulat na ito. Ang umpisa ng lay-off ay sa
Lunes, Enero 27. Hindi na muna sila papasok sa kumpanya. Makukuha nila ang suweldo nila sa Enero 30,
1992.
Hindi po natin matitiyak kung gaano katagal ang lay-off ngunit ang aming tingin ay matatagalan bago
magkaroon ng dagdag na trabaho. Dahil dito, sinimulan na namin ang isang Redundancy Program sa
mga supervisors. Nabawasan ang mga puwesto para sa kanila, kaya sila ay mawawalan ng trabaho at
bibigyan na ng redundancy pay.xvi[16] (Italics ours.)
xxx xxx xxx.
We agree with the ruling of the Secretary of Labor, thus:
xxx xxx xxx.
. . .MII insists that the layoff in question is temporary not permanent. It then cites International
Hardware, Inc. vs. NLRC, 176 SCRA 256, in which the Supreme Court held that the 30-day notice required
under Article 283 of the Labor Code need not be complied with if the employer has no intention to
permanently severe (sic) the employment relationship.
We are not convinced by this argument. International Hardware involves a case where there had been a
reduction of workload. Precisely to avoid laying off the employees, the employer therein opted to give
them work on a rotating basis. Though on a limited scale, work was available. This was the Supreme
Courts basis for holding that there was no intention to permanently severe (sic) the employment
relationship.
Here, there is no circumstance at all from which we can infer an intention from MII not to sever the
employment relationship permanently. If there was such an intention, MII could have made it very clear
in the notices of layoff. But as it were, the notices are couched in a language so uncertain that the only
conclusion possible is the permanent termination, not the continuation, of the employment relationship.
MII also seeks to excuse itself from compliance with the 30-day notice with a tautology. While insisting
that there is really no best time to announce a bad news, (sic) it also claims that it broke the bad news
only on 27 January 1992 because had it complied with the 30-day notice, it could have broken the bad
news on 02 January 1992, the first working day of the year. If there is really no best time to announce a
bad news (sic), it wouldnt have mattered if the same was announced at the first working day of the year.
That way, MII could have at least complied with the requirement of the law.xvii[17]
The second issue raised by petitioner merits our consideration.
In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA provisions on closed-shop
and the scope of the bargaining unit in this wise:
xxx xxx xxx.
Appropriateness of the bargaining unit.
xxx xxx xxx.
Exclusions. In our 14 April 1992 resolution, we ruled on the issue of exclusion as follows:
These aside, we reconsider our denial of the modifications which the Union proposes to introduce on the
close shop provision. While we note that the provision as presently worded has served the relationship of
the parties well under previous CBAs, the shift in constitutional policy toward expanding the right of all
workers to self-organization should now be formally recognized by the parties, subject to the following
exclusions only:
1. Managerial employees; and
2. The executive secretaries of the President, Executive Vice-President, Vice-President, Vice President for
Sales, Personnel Manager, and Director for Corporate Planning who may have access to vital labor
relations information or who may otherwise act in a confidential capacity to persons who determine or
formulate management policies.
The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall thus be modified consistently
with the foregoing.
Article I (b) of the 1988-1990 CBA provides:
b)Close Shop. - All Qualified Employees must join the Association immediately upon regularization as a
condition for continued employment. This provision shall not apply to: (i) managerial employees who are
excluded from the scope of the bargaining unit; (ii) the auditors and executive secretaries of senior
executive officers, such as, the President, Executive Vice-President, Vice-President for Finance, Head of
Legal, Vice-President for Sales, who are excluded from membership in the Association; and (iii) those
employees who are referred to in Attachment I hereof, subject, however, to the application of the
provision of Article II, par. (b) hereof. Consequently, the above-specified employees are not required to
join the Association as a condition for their continued employment.
On the other hand, Attachment I provides:
Exclusion from the Scope of the Close Shop Provision
The following positions in the Bargaining Unit are not covered by the Close Shop provision of the CBA
(Article I, par. b):
1. Executive Secretaries of Vice-Presidents, or equivalent positions.
2. Executive Secretary of the Personnel Manager, or equivalent positions.
3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.
4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at Head Office,
Accounting Department at Head Office, and Budget Staff, who because of the nature of their duties and
responsibilities need not join the Association as a condition for their employment.
5. Newly-hired secretaries of Branch Managers and Regional Managers.
Both MDD and MII read the exclusion of managerial employees and executive secretaries in our 14 April
1992 resolution as exclusion from the bargaining unit. They point out that managerial employees are
lumped under one classification with executive secretaries, so that since the former are excluded from the
bargaining unit, so must the latter be likewise excluded.
This reading is obviously contrary to the intent of our 14 April 1992 resolution. By recognizing the
expanded scope of the right to self-organization, our intent was to delimit the types of employees
excluded from the close shop provision, not from the bargaining unit, to executive secretaries only.
Otherwise, the conversion of the exclusionary provision to one that refers to the bargaining unit from one
that merely refers to the close shop provision would effectively curtail all the organizational rights of
executive secretaries.
The exclusion of managerial employees, in accordance with law, must therefore still carry the qualifying
phrase from the bargaining unit in Article I (b)(i) of the 1988-1990 CBA. In the same manner, the
exclusion of executive secretaries should be read together with the qualifying phrase are excluded from
membership in the Association of the same Article and with the heading of Attachment I. The latter
refers to Exclusions from Scope of Close Shop Provision and provides that [t]he following positions in
Bargaining Unit are not covered by the close shop provision of the CBA.
The issue of exclusion has different dimension in the case of MII. In an earlier motion for clarification, MII
points out that it has done away with the positions of Executive Vice-President, Vice-President for Sales,
and Director for Corporate Planning. Thus, the foregoing group of exclusions is no longer appropriate in
its present organizational structure. Nevertheless, there remain MII officer positions for which there may
be executive secretaries. These include the General Manager and members of the Management
Committee, specifically i) the Quality Assurance Manager; ii) the Product Development Manager; iii) the
Finance Director; iv) the Management System Manager; v) the Human Resources Manager; vi) the
Marketing Director; vii) the Engineering Manager; viii) the Materials Manager; and ix) the Production
Manager.
xxx xxx xxx
The basis for the questioned exclusions, it should be noted, is no other than the previous CBA between
MII and the Union. If MII had undergone an organizational restructuring since then, this is a fact to which
we have never been made privy. In any event, had this been otherwise the result would have been the
same. To repeat, we limited the exclusions to recognize the expanded scope of the right to self-
organization as embodied in the Constitution.xviii[18]
Metrolab, however, maintains that executive secretaries of the General Manager and the executive
secretaries of the Quality Assurance Manager, Product Development Manager, Finance Director,
Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager,
Materials Manager and Production Manager, who are all members of the companys Management
Committee should not only be exempted from the closed-shop provision but should be excluded from
membership in the bargaining unit of the rank and file employees as well on grounds that their executive
secretaries are confidential employees, having access to vital labor information.xix[19]
We concur with Metrolab.
Although Article 245 of the Labor Codexx[20] limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly
confidential records.
The rationale behind the exclusion of confidential employees from the bargaining unit of the rank and file
employees and their disqualification to join any labor organization was succinctly discussed in Philips
Industrial Development v. NLRC:xxi[21]
xxx xxx xxx.
On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse of
discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDIs Service
Engineers, Sales Force, division secretaries, all Staff of General Management, Personnel and Industrial
Relations Department, Secretaries of Audit, EDP and Financial Systems are included within the rank and
file bargaining unit.
In the first place, all these employees, with the exception of the service engineers and the sales force
personnel, are confidential employees. Their classification as such is not seriously disputed by PEO-FFW;
the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential
employees. By the very nature of their functions, they assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise managerial functions in the field of labor relations.
As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union
equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:
x x x The rationale for this inhibition has been stated to be, because if these managerial employees would
belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view
of evident conflict of interests. The Union can also become company-dominated with the presence of
managerial employees in Union membership.
In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable to confidential
employees:
This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph
operators, who having access to confidential information, may become the source of undue advantage.
Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is
specially true in the present case where the petitioning Union is already the bargaining agent of the rank-
and-file employees in the establishment. To allow the confidential employees to join the existing Union of
the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this
kind of employees by the nature of their functions/positions are expressly excluded.
xxx xxx xxx.
Similarly, in National Association of Trade Union - Republic Planters Bank Supervisors Chapter v.
Torresxxii[22] we declared:
xxx xxx xxx.
. . . As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers
are confidential employees, having control, custody and/ or access to confidential matters, e.g., the
branchs cash position, statements of financial condition, vault combination, cash codes for telegraphic
transfers, demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank
Manual regarding joint custody, this claim is not even disputed by petitioner. A confidential employee is
one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of
the employers property. While Art. 245 of the Labor Code singles out managerial employees as ineligible
to join, assist or form any labor organization, under the doctrine of necessary, implication, confidential
employees are similarly disqualified. . . .
xxx xxx xxx.
. . .(I)n the collective bargaining process, managerial employees are supposed to be on the side of the
employer, to act as its representatives, and to see to it that its interest are well protected. The employer
is not assured of such protection if these employees themselves are union members. Collective
bargaining in such a situation can become one-sided. It is the same reason that impelled this Court to
consider the position of confidential employees as included in the disqualification found in Art. 245 as if
the disqualification of confidential employees were written in the provision. If confidential employees
could unionize in order to bargain for advantages for themselves, then they could be governed by their
own motives rather than the interest of the employers. Moreover, unionization of confidential employees
for the purpose of collective bargaining would mean the extension of the law to persons or individuals who
are supposed to act in the interest of the employers. It is not farfetched that in the course of collective
bargaining, they might jeopardize that interest which they are duty-bound to protect. . . .
xxx xxx xxx.
And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor,xxiii[23] we
ruled that:
xxx xxx xxx.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically
routinary and clerical. However, they should be differentiated from rank-and-file employees because they
are tasked with, among others, the typing of legal documents, memoranda and correspondence, the
keeping of records and files, the giving of and receiving notices, and such other duties as required by the
legal personnel of the corporation. Legal secretaries therefore fall under the category of confidential
employees. . . .
xxx xxx xxx.
We thus hold that public respondent acted with grave abuse of discretion in not excluding the four
foremen and legal secretary from the bargaining unit composed of rank-and-file employees.
xxx xxx xxx.
In the case at bench, the Union does not disagree with petitioner that the executive secretaries are
confidential employees. It however, makes the following contentions:
xxx xxx xxx.
There would be no danger of company domination of the Union since the confidential employees would not
be members of and would not participate in the decision making processes of the Union.
Neither would there be a danger of espionage since the confidential employees would not have any conflict
of interest, not being members of the Union. In any case, there is always the danger that any employee
would leak management secrets to the Union out of sympathy for his fellow rank and filer even if he were
not a member of the union nor the bargaining unit.
Confidential employees are rank and file employees and they, like all the other rank and file employees,
should be granted the benefits of the Collective Bargaining Agreement. There is no valid basis for
discriminating against them. The mandate of the Constitution and the Labor Code, primarily of protection
to Labor, compels such conclusion.xxiv[24]
xxx xxx xxx.
The Unions assurances fail to convince. The dangers sought to be prevented, particularly the threat of
conflict of interest and espionage, are not eliminated by non-membership of Metrolabs executive
secretaries or confidential employees in the Union. Forming part of the bargaining unit, the executive
secretaries stand to benefit from any agreement executed between the Union and Metrolab. Such a
scenario, thus, gives rise to a potential conflict between personal interests and their duty as confidential
employees to act for and in behalf of Metrolab. They do not have to be union members to affect or
influence either side.
Finally, confidential employees cannot be classified as rank and file. As previously discussed, the nature
of employment of confidential employees is quite distinct from the rank and file, thus, warranting a
separate category. Excluding confidential employees from the rank and file bargaining unit, therefore, is
not tantamount to discrimination.
WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions of public
respondent Secretary of Labor dated 14 April 1992 and 25 January 1993 are hereby MODIFIED to the
extent that executive secretaries of petitioner Metrolabs General Manager and the executive secretaries of
the members of its Management Committee are excluded from the bargaining unit of petitioners rank and
file employees.
SO ORDERED.
61. Baltazar Camporedondo vs National Labor Relations Commission (Digest)
On December 13, 2012
312 SCRA 47 Business Organization Corporation Law Government Owned and Controlled Corporation
vs Private Corporation
Baltazar Camporedondo was the administrator of the Surigao del Norte chapter of the Philippine National
Red Cross (PNRC). In 1995, a PNRC auditor found out that Baltazar had unremitted collections amounting
to P109,000.00. Baltazar, unable to restitute said missing amount, then filed for early retirement. He later
filed a complaint for illegal dismissal against PNRC. He filed the case with the National Labor Relations
Commission (NLRC). He averred that he was forced to retire because of the erroneous audit. The Labor
Arbiter, affirmed by the NLRC, ruled that it has no jurisdiction over the case because PNRC is a
government owned and controlled corporation (GOCC). Baltazar however argues that PNRC impliedly
became a private corporation when its charter was amended to give it authority to secure loans, etc.
ISSUE: Whether or not the Philippine National Red Cross is a private corporation.
HELD: No. The simple test is to find out whether or not a corporation is public or private is to determine if
it has its own charter for the exercise of a public function or was it incorporated under the general
corporation law. PNRC has its own charter (R.A. 95). Its subsequent amendment did not convert it into a
private corporation. As a GOCC, it is subject to its own charter and its employees are under the
jurisdiction of the Civil Service Commission, and are compulsory members of the Government Service
Insurance System.
62. COOPERATIVE RURAL BANK OF DAVAO CITY, INC., v. FERRER-CALLEJA
FIRST DIVISION
G.R. No. 77951 September 26, 1988
COOPERATIVE RURAL BANK OF DAVAO CITY, INC., petitioner,
vs.
PURA FERRER-CALLEJA, DIRECTOR, BUREAU OF LABOR RELATIONS, MOLE, MANILA;
FELIZARDO T. SERAPIO, MED-ARBITER DESIGNATE, REGIONAL OFFICE NO. XI, MOLE, DAVAO
CITY; and FEDERATION OF FREE WORKERS, respondents.
Herbert P. Artes for petitioner.
The Solicitor General for Public respondent.

GANCAYCO, J.:
This is a Petition for certiorari under Rule 65 of the Rules of Court where the issue is whether or not the
employees of a cooperative can organize themselves for purposes of collective bargaining.
The record of the case discloses that the herein petitioner Cooperative Rural Bank of Davao City, Inc. is a
cooperative banking corporation operating in Davao City. It is owned in part by the Government and its
employees are members and co-owners of the same. The petitioner has around 16 rank-and-file
employees. As of August, 1986, there was no existing collective bargaining agreement between the said
employees and the establishment. On the other hand, the herein private respondent Federation of Free
Workers is a labor organization registered with the Department of Labor and Employment. It is interested
in representing the said employees for purposes of collective bargaining.
On August 27, 1986, the private respondent filed with the Davao City Regional Office of the then Ministry
of Labor and Employment a verified Petition for certification election among the rank-and-file employees
of the petitioner.
1
The same was docketed as Case No. R-325 ROXI MED-UR-73-86. On September 18,
1986, the herein public respondent issued an Order granting the Petition for certification election.
On October 3, 1986, the petitioner filed an Appeal Memorandum and sought a reversal of the Order of the
Med-Arbiter.
2
The petitioner argues therein that, among others, a cooperative is not covered by the Rules
governing certification elections inasmuch as it is not an institution operating for profit. The petitioner also
adds that two of the alleged rank-and-file employees seeking the certification election are managerial
employees disqualified from joining concerted labor activities. In sum, the petitioner insists that its
employees are disqualified from forming labor organizations for purposes of collective bargaining.
On October 8, 1986, the private respondent filed a "Motion to Dismiss the Appeal." On October 15, 1986,
the petitioner filed its opposition to the said Motion.
On February 11, 1987, the herein public respondent Bureau of Labor Relations Director Pura Ferrer-Calleja
issued a Resolution affirming the Order of the Med-Arbiter and dismissing the Appeal.
3
The pertinent
portions of the said Resolution are as follows
It is beyond doubt that respondent-appellant, Cooperative Rural Bank of Davao City falls
within the purview of Article 212, paragraph C of the Labor Code, acting as such in the
interest of an employer. To argue otherwise would amount to closing one's eyes to the
realities of today's cooperative banking institutions. ....
Moreover, basic is the right of every worker in any establishment whether operated for
profit or not to organize and engage in concerted activity, mutually beneficial to their
interest. Such right is sacredly enshrined and protected in our fundamental law, granting
every worker the right to organize into a collective group and engage in concerted activities
for purposes of promoting their well being, subject only to such limitations as may be
provided for by law.
xxx xxx xxx
As this Office has consistently ruled and applied in various cases, being a member of a
cooperative organization does not preclude one from forming or joining a labor union
provided that such person or persons are not among those disqualified by law. Nowhere in
the records can we find any piece of evidence showing that the signatories in the petition
are among those disqualified to form or join a union.
Finally, we cannot give credence to (the) employer's allegation that two of the signatories
thereof, are managerial employees, since no evidence showing such fact can be found from
the records.
xxx xxx xxx
In a Motion dated March 2, 1987, the petitioner asked for a reconsideration of the said Resolution.
4
The
petitioner reiterated therein its view that its employees are disqualified from forming the labor
organization so contemplated. The petitioner also called attention to an Opinion rendered by then Solicitor
General and Minister of Justice Estelito P. Mendoza dated August 14, 1981.
5
The Opinion states that
employees of an electric cooperative who are themselves members/co-owners of the same cannot form or
join labor organizations for purposes of collective bargaining. The Opinion also states that the duty to
bargain exists only between an employer and his/its employees, and that an employer has no duty to
bargain with his co-owners of a corporation who are also its employees. The petitioner submits that the
said Opinion calls for application in the present controversy.
On March 26, 1987, director Calleja issued a Resolution denying the reconsideration sought by the
petitioner.
6
Thus, the certification election was scheduled in the morning of April 23, 1987.
Finding the action taken by the Bureau unsatisfactory, the petitioner brought the case directly to this
Court on April 9, 1987 by way of the instant Petition for certiorari. The petitioner maintains that the public
respondents both acted without jurisdiction or in excess thereof, or with grave abuse of discretion
amounting to lack of jurisdiction, in allowing the certification election sought by the private respondent
despite the arguments of the petitioner in opposition thereto. The petitioner reiterates its argument that
employees of cooperatives who are members and co-owners of the same cannot form and join labor
organizations for purposes of collective bargaining.
On April 15, 1987, this Court issued a temporary restraining order enjoining the Bureau of Labor Relations
from proceeding with the certification election scheduled on April 23, 1987.
7
The certification election
nonetheless pushed through as scheduled for the alleged reason that the temporary restraining order was
not seasonably transmitted to Davao City.
8

This court also required the respondents to file their Comment on the Petition. The respondents complied
as instructed. The Office of the Solicitor General represented the public respondents.
The Solicitor General intimated to this Court that the instant Petition has been rendered moot and
academic inasmuch as the certification election sought to be enjoined had already been conducted. The
Solicitor General added that the public respondents did not commit any jurisdictional error.
10

In due time, the parties submitted other pleadings. On January 6, 1988, the case was deemed submitted
for decision.
After a careful examination of the entire record of the case, We find the instant Petition meritorious.
Contrary to the view espoused by the Solicitor General, this case cannot be considered moot and
academic simply because the certification election sought to be enjoined went on as scheduled. The
instant Petition is one for certiorari as a special civil action. Errors of jurisdiction on the part of the public
respondents are alleged in the Petition itself. If the public respondents had indeed committed jurisdictional
errors, the action taken by both the Med-Arbiter and the Bureau Director will be deemed null and void ab
initio.
11
And if this were so, the certification election would, necessarily, have no legal justification. The
arguments raised in the instant Petition strike at the very heart of the validity of the certification election
itself.
We come now to the main aspect of the case.
Article 243 of the Labor Code
12
enumerates who are eligible to form, join, or assist labor organizations for
purposes of collective bargaining, to wit
ART. 243. Coverage and employees' right to self-organization. All persons employed in
commercial, industrial and agricultural enterprises and in religious, charitable, medical or
educational institutions whether operating for profit or not, shall have the right to self-
organization and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining. ....
The recognized exception to this enumeration is found in Article 245 of the same code, which provides for
the ineligibility of managerial employees to join any labor reorganization, viz-
ART. 245. Ineligibility of managerial employees to join any labor organization. Managerial
employees are not eligible to join, assist or form any labor organization.
From the foregoing provisions of law it would appear at first blush that all the rank and file employees of a
cooperative who are not managerial employees are eligible to form, join or assist any labor organization of
their own choosing for the purpose of collective bargaining.
However, under Section 2 of P.D. No. 175, a cooperative is defined to mean "organizations composed
primarily of small producers and of consumers who voluntarily join together to form business enterprises
which they themselves own, control, and patronize." Its creation and growth were declared as a policy of
the State as a means of increasing the income and purchasing power of the low-income sector of the
population in order to attain a more equitable distribution of income and wealth .
13
The principles
governing it are:
a) Open membership"Should be voluntary and available without artificial restriction, or
any social, political, racial or religious discrimination, to all persons who can make use of its
services and are willing to accept responsibilities of membership;"
b) Democratic control."Irrespective of the number of shares owned, each member can
only cast one vote in deciding upon the affairs of the cooperative;"
c) Limited interests to capital. "Share capital shall earn only limited interest, the
maximum rate of interest to be established by the Department of Local Government and
Community Development from time to time;" and
d) Patronage refund "Net income after the interest on capital has been paid shall be
redistributed among the members in proposition to their patronage."
14

While cooperatives may exercise the same rights and privileges given to persons, partnership and
corporations provided under existing laws, operate business enterprises of all kinds, establish rural banks,
enjoy all the privileges and incentives granted by the NACIDA Act and other government agencies to
business organizations under existing laws, to expropriate idle urban or rural lands for its purposes, to
own and dispose of properties, enter into contracts, to sue and be sued and perform other acts necessary
to pursue its objectives,
15
such cooperatives enjoy such privileges as:
a) Exemption from income tax and sales taxes;
b) Preferential right to supply rice, corn and other grains, and other commodities produced by them to
State agencies administering price stabilization program; and
c) In appropriate cases, exemption from application of minimum wage law upon recommendation of the
Bureau of Cooperative Development subject to the approval of the Secretary of Labor.
16

A cooperative development loan fund has been created for the development of the cooperative movement.
17

It may be, further stated that the Department of Local Govemment and Community Development through
the Bureau of Cooperative Development is vested with full authority to promulgate rules and regulations
to cover the promotion, organization, registration, regulation and supervision of all types of cooperatives.
18
Electric cooperatives, however, are under the regulation and supervision of the National Electrification
Ad. Administration,
19
while it is the Monetary Board of the Central Bank that has exclusive responsibility
and authority over the banking functions and operations of cooperative banks .
20

A cooperative, therefore, is by its nature different from an ordinary business concern, being run either by
persons, partnerships, or corporations. Its owners and/or members are the ones who run and operate the
business while the others are its employees. As above stated, irrespective of the number of shares owned
by each member they are entitled to cast one vote each in deciding upon the affairs of the cooperative.
Their share capital earn limited interests. They enjoy special privileges as exemption from income tax
and sales taxes, preferential right to supply their products to State agencies and even exemption from the
minimum wages laws.
An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the
right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners. In the
opinion of August 14, 1981 of the Solicitor General he correctly opined that employees of cooperatives
who are themselves members of the cooperative have no right to form or join labor organizations for
purposes of collective bargaining for being themselves co-owners of the cooperative.
21

However, in so far as it involves cooperatives with employees who are not members or co-owners thereof,
certainly such employees are entitled to exercise the rights of all workers to organization, collective
bargaining, negotiations and others as are enshrined in the Constitution and existing laws of the country.

22

The questioned ruling therefore of public respondent Pura Ferrer-Calleja must be upheld insofar as it
refers to the employees of petitioner who are not members or co-owners of petitioner. It cannot extend to
the other employees who are at the same time its members or co-owners.
The Court upholds the findings of said public respondent that no persuasive evidence has been presented
to show that two of the signatories in the petition for certification election are managerial employees who
under the law are disqualified from pursuing union activities.
WHEREFORE, the herein petition is hereby GRANTED and the resolution of public respondent Pura Ferrer-
Calleja, Director, Bureau of Labor Relations, of February 11, 1987 is hereby MODIFIED to the effect that
only the rank and file employees of petitioner who are not its members or co-owners are entitled to self-
organization, collective bargaining, and negotiations, while the other employees who are members or co-
owners thereof cannot enjoy such right.
SO ORDERED.




THIRD DIVISION
Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of
Civil Procedure seeking to annul and set aside the Decision1[1] and Resolution2[2] of the Court of Appeals
in CA-G.R. SP No. 87236, dated 5 January 2006 and 20 March 2006, respectively, which annulled and set
aside the Orders of the Social Security Commission (SSC) in SSC Case No. 6-15507-03, dated 17
February 20043[3] and 16 September 2004,4[4] respectively, thereby dismissing the petition-complaint
dated 12 June 2003 filed by herein petitioner Social Security System (SSS) against herein respondent.
Herein petitioner Republic of the Philippines is represented by the SSC, a quasi-judicial body
authorized by law to resolve disputes arising under Republic Act No. 1161, as amended by Republic Act
No. 8282.5[5] Petitioner SSS is a government corporation created by virtue of Republic Act No. 1161, as
amended. On the other hand, herein respondent Asiapro Cooperative (Asiapro) is a multi-purpose
cooperative created pursuant to Republic Act No. 69386[6] and duly registered with the Cooperative
Development Authority (CDA) on 23 November 1999 with Registration Certificate No. 0-623-2460.7[7]















63. REPUBLIC OF THE PHILIPPINES,
represented by the SOCIAL SECURITY
COMMISSION and SOCIAL SECURITY
SYSTEM v. ASIAPRO COOPERATIVE

The antecedents of this case are as follows:Respondent Asiapro, as a cooperative, is composed of
owners-members. Under its by-laws, owners-members are of two categories, to wit: (1) regular member,
who is entitled to all the rights and privileges of membership; and (2) associate member, who has no right
to vote and be voted upon and shall be entitled only to such rights and privileges provided in its by-
laws.8[8] Its primary objectives are to provide savings and credit facilities and to develop other livelihood
services for its owners-members. In the discharge of the aforesaid primary objectives, respondent
cooperative entered into several Service Contracts9[9] with Stanfilco - a division of DOLE Philippines, Inc.
and a company based in Bukidnon. The owners-members do not receive compensation or wages from the
respondent cooperative. Instead, they receive a share in the service surplus10[10] which the respondent
cooperative earns from different areas of trade it engages in, such as the income derived from the said
Service Contracts with Stanfilco. The owners-members get their income from the service surplus
generated by the quality and amount of services they rendered, which is determined by the Board of
Directors of the respondent cooperative.
In order to enjoy the benefits under the Social Security Law of 1997, the owners-members of the
respondent cooperative, who were assigned to Stanfilco requested the services of the latter to register
them with petitioner SSS as self-employed and to remit their contributions as such. Also, to comply with
Section 19-A of Republic Act No. 1161, as amended by Republic Act No. 8282, the SSS contributions of
the said owners-members were equal to the share of both the employer and the employee.
On 26 September 2002, however, petitioner SSS through its Vice-President for Mindanao Division,
Atty. Eddie A. Jara, sent a letter11[11] to the respondent cooperative, addressed to its Chief Executive
Officer (CEO) and General Manager Leo G. Parma, informing the latter that based on the Service Contracts
it executed with Stanfilco, respondent cooperative is actually a manpower contractor supplying employees
to Stanfilco and for that reason, it is an employer of its owners-members working with Stanfilco. Thus,
respondent cooperative should register itself with petitioner SSS as an employer and make the
corresponding report and remittance of premium contributions in accordance with the Social Security Law
of 1997. On 9 October 2002,12[12] respondent cooperative, through its counsel, sent a reply to
petitioner SSSs letter asserting that it is not an employer because its owners-members are the
cooperative itself; hence, it cannot be its own employer. Again, on 21 October 2002,13[13] petitioner
SSS sent a letter to respondent cooperative ordering the latter to register as an employer and report its
owners-members as employees for compulsory coverage with the petitioner SSS. Respondent cooperative
continuously ignored the demand of petitioner SSS.













Accordingly, petitioner SSS, on 12 June 2003, filed a Petition14[14] before petitioner SSC against
the respondent cooperative and Stanfilco praying that the respondent cooperative or, in the alternative,
Stanfilco be directed to register as an employer and to report respondent cooperatives owners-members
as covered employees under the compulsory coverage of SSS and to remit the necessary contributions in
accordance with the Social Security Law of 1997. The same was docketed as SSC Case No. 6-15507-03.
Respondent cooperative filed its Answer with Motion to Dismiss alleging that no employer-employee
relationship exists between it and its owners-members, thus, petitioner SSC has no jurisdiction over the
respondent cooperative. Stanfilco, on the other hand, filed an Answer with Cross-claim against the
respondent cooperative.
On 17 February 2004, petitioner SSC issued an Order denying the Motion to Dismiss filed by the
respondent cooperative. The respondent cooperative moved for the reconsideration of the said Order, but
it was likewise denied in another Order issued by the SSC dated 16 September 2004.
Intending to appeal the above Orders, respondent cooperative filed a Motion for Extension of Time
to File a Petition for Review before the Court of Appeals. Subsequently, respondent cooperative filed a
Manifestation stating that it was no longer filing a Petition for Review. In its place, respondent
cooperative filed a Petition for Certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 87236,
with the following assignment of errors:

I. The Orders dated 17 February 2004 and 16 September 2004 of [herein
petitioner] SSC were issued with grave abuse of discretion amounting to a (sic) lack
or excess of jurisdiction in that:

A. [Petitioner] SSC arbitrarily proceeded with the case as if it has
jurisdiction over the petition a quo, considering that it failed to first
resolve the issue of the existence of an employer-employee
relationship between [respondent] cooperative and its owners-
members.
B. While indeed, the [petitioner] SSC has jurisdiction over all
disputes arising under the SSS Law with respect to coverage, benefits,
contributions, and related matters, it is respectfully submitted that
[petitioner] SSC may only assume jurisdiction in cases where there is
no dispute as to the existence of an employer-employee relationship.
C. Contrary to the holding of the [petitioner] SSC, the legal issue
of employer-employee relationship raised in [respondents] Motion to
Dismiss can be preliminarily resolved through summary hearings prior
to the hearing on the merits. However, any inquiry beyond a
preliminary determination, as what [petitioner SSC] wants to
accomplish, would be to encroach on the jurisdiction of the National
Labor Relations Commission [NLRC], which is the more competent
body clothed with power to resolve issues relating to the existence of
an employment relationship.

II. At any rate, the [petitioner] SSC has no jurisdiction
to take cognizance of the petition a quo.

A. [Respondent] is not an employer within the contemplation of
the Labor Law but is a multi-purpose cooperative created pursuant to
Republic Act No. 6938 and composed of owners-members, not
employees.
B. The rights and obligations of the owners-members of
[respondent] cooperative are derived from their Membership
Agreements, the Cooperatives By-Laws, and Republic Act No. 6938,
and not from any contract of employment or from the Labor Laws.
Moreover, said owners-members enjoy rights that are not consistent



with being mere employees of a company, such as the right to
participate and vote in decision-making for the cooperative.
C. As found by the Bureau of Internal Revenue [BIR], the owners-
members of [respondent] cooperative are not paid any compensation
income.15[15] (Emphasis supplied.)
On 5 January 2006, the Court of Appeals rendered a Decision granting the petition
filed by the respondent cooperative. The decretal portion of the Decision reads:
WHEREFORE, the petition is GRANTED. The assailed Orders dated [17 February 2004] and [16
September 2004], are ANNULLED and SET ASIDE and a new one is entered DISMISSING the petition-
complaint dated [12 June 2003] of [herein petitioner] Social Security System.16[16]
Aggrieved by the aforesaid Decision, petitioner SSS moved for a reconsideration, but it was denied
by the appellate court in its Resolution dated 20 March 2006.
Hence, this Petition.
In its Memorandum, petitioners raise the issue of whether or not the Court of Appeals erred in
not finding that the SSC has jurisdiction over the subject matter and it has a valid basis in
denying respondents Motion to Dismiss. The said issue is supported by the following arguments:

I. The [petitioner SSC] has jurisdiction over the petition-
complaint filed before it by the [petitioner SSS] under R.A. No. 8282.

II. Respondent [cooperative] is estopped from questioning
the jurisdiction of petitioner SSC after invoking its jurisdiction by filing an
[A]nswer with [M]otion to [D]ismiss before it.

III. The [petitioner SSC] did not act with grave abuse of
discretion in denying respondent [cooperatives] [M]otion to [D]ismiss.

IV. The existence of an employer-employee relationship is a
question of fact where presentation of evidence is necessary.

V. There is an employer-employee relationship between
[respondent cooperative] and its [owners-members].
Petitioners claim that SSC has jurisdiction over the petition-complaint filed before it by
petitioner SSS as it involved an issue of whether or not a worker is entitled to compulsory coverage
under the SSS Law. Petitioners avow that Section 5 of Republic Act No. 1161, as amended by
Republic Act No. 8282, expressly confers upon petitioner SSC the power to settle disputes on
compulsory coverage, benefits, contributions and penalties thereon or any other matter related
thereto. Likewise, Section 9 of the same law clearly provides that SSS coverage is compulsory
upon all employees. Thus, when petitioner SSS filed a petition-complaint against the respondent
cooperative and Stanfilco before the petitioner SSC for the compulsory coverage of respondent
cooperatives owners-members as well as for collection of unpaid SSS contributions, it was very
obvious that the subject matter of the aforesaid petition-complaint was within the expertise and
jurisdiction of the SSC.





Petitioners similarly assert that granting arguendo that there is a prior need to determine the
existence of an employer-employee relationship between the respondent cooperative and its owners-
members, said issue does not preclude petitioner SSC from taking cognizance of the aforesaid petition-
complaint. Considering that the principal relief sought in the said petition-complaint has to be resolved by
reference to the Social Security Law and not to the Labor Code or other labor relations statutes, therefore,
jurisdiction over the same solely belongs to petitioner SSC.
Petitioners further claim that the denial of the respondent cooperatives Motion to Dismiss
grounded on the alleged lack of employer-employee relationship does not constitute grave abuse of
discretion on the part of petitioner SSC because the latter has the authority and power to deny the same.
Moreover, the existence of an employer-employee relationship is a question of fact where presentation of
evidence is necessary. Petitioners also maintain that the respondent cooperative is already estopped from
assailing the jurisdiction of the petitioner SSC because it has already filed its Answer before it, thus,
respondent cooperative has already submitted itself to the jurisdiction of the petitioner SSC.
Finally, petitioners contend that there is an employer-employee relationship between the
respondent cooperative and its owners-members. The respondent cooperative is the employer of its
owners-members considering that it undertook to provide services to Stanfilco, the performance of which
is under the full and sole control of the respondent cooperative.
On the other hand, respondent cooperative alleges that its owners-members own the cooperative,
thus, no employer-employee relationship can arise between them. The persons of the employer and the
employee are merged in the owners-members themselves. Likewise, respondent cooperatives owners-
members even requested the respondent cooperative to register them with the petitioner SSS as self-
employed individuals. Hence, petitioner SSC has no jurisdiction over the petition-complaint filed before it
by petitioner SSS.
Respondent cooperative further avers that the Court of Appeals correctly ruled that petitioner SSC
acted with grave abuse of discretion when it assumed jurisdiction over the petition-complaint without
determining first if there was an employer-employee relationship between the respondent cooperative and
its owners-members. Respondent cooperative claims that the question of whether an employer-employee
relationship exists between it and its owners-members is a legal and not a factual issue as the facts are
undisputed and need only to be interpreted by the applicable law and jurisprudence.
Lastly, respondent cooperative asserts that it cannot be considered estopped from assailing the
jurisdiction of petitioner SSC simply because it filed an Answer with Motion to Dismiss, especially where
the issue of jurisdiction is raised at the very first instance and where the only relief being sought is the
dismissal of the petition-complaint for lack of jurisdiction.
From the foregoing arguments of the parties, the issues may be summarized into:

I. Whether the petitioner SSC has jurisdiction over the
petition-complaint filed before it by petitioner SSS against the respondent
cooperative.

II. Whether the respondent cooperative is estopped from
assailing the jurisdiction of petitioner SSC since it had already filed an
Answer with Motion to Dismiss before the said body.
Petitioner SSCs jurisdiction is clearly stated in Section 5 of Republic Act No. 8282 as well as
in Section 1, Rule III of the 1997 SSS Revised Rules of Procedure.
Section 5 of Republic Act No. 8282 provides:
SEC. 5. Settlement of Disputes. (a) Any dispute arising under this Act with respect to
coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be
cognizable by the Commission, x x x. (Emphasis supplied.)

Similarly, Section 1, Rule III of the 1997 SSS Revised Rules of Procedure states:
Section 1. Jurisdiction. Any dispute arising under the Social Security Act with respect to
coverage, entitlement of benefits, collection and settlement of contributions and penalties thereon, or
any other matter related thereto, shall be cognizable by the Commission after the SSS through its
President, Manager or Officer-in-charge of the Department/Branch/Representative Office concerned had
first taken action thereon in writing. (Emphasis supplied.)

It is clear then from the aforesaid provisions that any issue regarding the compulsory
coverage of the SSS is well within the exclusive domain of the petitioner SSC. It is
important to note, though, that the mandatory coverage under the SSS Law is premised on
the existence of an employer-employee relationship17[17] except in cases of compulsory
coverage of the self-employed.
It is axiomatic that the allegations in the complaint, not the defenses set up in the
Answer or in the Motion to Dismiss, determine which court has jurisdiction over an action;
otherwise, the question of jurisdiction would depend almost entirely upon the defendant.18[18]
Moreover, it is well-settled that once jurisdiction is acquired by the court, it remains with it until the full
termination of the case.19[19] The said principle may be applied even to quasi-judicial bodies.
In this case, the petition-complaint filed by the petitioner SSS before the petitioner SSC against the
respondent cooperative and Stanfilco alleges that the owners-members of the respondent cooperative are
subject to the compulsory coverage of the SSS because they are employees of the respondent
cooperative. Consequently, the respondent cooperative being the employer of its owners-members must
register as employer and report its owners-members as covered members of the SSS and remit the
necessary premium contributions in accordance with the Social Security Law of 1997. Accordingly, based
on the aforesaid allegations in the petition-complaint filed before the petitioner SSC, the case clearly falls
within its jurisdiction. Although the Answer with Motion to Dismiss filed by the respondent cooperative
challenged the jurisdiction of the petitioner SSC on the alleged lack of employer-employee relationship
between itself and its owners-members, the same is not enough to deprive the petitioner SSC of its
jurisdiction over the petition-complaint filed before it. Thus, the petitioner SSC cannot be faulted for
initially assuming jurisdiction over the petition-complaint of the petitioner SSS.
Nonetheless, since the existence of an employer-employee relationship between the respondent
cooperative and its owners-members was put in issue and considering that the compulsory coverage of
the SSS Law is predicated on the existence of such relationship, it behooves the petitioner SSC to
determine if there is really an employer-employee relationship that exists between the respondent
cooperative and its owners-members.







The question on the existence of an employer-employee relationship is not within the exclusive
jurisdiction of the National Labor Relations Commission (NLRC). Article 217 of the Labor Code
enumerating the jurisdiction of the Labor Arbiters and the NLRC provides that:
ART. 217. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. - (a) x x x.

x x x x

6. Except claims for Employees Compensation, Social Security, Medicare
and maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with
a claim for reinstatement.20[20]


Although the aforesaid provision speaks merely of claims for Social Security, it would necessarily
include issues on the coverage thereof, because claims are undeniably rooted in the coverage by the
system. Hence, the question on the existence of an employer-employee relationship for the purpose of
determining the coverage of the Social Security System is explicitly excluded from the jurisdiction of
the NLRC and falls within the jurisdiction of the SSC which is primarily charged with the duty of settling
disputes arising under the Social Security Law of 1997.
On the basis thereof, considering that the petition-complaint of the petitioner SSS involved the
issue of compulsory coverage of the owners-members of the respondent cooperative, this Court agrees
with the petitioner SSC when it declared in its Order dated 17 February 2004 that as an incident to the
issue of compulsory coverage, it may inquire into the presence or absence of an employer-employee
relationship without need of waiting for a prior pronouncement or submitting the issue to the NLRC for
prior determination. Since both the petitioner SSC and the NLRC are independent bodies and their
jurisdiction are well-defined by the separate statutes creating them, petitioner SSC has the authority to
inquire into the relationship existing between the worker and the person or entity to whom he renders
service to determine if the employment, indeed, is one that is excepted by the Social Security Law of 1997
from compulsory coverage.21[21]
Even before the petitioner SSC could make a determination of the existence of an employer-employee
relationship, however, the respondent cooperative already elevated the Order of the petitioner SSC,
denying its Motion to Dismiss, to the Court of Appeals by filing a Petition for Certiorari. As a consequence
thereof, the petitioner SSC became a party to the said Petition for Certiorari pursuant to Section
5(b)22[22] of Republic Act No. 8282. The appellate court ruled in favor of the respondent cooperative by
declaring that the petitioner SSC has no jurisdiction over the petition-complaint filed before it because
there was no employer-employee relationship between the respondent cooperative and its owners-
members. Resultantly, the petitioners SSS and SSC, representing the Republic of the Philippines, filed a
Petition for Review before this Court.







Although as a rule, in the exercise of the Supreme Courts power of review, the Court is not a trier
of facts and the findings of fact of the Court of Appeals are conclusive and binding on the Court,23[23]
said rule is not without exceptions. There are several recognized exceptions24[24] in which factual issues
may be resolved by this Court. One of these exceptions finds application in this present case which is,
when the findings of fact are conflicting. There are, indeed, conflicting findings espoused by the petitioner
SSC and the appellate court relative to the existence of employer-employee relationship between the
respondent cooperative and its owners-members, which necessitates a departure from the oft-repeated
rule that factual issues may not be the subject of appeals to this Court.
In determining the existence of an employer-employee relationship, the following elements are
considered: (1) the selection and engagement of the workers; (2) the payment of wages by whatever
means; (3) the power of dismissal; and (4) the power to control the workers conduct, with the latter
assuming primacy in the overall consideration.25[25] The most important element is the employers
control of the employees conduct, not only as to the result of the work to be done, but also as
to the means and methods to accomplish.26[26] The power of control refers to the existence of the
power and not necessarily to the actual exercise thereof. It is not essential for the employer to actually
supervise the performance of duties of the employee; it is enough that the employer has the right to wield
that power.27[27] All the aforesaid elements are present in this case.
First. It is expressly provided in the Service Contracts that it is the respondent cooperative which
has the exclusive discretion in the selection and engagement of the owners-members as well as
its team leaders who will be assigned at Stanfilco.28[28] Second. Wages are defined as
remuneration or earnings, however designated, capable of being expressed in terms of money,
whether fixed or ascertained, on a time, task, piece or commission basis, or other method of calculating
the same, which is payable by an employer to an employee under a written or unwritten contract
of employment for work done or to be done, or for service rendered or to be rendered.29[29]
In this case, the weekly stipends or the so-called shares in the service surplus given by the respondent
cooperative to itsowners-members were in reality wages, as the same were equivalent to an amount not
lower than that prescribed by existing labor laws, rules and regulations, including the wage order
applicable to the area and industry; or the same shall not be lower than the prevailing rates of















wages.30[30] It cannot be doubted then that those stipends or shares in the service surplus are indeed
wages, because these are given to the owners-members as compensation in rendering services to
respondent cooperatives client, Stanfilco. Third. It is also stated in the above-mentioned Service
Contracts that it is the respondent cooperative which has the power to investigate, discipline and
remove the owners-members and its team leaders who were rendering services at Stanfilco.31[31]
Fourth. As earlier opined, of the four elements of the employer-employee relationship, the control test
is the most important. In the case at bar, it is the respondent cooperative which has the sole
control over the manner and means of performing the services under the Service Contracts
with Stanfilco as well as the means and methods of work.32[32] Also, the respondent cooperative
is solely and entirely responsible for its owners-members, team leaders and other representatives at
Stanfilco.33[33] All these clearly prove that, indeed, there is an employer-employee relationship between
the respondent cooperative and its owners-members.
It is true that the Service Contracts executed between the respondent cooperative and Stanfilco
expressly provide that there shall be no employer-employee relationship between the respondent
cooperative and its owners-members.34[34] This Court, however, cannot give the said provision force
and effect.
As previously pointed out by this Court, an employee-employer relationship actually exists between
the respondent cooperative and its owners-members. The four elements in the four-fold test for the
existence of an employment relationship have been complied with. The respondent cooperative must not
be allowed to deny its employment relationship with its owners-members by invoking the questionable
Service Contracts provision, when in actuality, it does exist. The existence of an employer-employee
relationship cannot be negated by expressly repudiating it in a contract, when the terms and
surrounding circumstances show otherwise. The employment status of a person is defined and
prescribed by law and not by what the parties say it should be.35[35]
It is settled that the contracting parties may establish such stipulations, clauses, terms and
conditions as they want, and their agreement would have the force of law between them. However, the
agreed terms and conditions must not be contrary to law, morals, customs, public policy or
public order.36[36] The Service Contract provision in question must be struck down for being contrary
to law and public policy since it is apparently being used by the respondent cooperative merely to















circumvent the compulsory coverage of its employees, who are also its owners-members, by the Social
Security Law.
This Court is not unmindful of the pronouncement it made in Cooperative Rural Bank of Davao City,
Inc. v. Ferrer-Calleja37[37] wherein it held that:

A cooperative, therefore, is by its nature different from an ordinary business
concern, being run either by persons, partnerships, or corporations. Its owners and/or
members are the ones who run and operate the business while the others are its employees
x x x.

An employee therefore of such a cooperative who is a member and co-
owner thereof cannot invoke the right to collective bargaining for certainly an
owner cannot bargain with himself or his co-owners. In the opinion of August 14,
1981 of the Solicitor General he correctly opined that employees of cooperatives who are
themselves members of the cooperative have no right to form or join labor organizations for
purposes of collective bargaining for being themselves co-owners of the cooperative.

However, in so far as it involves cooperatives with employees who are not members
or co-owners thereof, certainly such employees are entitled to exercise the rights of all
workers to organization, collective bargaining, negotiations and others as are enshrined in
the Constitution and existing laws of the country.


The situation in the aforesaid case is very much different from the present case. The declaration
made by the Court in the aforesaid case was made in the context of whether an employee who is also an
owner-member of a cooperative can exercise the right to bargain collectively with the employer who is the
cooperative wherein he is an owner-member. Obviously, an owner-member cannot bargain collectively
with the cooperative of which he is also the owner because an owner cannot bargain with himself. In the
instant case, there is no issue regarding an owner-members right to bargain collectively with the
cooperative. The question involved here is whether an employer-employee relationship can exist between
the cooperative and an owner-member. In fact, a closer look at Cooperative Rural Bank of Davao City,
Inc. will show that it actually recognized that an owner-member of a cooperative can be its own employee.
It bears stressing, too, that a cooperative acquires juridical personality upon its registration with
the Cooperative Development Authority.38[38] It has its Board of Directors, which directs and supervises
its business; meaning, its Board of Directors is the one in charge in the conduct and management of its
affairs.39[39] With that, a cooperative can be likened to a corporation with a personality separate and
distinct from its owners-members. Consequently, an owner-member of a cooperative can be an employee
of the latter and an employer-employee relationship can exist between them.

In the present case, it is not disputed that the respondent cooperative had registered itself with the
Cooperative Development Authority, as evidenced by its Certificate of Registration No. 0-623-2460.40[40]








In its by-laws,41[41] its Board of Directors directs, controls, and supervises the business and manages
the property of the respondent cooperative. Clearly then, the management of the affairs of the
respondent cooperative is vested in its Board of Directors and not in its owners-members as a whole.
Therefore, it is completely logical that the respondent cooperative, as a juridical person represented by its
Board of Directors, can enter into an employment with its owners-members.
In sum, having declared that there is an employer-employee relationship between the respondent
cooperative and its owners-member, we conclude that the petitioner SSC has jurisdiction over the
petition-complaint filed before it by the petitioner SSS. This being our conclusion, it is no longer
necessary to discuss the issue of whether the respondent cooperative was estopped from assailing the
jurisdiction of the petitioner SSC when it filed its Answer with Motion to Dismiss.
WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The Decision and
the Resolution of the Court of Appeals in CA-G.R. SP No. 87236, dated 5 January 2006 and 20 March
2006, respectively, are hereby REVERSED and SET ASIDE. The Orders of the petitioner SSC dated 17
February 2004 and 16 September 2004 are hereby REINSTATED. The petitioner SSC is hereby
DIRECTED to continue hearing the petition-complaint filed before it by the petitioner SSS as regards the
compulsory coverage of the respondent cooperative and its owners-members. No costs.
SO ORDERED.
64. ICMC v. CALLEJA (Digest)

Kapisanan ng Manggagawa at TAC sa IRRI vs Sec of Labor andEmployment

Facts:

ICMC case:
o
After the Vietnam War, Vietnamese refugees started fleeing fromSouth Vietnam to other countries. The
Philippine Government and theUnited Nations High Commissioner for Refugees forged an
agreementwhereby an operating center for processing Indo-Chinese refugees foreventual resettlement to
other countries was to be established inBataan. ICMC was one of those accredited by the
PhilippineGovernment to operate the processing center in Bataan. It is a non-profit agency involved in
international humanitarian and voluntarywork, enjoys Consultative Status Category II, it is an
internationalorganization rendering voluntary and humanitarian services in thePhilippines.
o
The Trade Unions of the Philippines and Allied Services (TUPAS) filedwith the Ministry of Labor and
Employment a Petition for CertificationElection among the rank and file employed members of ICMC.
ICMCopposed because it was an international organization registered withthe UN and enjoys diplomatic
immunity.
o
Med-Arbiter: dismissed petition. Director Calleja of Bureau of LaborRelations reversed Med-Arbiter's
decision and ordered the immediateconduct of a certification election. At that time, ICMC's request
forrecognition as a specialized agency was still pending with DFA, but waslater granted, with
corresponding diplomatic privileges and immunities.ICMC sought the immediate dismissal of the petition
for certificationelection, but was denied.
o
ICMC filed petition for certiorari with preliminary injunction. SC: issued TRO on the certification election

IRRI case:
o
The Philippine Government and the Ford and Rockefeller Foundationssigned a memorandum of understanding
establishing the InternationalRice Research Institute (IRRA), to be an autonomous, philanthropic,tax-free,
non-profit, non-stock organization designed to carry out theprincipal objective of conducting basic
research on the rice plant, on allphases of rice production, management, distribution and utilizationwith a
view to attaining nutritive and economic advantage or benefitfor the people of Asia and other major rice-
growing areas throughimprovement in quality and quantity of rice.
o




Initially, it was organized and registered with the SEC as a privatecorporation subject to all laws and
regulations. However, it wasgranted the status, prerogatives, privileges and immunities of aninternational
organization by PD 1620.
o
The Organized Labor Association in Line Industries and Agriculture(OLALIA) is a legitimate labor
organization with an existing local union,the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan).
o
Kapisanan filed a petition for direct certification election. IRRI opposeddue to it having the status of an
international organization which grants it immunity from all civil, criminal, and administrativeproceedings
under Philippine laws.
o
Med-Arbiter: dismissed petition for direct election. BLR Director Callejareversed Med-Arbiter's decision and
called for a certification electionamong the rank and file employees of IRRI. The Secretary of Labor
setaside Calleja's decision.

Issue:- Whether or not the grant of diplomatic privileges and immunities extends toimmunity from the
application of Philippine labor laws

Held:- Yes. Diplomatic Immunity has been granted to both ICMC and IRRI. For ICMC, Article 3Section 4 of
the Convention on the Privileges and Immunities of SpecializedAgencies states that specialized agencies
like ICMC shall enjoy immunity from everyform of legal process except insofar as in any particular case
they have expresslywaived their immunity. Their property and assets shall be immune from
searc,requisition, confiscation, expropriation and any other form of interference. For IRRI,Article 3 of PD
1620 likewise states that it shall enjoy immunity from any penal, civiland administrative proceedings,
except where it has expressly waived its immunity. The objective in granting these immunities is to avoid
the danger of partiality and interference by the host country in their internal workings, and to shield the
affairsof international organizations from political pressure or control by the host countryto the prejudice
of the member States of the organization and to ensure theunhampered performance of their functions.
The exercise of jurisdiction by the Department of Labor defeats this purpose. This immunity does not
deprive labor of its basic rights as both ICMC and IRRI havetheir own modes of protecting the rights of
those employed by them. For ICMC, the Government is given the discretion to withdraw their immunities
and privileges if there has been abuse of those privileges granted. For IRRI, there is the formation of the
Council of IRRI Employees and Management (CIEM), wherein both managementand employees are
represented, for the purpose of maintaining mutual andbeneficial cooperation between IRRI and its
employees.It is inaccurate to state that a certification election is beyond the scope of thatimmunity as it is
not a suit against ICMC because a certification election should notbe viewed as an isolated event but one
that could trigger a series of events in theprocess of collective bargaining which could inevitably involve
both organizations inthe legal process/proceedings.ICMC case: TRO on the certification election is made
permanent. IRRI case: petition dismissed, decision of the Secretary of Labor affirmed.

66. THE HERITAGE HOTEL MANILA, acting through its owner, GRAND PLAZA HOTEL
CORPORATION, Petitioner, v. NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND
ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC),
Respondent.
D E C I S I O N
Before the Court is a petition for review on certiorari of the Decision
1
cof the Court of Appeals (CA) dated
May 30, 2005 and Resolution dated June 4, 2007. The assailed Decision affirmed the dismissal of a
petition for cancellation of union registration filed by petitioner, Grand Plaza Hotel Corporation, owner of
Heritage Hotel Manila, against respondent, National Union of Workers in the Hotel, Restaurant and Allied
Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC), a labor organization of the
supervisory employees of Heritage Hotel Manila.
The case stemmed from the following antecedents: chanrob1esvirtwallawlibrary
On October 11, 1995, respondentfiled with the Department of Labor and Employment-National Capital
Region (DOLE-NCR) a petition for certification election.
2
cralaw The Med-Arbiter granted the petition on
February 14, 1996 and ordered the holding of a certification election.
3
cralaw On appeal, the DOLE
Secretary, in a Resolution dated August 15, 1996, affirmed the Med-Arbiter's order and remanded the
case to the Med-Arbiter for the holding of a preelection conference on February 26, 1997. Petitioner filed a
motion for reconsideration, but it was denied on September 23, 1996.
The preelection conference was not held as initially scheduled; it was held a year later, or on February 20,
1998. Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of
respondent. The latter agreed to suspend proceedings until further notice. The preelection conference
resumed on January 29, 2000.
Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations
(BLR) its annual financial report for several years and the list of its members since it filed its registration
papers in 1995. Consequently, on May 19, 2000, petitioner filed a Petition for Cancellation of Registration
of respondent, on the ground of the non-submission of the said documents. Petitioner prayed that
respondent's Certificate of Creation of Local/Chapter be cancelled and its name be deleted from the list of
legitimate labor organizations. It further requested the suspension of the certification election
proceedings.
4
cralawredlaw
On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or Suspend the
[Certification Election] Proceedings,
5
cralaw arguing that the dismissal or suspension of the proceedings is
warranted, considering that the legitimacy of respondent is seriously being challenged in the petition for
cancellation of registration. Petitioner maintained that the resolution of the issue of whether respondent is
a legitimate labor organization is crucial to the issue of whether it may exercise rights of a legitimate labor
organization, which include the right to be certified as the bargaining agent of the covered employees.
Nevertheless, the certification election pushed through on June 23, 2000. Respondent emerged as the
winner.
6
cralawredlaw
On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of Election Results and
Winner,
7
cralaw stating that the certification election held on June 23, 2000 was an exercise in futility
because, once respondent's registration is cancelled, it would no longer be entitled to be certified as the
exclusive bargaining agent of the supervisory employees. Petitioner also claimed that some of
respondent's members were not qualified to join the union because they were either confidential
employees or managerial employees. It then prayed that the certification of the election results and
winner be deferred until the petition for cancellation shall have been resolved, and that respondent's
members who held confidential or managerial positions be excluded from the supervisors' bargaining unit.
Meanwhile, respondent filed its Answer
8
cralaw to the petition for the cancellation of its registration. It
averred that the petition was filed primarily to delay the conduct of the certification election, the
respondent's certification as the exclusive bargaining representative of the supervisory employees, and
the commencement of bargaining negotiations. Respondent prayed for the dismissal of the petition for the
following reasons: (a) petitioner is estopped from questioning respondent's status as a legitimate labor
organization as it had already recognized respondent as such during the preelection conferences; (b)
petitioner is not the party-in-interest, as the union members are the ones who would be disadvantaged by
the non-submission of financial reports; (c) it has already complied with the reportorial requirements,
having submitted its financial statements for 1996, 1997, 1998, and 1999, its updated list of officers, and
its list of members for the years 1995, 1996, 1997, 1998, and 1999; (d) the petition is already moot and
academic, considering that the certification election had already been held, and the members had
manifested their will to be represented by respondent.
Citing National Union of Bank Employees v. Minister of Labor, et al.
9
cralaw andSamahan ng Manggagawa
sa Pacific Plastic v. Hon. Laguesma,
10
cralaw the Med-Arbiter held that the pendency of a petition for
cancellation of registration is not a bar to the holding of a certification election. Thus, in an Order
11
cralaw
dated January 26, 2001, the Med-Arbiter dismissed petitioner's protest, and certified respondent as the
sole and exclusive bargaining agent of all supervisory employees.
Petitioner subsequently appealed the said Order to the DOLE Secretary.
12
cralaw The appeal was later
dismissed by DOLE Secretary Patricia A. Sto. Tomas (DOLE Secretary Sto. Tomas) in the Resolution of
August 21, 2002.
13
cralaw Petitioner moved for reconsideration, but the motion was also
denied.
14
cralawredlaw
In the meantime, Regional Director Alex E. Maraan (Regional Director Maraan) of DOLE-NCR finally
resolved the petition for cancellation of registration. While finding that respondent had indeed failed to file
financial reports and the list of its members for several years, he, nonetheless, denied the petition,
ratiocinating that freedom of association and the employees' right to self-organization are more
substantive considerations. He took into account the fact that respondent won the certification election
and that it had already been certified as the exclusive bargaining agent of the supervisory employees. In
view of the foregoing, Regional Director Maraan-while emphasizing that the non-compliance with the law
is not viewed with favor-considered the belated submission of the annual financial reports and the list of
members as sufficient compliance thereof and considered them as having been submitted on time. The
dispositive portion of the decision
15
cralaw dated December 29, 2001 reads: chanrob1esvirtwallawlibrary
WHEREFORE, premises considered, the instant petition to delist the National Union of Workers in the
Hotel, Restaurant and Allied Industries-Heritage Hotel Manila Supervisors Chapter from the roll of
legitimate labor organizations is hereby DENIED.
SO ORDERED.
16
cralawredlaw
Aggrieved, petitioner appealed the decision to the BLR.
17
cralaw BLR Director Hans Leo Cacdac inhibited
himself from the case because he had been a former counsel of respondent.
In view of Director Cacdac's inhibition, DOLE Secretary Sto. Tomas took cognizance of the appeal. In a
resolution
18
cralaw dated February 21, 2003, she dismissed the appeal, holding that the constitutionally
guaranteed freedom of association and right of workers to self-organization outweighed respondent's
noncompliance with the statutory requirements to maintain its status as a legitimate labor organization.
Petitioner filed a motion for reconsideration,
19
cralaw but the motion was likewise denied in a
resolution
20
cralaw dated May 30, 2003. DOLE Secretary Sto. Tomas admitted that it was the BLR which
had jurisdiction over the appeal, but she pointed out that the BLR Director had voluntarily inhibited
himself from the case because he used to appear as counsel for respondent. In order to maintain the
integrity of the decision and of the BLR, she therefore accepted the motion to inhibit and took cognizance
of the appeal.
Petitioner filed a petition for certiorari with the CA, raising the issue of whether the DOLE Secretary acted
with grave abuse of discretion in taking cognizance of the appeal and affirming the dismissal of its petition
for cancellation of respondent's registration.
In a Decision dated May 30, 2005, the CA denied the petition. The CA opined that the DOLE Secretary
may legally assume jurisdiction over an appeal from the decision of the Regional Director in the event that
the Director of the BLR inhibits himself from the case. According to the CA, in the absence of the BLR
Director, there is no person more competent to resolve the appeal than the DOLE Secretary. The CA
brushed aside the allegation of bias and partiality on the part of the DOLE Secretary, considering that such
allegation was not supported by any evidence.
The CA also found that the DOLE Secretary did not commit grave abuse of discretion when she affirmed
the dismissal of the petition for cancellation of respondent's registration as a labor organization. Echoing
the DOLE Secretary, the CA held that the requirements of registration of labor organizations are an
exercise of the overriding police power of the State, designed for the protection of workers against
potential abuse by the union that recruits them. These requirements, the CA opined, should not be
exploited to work against the workers' constitutionally protected right to self-organization.
Petitioner filed a motion for reconsideration, invoking this Court's ruling in Abbott Labs. Phils., Inc. v.
Abbott Labs. Employees Union,
21
cralaw which categorically declared that the DOLE Secretary has no
authority to review the decision of the Regional Director in a petition for cancellation of union registration,
and Section 4,
22
cralaw Rule VIII, Book V of the Omnibus Rules Implementing the Labor Code.
In its Resolution
23
cralaw dated June 4, 2007, the CA denied petitioner's motion, stating that the BLR
Director's inhibition from the case was a peculiarity not present in the Abbott case, and that such
inhibition justified the assumption of jurisdiction by the DOLE Secretary.
In this petition, petitioner argues that: chanrob1esvirtwallawlibrary
I.
The Court of Appeals seriously erred in ruling that the Labor Secretary properly assumed jurisdiction over
Petitioner's appeal of the Regional Director's Decision in the Cancellation Petition x x x.
A. Jurisdiction is conferred only by law. The Labor Secretary had no jurisdiction to review the decision of
the Regional Director in a petition for cancellation. Such jurisdiction is conferred by law to the BLR.
B. The unilateral inhibition by the BLR Director cannot justify the Labor Secretary's exercise of jurisdiction
over the Appeal.
C. The Labor Secretary's assumption of jurisdiction over the Appeal without notice violated Petitioner's
right to due process.
II.
The Court of Appeals gravely erred in affirming the dismissal of the Cancellation Petition despite the
mandatory and unequivocal provisions of the Labor Code and its Implementing Rules.
24
cralawredlaw
The petition has no merit.
Jurisdiction to review the decision of the Regional Director lies with the BLR. This is clearly provided in the
Implementing Rules of the Labor Code and enunciated by the Court in Abbott. But as pointed out by the
CA, the present case involves a peculiar circumstance that was not present or covered by the ruling in
Abbott. In this case, the BLR Director inhibited himself from the case because he was a former counsel of
respondent. Who, then, shall resolve the case in his place?
In Abbott, the appeal from the Regional Director's decision was directly filed with the Office of the DOLE
Secretary, and we ruled that the latter has no appellate jurisdiction. In the instant case, the appeal was
filed by petitioner with the BLR, which, undisputedly, acquired jurisdiction over the case. Once jurisdiction
is acquired by the court, it remains with it until the full termination of the case.
25
cralawredlaw
Thus, jurisdiction remained with the BLR despite the BLR Director's inhibition. When the DOLE Secretary
resolved the appeal, she merely stepped into the shoes of the BLR Director and performed a function that
the latter could not himself perform. She did so pursuant to her power of supervision and control over the
BLR.
26
cralawredlaw
Expounding on the extent of the power of control, the Court, in Araneta, et al. v. Hon. M. Gatmaitan, et
al.,
27
cralaw pronounced that, if a certain power or authority is vested by law upon the Department
Secretary, then such power or authority may be exercised directly by the President, who exercises
supervision and control over the departments. This principle was incorporated in the Administrative Code
of 1987, which defines "supervision and control" as including the authority to act directly whenever a
specific function is entrusted by law or regulation to a subordinate.
28
cralaw Applying the foregoing to the
present case, it is clear that the DOLE Secretary, as the person exercising the power of supervision and
control over the BLR, has the authority to directly exercise the quasi-judicial function entrusted by law to
the BLR Director.
It is true that the power of control and supervision does not give the Department Secretary unbridled
authority to take over the functions of his or her subordinate.Such authority is subject to certain
guidelines which are stated in Book IV, Chapter 8, Section 39(1)(a) of the Administrative Code of
1987.
29
cralaw However, in the present case, the DOLE Secretary's act of taking over the function of the
BLR Director was warranted and necessitated by the latter's inhibition from the case and the objective to
"maintain the integrity of the decision, as well as the Bureau itself."
30
cralawredlaw
Petitioner insists that the BLR Director's subordinates should have resolved the appeal, citing the provision
under the Administrative Code of 1987 which states, "in case of the absence or disability of the head of a
bureau or office, his duties shall be performed by the assistant head."
31
cralaw The provision clearly does
not apply considering that the BLR Director was neither absent nor suffering from any disability; he
remained as head of the BLR. Thus, to dispel any suspicion of bias, the DOLE Secretary opted to resolve
the appeal herself.
Petitioner was not denied the right to due process when it was not notified in advance of the BLR
Director's inhibition and the DOLE Secretary's assumption of the case. Well-settled is the rule that the
essence of due process is simply an opportunity to be heard, or, as applied to administrative proceedings,
an opportunity to explain one's side or an opportunity to seek a reconsideration of the action or ruling
complained of.
32
cralaw Petitioner had the opportunity to question the BLR Director's inhibition and the
DOLE Secretary's taking cognizance of the case when it filed a motion for reconsideration of the latter's
decision. It would be well to state that a critical component of due process is a hearing before an impartial
and disinterested tribunal, for all the elements of due process, like notice and hearing, would be
meaningless if the ultimate decision would come from
33
cralaw It was precisely to ensure a fair trial that
moved the BLR Director to inhibit himself from the case and the DOLE Secretary to take over his function.
Petitioner also insists that respondent's registration as a legitimate labor union should be cancelled.
Petitioner posits that once it is determined that a ground enumerated in Article 239 of the Labor Code is
present, cancellation of registration should follow; it becomes the ministerial duty of the Regional Director
to cancel the registration of the labor organization, hence, the use of the word "shall." Petitioner points
out that the Regional Director has admitted in its decision that respondent failed to submit the required
documents for a number of years; therefore, cancellation of its registration should have followed as a
matter of course.
We are not persuaded.
Articles 238 and 239 of the Labor Code read: chanrob1esvirtwallawlibrary
ART. 238. CANCELLATION OF REGISTRATION; APPEAL
The certificate of registration of any legitimate labor organization, whether national or local, shall be
canceled by the Bureauif it has reason to believe, after due hearing, that the said labor organizationno
longer meets one or more of the requirements herein prescribed.
34
cralawredlaw
ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION.
The following shall constitute grounds for cancellation of union registration:
chanrob1esvirtwallawlibrary
x x x
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of
every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report
itself; chanroblesvirtualawlibrary
x x x
(i) Failure to submit list of individual members to the Bureau once a year or whenever required by the
Bureau.
35
cralawredlaw
These provisions give the Regional Director ample discretion in dealing with a petition for cancellation of a
union's registration, particularly, determining whether the union still meets the requirements prescribed
by law. It is sufficient to give the Regional Director license to treat the late filing of required documents as
sufficient compliance with the requirements of the law. After all, the law requires the labor organization to
submit the annual financial report and list of members in order to verify if it is still viable and financially
sustainable as an organization so as to protect the employer and employees from fraudulent or fly-by-
night unions. With the submission of the required documents by respondent, the purpose of the law has
been achieved, though belatedly.
We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the
petition for cancellation of respondent's registration. The union members and, in fact, all the employees
belonging to the appropriate bargaining unit should not be deprived of a bargaining agent, merely because
of the negligence of the union officers who were responsible for the submission of the documents to the
BLR.
Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union
registration, lest they be accused of interfering with union activities. In resolving the petition,
consideration must be taken of the fundamental rights guaranteed by Article XIII, Section 3 of the
Constitution, i.e., the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities. Labor authorities should bear in mind that registration confers upon a union
the status of legitimacy and the concomitant right and privileges granted by law to a legitimate labor
organization, particularly the right to participate in or ask for certification election in a bargaining
unit.
36
cralaw Thus, the cancellation of a certificate of registration is the equivalent of snuffing out the life
of a labor organization. For without such registration, it loses - as a rule - its rights under the Labor
Code.
37
cralawredlaw
It is worth mentioning that the Labor Code's provisions on cancellation of union registration and on
reportorial requirements have been recently amended by Republic Act (R.A.) No. 9481, An Act
Strengthening the Workers' Constitutional Right to Self-Organization, Amending for the Purpose
Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines , which
lapsed into law on May 25, 2007 and became effective on June 14, 2007. The amendment sought to
strengthen the workers' right to self-organization and enhance the Philippines' compliance with its
international obligations as embodied in the International Labour Organization (ILO) Convention No. 87,
38
cralaw pertaining to the non-dissolution of workers' organizations by administrative authority.
39
cralaw
Thus, R.A. No. 9481 amended Article 239 to read: chanrob1esvirtwallawlibrary
ART. 239. Grounds for Cancellation of Union Registration.-The following may constitute grounds for
cancellation of union registration: chanrob1esvirtwallawlibrary
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who
took part in the ratification; chanroblesvirtualawlibrary
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the
election of officers, and the list of voters; chanroblesvirtualawlibrary
(c) Voluntary dissolution by the members.
R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides: chanrob1esvirtwallawlibrary
ART. 242-A. Reportorial Requirements.-The following are documents required to be submitted to the
Bureau by the legitimate labor organization concerned: chanrob1esvirtwallawlibrary
(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification of the constitution and by-laws within thirty (30) days from
adoption or ratification of the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from
election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for cancellation of union
registration but shall subject the erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.
ILO Convention No. 87, which we have ratified in 1953, provides that "workers' and employers'
organizations shall not be liable to be dissolved or suspended by administrative authority." The ILO has
expressed the opinion that the cancellation of union registration by the registrar of labor unions, which in
our case is the BLR, is tantamount to dissolution of the organization by administrative authority when such
measure would give rise to the loss of legal personality of the union or loss of advantages necessary for it
to carry out its activities, which is true in our jurisdiction. Although the ILO has allowed such measure to
be taken, provided that judicial safeguards are in place, i.e., the right to appeal to a judicial body, it has
nonetheless reminded its members that dissolution of a union, and cancellation of registration for that
matter, involve serious consequences for occupational representation. It has, therefore, deemed it
preferable if such actions were to be taken only as a last resort and after exhausting other possibilities
with less serious effects on the organization.
40
cralawredlaw
The aforesaid amendments and the ILO's opinion on this matter serve to fortify our ruling in this case. We
therefore quote with approval the DOLE Secretary's rationale for denying the petition, thus:
chanrob1esvirtwallawlibrary
It is undisputed that appellee failed to submit its annual financial reports and list of individual members in
accordance with Article 239 of the Labor Code. However, the existence of this ground should not
necessarily lead to the cancellation of union registration. Article 239 recognizes the regulatory authority of
the State to exact compliance with reporting requirements. Yet there is more at stake in this case than
merely monitoring union activities and requiring periodic documentation thereof.
The more substantive considerations involve the constitutionally guaranteed freedom of association and
right of workers to self-organization. Also involved is the public policy to promote free trade unionism and
collective bargaining as instruments of industrial peace and democracy. An overly stringent interpretation
of the statute governing cancellation of union registration without regard to surrounding circumstances
cannot be allowed. Otherwise, it would lead to an unconstitutional application of the statute and
emasculation of public policy objectives. Worse, it can render nugatory the protection to labor and social
justice clauses that pervades the Constitution and the Labor Code.
Moreover, submission of the required documents is the duty of the officers of the union. It would be
unreasonable for this Office to order the cancellation of the union and penalize the entire union
membership on the basis of the negligence of its officers. In National Union of Bank Employees vs.
Minister of Labor, L-53406, 14 December 1981, 110 SCRA 296, the Supreme Court ruled:
chanrob1esvirtwallawlibrary
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to self-
organization finds general and specific constitutional guarantees. x x x Such constitutional guarantees
should not be lightly taken much less nullified. A healthy respect for the freedom of association demands
that acts imputable to officers or members be not easily visited with capital punishments against the
association itself."
At any rate, we note that on 19 May 2000, appellee had submitted its financial statement for the years
1996-1999. With this submission, appellee has substantially complied with its duty to submit its financial
report for the said period. To rule differently would be to preclude the union, after having failed to meet its
periodic obligations promptly, from taking appropriate measures to correct its omissions. For the record,
we do not view with favor appellee's late submission. Punctuality on the part of the union and its officers
could have prevented this petition.
41
cralawredlaw
WHEREFORE , premises considered, the Court of Appeals Decision dated May 30, 2005 and Resolution
dated June 4, 2007 are AFFIRMED.
SO ORDERED .
67. S.S. VENTURES INTERNATIONAL, INC., PETITIONER, VS. S.S. VENTURES LABOR UNION(SSVLU) AND
DIR. HANS LEO CACDAC, IN HIS CAPACITY AS DIRECTOR OF THE BUREAU OFLABOR RELATIONS (BLR),
RESPONDENTS. (Digest)

FACTS:

SS Ventures filed a Petition to cancel the SS Ventures Labor Union's certificate of registration invoking the
grounds set forth in Article 239(a) of the Labor Code alleging the following:(1) The Union included the
names and forged the signatures of more or less 82 former employees no longer connected with Ventures
in its list of members who attended the organizational meeting and in the adoption/ratification of its
constitution and by-laws(2) The Union twice entered the signatures of three persons;(3) No organizational
meeting and ratification actually took place; and(4) The Union's application for registration was not
supported by at least 20% of the rank-and-file employees of Ventures, or 418 of the total 2,197-
employee complement. Since more or less 82 of the500 signatures were forged or invalid, then the
remaining valid signatures would only be 418, which is very much short of the 439 minimum (2197 total
employees x 20% = 439.4) required by the Labor Code. The Union denied committing the imputed acts of
fraud or forgery. Regional Director decision: ifo Ventures. Union appealed to Bureau of Labor Relations
(BLR). BLR decision ifo Union. Ventures sought reconsideration. Denied by the BLR. Ventures appealed to
the CA: Dismissed, Hence SC Petition.

RULING:

Petition lacks merit. The right to form, join, or assist a union is specifically protected by Art. XIII, Section
3 of the Constitution and such right, according to Art. III, Sec. 8 of the Constitution and Art. 246 of the
Labor Code, shall not be abridged. Once registered with the DOLE, a union is considered a legitimate labor
organization endowed with the right and privileges granted by law to such organization. While a certificate
of registration confers a union with legitimacy with the concomitant right to participate in or ask for
certification election in a bargaining unit, the registration may be canceled or the union may be decertified
as the bargaining unit, in which case the union is divested of the status of a legitimate labor organization.
Among the grounds for cancellation is the commission of any of the acts enumerated in Art.239(a)of the
Labor Code, such as fraud and misrepresentation in connection with the adoption or ratification of the
union's constitution and like documents. The Court, has in previous cases, said that to decertify a union, it
is not enough to show that the union includes ineligible employees in its membership. It must also be
shown that there was misrepresentation, false statement, or fraud in connection with the application for
registration and the supporting documents, such as the adoption or ratification of the constitution and by-
laws or amendments thereto and the minutes of ratification of the constitution or by-laws, among other
documents.

68. ALLIANCE OF DEMOCRATIC FREE LABOR ORGANIZATION (ADFLO), petitioner, vs.
UNDERSECRETARY OF LABOR BIENVENIDO LAGUESMA and CONFEDERATION OF LABOR AND
ALLIED SOCIAL SERVICES (CLASS), respondents.
D E C I S I O N
PANGANIBAN, J.:
In the instant case, this Court upholds petitioners right to due process, the most basic tenet of which is
the right to be heard.
This is a petition for certiorari and prohibition under Rule 65 of the Rules of Court to review and set aside
the Decisionxxv[1] of Respondent Undersecretary of Labor Bienvenido Laguesma, dated October 16,
1992, in Case No. OS-A-12-289-89 cancelling the registration of the Alliance of Democratic Free Labor
organization (ADFLO) as a legitimate labor federation; and the Orderxxvi[2] dated November 18, 1992
denying the motion for reconsideration.
By a Resolution dated October 25, 1995, the First Division of this Court transferred the above case, along
with several others, to the Third. Deliberating on the Petition, and the Comments by the Solicitor
Generalxxvii[3] and the private respondent, this Court, on February 12, 1996, gave due course to the
Petition and considered the case submitted for resolution without requiring the parties to submit
memoranda. Thereafter, after due consultation and discussion, the case was assigned to undersigned
ponente for the writing of this Decision.
The Facts
The facts of this case, as set out in the Comment of the Solicitor General filed on June 4, 1993 are not
disputed by the private respondent in its own Comment filed on July 29, 1993. They are substantially the
same as those stated in the Petition. Narrates the Solicitor General:xxviii[4]
1. The factual antecedents of this controversy are as follows:
On 02 March 1988, the Alliance of Democratic Free Labor Organization (ADFLO) filed an application for
registration as a national federation alleging, among others that it has twelve (12) affiliates, namely:
A. Affiliate independent unions:
1. Tollys Employees Association, 220 Brgy. Mapulang Lupa, Valenzuela, Metro Manila
2. Healthknit Garments Workers Association, 2110 Bolinao St., Sta. Cruz, Manila
3. Malayang Manggagawa sa United Asia Weaving and Trimming Manufacturing Corporation, Macopa
Road, Malabon, Metro Manila
4. Fireprint Inc. Employees Association, 187 General Mascardo St., Bagong Barrio, Caloocan City.
5. Batangas Lumber Labor Union, Calicantio, Batangas City
6. Clover Manufacturing Corporation, 23-3 Pilaran Cpd., Quezon City
7. Pacific Mills Workers Free Labor Union, 108 Balintawak, Quezon City
8. Ronimart Employees Labor Union, Balibago, Sta. Rosa, Laguna
9. Kapisanan ng mga Manggagawa sa Place Canteen, UST Cpd., UST, Espana, Manila
10. Samahan ng mga Kawani at Manggagawa su A.V. Tantuco, Bagong Ilog, Pasig, Metro Manila
B. Direct Affiliates
1. VICMAR Theater, Inc., ADFLO Chapter, Batangas City
2. Ricman Enterprises, ADFLO Chapter, Batangas City
After proper evaluation of its application and finding ADFLO to have complied with the requirements for
registration pursuant to Articles 234 and 237 of the Labor Code, the Bureau (of Labor Relations) issued on
22 March 1988 a Certificate of Registration No. 11399-FED-LC to the federation.
On 15 February 1989, the Confederation of Labor and Allied Social Services (CLASS) filed a petition for the
cancellation of the Registration Certificate issued to ADFLO.
Finding the petition to be in order, the Bureau furnished ADFLO a copy of said petition and directed the
latter to file an answer/comment thereon. The Bureau also directed CLASS-TUCP to substantiate its
allegations in the petition.
On 11 April 1989, instead of filing an answer, ADFLO moved to dismiss the petition. It alleged that the
petition contains merely general allegations that are vague; that petitioner has no cause of action because
if failed to substantiate its accusations; that the petition was filed by CLASS-TUCP for the purpose of
harassing the respondent in connection with the certification election case pending at Allen Arthur, Inc.,
wherein CLASS is the incumbent bargaining representative and ADFLO is one of the contending parties;
that ADFLOs financial statement will only become due at the end of April, 1989; and, that the report on
the compliance with the requirements on labor education will likewise become due only on (sic) April,
1989.
Petitioner CLASS-TUCP, in its Memorandum dated 26 July 1989, alleged that the documents submitted by
ADFLO were simulated. Among the documents are: the minutes of the organizational meetings, list of
delegates to the meeting, list of locals/affiliates, the Constitution and By-laws, collective bargaining and
the resolution of affiliation of the local unions. In this respect, it pointed out that a visit to the places of
operation of the enumerated establishments whose workers are alleged members of unions affiliated with
ADFLO with an interview of their respective local officers revealed that the said local officers have never
attended nor participated in the ADFLOs organization meeting held on 6 December 1987 at Sampaloc,
Manila; that said officers have never Participated in the discussion and ratification of ADFLOs Constitution
and By-laws and in the election of its national officers.
Petitioner CLASS-TUCP, further averred that the nine (9) resolutions of affiliation all dated 6 December
1987 do not bear the signatures of the members of the Board of Directors and have not been ratified by
the general membership of each of the nine (9) unions as required by Article IV, Section 3 of the
Constitution and By-laws of ADFLO.
On 07 August 1989, ADFLO was summoned to a conference by the Bureau. In said conference, the Bureau
disclosed the seriousness of the charges against ADFLO that may warrant the cancellation of its certificate
of registration.
On 15 August 1989, a hearing was conducted and both parties were duly represented. ADFLO manifested
that it would move to inhibit the Director of Labor Relations from taking further action over the present
petition. It further manifested that it would file its comment to the earlier memorandum filed by CLASS.
CLASS, for its part, requested that it be given five (5) days within which to file its objection against the
motion to inhibit the Bureau Director.
On 25 August 1989, ADFLO filed its answer, averring that it had complied with all the legal requirements
for registration including the affiliation of more than 10 local unions; that it did not commit any fraud or
misrepresentation in its application for registration; that it conducted itself as a legitimate labor
organization and that the cancellation of its registration certificate which was secured in good faith will
violate the Constitutional right of the workers to organize and will deprive the membership of their rights
granted by law.
On even date, ADFLO filed a Motion to Inhibit the Bureau Director from hearing and deciding the case on
the ground that the Director prejudged the instant petition when she verbally declared that the federation
obtained its certificate of registration through fraud and misrepresentation; that the recommendation to
hold in abeyance the election at Allen Arthur, Inc., was based only on her unilateral finding of a prima
facie case; that she has shown personal interest in this petition when made personal calls to all locals and
affiliates without notice to the respondent, ADFLO (Resolution of Secretary of Labor Ruben Torres, dated
21 February; Records, Vol. I, pp. 431-435).
2. On November 16, 1990, the Bureau of Labor Relations (BLR), through Director Pura Ferrer-Calleja,
rendered a Decision cancelling the registration of ADFLO (Id., Pp. 383-394). ADFLO appealed the Decision
to the Secretary of Labor Ruben Torres, who, on February 21, 1990, issued a Resolution, the decretal
portion of which reads:
WHEREFORE, premises considered, the appeal is hereby granted and the Decision of the Director, Bureau
of Labor Relations, set aside. Conformably, a new order is entered remanding the case to the Bureau for
further proceedings.
Let, therefore, the entire records of the case be immediately forwarded to the Bureau of Labor Relations
for implementation of this Order.
SO ORDERED (Ibid., p. 431; Italics supplied).
3. Private respondent Confederation of Labor and Allied Social Services (CLASS-TUCP) moved for a
reconsideration thereof, which was denied for lack of merit in the Order dated May 23, 1990 (id., p. 524).
4. CLASS then filed a Petition for Certiorari with the Supreme Court, which, on November 5, 1990,
was dismissed for lack of merit (Id., p. 563).
5. The first hearing conducted by the BLR after the case was remanded to it for further proceedings
was held on October 7, 1991. However, since CLASS was not yet ready with its evidence, the hearing was
postponed and CLASS was given a period of ten (10) days to submit its exhibits while ADFLO was given a
period of ten (10) days from receipt of copies of the evidence presented within which to comment thereon
(Id., p. 566).
6. On October 16, 1991, CLASS filed its Formal Offer of evidence consisting of Exhibits A - R, in
support of its allegation that ADFLO committed frauds, misrepresentation and forgeries in the submission
of the requirements relative to its registration as a legitimate federation (Id., pp. 625-630).
7. On November 27, 1991, ADFLO filed an Objection to Admission of Exhibits based on the grounds
that the exhibits were not marked nor identified by any witness during the hearing of the case where
ADFLO had been properly notified (Id., pp. 658-659).
8. In the meantime, at the hearing of the case scheduled on November 27, 1991, CLASS failed to
appear and only ADFLOs President Antonio Cedilla appeared. Unaware that an objection had already been
filed by ADFLOs counsel, Cedilla manifested that ADFLO will file its answer to CLASS offer of evidence
within thirty (30) days or up to December 27, 1991 (Id., p. 658).
9. Subsequently, however, counsel for CLASS was permitted to write on the minutes of the aforesaid
hearing its objection to the request for extension, invoking its right to a speedy trial of the case and
praying that the case be deemed submitted for resolution on the basis of its evidence (Id., p. 647).
10. On February 12, 1992, BLR Director Pura Ferrer-Calleja. without first ruling on the admissibility of
the exhibits of CLASS and without any further hearing, rendered an order, the dispositive portion of which
reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered affirming the decision of this Bureau,
entered on 16 November 1989 cancelling the registration of Federation Alliance of Democratic Free Labor
organization (ADFLO).
SO ORDERED (Id., p. 657).
11. On February 27, 1992, ADFLO filed its Motion for Reconsideration of said Decision dated February
12, 1992 (Id., pp. 670-671) which was treated as an appeal, hence, the records of the case were sent to
the Secretary of Labor. On October 16, 1992, public respondent Undersecretary of Labor Bienvenido E.
Laguesma rendered the assailed Decision, adjudicating the case in this wise:
WHEREFORE, respondents appeal is hereby DENIED for lack of merit and the questioned order dated
February 12, 1992 is hereby affirmed, subject to the correction aforestated and the requirements set forth
in the ultimate paragraph of this Decision.
All existing affiliates of respondents (sic) ADFLO shall be notified of this Decision, through the Bureau of
Labor Relations.
SO DECIDED (Id., p. 358).
12. On November 6, 1992, ADFLO moved to reconsider such decision on the ground that ADFLO was
denied the right to a hearing in violation of its right to due process of law, and that the Order dated
November 16, 1989 of the BLR could no longer be reinstated because it was annulled and set aside by
virtue of the Resolution of the Secretary of Labor dated February 21, 1990, which ruling had been affirmed
by the Supreme Court (Petition, p. 6).
13. On November 18, 1992, Undersecretary Laguesma issued an Order denying ADFLOs Motion for
Reconsideration (Id., pp. 364-365).
14. Hence, ADFLO appealed to the Secretary of Labor. However, instead of forwarding the records to
the Secretary, public respondent Undersecretary Laguesma endorsed the records to the Officer-in-Charge
of the BLR for (your) information and guidance (Id., Vol. III, p. 111).
15. On December 14, 1992, ADFLO filed a Motion to Resolve the case but since more than thirty (30)
days had passed since then, and the Secretary of Labor failed to act on its appeal, it was constrained to
resort to the filing of the instant Petition for Certiorari and Prohibition before this Honorable Court.
The Issues
The main issues presented by petitionerxxix[5] are the following:
(1) Was the decision cancelling the registration of petitioner rendered in violation of the due process
clause? and
(2) Is the decision supported by substantial evidence?
The First Issue: Due Process
As prayed for by the Solicitor General, we grant the Petition.
While, in general, administrative agencies exercising quasi-judicial powers, like the Department of Labor
and Employment, are free from the rigidity of certain procedural requirements, they are nonetheless
bound by law and practice to observe the fundamental and essential requirements of due process in
justiciable cases presented before them.xxx[6]
These essential requirements of due process were laid down in the landmark case of Ang Tibay vs. Court
of Industrial Relations, et al.,xxxi[7] as follows:
The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of
certain procedural requirements does not mean that it can, injusticiable cases coming before it, entirely
ignore or disregard the fundamental and essential requirements of due process in trials and investigations
of an administrative character. There are cardinal primary rights which must be respected even in
proceedings of this character:
(1) The first of these rights is the right to a hearing, which includes the right of the party interested or
affected to present his own case and submit evidence in support thereof. In the language of Chief Justice
Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, the liberty and property of
the citizen shall be protected by the rudimentary requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to adduce evidence
tending to establish the rights which he asserts but the tribunal must consider the evidence presented. x x
x In the language of this Court in Edwards vs. McCoy, 22 Phil., 598, the right to adduce evidence, without
the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if
the person or persons to whom the evidence is presented can thrust it aside without notice or
consideration.
(3) While the duty to deliberate does not impose the obligation to decide right, it does imply a
necessity which cannot be disregarded, namely, that of having something to support its decision. A
decision with absolutely nothing to support it is a nullity, a place when directly attached. (Edwards vs.
McCoy, supra.) x x x
(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs.
Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O.G. 1 335), but the evidence must be
substantial. x x x Substantial evidence is more than a mere scintilla. It means such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion. x x x But this assurance of a
desirable flexibility in administrative procedure does not go so far as to justify orders without a basis in
evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute
substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law.
ed. No. 4, Adv. Op., p. 131.)
(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in
the record and disclosed to the parties affected. x x x Only by confining the administrative tribunal to the
evidence disclosed to the parties, can the latter be protected in their right to know and meet the case
against them.
(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the views of a
subordinate in arriving at a decision.
7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a
manner that the Parties to the proceeding can know the various issues involved, and the reasons for the
decisions rendered. The performance of this duty is inseparable from the authority conferred upon it.
The most basic tenet of due process is the right to be heard, and as applied in administrative proceedings,
an opportunity to explain ones side.xxxii[8] Such opportunity was denied petitioner in this case.
The public respondent and his subaltern, the Director of the Bureau of Labor Relations, should have
learned their lessons when the latters resolution dated November 16, 1989 cancelling petitioners
registration due precisely to absence of due process was reversed by the then Secretary of Labor whose
decision was, in effect, affirmed by this Court. However, instead of taking a lesson in due process, said
director - this time abetted by public respondent - violated again the same fundamental principle.
After petitioner submitted its objections to the admission of the documentary evidence of CLASS, the BLR
director should have first ruled on their admissibility. However, without ruling on said offer and without
setting the case for reception of petitioners evidence, the said official proceeded to render judgment
affirming its earlier (but already ruled as improper) decision to cancel the registration of ADFLO. This is a
gross violation of petitioners right to due process.
Under Section 1, Article II of our Constitution, (n)o person shall be deprived of life, liberty or property
without due process of law x x x and under Article 238 of the Labor Code, (t)he certificate of registration
of any legitimate labor organization, whether national or local, shall be cancelled by the Bureau if it has
reason to believe, after due hearing, that the said labor organization no longer meets one or more of the
requirements herein prescribed. (italics supplied)
The cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor
organization. For without such registration, it loses - as a rule - its rights under the Labor Code. Under the
circumstances, petitioner was indisputably entitled to be heard before a judgment could be rendered
cancelling its certificate of registration. In David vs. Aguilizan,xxxiii[9] it was held that a decision rendered
without any hearing is null and void.
The Second Issue: Substantial Basis
There is yet another reason why this petition should be granted. It will be noted that the Director of the
Bureau of Labor Relations never made any ruling on whether the exhibits submitted by CLASS were
admissible in evidence. That being so, the said exhibits cannot be made use of in deciding the case. And,
in the absence of this evidence, there is nothing in the record to support the assailed decision. Therefore,
the latter must necessarily fall for lack of substantial basis. A decision with absolutely nothing to support
it is a nullity.xxxiv[10]
So too, the assailed Decision of Undersecretary Laguesma requiring the existing affiliates of ADFLO to
register either independently in accordance with Article 234, Title IV, Book V of the Labor Code or affiliate
with other existing duly-registered federations or national union within 30 days from receipt of said
Decision is totally unwarranted inasmuch as said affiliates are not parties in the instant case.
WHEREFORE, the Petition is GRANTED; the Decision dated October 16, 1992 and Order dated November
18, 1992 of public respondent are SET ASIDE and REVERSED. The present case is hereby REMANDED to
the Bureau of Labor Relations for further proceedings with the specific caveat to observe due process as
mandated by the Constitution and the Labor Code;
SO ORDERED.
69. TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INC v. TAGAYTAY HIGHLANDS
EMPLOYEES UNION-PGTWO395 SCRA 699 January 22, 2003

The Supreme Court ruled that the effect of issuance of certificate of registration to a union is that it
becomes legitimate and its legal personality can only be attacked through a petition for cancellation of
registration and not thru intervention in a certification election petition.
FACTS:On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport and
General Workers Organization(PTGWO), Local Chapter No. 776, a legitimate labor organization said to
represent majority of the rank-and-file employees of Tagaytay Highlands International Golf Club
Incorporated (THIGCI), filed a petition for certification election before the DOLE Mediation- Arbitration
Unit, Regional Branch No. IV. THIGCI, in its Comment, opposed THEUs petition for certification election on
the ground that the list of union members submitted by it was defective and fatally flawed as it included
the names and signatures of supervisors, resigned, terminated and absent without leave(AWOL)
employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from
THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-file employees
of THIGCI. THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees to the
petition for certification election. And it therein incorporated a tabulation showing the numberof
signatories to said petition whose membership in the union was being questioned as disqualified and the
reasons for disqualification. THEU asserted that it complied with all the requirements for valid affiliation
and inclusion in the roster of legitimate labor organizationspursuant to DOLE Department Order No. 9,
series of 1997, on account of which it was duly granted a Certification of Affiliation by DOLE on October
10, 1997; and that Section 5, Rule V of said Department Order provides that the legitimacy of its
registration cannot besubject to collateral attack, and for as long as there is no final order of cancellation,
it continues to enjoy the rights accorded to a legitimateorganization. Therefore, the Med-Arbiter should,
pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLEDepartment Order No. 09,
automatically order the conduct of a certification election.On January 28, 1998, DOLE Med-Arbiter
Anastacio Bactin ordered the holding of a certification election. THIGCI appealed to the Office of the DOLE
Secretary which, by Resolution of June 4, 1998, set aside the said Med-Arbiters Order andaccordingly
dismissed the petition for certification election on the ground that there is a "clear absence of community
or mutuality of interests," it finding that THEU sought to represent two separate bargaining units
(supervisory employees and rank-and-file employees) as well as employees of two separate and distinct
corporate entities.Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-
Baldoz, by authority of the DOLE Secretary,issued DOLE Resolution of November 12, 1998 setting aside
the June 4, 1998 Resolution dismissing the petition for certification election.She held that since THEU is a
local chapter, the twenty percent (20%) membership requirement is not necessary for it to acquire
legitimatestatus, hence, "the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-
and-file members . . . cannot negate thelegitimacy it has already acquired before the petition". THIGCIs
Motion for Reconsideration was denied by the DOLE Undersecretary hence it filed a petition for certiorari
with the CA. The CA denied THIGCIs Petition for Certiorari and affirmed the DOLE Resolution dated
November 12, 1998. It held that while apetition for certification election is an exception to the innocent
bystander rule, hence, the employer may pray for the dismissal of suchpetition on the basis of lack of
mutuality of interests of the members of the union as well as lack of employer-employee relationship
andpetitioner failed to adduce substantial evidence to support its allegations.ISSUE: Whether the unions
legal personality can be subject to collateral attack after a certificate of registration is issuedHELD:NO,
Petition is DENIED, and the records of the case are remanded to the office of origin. While Article 245
expressly prohibits supervisory employees from joining a rank-and-file union, it does not provide what
would be theeffect if a rank-and-file union counts supervisory employees among its members, or vice-
versa. Citing
Toyota
19
which held that "a labororganization composed of both rank-and-file and supervisory employees is no
labor organization at all," and the subsequent case of Progressive Development Corp.
Pizza Hut v. Ledesma
20
which held that:"The Labor Code requires that in organized and unorganized establishments, a petition for
certification election must befiled by a legitimate labor organization. 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.

70. MARIWASA SIAM CERAMICS, INC., v.
THE SECRETARY OF THE DEPARTMENT OF
LABOR AND EMPLOYMENT
This is a petition for review on certiorari42[1] under Rule 45 of the Rules of Court, seeking to annul the
Decision43[2] dated December 20, 2007 and the Resolution44[3] dated June 6, 2008 of the Court of Appeals
in CA-G.R. SP No. 98332.

The antecedent facts are as follows

On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc.
(SMMSC-Independent) was issued a Certificate of Registration45[4] as a legitimate labor organization by
the Department of Labor and Employment (DOLE), Region IV-A.

On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union
Registration against respondent, claiming that the latter violated Article 23446[5] of the Labor Code for
not complying with the 20% requirement, and that it committed massive fraud and misrepresentation in
violation of Article 23947[6] of the same code. The case was docketed as Case No. RO400-0506-AU-004.

On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the petition,
revoking the registration of respondent, and delisting it from the roster of active labor unions.
Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).














In a Decision48[7] dated June 14, 2006, the BLR granted respondents appeal and disposed as
follows

WHEREFORE, premises considered, the appeal by Samahan ng Manggagawa sa
Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) is hereby GRANTED, and the Decision
dated 26 August 2005 by DOLE-Region-IV-A Director Maximo B. Lim is hereby REVERSED
and SET ASIDE. Samahan ng Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-
Independent), under Registration Certificate No. RO400-200505-UR-002, remains in the
roster of legitimate labor organizations.

SO DECIDED.49[8]


Petitioner filed a Motion for Reconsideration but the BLR denied it in a Resolution50[9] dated
February 2, 2007.

Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari; but the
CA denied the petition for lack of merit.

Petitioners motion for reconsideration of the CA Decision was likewise denied, hence, this petition
based on the following grounds

Review of the Factual Findings of the Bureau of Labor Relations, adopted and
confirmed by the Honorable Court of Appeals is warranted[;]

The Honorable Court of Appeals seriously erred in ruling that the affidavits of
recantation cannot be given credence[;]

The Honorable Court of Appeals seriously erred in ruling that private respondent
union complied with the 20% membership requirement[; and]

The Honorable Court of Appeals seriously erred when it ruled that private respondent
union did not commit misrepresentation, fraud or false statement.51[10]


The petition should be denied.

The petitioner insists that respondent failed to comply with the 20% union membership
requirement for its registration as a legitimate labor organization because of the disaffiliation from the
total number of union members of 102 employees who executed affidavits recanting their union
membership.

It is, thus, imperative that we peruse the affidavits appearing to have been executed by these
affiants.










The affidavits uniformly state

Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado bilang
Rank & File sa Mariwasa Siam Ceramics, Inc., Bo. San Antonio, Sto. Tomas, Batangas,
matapos na makapanumpa ng naaayon sa batas ay malaya at kusang loob na nagsasaad ng
mga sumusunod:

1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa sa Mariwasa
Siam Ceramics, Inc. o SMMSC-Independent sa kabila ng aking pag-aalinlangan[;]

2. Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at handa
ako[ng] tumalikod sa anumang kasulatan na aking nalagdaan sa kadahilanan na
hindi angkop sa aking pananaw ang mga mungkahi o adhikain ng samahan.

SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan ngayong ika-____
ng ______, 2005 dito sa Lalawigan ng Batangas, Bayan ng Sto. Tomas.


____________________
Nagsasalaysay

Evidently, these affidavits were written and prepared in advance, and the pro forma affidavits were
ready to be filled out with the employees names and signatures.

The first common allegation in the affidavits is a declaration that, in spite of his hesitation, the
affiant was forced and deceived into joining the respondent union. It is worthy to note, however, that the
affidavit does not mention the identity of the people who allegedly forced and deceived the affiant into
joining the union, much less the circumstances that constituted such force and deceit. Indeed, not only
was this allegation couched in very general terms and sweeping in nature, but more importantly, it was
not supported by any evidence whatsoever.

The second allegation ostensibly bares the affiants regret for joining respondent union and
expresses the desire to abandon or renege from whatever agreement he may have signed regarding his
membership with respondent.

Simply put, through these affidavits, it is made to appear that the affiants recanted their support of
respondents application for registration.

In appreciating affidavits of recantation such as these, our ruling in La Suerte Cigar and Cigarette
Factory v. Director of the Bureau of Labor Relations52[11] is enlightening, viz.

On the second issuewhether or not the withdrawal of 31 union members from
NATU affected the petition for certification election insofar as the 30% requirement is
concerned, We reserve the Order of the respondent Director of the Bureau of Labor
Relations, it appearing undisputably that the 31 union members had withdrawn their
support to the petition before the filing of said petition. It would be otherwise if the
withdrawal was made after the filing of the petition for it would then be presumed that the
withdrawal was not free and voluntary. The presumption would arise that the withdrawal
was procured through duress, coercion or for valuable consideration. In other words, the
distinction must be that withdrawals made before the filing of the petition are presumed
voluntary unless there is convincing proof to the contrary, whereas withdrawals made after
the filing of the petition are deemed involuntary.

The reason for such distinction is that if the withdrawal or retraction is made before
the filing of the petition, the names of employees supporting the petition are supposed to be



held secret to the opposite party. Logically, any such withdrawal or retraction shows
voluntariness in the absence of proof to the contrary. Moreover, it becomes apparent that
such employees had not given consent to the filing of the petition, hence the subscription
requirement has not been met.

When the withdrawal or retraction is made after the petition is filed, the employees
who are supporting the petition become known to the opposite party since their names are
attached to the petition at the time of filing. Therefore, it would not be unexpected that the
opposite party would use foul means for the subject employees to withdraw their
support.53[12]

In the instant case, the affidavits of recantation were executed after the identities of the union
members became public, i.e., after the union filed a petition for certification election on May 23, 2005,
since the names of the members were attached to the petition. The purported withdrawal of support for
the registration of the union was made after the documents were submitted to the DOLE, Region IV-A.
The logical conclusion, therefore, following jurisprudence, is that the employees were not totally free from
the employers pressure, and so the voluntariness of the employees execution of the affidavits becomes
suspect.

It is likewise notable that the first batch of 25 pro forma affidavits shows that the affidavits were
executed by the individual affiants on different dates from May 26, 2005 until June 3, 2005, but they were
all sworn before a notary public on June 8, 2005.
There was also a second set of standardized affidavits executed on different dates from May 26,
2005 until July 6, 2005. While these 77 affidavits were notarized on different dates, 56 of these were
notarized on June 8, 2005, the very same date when the first set of 25 was notarized.

Considering that the first set of 25 affidavits was submitted to the DOLE on June 14, 2005, it is
surprising why petitioner was able to submit the second set of affidavits only on July 12, 2005.

Accordingly, we cannot give full credence to these affidavits, which were executed under suspicious
circumstances, and which contain allegations unsupported by evidence. At best, these affidavits are self-
serving. They possess no probative value.

A retraction does not necessarily negate an earlier declaration. For this reason, retractions are
looked upon with disfavor and do not automatically exclude the original statement or declaration based
solely on the recantation. It is imperative that a determination be first made as to which between the
original and the new statements should be given weight or accorded belief, applying the general rules on
evidence. In this case, inasmuch as they remain bare allegations, the purported recantations should not
be upheld.54[13]

Nevertheless, even assuming the veracity of the affidavits of recantation, the legitimacy of
respondent as a labor organization must be affirmed. While it is true that the withdrawal of support may
be considered as a resignation from the union, the fact remains that at the time of the unions application
for registration, the affiants were members of respondent and they comprised more than the required
20% membership for purposes of registration as a labor union. Article 234 of the Labor Code merely
requires a 20% minimum membership during the application for union registration. It does not mandate
that a union must maintain the 20% minimum membership requirement all throughout its
existence.55[14]








Respondent asserts that it had a total of 173 union members at the time it applied for registration.
Two names were repeated in respondents list and had to be deducted, but the total would still be 171
union members. Further, out of the four names alleged to be no longer connected with petitioner, only
two names should be deleted from the list since Diana Motilla and T.W. Amutan resigned from petitioner
only on May 10, 2005 and May 17, 2005, respectively, or after respondents registration had already been
granted. Thus, the total union membership at the time of registration was 169. Since the total number of
rank-and-file employees at that time was 528, 169 employees would be equivalent to 32% of the total
rank-and-file workers complement, still very much above the minimum required by law.

For the purpose of de-certifying a union such as respondent, it must be shown that there was
misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto; the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the list of voters, or failure to submit these
documents together with the list of the newly elected-appointed officers and their postal addresses to the
BLR.56[15]

The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondents certificate of
registration. The cancellation of a unions registration doubtless has an impairing dimension on the right
of labor to self-organization. For fraud and misrepresentation to be grounds for cancellation of union
registration under the Labor Code, the nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union members.

In this case, we agree with the BLR and the CA that respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged failure of respondent to indicate with
mathematical precision the total number of employees in the bargaining unit is of no moment, especially
as it was able to comply with the 20% minimum membership requirement. Even if the total number of
rank-and-file employees of petitioner is 528, while respondent declared that it should only be 455, it still
cannot be denied that the latter would have more than complied with the registration requirement.

WHEREFORE, the petition is DENIED. The assailed December 20, 2007 Decision and the June 6,
2008 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.

SO ORDERED.

71. G.R. No. 178989 March 18, 2010
EAGLE RIDGE GOLF & COUNTRY CLUB, Petitioner,
vs.
COURT OF APPEALS and EAGLE RIDGE EMPLOYEES UNION (EREU), Respondents.
D E C I S I O N
VELASCO, JR., J.:
In this petition for certiorari under Rule 65, Eagle Ridge Golf & Country Club (Eagle Ridge) assails and
seeks to nullify the Resolutions of the Court of Appeals (CA) dated April 27, 2007
1
and June 6, 2007,
2

issued in CA-G.R. SP No. 98624, denying a similar recourse petitioner earlier interposed to set aside the
December 21, 2006 Decision
3
of the Bureau of Labor Relations (BLR), as reiterated in a Resolution
4
of
March 7, 2007.
Petitioner Eagle Ridge is a corporation engaged in the business of maintaining golf courses. It had, at the
end of CY 2005, around 112 rank-and-file employees. The instant case is an off-shot of the desire of a
number of these employees to organize themselves as a legitimate labor union and their employers
opposition to their aspiration.



The Facts
On December 6, 2005, at least 20% of Eagle Ridges rank-and-file employeesthe percentage threshold
required under Article 234(c) of the Labor Code for union registrationhad a meeting where they
organized themselves into an independent labor union, named "Eagle Ridge Employees Union" (EREU or
Union),
5
elected a set of officers,
6
and ratified
7
their constitution and by-laws.
8

On December 19, 2005, EREU formally applied for registration
9
and filed BLR Reg. Form No. I-LO, s.
1998
10
before the Department of Labor and Employment (DOLE) Regional Office IV (RO IV). In time, DOLE
RO IV granted the application and issued EREU Registration Certificate (Reg. Cert.) No. RO400-200512-
UR-003.
The EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club, docketed as
Case No. RO400-0601-RU-002. Eagle Ridge opposed this petition,
11
followed by its filing of a petition for
the cancellation
12
of Reg. Cert. No. RO400-200512-UR-003. Docketed as RO400-0602-AU-003, Eagle
Ridges petition ascribed misrepresentation, false statement, or fraud to EREU in connection with the
adoption of its constitution and by-laws, the numerical composition of the Union, and the election of its
officers.
Going into specifics, Eagle Ridge alleged that the EREU declared in its application for registration having
30 members, when the minutes of its December 6, 2005 organizational meeting showed it only had 26
members. The misrepresentation was exacerbated by the discrepancy between the certification issued by
the Union secretary and president that 25 members actually ratified the constitution and by-laws on
December 6, 2005 and the fact that 26 members affixed their signatures on the documents, making one
signature a forgery.
Finally, Eagle Ridge contended that five employees who attended the organizational meeting had
manifested the desire to withdraw from the union. The five executed individual affidavits or Sinumpaang
Salaysay
13
on February 15, 2006, attesting that they arrived late at said meeting which they claimed to be
drinking spree; that they did not know that the documents they signed on that occasion pertained to the
organization of a union; and that they now wanted to be excluded from the Union. The withdrawal of the
five, Eagle Ridge maintained, effectively reduced the union membership to 20 or 21, either of which is
below the mandatory minimum 20% membership requirement under Art. 234(c) of the Labor Code.
Reckoned from 112 rank-and-file employees of Eagle Ridge, the required number would be 22 or 23
employees.
As a counterpoint, EREU, in its Comment,
14
argued in gist:
1) the petition for cancellation was procedurally deficient as it does not contain a certification
against forum shopping and that the same was verified by one not duly authorized by Eagle Ridges
board;
2) the alleged discrepancies are not real for before filing of its application on December 19, 2005,
four additional employees joined the union on December 8, 2005, thus raising the union
membership to 30 members as of December 19, 2005;
3) the understatement by one member who ratified the constitution and by-laws was a
typographical error, which does not make it either grave or malicious warranting the cancellation of
the unions registration;
4) the retraction of 5 union members should not be given any credence for the reasons that: (a)
the sworn statements of the five retracting union members sans other affirmative evidence
presented hardly qualify as clear and credible evidence considering the joint affidavits of the other
members attesting to the orderly conduct of the organizational meeting; (b) the retracting
members did not deny signing the union documents; (c) following, Belyca Corporation v. Ferrer-
Calleja
15
and Oriental Tin Can Labor Union v. Secretary of Labor and Employment,
16
it can be
presumed that "duress, coercion or valuable consideration" was brought to bear on the retracting
members; and (d) citing La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor
Relations,
17
Belyca Corporation and Oriental Tin Can Labor Union, where the Court ruled that "once
the required percentage requirement has been reached, the employees withdrawal from union
membership taking place after the filing of the petition for certification election will not affect the
petition," it asserted the applicability of said ruling as the petition for certification election was filed
on January 10, 2006 or long before February 15, 2006 when the affidavits of retraction were
executed by the five union members, thus contending that the retractions do not affect nor be
deemed compelling enough to cancel its certificate of registration.
The Union presented the duly accomplished union membership forms
18
dated December 8, 2005 of four
additional members. And to rebut the allegations in the affidavits of retraction of the five union members,
it presented the Sama-Samang Sinumpaang Salaysay
19
dated March 20, 2006 of eight union members;
another Sama-Samang Sinumpaang Salaysay,
20
also bearing date March 20, 2006, of four other union
members; and the Sworn Statement
21
dated March 16, 2006 of the Unions legal counsel, Atty. Domingo
T. Aonuevo. These affidavits attested to the orderly and proper proceedings of the organizational
meeting on December 6, 2005.
In its Reply,
22
Eagle Ridge reiterated the grounds it raised in its petition for cancellation and asserted
further that the four additional members were fraudulently admitted into the Union. As Eagle Ridge
claimed, the applications of the four neither complied with the requirements under Section 2, Art. IV of
the unions constitution and by-laws nor were they shown to have been duly received, issued receipts for
admission fees, processed with recommendation for approval, and approved by the union president.
Moreover, Eagle Ridge presented another Sinumpaang Salaysay
23
of retraction dated March 15, 2006 of
another union member. The membership of EREU had thus been further reduced to only 19 or 20. This
same member was listed in the first Sama-Samang Sinumpaang Salaysay
24
presented by the Union but
did not sign it.
The Ruling of the DOLE Regional Director
After due proceedings, the DOLE Regional Director, Region IV-A, focusing on the question of
misrepresentation, issued on April 28, 2006 an Order
25
finding for Eagle Ridge, its petition to cancel Reg.
Cert. No. RO400-200512-UR-003 being granted and EREU being delisted from the roster of legitimate
labor organizations.
Aggrieved, the Union appealed to the BLR, the recourse docketed as BLR A-C-30-5-31-06 (Case No.
RO400-0602-AU-003).
The Ruling of the BLR
Initially, the BLR, then headed by an Officer-in-Charge (OIC), affirmed
26
the appealed order of the DOLE
Regional Director.
Undeterred by successive set backs, EREU interposed a motion for reconsideration, contending that:
1) Contrary to the ruling of the BLR OIC Director, a certificate of non-forum shopping is mandatory
requirement, under Department Order No. (DO) 40-03 and the Rules of Court, non-compliance
with which is a ground to dismiss a petition for cancellation of a certificate of registration;
2) It was erroneous for both the Regional Director and the BLR OIC Director to give credence to the
retraction statements of union members which were not presented for reaffirmation during any of
the hearings of the case, contrary to the requirement for the admission of such evidence under
Sec. 11, Rule XI of DO 40-03.
In a Decision dated December 21, 2006, the BLR, now headed by Director Rebecca C. Chato, set aside the
July 28, 2006 order of the BLR OIC Director, disposing as follows:
WHEREFORE, the motion for reconsideration is hereby GRANTED and our Resolution dated 28 July 2006 is
hereby VACATED. Accordingly, the Eagle Ridge Employees Union (EREU) shall remain in the roster of
legitimate organizations.
In finding for the Union, the BLR Director eschewed procedural technicalities. Nonetheless, she found as
without basis allegations of misrepresentation or fraud as ground for cancellation of EREUs registration.
In turn aggrieved, Eagle Ridge sought but was denied reconsideration per the BLRs Resolution dated
March 7, 2007.
Eagle Ridge thereupon went to the CA on a petition for certiorari.
The Ruling of the CA
On April 27, 2007, the appellate court, in a terse two-page Resolution,
27
dismissed Eagle Ridges petition
for being deficient, as:
1. the questioned [BLR] Decision dated December 21, 2006 and the Resolution dated March 7,
2007 Resolution [appended to the petition] are mere machine copies; and
2. the verification and certification of non-forum shopping was subscribed to by Luna C. Piezas on
her representation as the legal counsel of the petitioner, but sans [the requisite] Secretarys
Certificate or Board Resolution authorizing her to execute and sign the same.
The CA later denied, in its second assailed resolution, Eagle Ridges motion for reconsideration, albeit the
latter had submitted a certificate to show that its legal counsel has been authorized, per a board
resolution, to represent the corporation.
The Issues
Eagle Ridge is now before us via this petition for certiorari on the submissions that:
I.
[THE CA] COMMITTED SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN DISMISSING THE COMPANYS PETITION FOR CERTIORARI AND DENYING
ITS MOTION FOR RECONSIDERATION CONSIDERING THAT THE COMPANYS PREVIOUS COUNSEL WAS
AUTHORIZED TO REPRESENT THE COMPANY IN THE PETITION FOR CERTIORARI FILED BEFORE THE [CA];
II.
IN ORDER NOT TO FURTHER PREJUDICE THE COMPANY, IT IS RESPECTFULLY SUBMITTED THAT THIS
HONORABLE COURT COULD TAKE COGNIZANCE OF THE MERITS OF THIS CASE AND RESOLVE THAT
BASED ON THE EVIDENCE ON RECORD, THERE WAS FRAUD, MISREPRESENTATION AND/OR FALSE
STATEMENT WHICH WARRANT THE CANCELLATION OF CERTIFICATE OF REGISTRATION OF EREU.
28

The Courts Ruling
We dismiss the petition.
Procedural Issue: Lack of Authority
Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of right.
29
Accordingly,
the party who seeks to avail of it must strictly observe the rules laid down by law.
30

Petitions for certiorari under Rule 65 of the Rules of Court require a "sworn certification of non-forum
shopping as provided in the third paragraph of Section 3, Rule 46."
31
Sec. 3, paragraphs 4 and 6 of Rule
46 pertinently provides:
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. x x x x
x x x x
x x x x
The petitioner shall also submit together with the petition a sworn certification that he has not
theretofore commenced any action involving the same issues in the Supreme Court, the Court of
Appeals x x x, or any other tribunal or agency; if there is such other action or proceeding, he must state
the status of the same x x x.
x x x x
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient
ground for the dismissal of the petition. (Emphasis supplied.)
Evidently, the Rules requires the petitioner, not his counsel, to sign under oath the requisite certification
against non-forum shopping. Such certification is a peculiar personal representation on the part of the
principal party, an assurance to the court that there are no other pending cases involving basically the
same parties, issues, and cause of action.
32

In the instant case, the sworn verification and certification of non-forum shopping in the petition for
certiorari of Eagle Ridge filed before the CA carried the signature of its counsel without the requisite
authority.
Eagle Ridge tried to address its faux pas by submitting its board secretarys Certificate
33
dated May 15,
2007, attesting to the issuance on May 10, 2007 of Board Resolution No. ERGCCI 07/III-01 that
authorized its counsel of record, Atty. Luna C. Piezas, to represent it before the appellate court.
The CA, however, rejected Eagle Ridges virtual plea for the relaxation of the rules on the signing of the
verification and certification against forum shopping, observing that the board resolution adverted to was
approved after Atty. Piezas has signed and filed for Eagle Ridge the petition for certiorari.
The appellate courts assailed action is in no way tainted with grave abuse of discretion, as Eagle Ridge
would have this Court believed. Indeed, a certification of non-forum shopping signed by counsel without
the proper authorization is defective and constitutes a valid cause for dismissal of the petition.
34

The submission of the board secretarys certificate through a motion for reconsideration of the CAs
decision dismissing the petition for certiorari may be considered a substantial compliance with the Rules of
Court.
35
Yet, this rule presupposes that the authorizing board resolution, the approval of which is certified
to by the secretarys certification, was passed within the reglementary period for filing the petition. This
particular situation does not, however, obtain under the premises. The records yield the following material
dates and incidents: Eagle Ridge received the May 7, 2007 resolution of the BLR Director on March 9,
2007, thus giving it 60 days or up to May 8, 2007 to file a petition for certiorari, as it in fact filed its
petition on April 18, 2007 before the CA. The authorization for its counsel, however, was only issued in a
meeting of its board on May 10, 2007 or a couple of days beyond the 60-day reglementary period referred
to in filing a certiorari action. Thus, there was no substantial compliance with the Rules.
As with most rules of procedure, however, exceptions are invariably recognized and the relaxation of
procedural rules on review has been effected to obviate jeopardizing substantial justice.
36
This liberality
stresses the importance of review in our judicial grievance structure to accord every party litigant the
amplest opportunity for the proper and just disposition of his cause, freed from the constraints of
technicalities.
37
But concomitant to a liberal interpretation of the rules of procedure should be an effort on
the part of the party invoking liberality to adequately explain his failure to abide by the rules.
38
1avvphi1
To us, Eagle Ridge has not satisfactorily explained its failure to comply. It may be true, as Eagle Ridge
urges, that its counsels authority to represent the corporation was never questioned before the DOLE
regional office and agency. But EREUs misstep could hardly lend Eagle Ridge comfort. And obviously,
Eagle Ridge and its counsel erred in equating the latters representation as legal counsel with the authority
to sign the verification and the certificate of non-forum shopping in the formers behalf. We note that the
authority to represent a client before a court or quasi-judicial agency does not require an authorizing
board resolution, as the counsel-client relationship is presumed by the counsels representation by the
filing of a pleading on behalf of the client. In filing a pleading, the counsel affixes his signature on it, but it
is the client who must sign the verification and the certification against forum shopping, save when a
board resolution authorizes the former to sign so.
It is entirely a different matter for the counsel to sign the verification and the certificate of non-forum
shopping. The attestation or certification in either verification or certification of non-forum shopping
requires the act of the principal party. As earlier indicated, Sec. 3 of Rule 46 exacts this requirement; so
does the first paragraph of Sec. 5 of Rule 7 pertinently reading:
SEC. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath
in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed
thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed
any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or
claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the
same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days
therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. (Emphasis
added.)
It is, thus, clear that the counsel is not the proper person to sign the certification against forum shopping.
If, for any reason, the principal party cannot sign the petition, the one signing on his behalf must have
been duly authorized.
39

In addition, Eagle Ridge maintains that the submitted board resolution, albeit passed after the filing of the
petition was filed, should be treated as a ratificatory medium of the counsels act of signing the sworn
certification of non-forum shopping.
We are not inclined to grant the desired liberality owing to Eagle Ridges failure to sufficiently explain its
failure to follow the clear rules.
If for the foregoing considerations alone, the Court could very well dismiss the instant petition.
Nevertheless, the Court will explore the merits of the instant case to obviate the inequity that might result
from the outright denial of the petition.
Substantive Issue: No Fraud in the Application
Eagle Ridge cites the grounds provided under Art. 239(a) and (c) of the Labor Code for its petition for
cancellation of the EREUs registration. On the other hand, the Union asserts bona fide compliance with
the registration requirements under Art. 234 of the Code, explaining the seeming discrepancies between
the number of employees who participated in the organizational meeting and the total number of union
members at the time it filed its registration, as well as the typographical error in its certification which
understated by one the number of union members who ratified the unions constitution and by-laws.
Before their amendment by Republic Act No. 9481
40
on June 15, 2007, the then governing Art. 234 (on
the requirements of registration of a labor union) and Art. 239 (on the grounds for cancellation of union
registration) of the Labor Code respectively provided as follows:
ART. 234. REQUIREMENTS OF REGISTRATION. Any applicant labor organization, association or
group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges
granted by law to legitimate labor organizations upon issuance of the certificate of registration based on
the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of workers who participated in such
meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate;
x x x x
(e) Four copies (4) of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification and the list of the members who participated in it.
41

x x x x
ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION. The following shall constitute
grounds for cancellation of union registration:
(a) Misrepresentation, false statements or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification;
x x x x
(c) Misrepresentation, false statements or fraud in connection with the election of
officers, minutes of the election of officers, the list of voters, or failure to submit these
documents together with the list of the newly elected/appointed officers and their postal addresses
within thirty (30) days from election.
42
(Emphasis supplied.)
A scrutiny of the records fails to show any misrepresentation, false statement, or fraud committed by
EREU to merit cancellation of its registration.
First. The Union submitted the required documents attesting to the facts of the organizational
meeting on December 6, 2005, the election of its officers, and the adoption of the Unions
constitution and by-laws. It submitted before the DOLE Regional Office with its Application for
Registration and the duly filled out BLR Reg. Form No. I-LO, s. 1998, the following documents, to
wit:
(a) the minutes of its organizational meeting
43
held on December 6, 2005 showing 26
founding members who elected its union officers by secret ballot;
(b) the list of rank-and-file employees
44
of Eagle Ridge who attended the organizational
meeting and the election of officers with their individual signatures;
(c) the list of rank-and-file employees
45
who ratified the unions constitution and by-laws
showing the very same list as those who attended the organizational meeting and the
election of officers with their individual signatures except the addition of four employees
without their signatures, i.e., Cherry Labajo, Grace Pollo, Annalyn Poniente and Rowel
Dolendo;
(d) the unions constitution and by-laws
46
as approved on December 6, 2005;
(e) the list of officers
47
and their addresses;
(f) the list of union members
48
showing a total of 30 members; and
(g) the Sworn Statement
49
of the unions elected president and secretary. All the foregoing
documents except the sworn statement of the president and the secretary were
accompanied by Certifications
50
by the union secretary duly attested to by the union
president.
Second. The members of the EREU totaled 30 employees when it applied on December 19, 2005
for registration. The Union thereby complied with the mandatory minimum 20% membership
requirement under Art. 234(c). Of note is the undisputed number of 112 rank-and-file employees
in Eagle Ridge, as shown in the Sworn Statement of the Union president and secretary and
confirmed by Eagle Ridge in its petition for cancellation.
Third. The Union has sufficiently explained the discrepancy between the number of those who
attended the organizational meeting showing 26 employees and the list of union members showing
30. The difference is due to the additional four members admitted two days after the organizational
meeting as attested to by their duly accomplished Union Membership forms. Consequently, the
total number of union members, as of December 8, 2005, was 30, which was truthfully indicated in
its application for registration on December 19, 2005.
As aptly found by the BLR Director, the Union already had 30 members when it applied for
registration, for the admission of new members is neither prohibited by law nor was it concealed in
its application for registration. Eagle Ridges contention is flawed when it equated the requirements
under Art. 234(b) and (c) of the Labor Code. Par. (b) clearly required the submission of the
minutes of the organizational meetings and the list of workers who participated in the meetings,
while par. (c) merely required the list of names of all the union members comprising at least 20%
of the bargaining unit. The fact that EREU had 30 members when it applied for registration on
December 19, 2005 while only 26 actually participated in the organizational meeting is borne by
the records.
Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the inclusion of the additional
four members allegedly for not complying with what it termed as "the sine qua non requirements"
for union member applications under the Unions constitution and by-laws, specifically Sec. 2 of
Art. IV. We are not persuaded. Any seeming infirmity in the application and admission of union
membership, most especially in cases of independent labor unions, must be viewed in favor of valid
membership.
The right of employees to self-organization and membership in a union must not be trammeled by
undue difficulties. In this case, when the Union said that the four employee-applicants had been
admitted as union members, it is enough to establish the fact of admission of the four that they
had duly signified such desire by accomplishing the membership form. The fact, as pointed out by
Eagle Ridge, that the Union, owing to its scant membership, had not yet fully organized its different
committees evidently shows the direct and valid acceptance of the four employee applicants rather
than deter their admissionas erroneously asserted by Eagle Ridge.
Fifth. The difference between the number of 26 members, who ratified the Unions constitution and
by-laws, and the 25 members shown in the certification of the Union secretary as having ratified it,
is, as shown by the factual antecedents, a typographical error. It was an insignificant mistake
committed without malice or prevarication. The list of those who attended the organizational
meeting shows 26 members, as evidenced by the signatures beside their handwritten names. Thus,
the certifications understatement by one member, while not factual, was clearly an error, but
neither a misleading one nor a misrepresentation of what had actually happened.
Sixth. In the more meaty issue of the affidavits of retraction executed by six union members, we
hold that the probative value of these affidavits cannot overcome those of the supporting affidavits
of 12 union members and their counsel as to the proceedings and the conduct of the organizational
meeting on December 6, 2005. The DOLE Regional Director and the BLR OIC Director obviously
erred in giving credence to the affidavits of retraction, but not according the same treatment to the
supporting affidavits.
The six affiants of the affidavits of retraction were not presented in a hearing before the Hearing
Officer (DOLE Regional Director), as required under the Rules Implementing Book V of the Labor
Code covering Labor Relations. Said Rules is embodied in Department Order No. (DO) 40-03 which
was issued on February 17, 2003 and took effect on March 15, 2003 to replace DO 9 of 1997. Sec.
11, Rule XI of DO 40-03 specifically requires:
Section 11. Affirmation of testimonial evidence. Any affidavit submitted by a party to
prove his/her claims or defenses shall be re-affirmed by the presentation of the affiant
before the Med-Arbiter or Hearing Officer, as the case may be. Any affidavit submitted
without the re-affirmation of the affiant during a scheduled hearing shall not be admitted
in evidence, except when the party against whom the affidavit is being offered admits all
allegations therein and waives the examination of the affiant.
It is settled that affidavits partake the nature of hearsay evidence, since they are not generally
prepared by the affiant but by another who uses his own language in writing the affiants
statement, which may thus be either omitted or misunderstood by the one writing them.
51
The
above rule affirms the general requirement in adversarial proceedings for the examination of the
affiant by the party against whom the affidavit is offered. In the instant case, it is required for
affiants to re-affirm the contents of their affidavits during the hearing of the instant case for them
to be examined by the opposing party, i.e., the Union.
For their non-presentation and consonant to the above-quoted rule, the six affidavits of retraction
are inadmissible as evidence against the Union in the instant case. Moreover, the affidavit and
joint-affidavits presented by the Union before the DOLE Regional Director were duly re-affirmed in
the hearing of March 20, 2006 by the affiants. Thus, a reversible error was committed by the DOLE
Regional Director and the BLR OIC Director in giving credence to the inadmissible affidavits of
retraction presented by Eagle Ridge while not giving credence to the duly re-affirmed affidavits
presented by the Union.
Evidently, the allegations in the six affidavits of retraction have no probative value and at the very
least cannot outweigh the rebutting attestations of the duly re-affirmed affidavits presented by the
Union.
Seventh. The fact that six union members, indeed, expressed the desire to withdraw their
membership through their affidavits of retraction will not cause the cancellation of registration on
the ground of violation of Art. 234(c) of the Labor Code requiring the mandatory minimum 20%
membership of rank-and-file employees in the employees union.
The six retracting union members clearly severed and withdrew their union membership. The query
is whether such separation from the Union can detrimentally affect the registration of the Union.
We answer in the negative.
Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union
membership of at least 22 employees (112 x 205 = 22.4). When the EREU filed its application for
registration on December 19, 2005, there were clearly 30 union members. Thus, when the
certificate of registration was granted, there is no dispute that the Union complied with the
mandatory 20% membership requirement.
Besides, it cannot be argued that the six affidavits of retraction retroact to the time of the
application of registration or even way back to the organizational meeting. Prior to their
withdrawal, the six employees in question were bona fide union members. More so, they never
disputed affixing their signatures beside their handwritten names during the organizational
meetings. While they alleged that they did not know what they were signing, it bears stressing that
their affidavits of retraction were not re-affirmed during the hearings of the instant case rendering
them of little, if any, evidentiary value.
With the withdrawal of six union members, there is still compliance with the mandatory
membership requirement under Art. 234(c), for the remaining 24 union members constitute more
than the 20% membership requirement of 22 employees.
Eagle Ridge further argues that the list of union members includes a supervisory employee. This is
a factual issue which had not been raised at the first instance before the DOLE Regional Director
and cannot be appreciated in this proceeding. To be sure, Eagle Ridge knows well who among its
personnel belongs or does not belong to the supervisory group. Obviously, its attempt to raise the
issue referred to is no more than an afterthought and ought to be rejected.
Eighth. Finally, it may not be amiss to note, given the factual antecedents of the instant case, that
Eagle Ridge has apparently resorted to filing the instant case for cancellation of the Unions
certificate of registration to bar the holding of a certification election. This can be gleaned from the
fact that the grounds it raised in its opposition to the petition for certification election are basically
the same grounds it resorted to in the instant case for cancellation of EREUs certificate of
registration. This amounts to a clear circumvention of the law and cannot be countenanced.
For clarity, we reiterate the following undisputed antecedent facts:
(1) On December 6, 2005, the Union was organized, with 26 employees of Eagle Ridge
attending;
(2) On December 19, 2005, the Union filed its formal application for registration indicating a
total of 30 union members with the inclusion of four additional members on December 8,
2005 (Reg. Cert. No. RO400-200512-UR-003 was eventually issued by the DOLE RO IV-A);
(3) On January 10, 2006, the Union filed before the DOLE RO IV-A its petition for
certification election in Eagle Ridge;
(4) On February 13, 2006, Eagle Ridge filed its Position Paper opposing the petition for
certification election on essentially the same grounds it raised in the instant case; and
(5) On February 24, 2006, Eagle Ridge filed the instant case for cancellation of the Unions
certificate of registration on essentially the same grounds it raised in its opposition to the
Unions petition for certification election.
Evidently, as the Union persuasively argues, the withdrawal of six member-employees from the Union will
affect neither the Unions registration nor its petition for certification election, as their affidavits of
retraction were executed after the Unions petition for certification election had been filed. The initial five
affidavits of retraction were executed on February 15, 2006; the sixth, on March 15, 2006. Indisputably,
all six were executed way after the filing of the petition for certification election on January 10, 2006.
In Eastland Manufacturing Company, Inc. v. Noriel,
52
the Court emphasized, and reiterated its earlier
rulings,
53
that "even if there were less than 30% [the required percentage of minimum membership then]
of the employees asking for a certification election, that of itself would not be a bar to respondent Director
ordering such an election provided, of course, there is no grave abuse of discretion."
54
Citing Philippine
Association of Free Labor Unions v. Bureau of Labor Relations,
55
the Court emphasized that a certification
election is the most appropriate procedure for the desired goal of ascertaining which of the competing
organizations should represent the employees for the purpose of collective bargaining.
56

Indeed, where the company seeks the cancellation of a unions registration during the pendency of a
petition for certification election, the same grounds invoked to cancel should not be used to bar the
certification election. A certification election is the most expeditious and fairest mode of ascertaining the
will of a collective bargaining unit as to its choice of its exclusive representative.
57
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.
58

The Court ends this disposition by reproducing the following apt excepts from its holding in S.S. Ventures
International, Inc. v. S.S. Ventures Labor Union (SSVLU) on the effect of the withdrawal from union
membership right before or after the filing of a petition for certification election:
We are not persuaded. As aptly noted by both the BLR and CA, these mostly undated written statements
submitted by Ventures on March 20, 2001, or seven months after it filed its petition for cancellation of
registration, partake of the nature of withdrawal of union membership executed after the Unions filing of
a petition for certification election on March 21, 2000. We have in precedent cases said that the
employees withdrawal from a labor union made before the filing of the petition for certification
election is presumed voluntary, while withdrawal after the filing of such petition is considered
to be involuntary and does not affect the same. Now then, if a withdrawal from union
membership done after a petition for certification election has been filed does not vitiate such
petition, is it not but logical to assume that such withdrawal cannot work to nullify the
registration of the union? Upon this light, the Court is inclined to agree with the CA that the BLR did not
abuse its discretion nor gravely err when it concluded that the affidavits of retraction of the 82 members
had no evidentiary weight.
59
(Emphasis supplied.)
WHEREFORE, premises considered, we DISMISS the instant petition for lack of merit.
Costs against petitioner.
SO ORDERED.
72. G.R. No. 74841 December 20, 1991
ASSOCIATED LABOR UNIONS-VIMCONTU, THE CEBU OIL EMPLOYEES ASSOCIATION,
represented by its Acting President, MIGUEL C. ALIVIADO, and THE MOBIL DAVAO/ COTABATO
CHAPTER-ALU, represented by its President, DAVID C. ONDEVILLA, petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), MOBIL OIL PHILIPPINES, INC., JEAN
PIERRE BAILLEUX, CALTEX PHILIPPINES, INC., and MOBIL PHILIPPINES, INC., respondents.
G.R. No. 75667 December 20, 1991
ASSOCIATED LABOR UNIONS-VIMCONTU, THE CEBU OIL EMPLOYEES ASSOCIATION-ALU LOCAL
15, represented by its President, EMILIO S. SUAREZ, and THE MOBIL DAVAO/COTABATO
CHAPTER-ALU, represented by its President, DAVID C. ONDEVILLA, petitioners,
vs.
MOBIL OIL PHILS., INC., JEAN PIERRE BAILLEUX, CALTEX PHILIPPINES, INC., and MOBIL
PHILIPPINES, INC., respondents.
Edgemelo C. Rosales for petitioner ALU.
DAVIDE, JR., J:p
These consolidated petitions for certiorari, filed within four (4) days from each other, seek to annul and
set aside the decision 1 dated 22 January 1986 of the National Labor Relations Commissions (NLRC)
affirming the dismissal by Labor Arbiter Felipe T. Graduque II of the complaint filed in NLRC Case No.
RAB-VII-0762-83 entitled Associated Labor Unions-VIMCONTU, et al. versus Mobil Oil Philippines, Inc. et
al., promulgated on 6 December 1984.
G.R. No. 74841 was filed by Atty. Felipe Tac-an on 25 July 1986, 2 with the local represented by its acting
president, Miguel Aliviado. G.R. No. 75667 was filed by Atty. Candido C. Caballero on 28 July 1986. 3 He
avers that he is counsel for the petitioner Unions except for twenty (20) petitions stem from the same
facts and involve identical issues, a single discussion will be devoted to both.
The antecedent facts are partly summarized by the public respondent, as follows:
... A collective bargaining agreement was entered into between the complainants and the
respondent Mobil Oil Philippines, Inc. for a period of three years starting from April 1, 1982
to March 31, 1985. On August 5, 1983, respondent J.P. Bailiux, President of Mobil Oil
Philippines, Inc. sent letters to the employees, notifying of (sic) the termination of their
services effective August 31, 1983 because of the sale of the respondent firm. On
September 13, 1983, complainant employee accepted their checks for separation pay and
signed quit-claims under protest and subject to the outcome of this case.
Caltex Philippines, Inc. was impleaded as additional respondent because of its acquisition of
the entire marketing and distribution assets of Mobil Oil Philippines. Mobil Philippines, Inc.
was also made a respondent in view of a metropolitan daily newspaper announcement that
Mobil Oil Philippines, Inc. will continue to do business under the corporate name of Mobil
Philippines, Inc. and that this newly formed company will market chemicals and special
products such as solvents, process products, waxes and industrial asphalt, fuels and
lubricants for the international marine and aviation industries.
Complainants charge respondent Mobil Oil Philippines, Inc. and J.P. Bailiux with unfair labor
practice for violating their collective bargaining agreement which, among others, states that
"this Agreement shall be binding upon the parties hereto and their successors and assigns,
and may be assigned by the company without the previous approval of the Union. However,
the latter will be notified of such assignment when it occurs." In this case, the complainant
unions were not notified officially of such assignment to Caltex Philippines and respondent
Mobil Oil Philippines made announcement in major dailies that the company shall continue
to operate its business. 4
The pleadings of the parties further disclose the following:
What Caltex Phils. purchased was Mobil Petroleum's USA (Mobil Pet) shareholdings in Mobil Oil Philippines,
Inc. (MOPI) for US$40,000,000.00. Upon consummation of the sale, MOPI filed an amended articles of
incorporation which provided that its corporate term would cease on 31 December 1983. By 5 September
1983, MOPI actually closed and ceased operations. 5
The complaint for unfair labor practice and breach of contract against Jean Pierre Bailleux was filed on 8
September 1983 in the NLRC, Ministry of Labor and Employment, Cebu City. This was amended on 5
October 1983 to implead additional respondents, namely: MOPI, Caltex Phils., Inc. and Mobil Phils., Inc.
and to demand payment for actual, moral and exemplary damages in the amounts of P2,000,000.00,
P3,000,000.00, and P1,000,000.00, respectively, and for attorney's fees, litigation expenses, and other
measures of reliefs and remedies consistent with law and equity. 6
In due course, Labor Arbiter Felipe T. Garduque II rendered a decision dismissing the complaint on the
basis of the following findings and conclusions:
After a close evaluation of the arguments of both contending parties, it is believed that the
alleged sale by Mobil Petroluem, USA to Caltex, the former being a principal stockholder of
MOPI, was in fact made by MOPI to Caltex, and whatever CBA entered into by MOPI binds
its stockholders. However, Section I of Article XX of the CBA was not violated by respondent
MOPI as the record shows and from the admission of complainants-union that the latter has
(sic) knowledge of the impending sales and closure of the firm in a series of
negotiations/meetings.
Further, it would seem that as between complainants and respondent MOPI, the situation is
one of closure and not redundancy, and therefore, Sec. 3 of Article XI is not applicable.
Furthermore, since this instant complaint of unfair labor practice takes the nature of a
criminal case, the same must be established by clear and convincing evidence which
complainants failed to do so.
On the issue of whether or not respondents Caltex and MOPI bound (sic) by the provisions
of the CBA, the Commission finds that although Caltex is bound by the said agreement
under Section I thereof, but the rights and interests or benefits that may have been earned
during the remaining term of the CBA have been satisfied by MOPI when herein
complainants accepted their respective checks and executed quitclaim from and in favor of
the firm.
The office took note of the fact although acceptance of payment was under protest, there
have been previous long negotiations/meetings for settlement between herein parties, and
the benefits granted by respondent MOPI, were far above the benefits provided for by law.
As regards respondent MPI, in addition to the above, there is no concrete evidence to
establish or porve complainant's allegation that MOPI will continue its business. 7
Complainants (petition herein) appealed from the decision to the NLRC. Finding the arguments raised on
appeal to be a repetition of the grounds presented before the labor arbiter, and opining that no grave
abuse of discretion was committed by labor arbiter Garduque, the NLRC's first division dismissed the
appeal in its decision of January 22 1986. Their motion for reconsideration filed on 20 March 1986 8
having been denied for lack of merit on 11 April 1986, 9 these instant petitions were filed on the dates
earlier mentioned.
In G.R. No. 74841, petitioners assail the above decision and contend that the NLRC committed serious
errors of law and grave abuse of discretion when it ruled to justify the termination that : (a) petitioners
had knowledge of the impending sale to Caltex and closure of the company in a series of
negotiations/meetings by considering it as a sufficient notice of termination; (b) the situation was one of
closure and not redundancy; (c) the rights and interests or benefits that may have been earned during the
remaining term of the CBA have been satisfied by MOPI when complainants accepted their respective
checks and executed quitclaim from and in favor of the firm; (d) the benefits granted by respondent MOPI
were far above the benefits provided by law; and (e) as regards the liability of Mobil Philippines, Inc.,
there is no concrete evidence to establish or prove complainants' allegation that MOPI will continue its
business. As to the issue of unfair labor practice, they alleged that public respondent committed serious
errors of law and acted with grave abuse of discretion when it ruled that since the complaint for unfair
Labor practice partakes of the nature of a criminal case, it must be established by clear and convincing
evidence. 10
In G.R. No. 75667, petitioners attribute to the public respondent the commission of the following errors:
(A) ... grave abuse of discretion amounting to lack of or in excess of jurisdiction in holding
that respondents Mobil Oil Philippines, Inc., Jean Pierre Bailleux, Caltex Philippines, Inc. and
Mobil Philippines, Inc. did not commit an unfair labor practice acts (sic) resulting from a
breach of contract thus giving out actual, moral and exemplary damages as well as
attorney's fees and costs of litigation, ...
(B) ... in the findings and conclusions of law when the respondent commission instantly
dismissed the complaint and appeal for lack of merit, inspite of an utter disregard of the
valid and existing collective bargaining agreement of the herein petitioners and respondent
Mobil Oil Philippines and Jean Pierre Bailleux. 11
On 11 August 1986, We required the respondents in G.R. No. 74841 to comment on the petition, 12
which public respondent NLRC did through the office of the Solicitor General on 5 March 1987 13 and
private respondents on 25 September 1987. 14
On 7 October 1987, We ordered the consolidation of the two (2) petitions, 15 considered the Solicitor
General's comment in G.R. No. 74841 as his comment in G.R. No. 75667, and required petitioners to reply
to the comment, which they complied with on 1 June 1988. 16
Thereupon, on 23 November 1987, petitioners, thru their representatives Miguel Aliviado and David
Ondevilla, filed a motion to disregard, expunge and/or dismiss the petition filed without authority by Atty.
Candido Caballero and consider only the petition filed by Atty. Felipe Tac-an in G.R. No. 74841. 17 This
was followed by a motion to withdrawal appearance filed by Atty. Caballero on 14 December 1987. 18
Atty. Edgemelo Rosales replaced Caballero as counsel for petitioners.
On 20 May 1988, this court resolved to give due course to both petitions and require the parties to file
simultaneous memoranda. 19 On 1 July 1988, public respondent moved that it be excused from filing a
Memorandum and that its Comment dated 2 March 1987 be considered as its joint memorandum in the
two (2) petitions 20 which this Court granted on 3 August 1988. 21
Petitioners filed their Memorandum on 28 July 1988 22 while private respondents filed theirs on 12 August
1988. 23
There is no merit in these consolidated petitions.
The issues presently raised have already been passed upon and resolved by this Court in another almost
identical case, Mobil Employees Association, et al. vs. NLRC, et al., 24 a petition which challenged the
decision dated 6 April 1987 of the NLRC Second Division, upholding a labor arbiter's finding that MOPI was
not guilty of unfair labor practice and illegal dismissal and that the termination was accused by cessation
of MOPI's business operations in the country. Through Mr. Justice Feliciano, this Court held in said case
that:
xxx xxx xxx
Examination of the CBA provisions entitled "Effectivity" shows that the written notice to
terminate that is required to be given by either party to the other relates to notice to
terminate the CBA at the end of the original three-year, period or any subsequent year
thereafter, in the absence of which written notice, the duration of the CBA would be
automatically extended for one (1) year periods. What is involved in instant Petition is not,
however, the termination of the CBA itself, considering that the sale by Mobil Pet of its
wholly owned subsidiary MOPI to Caltex Pet took place in 1983, in the middle of original
(sic) period of the CBA's. It appears to the Court that the applicable provision is Article II,
Section 1, quoted above. Under Article II, Section 1, in cases of termination of services of
employees, the company is required to comply with the provisions of the Labor Code and its
implementing Rules and Regulations and, "time and circumtances permitting" and
"whenever possible," management should enlist the support of the unions in actions
affecting the vital interest of the bargainable (i.e., member) employees. It may be well to
add that, since actual notice was given to all of MOPI's employees, including, of course, the
employees who were members of petitioner unions, such notice may also be regarded as
effectively the notice to the unions contemplated by the CBA provision on "Effectivity."
Article 284 of the Labor Code as it existed in 1983 provided as follows:
Art. 284. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment top prevent losses or the closing or cessation of operation of the
establishment or undertaking, unless the closing is for the purpose of circumventing the
provisions of this title by serving a written notice on the workers and the Ministry of Labor
and Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor-saving devices or redundany, the worker affected
thereby shall be entitled to a separation pay equivalent to least his one (1) month pay or to
at least one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closure or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or least one-half () month pay
for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
(Emphasis supplied.)
Under Article 184 above, three (3) requirements may be seen be established in respect of
cessation of business operations of an employer company not due to business reverses,
namely:
(a) service of a written notice to the employees and to the MOLE at least one (1) month
before the intended date thereof;
(b) the cessation of or withdrawal from business operation must be bona fide in character;
and
(c) payment to the employees of termination pay amounting to at least one-half () month
pay for each year of service, or one (1) month pay, which is higher.
As noted earlier, MOPI's employee and the MOLE were notified in writing on 5 August 1983
that the employees' service would cease on 31 August 1983, but that employees would
nonetheless be paid their salaries and other benefits until or as of 5 September 1983. We
believe that is more than substantial compliance with the notice requirements of the Labor
Code. In respect of requirement (c) above relating to payment of termination pay to the
package given by MOPI to all its employees far exceeded the minimum requirement of one-
half () month pay for every year of service laid down in Article 184 of the Labor Code. The
very generosity of the termination pay package thus given to the employees argues strongly
that the cessation of business operations by MOPI was a bona fide one. It is very difficult for
this Court to believe that MOPI would be dissolved and all its employees separated with
generous separation pay benefits, for the sole purpose of circumventing the requirements of
MOPI's CBA with petitioner unions. Indeed, petitioners have not suggested any reason why
MOPI should have undertaken such a fundamental and non-reversible business
reorganization merely to evade its obligations under the CBA. The establishment of MPI with
the same Directors who had served as such in MOPI and the hiring of some former MOPI
employees for the purpose of settling and winding up the affairs of MOPI, does not detract
from the bona fide character of MOPI's dissolution and withdrawal from business. MPI's
residual business consisting of the marketing of chemicals, aviation and marine fuels as well
as exports, all of which constituted a fraction of the prior business of MOPI, similarly does
not argue against the bona fide character of the corporate reorganization which here took
place. The net effect of the reorganization was the liquidation by Mobil Pet of the great bulk
of its former business in the Philippines, the dissolution of the corporate entity of MOPI and
the transfer of its physical assets and business to some other Philippine entity owned and
controlled by Caltex Pet, presumably Caltex Philippines, without any impact upon the
foreign exchange reserves of the Philippines.
xxx xxx xxx
We conclude that petitioners have failed to show any grave abuse of discretion or any act
without or in excess of jurisdiction on the part of the NLRC in rendering its decision dated 6
April 1987.
xxx xxx xxx
The above decision forecloses any further attempt at reversing the decision of the public respondnt
challenged in these petitions. The parallels in that case and in these cases are too overwhelming for this
Court to disregard: (a) both cases sprung from the same sale negotiations between Mobil Pet and Caltex
Pet; (b) in both, MOPI's President, J.P. Bailleux, informed all employees in a letter dated 5 August 1983
that on 31 August 1983, their employment would cease as a result of MOPI's withdrawal from business;
(c) all employees were paid compensation up to or until 5 September 1983 and were given separation pay
equivalent to 2.25 months basic salary as of 31 August 1983 for every year of service and their unused
vacation leave for the current year were paid in cash; and (d) in both, complaints for ULP, based on
similarly worded CBAs (particularly on the notice requirements), were filed with different, branches of
NLRC which promulgated the two decisions appealed from within six days from each other. The only
difference, albeit insignificant, between the two (2) cases is that in the Mobil Employees Association case,
the collective bargaining agreements (CBA) are with MOPI-Luzon and MOPI-Iloilo, while in the instant
petitions, the CBAs are with MOPI of Cebu, Cotabato and Davao.
Thus, with this Court's pronouncement in Mobil Employees Association, et al. vs. NLRC, et al., supra., that
what was effected was cessation of business and that the requirement of due notice was substantially
complied with, the allegations that both MOPI and Caltex merely intended to evade the provisions of the
CBA cannot be sustained. There was nothing irregular in the closure by MOPI of its business operation.
Caltex may not be said to have stepped into the picture as an assignee of the CBA because of the very
fact of such closure.
In Sundowner Development Corp. vs. Drilon, 25 We stated the rule that unless expressly assumed, labor
contracts such as are not enforceable against a transferee of an enterprise, labor contracts being in
personam, thus binding only between the parties. 26 As a general rule, there is no law requiring a bona
fide purchaser of the assets of an on-going concern to absorb in its employ the employees of the latter.
27 However, although the purchaser of the assets or enterprise is not legally bound to absorb in its
employ the employees of the seller of such assets or enterprise, the parties are reliable to the employees
if the transaction between the parties is colored or clothed with bad faith. 28 The sale or disposition must
be motivated by good faith as an element of exemption from liability. 29
This flows from the well-recognized principle that is within the employer's legitimate sphere of
management control of the business to adopt economic policies or make some changes or adjustments in
their organization or operations that would insure profit to itself or protect the investment of its
stockholders. As in the exercise of such management prerogative, the employer may merge or consolidate
its business with another, or sell or dispose all or substantially all of its assets and properties which may
bring about the dismissal or termination of its employees in the process. 30 This disposes of the allegation
that there was termination due to redundancy; such could not be the case as all the employees were
terminated as a result of the closure. Redundancy contemplates a situation where employees are
dismissed because of duplicitous functions.
The foregoing renders unnecessary further discussion on the other issues raised by petitioners.
WHEREFORE, both Petitions for certiorari are DISMISSED for lack of merit.
IT IS SO ORDERED.
73. G.R. No. 177024
THE HERITAGE HOTEL MANILA v. PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA
HERITAGE MANILA
This case is about a companys objections to the registration of its rank and file union for non-
compliance with the requirements of its registration.
The Facts and the Case
Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila (petitioner
company) formed the Heritage Hotel Employees Union (the HHE union). The Department of Labor and
Employment-National Capital Region (DOLE-NCR) later issued a certificate of registration57[1] to this
union.
Subsequently, the HHE union filed a petition for certification election58[2] that petitioner company
opposed. The company alleged that the HHE union misrepresented itself to be an independent union,
when it was, in truth, a local chapter of the National Union of Workers in Hotel and Restaurant and Allied
Industries (NUWHRAIN). The company claimed that the HHE union intentionally omitted disclosure of its
affiliation with NUWHRAIN because the companys supervisors union was already affiliated with it.59[3]
Thus, the company also filed a petition for the cancellation of the HHE unions registration certificate.60[4]









Meanwhile, the Med-Arbiter granted the HHE unions petition for certification election.61[5] Petitioner
company appealed the decision to the Secretary of Labor but the latter denied the appeal.62[6] The
Secretary also denied petitioners motion for reconsideration, prompting the company to file a petition for
certiorari63[7] with the Court of Appeals.
On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding of the HHE
unions certification election, effective until the petition for cancellation of that unions registration shall
have been resolved with finality.64[8] The decision of the Court of Appeals became final when the HHE
union withdrew the petition for review that it filed with this Court.65[9]On December 10, 2003 certain
rank and file employees of petitioner company held a meeting and formed another union, the respondent
Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila (the PIGLAS union). This union
applied for registration with the DOLE-NCR66[10] and got its registration certificate on February 9, 2004.
Two months later, the members of the first union, the HHE union, adopted a resolution for its dissolution.
The HHE union then filed a petition for cancellation of its union registration.67[11]
On September 4, 2004 respondent PIGLAS union filed a petition for certification election68[12] that
petitioner company also opposed, alleging that the new unions officers and members were also those who
comprised the old union. According to the company, the employees involved formed the PIGLAS union to
circumvent the Court of Appeals injunction against the holding of the certification election sought by the
former union. Despite the companys opposition, however, the Med-Arbiter granted the petition for
certification election.69[13]



















On December 6, 2004 petitioner company filed a petition to cancel the union registration of respondent
PIGLAS union.70[14] The company claimed that the documents submitted with the unions application for
registration bore the following false information:

(a) The List of Members showed that the PIGLAS union had 100 union
members;71[15]
(b) The Organizational Minutes said that 90 employees attended the meeting on
December 10, 2003;72[16]
(c) The Attendance Sheet of the meeting of December 10, 2003 bore the signature
of 127 members who ratified the unions Constitution and By-Laws;73[17] and
(d) The Signature Sheet bore 128 signatures of those who attended that
meeting.74[18]
Petitioner company alleged that the misrepresentation was evidenced by the discrepancy in the number of
union members appearing in the application and the list as well as in the number of signatories to the
attendance and signature sheets. The minutes reported that only 90 employees attended the meeting.
The company further alleged that 33 members of respondent PIGLAS union were members of the defunct
HHE union. This, according to the company, violated the policy against dual unionism and showed that
the new union was merely an alter ego of the old.
On February 22, 2005 the DOLE-NCR denied the companys petition to cancel respondent PIGLAS unions
registration for the reason that the discrepancies in the number of members stated in the applications
supporting documents were not material and did not constitute misrepresentation. As for the charge of
dual unionism, the same is not a ground for canceling registration. It merely exposed a union member to
a possible charge of disloyalty, an internal matter. Here, the members of the former union simply
exercised their right to self-organization and to the freedom of association when they subsequently joined
the PIGLAS union.75[19]
On appeal, the Bureau of Labor Relation (BLR) affirmed the ruling of the DOLE-NCR. It reasoned that
respondent PIGLAS unions organization meeting lasted for 12 hours. It was possible for the number of
attendees to have increased from 90 to 128 as the meeting progressed. Besides, with a total of 250
employees in the bargaining unit, the union needed only 50 members to comply with the 20 percent
membership requirement. Thus, the union could not be accused of misrepresentation since it did not pad
its membership to secure registration.













As for the issue of dual unionism, it has become moot and academic, said the BLR, because of the
dissolution of the old union and the cancellation of its certificate of registration.76[20]
Petitioner company filed a petition for certiorari with the Court of Appeals,77[21] assailing the order of the
BLR. But the latter court dismissed the petition, not being accompanied by material documents and
portions of the record.78[22] The company filed a motion for reconsideration, attaching parts of the
record that were deemed indispensable but the court denied it for lack of merit.79[23] Hence, the
company filed this petition for review under Rule 45.
Issues Presented
The petition presents the following issues:

1. Whether or not the Court of Appeals erred in dismissing the petition for
certiorari before it for failure of petitioner company to attach certain material portions of the
record;

2. Whether or not the union made fatal misrepresentation in its application for
union registration; and

3. Whether or not dual unionism is a ground for canceling a unions
registration.
The Rulings of the Court
First. While the Court of Appeals correctly dismissed the companys petition initially for failure to attach
material portions of the record, the court should have bended back a little when petitioner company
subsequently attached those missing materials to its motion for reconsideration. As a general rule,
petitions for certiorari that lack copies of essential pleadings and portions of the record may be dismissed
but this rule has not been regarded as absolute. The omission may be cured.80[24]
The Court of Appeals has three courses of action when the annexes to the petition are insufficient. It may
dismiss the petition,81[25] require the submission of the relevant documents, or order the filing of an
amended petition with the required pleadings or documents. A petition lacking in essential pleadings or













portions of the record may still be given due course, or reinstated if earlier dismissed, upon subsequent
submission of the necessary documents or to serve the higher interest of justice.82[26]
Second. Since a remand of the case to the Court of Appeals for a determination of the substantive issues
will only result in more delays and since these issues have been amply argued by the opposing sides in
the various pleadings and documents they submitted to this Court, the case may now be resolved on the
merits.
Did respondent PIGLAS union commit fraud and misrepresentation in its application for union registration?
We agree with the DOLE-NCR and the BLR that it did not. Except for the evident discrepancies as to the
number of union members involved as these appeared on the documents that supported the unions
application for registration, petitioner company has no other evidence of the alleged misrepresentation.
But those discrepancies alone cannot be taken as an indication that respondent misrepresented the
information contained in these documents.
The charge that a labor organization committed fraud and misrepresentation in securing its registration is
a serious charge and deserves close scrutiny. It is serious because once such charge is proved, the labor
union acquires none of the rights accorded to registered organizations. Consequently, charges of this
nature should be clearly established by evidence and the surrounding circumstances.83[27]
Here, the discrepancies in the number of union members or employees stated in the various supporting
documents that respondent PIGLAS union submitted to labor authorities can be explained. While it
appears in the minutes of the December 10, 2003 organizational meeting that only 90 employees
responded to the roll call at the beginning, it cannot be assumed that such number could not grow to 128
as reflected on the signature sheet for attendance. The meeting lasted 12 hours from 11:00 a.m. to
11:00 p.m. There is no evidence that the meeting hall was locked up to exclude late attendees.
There is also nothing essentially mysterious or irregular about the fact that only 127 members ratified the
unions constitution and by-laws when 128 signed the attendance sheet. It cannot be assumed that all
those who attended approved of the constitution and by-laws. Any member had the right to hold out and
refrain from ratifying those documents or to simply ignore the process.
At any rate, the Labor Code84[28] and its implementing rules85[29] do not require that the number of
members appearing on the documents in question should completely dovetail. For as long as the
documents and signatures are shown to be genuine and regular and the constitution and by-laws
democratically ratified, the union is deemed to have complied with registration requirements.
Petitioner company claims that respondent PIGLAS union was required to submit the names of all its
members comprising at least 20 percent of the employees in the bargaining unit. Yet the list it submitted
named only 100 members notwithstanding that the signature and attendance sheets reflected a









membership of 127 or 128 employees. This omission, said the company, amounted to material
misrepresentation that warranted the cancellation of the unions registration.
But, as the labor authorities held, this discrepancy is immaterial. A comparison of the documents shows
that, except for six members, the names found in the subject list are also in the attendance and signature
sheets. Notably, the bargaining unit that respondent PIGLAS union sought to represent consisted of 250
employees. Only 20 percent of this number or 50 employees were required to unionize. Here, the union
more than complied with such requirement.
Labor laws are liberally construed in favor of labor especially if doing so would affirm its constitutionally
guaranteed right to self-organization.86[30] Here, the PIGLAS unions supporting documents reveal the
unmistakable yearning of petitioner companys rank and file employees to organize. This yearning should
not be frustrated by inconsequential technicalities.
Third. The fact that some of respondent PIGLAS unions members were also members of the old rank
and file union, the HHE union, is not a ground for canceling the new unions registration. The right of any
person to join an organization also includes the right to leave that organization and join another one.
Besides, HHE union is dead. It had ceased to exist and its certificate of registration had already been
cancelled. Thus, petitioners arguments on this point may also be now regarded as moot and academic.
WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Bureau of Labor Relations
in BLR-A-26-3-05 dated May 26, 2006.
SO ORDERED.
74. SMC SUPERVISORS AND EXEMPT UNION v. LAGUESMA

Facts:- October 1990, petitioner union filed before DOLE a petition for district certification or
CertificationElection among the supervisors and exempt employees of the SMC Magnolia Poultry Products
Plants of Cabuyao, San Fernando and Otis.- December 1990, Med-Arbiter Danilo Reynante issued an order
ordering the conduct of certificationamong the supervisors and exempt employees of the SMC Magnolia
Poultry Products Plants of Cabuyao,San Fernando and Otis as one bargaining unit. January 1991, SMC
filed a notice of appeal pointing outthe Med-Arbiter's error in grouping together all three separate plants
(Otis, Cabuyao, San Fernando) intoone bargaining unit and in including supervisory levels 3 and above
whose positions are confidential innature.- July 1991, Laguesma granted SMC's appeal and ordered the
remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the
employees sought to be included in theappropriate bargaining unit.- Upon SMC union's motion, Laguesma
directed the conduct of separate certification elections among thesupervisors ranked as supervisory levels
1-4 and the exempt employees in each of the three plants. SMCfiled a Motion for Reconsideration with
Motion to suspend proceedings. March 1993, Laguesma issuedan Order granting the Motion citing the
doctrine in PIDI vs NLRC
which stated that confidentialemployees, like managerial employees, are not allowed to form, join or
assist a labor union for purposesof collective bargaining. In this case, S3 and S4 and the so-called exempt
employees are confidentialemployees and are not allowed to participate in the certification election.

Issue:- Whether S3 and S4 employees and the exempt employees are considered confidential employees,
hence ineligible from joining a union.- If they are not confidential employees, do the employees of the
three plants constitute an appropriatesingle bargaining unit?

Held: The said employees (S3, S4 and exempt) do not fall within the term "confidential employees" and
aretherefore allowed to participate in the certification election. The unions from the three plants will
formone bargaining unit.Ratio:S3, S4 and exempt employees:The said employees are not vested with the
powers and prerogatives to lay down and executemanagement policies and/or to hires, transfer, suspend,
layoff, recall, discharge or dismiss employees.They are not qualified to be classified as managerial
employees who, under Article 245 of the Labor code,are not eligible to join, assist, or form any labor
organization. They are not allowed membership in a labor organization of the rank and file employees but
may join, assist or form separate labor organizations of their own.Confidential employees are:
those who assist or act in a confidential capacity to persons whoformulate, determine, and effectuate
management policies in the field of labor relations. The exclusion from bargaining units of employees who,
in the normal course of their duties, become aware of management policies relating to labor relations is a
principal objective sought to be accomplished by the"confidential employee rule." Employees should not
be placed in a position involving a potential conflictof interests. In determining the confidentiality of
certain employees, a key question frequently consideredis the employees' necessary access to confidential
labor relations information.




76. ALHAMBRA CIGAR CO vs. ALHAMBRA UNION

FACTS:
Respondent Alhambra Employees' Association, a legitimate labor organization, filed a petition in
which it is prayed that said union be certified as the sole and exclusive bargaining agent for all the
employees in the admi ni st rati ve, sal es, engi neeri ng and di spensary depart ment s of the
Al hambra Ci gar and Ci garett e Manufacturing Company.

The pet i t i on i s oppos ed by t he Company and another legitimate labor organization, the
Federacion Ob r e r a d e l a I n d u s t r i a T a b a q u e r a d e F i l i p i n a s (FOITAF).

They alleged that there is an existing CBA between the company and the FOITAF which constitutes a
bar to the instant certification proceeding.

Petitioner contends that all the employees paid in the administrative, sales, engineering, and dispensary
departments constitute an appropriate unit which is an employer unit

ISSUE:
WON the lower court erred in holding that all the employees in the administrative, sales, and
dispensary departments of petitioner company, with the exception of t he s uper vi s or s , s ec ur i t y
gua r ds , and c onf i dent i al employees therein, constitute an appropriate separate collective
bargaining unit.

HELD:
The Court ruled that, no reason to disturb said finding of t h e l o w e r c o u r t t h a t ,
s a i d e m p l o y e e s i n t h e administrative, sales, and dispensary departments perform wor k
whi c h ha v e not hi ng t o do wi t h pr oduc t i on and mai nt enance, unl i ke those i n the
raw l eaf (manl al asi ), cigar, cigarette, packing (precinteria), and engineering and garage
departments whose functions involve production and mai nt enance, they have a communi ty
of i nt erest which justifies their formation or existence as a separate appropriate collective bargaining
unit.
79. G.R. No. 110399 August 15, 1997
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION v.
HONORABLE BIENVENIDO E. LAGUESMA
FACTS:
Petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Direct
Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia
Poultry Products Plants of Cabuyao, San Fernando and Otis. Med-Arbiter Danilo L. Reynante issued an
Order for the conduct of certification election among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit.
Respondent San Miguel Corporation opposed arguing that the Med-Arbiters committed an error in
grouping together all three separate plants into one bargaining unit, and in including supervisory levels 3
and above whose positions are confidential in nature.
The public respondent citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC issued
an order excluding the employees under supervisory levels 3 and 4 and the so-called exempt employees
from the proposed bargaining unit and ruled out their participation in the certification election.
ISSUES:
1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered
confidential employees, hence ineligible from joining a union.
2. If they are not confidential employees, do the employees of the three plants constitute an appropriate
single bargaining unit?
HELD:
1. NO. Supervisory employees 3 and 4 and the exempt employees of the company do not fall within the
term confidential employees who may be prohibited from joining a union.
Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons
who formulate, determine, and effectuate management policies 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 supervisor, and the supervisor must handle the prescribed responsibilities relating to
labor relations.
An important element of the confidential employee rule is the employees need to use labor relations
information. Thus, in determining the confidentiality of certain employees, a key question frequently
considered is the employees necessary access to confidential labor relations information.
In the case at bar, supervisors 3 and above may not be considered confidential employees merely because
they handle confidential data as such must first be strictly classified as pertaining to labor relations for
them to fall under said restrictions. The information they handle are properly classifiable as technical and
internal business operations data which, to our mind, has no relevance to negotiations and settlement of
grievances wherein the interests of a union and the management are invariably adversarial. Since the
employees are not classifiable under the confidential type, this Court rules that they may appropriately
form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are
confidential employees, jurisprudence has established that there is no legal prohibition against confidential
employees who are not performing managerial functions to form and join a union.
2. YES. An appropriate bargaining unit may be defined as a group of employees of a given
employer, comprised of all or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer, indicate to be best suited
to serve the reciprocal rights and duties of the parties under the collective bargaining
provisions of the law.
A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in
wages, hours, working conditions and other subjects of collective bargaining.
It is readily seen that the employees in the instant case have community or mutuality of interests, which
is the standard in determining the proper constituency of a collective bargaining unit. It is undisputed
that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although
they belong to three different plants, they perform work of the same nature, receive the same wages and
compensation, and most importantly, share a common stake in concerted activities.
In light of these considerations, the Solicitor General has opined that separate bargaining units in the
three different plants of the division will fragmentize the employees of the said division, thus greatly
diminishing their bargaining leverage. Any concerted activity held against the private respondent for a
labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of
the private respondent. The two other plants still in operation can well step up their production and make
up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly
frustrate the provisions of the Labor Code and the mandate of the Constitution.


ONE UNION ONE COMPANY POLICY
1. G.R. No. 85343 June 28, 1989
PHILTRANCO SERVICE ENTERPRISES v. BUREAU OF LABOR RELATIONS
In this petition for certiorari, the petitioner assails the order of the Bureau of Labor Relations (BLR) dated
September 5, 1988. The dispositive portion of the order reads:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 4 April 1988 is hereby set aside
and vacated and a new one entered ordering the conduct of a certification election among regular rank-
and-file professional, technical, administrative and confidential employees of respondent company, with
the following choices:
1. Kapisanan ng mga Kawani, Assistant Manggagawa at Konpidensyal sa Philtranco
(KASAMA KO)
2. No Union.
Let, therefore the records of the case be remanded to the Office of origin for the immediate
conduct of the election.
SO ORDERED. (Rollo, p. 33)
The antecedent facts are as follows:
Petitioner Philtranco Service Enterprises, Inc. is a land transportation company engaged in the business of
carrying passengers and freight. The company employees included field workers consisting of drivers,
conductors, coach drivers, coach stewards and mechanics and office employees like clerks, cashiers,
programmers, telephone operators, etc.
On February 15, 1988, the Kapisanan ng mga Kawani, Assistant, Manggagawa at Konpidensyal sa
Philtranco (KASAMA KO), a registered labor organization filed a petition for certification election with the
Department of Labor and Employment, alleging among others that:
xxx xxx xxx
3. Petitioner desires to represent all professional, technical, administrative, and confidential
employees personnel of respondent at its establishments in Luzon, Visayas and Mindanao
for purposes of collective bargaining;
4. The aforementioned employees were always expressly excluded from participating in the
certification election conducted among the rank and file employees (drivers, conductors,
coach drivers, coach stewards, and mechanics) of respondent and are excluded from the
bargaining unit covered by the CBA between respondent and its rank and file employees. In
addition, there exist substantial differences in the terms and conditions of employment
between the above-mentioned employees, hence, the former are covered by another
appropriate bargaining unit which is separate and distinct from that of the rank and file
employees of respondent and; which has been recognized by the Bureau of Labor Relations
and upheld by the Honorable Supreme Court. Attached hereto as Annex 'A' and Annex 'B'
are copies of the decision of the BLR and the Supreme Court in support thereof;
xxx xxx xxx
6. The petition is supported by the signatures of more than twenty percent (20%) of all
covered employees as provided for by law and which shall be presented during the initial
hearing;
xxx xxx xxx
8. There has been no Consent Election or Certification Election held and conducted by this
Honorable Office for the past three (3) years prior to the filing of this petition in the
bargaining unit petitioner sought to represent, the last Certification Election having been
held last November 27, 1984. Attached hereto as Annex "C" is a copy of the Order issued by
this Honorable Office relative to the result of the last certification election. (Rollo, pp. 4-5)
On February 24, 1988, the National Mines and Allied Workers Union (NAMAWU-MIF) filed a motion for
intervention alleging that it is the bargaining agent of the workers at Philtranco and as such it has a
substantial interest in the outcome of the petition.
On February 26, 1988, Arbiter Paterno Adap called the parties to a hearing. Philtranco and NAMAWU were
ordered to submit their respective position papers and KASAMA KO was given the opportunity to submit a
reply.
On April 4, 1988, a resolution was rendered with the following dispositive portion:
WHEREFORE, in the light of the foregoing premises, this petition is, as it is hereby ordered
DISMISSED. If there are still individual members of the herein petitioner eligible to join a
labor organization, it is hereby directed that all should be included/incorporated in the
existing bargaining unit.
Parties are further directed/enjoined to device a mechanism for the implementation of the
matter herein treated. (Rollo, pp. 29-30)
KASAMA KO appealed to the Bureau of Labor Relations (BLR) On September 5, 1988 the BLR reversed the
resolution of the Med-Arbiter. A motion for reconsideration was denied in an order dated October 10,
1988.
As prayed for by the petitioner, a temporary restraining order was issued by this Court on November 7,
1988 restraining the BLR from enforcing and/or carrying out the decision dated September 5, 1988 and
the order dated October 10, 1988.
The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the rank
and file groups. Thus, Art. 212 (k) of the Code provides:
xxx xxx xxx
(k) Managerial employee' is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees, or to effectively recommend such managerial
actions. All employees not falling within this definition are considered rank and file
employees for purposes of this Book.
In implementation of the aforequoted provision of the law, Section 11 of Rule II, Book V of the Omnibus
Rules implementing the Labor Code did away with existing supervisors' unions classifying the members
either as managerial or rank and file employees depending on the work they perform. If they discharge
managerial functions, supervisors are prohibited from forming or joining any labor organization. If they do
not perform managerial work, they may join the rank and file union and if none exists, they may form one
such rank and file organization. This rule was emphasized in the case of Bulletin Publishing Corp. v.
Sanchez, (144 SCRA 628 [1986]).
It, therefore, follows that the members of the KASAMA KO who are professional, technical, administrative
and confidential personnel of PHILTRANCO performing managerial functions are not qualified to join, much
less form a union. This rationalizes the exclusion of managers and confidential employees exercising
managerial functions from the ambit of the collective bargaining unit. As correctly observed by Med-
Arbiter Adap:
... managerial and confidential employees were expressly excluded within the operational
ambit of the bargaining unit for the simple reason that under the law, managers are
disqualified to be members of a labor organization.
On the other hand, confidential workers were not included because either they were
performing managerial functions and/or their duties and responsibilities were considered or
may be categorized as part and parcel of management as the primary reason for their
exclusion in the bargaining unit. The other categorized employees were likewise not
included because parties have agreed on the fact that the aforementioned group of workers
are not qualified to join a labor organization at the time the agreement was executed and
that they were classified as outside the parameter of the bargaining unit. (Rollo, pp. 28-29)
The respondents, on the other hand, aver that the members of the respondent union are rank and file
employees qualified to form a union. In fact their status as rank and file employees was allegedly
recognized by this Court in the case of Pantranco South Express, Inc. v. NAMAWU, (G.R. No. 67475, July
30, 1984).
The reliance on the Pantranco South Express, Inc. case is misplaced. The petition filed by
Pantranco South Express Inc. simply asked for a ruling that certain employees were performing
managerial functions. We denied the petition for lack of merit in a minute resolution. There was absolutely
no discussion on the recognition of another separate rank and file union in addition to the existing
bargaining unit.
There is no conflict. The employees of Philtranco have been appraised and their functions evaluated.
Managers by any name may not join the rank and file union. On the other hand, those who are rank and
file workers may join the existing bargaining unit instead of organizing another bargaining unit and
compelling the employer to deal with it.
We are constrained to disallow the formation of another union. There is no dispute that there
exists a labor union in the company, herein intervenor, the NAMAWU-MIF which is the collective
bargaining agent of the rank and file employees in PHILTRANCO.
Article 2 of the Collective Bargaining Agreement between PHILTRANCO and NAMAWU-MIF under the sub-
title Appropriate Bargaining Unit provides:
Section 1 -The appropriate bargaining unit covered by this agreement consists of all regular
rank- and file employees of the company. Managerial, confidential, casuals, temporary,
probationary and contractual employees as well as trainees, apprentices, security personnel
and foreman are excluded from the bargaining unit and therefore, not covered by this
AGREEMENT. The job description outside the bargaining unit are enumerated in the list
hereto attached as Annex '1' and made an integral part hereof (Emphasis supplied; Rollo, p.
27)
We see no need for the formation of another union in PHILTRANCO. The qualified members of the KASAMA
KO may join the NAMAWU-MIF if they want to be union members, and to be consistent with the one-
union, one-company policy of the Department of Labor and Employment, and the laws it enforces. As held
in the case of General Rubber and Footwear Corp. v. Bureau of Labor Relations (155 SCRA 283 [1987]):
... It has been the policy of the Bureau to encourage the formation of an employer unit
'unless circumstances otherwise require. The proliferation of unions in an employer unit is
discouraged as a matter of policy unless there are compelling reasons which would deny a
certain class of employees the right to self-organization for purposes of collective
bargaining. This case does not fall squarely within the exception. (Emphasis supplied).
There are no compelling reasons in this case such as a denial to the KASAMA KO group of the right to join
the certified bargaining unit or substantial distinctions warranting the recognition of a separate group of
rank and file workers. Precisely, NAMAWU-MIF intervened to make it clear it has no objections to qualified
rank and file workers joining its union.
It is natural in almost all fairly sized companies to have groups of workers discharging different functions.
No company could possibly have all employees performing exactly the same work. Variety of tasks is to be
expected. It would not be in the interest of sound labor-management relations if each group of employees
assigned to a specialized function or section would decide to break away from their fellow-workers and
form their own separate bargaining unit. We cannot allow one unit for typists and clerks, one unit for
accountants, another unit for messengers and drivers, and so on in needless profusion. Where shall the
line be drawn? The questioned decision of the public respondent can only lead to confusion, discord and
labor strife.
The respondents state that this case is an exception to the general rule considering that substantial
differences exist between the office employees or professional, technical, administrative and confidential
employees vis-a-vis the field workers or drivers, conductors and mechanics of the petitioner. Against this
contention, we find that the "substantial differences" in the terms and conditions of employment between
the private respondent's members and the rest of the company's rank and file employees are more
imagined than real. We agree with the petitioner that the differences alleged are not substantial or
significant enough to merit the formation of another union.
PHILTRANCO is a large bus company engaged in the business of carrying passengers and freight, servicing
Luzon, Visayas and Mindanao. Certainly there is a commonality of interest among filing clerks,
dispatchers, drivers, typists, and field men. They are all interested in the progress of their company and in
each worker sharing in the fruits of their endeavors equitably and generously. Their functions mesh with
one another. One group needs the other in the same way that the company needs them all. The drivers,
mechanics and conductors are necessary for the company but technical, administrative and office
personnel are also needed and equally important for the smooth operation of the business. There may be
differences as to the nature of their individual assignments but the distinctions are not enough to warrant
the formation of separate unions. The private respondent has not even shown that a separate bargaining
unit would be beneficial to the employees concerned. Office employees also belong to the rank and file.
There is an existing employer wide unit in the company represented by NAMAWU-MIF. And as earlier
stated, the fact that NAMAWU-MIF moved to intervene in the petition for certification election filed by
KASAMA KO negates the allegations that "substantial differences" exist between the employees
concerned. We find a commonality of interest among them. There are no compelling reasons for the
formation of another union.
We quote with favor Med-Arbiter Adap's rationale, to wit:
... It is against the policy of the Department of Labor to dismember the already wide
existing bargaining unit because of its well established goal towards a single employer wide
unit which is more to the broader and greater benefit of the employees working force.
The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the
employees bargaining power with the management. To do otherwise, would be contrary,
inimical and repugnant to the objectives of a strong and dynamic unionism. Let there be a
unified whole rather than a divisive one, let them speak as one in a clear resonant voice
unmarred by dissension towards progressive unionism. (Rollo, p. 29)
WHEREFORE, the decision of the Bureau of Labor Relations, dated September 5, 1988 and the Order
dated October 10, 1988 are hereby SET ASIDE. The resolution of the Med-Arbiter dated April 4, 1988 is
REINSTATED. The restraining order issued by the Court on November 7, 1988 is made permanent.
SO ORDERED.
2. GENERAL RUBBER AND FOOTWEAR CORP. v. BLR, 155 SCRA 283
On 15 Oct 1982, General Rubber executed a CBA with General Rubber Workers Union (Independent).
Three years later [17 Jul 1985], the monthly-paid employees formed their own collective bargaining unit
[NATU] and filed a petition for direct certification with the BLR. General Rubber opposed this. On 02 Sep
1985, the Med-Arbiter issued an order for the holding of a certification election. A month later, the CBA
expired. The daily-paid rank-and-file employees formed the Samahang Manggagawa sa General Rubber
Corporation-ANGLO as their union for collective bargaining. BLR issued an order that sanctioned the
creation of 2 bargaining units in General Rubber.

There is already an existing bargaining unit, whose members are represented by the ANGLO for collective
bargaining purposes, so why did BLR order the creation of a new bargaining unit.

Managerial employees or those employees exercising managerial functions CANNOT legally form and join a
labor organization and be members of the new bargaining unit.

Supervisors, employees performing managerial, confidential and technical functions and office personnel,
who are negotiated by General Rubber to be excluded from the existing bargaining unit because they are
performing vital functions to management, CANNOT form and join a labor organization and be members of
the new bargaining unit.

A policy is in favor of a larger unit and not the creation of smaller units in one establishment.

ISSUE:
WON the monthly-paid employees should be allowed to join the union of the daily-paid employees.

HELD:

YES. The fact that the employees perform supervisory functions (making recommendation petitions as to
what managerial actions to take in disciplinary cases) does not make them managerial employees already.
It has not been clearly established how effective those recommendations are. The proliferation of unions
in an employer unit is discouraged as a matter of policy unless there are compelling reasons which would
deny a certain class of employees the right to self-organization for purposes of collective bargaining. This
case does not fall squarely within the exception. The monthlies who are rank-and-file havebeen historically
excluded from the bargaining unit composed of daily-paid rank-and-filers. The expired CBA provides:

Section 1. Appropriate bargaining unit.

- This Agreement covers all regular employees and workers employed by the company at its factory in
Malabon, Metro Manila. The words "employee," "laborer" and "workers" whenused in this Agreement shall
be deemed to refer to those employees within the bargaining unit. Employees who occupy managerial,
confidential or technical positions, supervisors, contract employees, monthly-paid employees, security as
wen as office personnel are excluded from the appropriate bargaining unit.

The NATU members are not managerial employees but merely considered as rank-and-file employees who
have every right to self-organization or to be heard through a duly certified collective bargaining union.
Members of supervisory unions who do not fall within the definition of managerial employees shall become
eligible to join or assist the rank-and-file labor organization, and if none exists, to form or assist in the
forming of such organizations. Perhaps it is unusual for General Rubber to have to deal with two collective
bargaining unions but there is no one to blame except General Rubber itself for creating the situation it is
in. From the beginning of the existence ofa bargaining limit, General sought to suppress the NATU
members right to self-organization. General Rubber maintained that the exclusion of the NATU members
from the bargaining union of the rank-and-file or from forming their own union was agreed upon by
General Rubber with the previous bargaining representatives. It has not been shown that NATU was privy
to this agreement. Even if it were so, it can never bind subsequent federations and unions because it is a
curtailment of the right to self-organization. The monthly-paid rank-and-file employees should be allowed
to join the union of the daily-paid-rank-and-file employees so that they can also avail of the CBA benefits
or to form their own rank-and-file union, without prejudice to the certification election that has been
ordered.

3. Knitjoy Manufacturing Incorporated v. Ferrer-Calleja; G.R. No. 81883; September 23,
1992(214 SCRA 174)

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; ONE COMPANY-ONE UNION
POLICY; EXCEPTION.

The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the
greater mutual benefits which the parties could derive, especially in the case of employees whose
bargaining strength could undeniably be enhanced by their unity and solidarity but diminished by their
disunity, division and dissension, is not without exceptions. The present Article245 of the Labor Code
expressly allows supervisory employees who are not performing managerial functions to join, assist or
form their separate union but bars them from membership in a labor organization of the rank-and-file
employees. Even Section 2(c), Rule V, Book V of the Implementing Rules and Regulations of the Labor
Code, which seeks to implement the policy, also recognizes exceptions. The usual exception, of course,
is where the employer unit has to give way to the other units like the craft unit, plant unit, or a
subdivision thereof, the recognition of these exceptions takes into account the policy to assure employees
of the fullest freedom in exercising their rights. Otherwise stated, the one company-one union policy must
yield to the right of the employees to form unions or associations for purposes not contrary to law, to self-
organization and to enter into collective bargaining negotiations, among others, which the Constitution
guarantees.

2. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO FROM UNION OR ASSOCIATIONS; SCOPE.

The right to form a union or association or to self-organization comprehends two (2) broad notions, to wit:
(a) the liberty or freedom, i.e., the absence of restraint which guarantees that the employee may act for
himself without being prevented by law, and (b) the power, by virtue of which an employee may, as help
eases, join or refrain from joining an association. (Victoriano v. Elizalde Rope Workers Union, 59
SCRA 54).

3. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; ONE COMPANY-ONE UNION
POLICY; NOT APPLICABLE WHERE EXISTING UNION COVERED ONLY ONE CLASS OF EMPLOYEES; CASE AT
BAR.

in the bargaining history of KNITJOY, the CBA has been consistently limited to the regular rank-and-file
employees paid on a daily or piece-rate basis. On the other hand, the rank-and-file employees paid on a
monthly basis were never included within its scope. Respondent KMEUs membership is limited to the
latter class of employees. KMEU does not seek to dislodge CFW as the exclusive bargaining representative
for the former. The records further disclose that in the certification solicited by TUPAS and during the
elections which followed thereafter, resulting in the certification of CFW as the exclusive bargaining
representative, the monthly-paid employees were expressly excluded. Thus, the negotiations between
CFW and KNITJOY following such a certification could only logically refer to the rank-and-file employees
paid on a daily or piece-rate basis. Clearly therefore, KNITJOY and CFW recognize that insofar as the
monthly-paid employees are concerned, the latters constituting a separate bargaining unit with the
appropriate union as sole bargaining representative, can neither be prevented nor avoided without
infringing on these employees rights to form a union and to enter into collective bargaining negotiations.
Stated differently, KNITJOY and CFW recognize the fact that the existing bargaining unit in the former is
not and has never beenthe employer unit. Given this historical and factual setting, KMEU had the
unquestioned and undisputed right to seek certification as the exclusive bargaining representative for the
monthly-paid rank-and-file employees; both KNITJOY and CFW cannot block the same on the basis of this
Courts declaration in Bulletin Publishing Corp. v. Hon. Sanchez 15 and General Rubber and Footwear
Corp. v. Bureau of Labor Relations (155 SCRA 283 [1987]) regarding the one-company-one union
concept.

4. ID.; ID.; ID.; CERTIFICATION ELECTION; RESULTS THEREOF CONFINED ONLY TO THE GROUP IT
REPRESENTS; CBA ENTERED DOES NOT BAR HOLDING OF ANOTHER CERTIFICATION ELECTION FOR THE
OTHER GROUP; CASE AT BAR.

Considering that (a) the TUPAS solicited certification election was strictly confined to the rank-and-file
employees who are paid on a daily or piece-rate basis, (b) the results of the election must also necessarily
confine the certified unions representation to the group it represents and (c) the issue of the plight of the
monthly-paid employees was still pending, KNITJOY and CFW clearly acted with palpable bad faith and
malice in including within the scope of the new CBA these monthly-paid employees. Thus was effected a
conspiracy to defeat and suppress the right of the KMEU and its members to bargain collectively and
negotiate for themselves, to impose upon the latter a contract the negotiation for which they were not
even given notice of, consulted or allowed to participate in, and to oust from the BLR the pending appeal
on the certification issue. In the latter case, KNITJOY and CFW are guilty of contumacious conduct. It goes
without saying then that the new CBA cannot validly include in its scope or coverage the monthly-paid
rank-and-file employees of KNITJOY. It does not bar the holding of a certification election to determine
their sole bargaining agent, and the negotiation for and the execution of a subsequent CBA between
KNITJOY and the eventual winner in said election (Section 4, Rule V, Book V of the Rules Implementing
the Labor Code).

D E C I S I O N

These petitions have a common origin and raise identical issues. They were ordered consolidated on 23
November 1988.In G.R. No. 81883, the 1 December 1987 Decision of respondent Director of the Bureau
of Labor Relations in BLR Case No. A-10-315-87, which reversed the Order of Med-Arbiter-Designate
Rolando S. dela Cruz dated 4 September 1987 and ordered the holding of a certification election among
the regular rank-and-file monthly-paid employees of Knitjoy Manufacturing, Inc. (KNITJOY), is assailed by
the latter. The Med-Arbiters order dismissed the petition of private respondent Knitjoy Monthly Employees
Union(KMEU) for such certification election and directed the parties "to work out (sic) towards the
formation of a single union in the company."The antecedent material operative facts in these petitions are
as follows: Petitioner KNITJOY had a collective bargaining agreement (CBA) with the Federation of Filipino
Workers (FFW). The bargaining unit covered only the regular rank-and-file employees of KNITJOY paid on
a daily or piece-rate basis. It did not include regular rank-and-file office and production employees paid on
a monthly basis. The CBA expired on 15 June 1987. Prior to its expiration, the FFW was split into two (2)
factions the Johnny Tan and the Aranza Mendez factions. The latter eventually became the
Confederation of Filipino Workers (CFW), herein petitioner in G.R. No. 82111. Also prior to the expiration
of the CBA, the Trade Union of the Philippines and Allied Services (TUPAS)filed a petition for the holding of
a certification election among KNITJOYs regular rank-and-file employees paid on a daily and piece-rate
basis. Excluded were the regular rank-and-file employees paid on a monthly basis. In the certification
election conducted on 10 June 1987, CFW emerged as the winner; thereafter, negotiations for a new CBA
between CFW and KNITJOY commenced. On 24 June 1987, during the pendency of the said negotiations,
private respondent KMEU filed a petition for certification election among KNITJOYs regular rank -and-file
monthly-paid employees with Regional Office No. IV of the Department of Labor and Employment (DOLE)
which docketed the same as R-04-OD-M-6-75-87. The Knitjoy Monthly Employees Association and
Confederation of Citizens Labor Union(KMEA-CCLU), another union existing in the said company,
and petitioner CFW intervened therein. The petition was dismissed in the Order of 4 September 1987 of
Med-Arbiter Rolando S. de la Cruz, the dispositive portion of which reads:

"WHEREFORE, premises considered, the petition is hereby Dismissed, but the parties are instructed
to work out (sic) towards the formation of a single union in the company." 1KMEU filed a motion to
reconsider this order, which was treated as an appeal by the Bureau of Labor Relations (BLR).

On 1 December 1987, public respondent Pura Ferrer-Calleja. Director of the BLR, handed down a Decision
reversing the order of Med-Arbiter de la Cruz. The dispositive portion of the Decision reads:

"WHEREFORE, premises considered, the Appeal of Knitjoy Monthly Employees is hereby granted subject to
the exclusion of the monthly paid employees who are deemed managerial. Let, therefore, the certification
election proceed without delay, with the following as choices:

1. Knitjoy Monthly Employees Union (KMEU); and

2. No Union.

The companys latest payroll shall be the basis in determining the list of eligible voters.

SO ORDERED."

4. BARBIZON PHILS INC. vs. NAGKAKAISANG SUPERVISOR NG BARBIZON PHILS (1996)

FACTS:

Peti ti oner Phi l . Li ngeri e Corp. (now Barbi zon Phi l i ppi nes Inc. ) fi l ed a peti ti on f or
certi fi cati on election among its rank-and-file employees. As a consequence thereof, 2 unions
sought recognition:
(11 PHILIPPINE LINGERIE WORKERS UNION-ALAB and (11 B U K L O D N G M A N G G A G A W A
N G PHILIPPINE LINGERIE CORPORATION PLW Union moved for the exclusion of a number o f
e m p l o y e e s w h o w e r e a l l e g e d l y h o l d i n g supervisory positions.

Med-Arbiter: denied the said motion.

BLR : affirmed the Med-Arbiter and ordered the election to be conducted.
A certification election was conducted with the votes of "supervisors and confidential"
employees being challenged.
PLW UNION fi l ed an election protest.
In t he meantime, BUKLOD moved for the opening of the challenged ballots.

BLR: deni ed t he protest and rul ed that the al l eged s u p e r v i s o r s a r e n o t ma n a g e r i a l
e mp l o y e e s . T h e p e t i t i o n e r wa s c e r t i f i e d a s t h e s o l e a n d e x c l u s i v e
bargaining representative of all the regular rank-and-file e mp l o y e e s o f B a r b i z o n
P h i l i p p i n e s , I n c . ( f o r me r l y Philippine Lingerie Corporation).
BUKLOD was certified as the sole and exclusive bargai ni ng representati ve of al l t he rank-
and-fi l e employees of Barbizon Phils (former PLC)

Wh i l e t h e C B A w a s s t i l l i n f o r c e , s e v e r a l e m p l o y e e s o r g a n i z e d
t h e m s e l v e s i n t o t h e Nagkakaisang Supervisors Ng Barbizon Philippines, I nc .
( NSBPI ) and t he Na gka k ai s ang Exc l uded Monthly Paid Employees Ng Barbizon, Philippines,
Inc.(NEMPEBPI) allegedly because they were excluded f r om t he c ov er a ge of t he exi s t i ng
CBA bet ween petitioner Barbizon and BUKLOD.

Petitioner Barbizon alleged that the petitions for c er t i f i c at i on el ec t i on f i l ed by t he
Na gk a kai s a ng Supervi sor ng Barbi zon Phi l i ppi nes, Inc. NAFLU(NSBPI) must necessarily
fail because the employees desi gnat ed as "supervi sors" cannot l egal l y f orm a supervi sors'
uni on. Bei ng part of t he rank and fi l e, petitioner avers that said employees belong to the
" empl oy er wi de uni t , " whi c h i s t he a ppr opr i at e bargaining unit of all its rank and file
employees and which is represented by the BUKLOD.
The Secret ary of Labor grant ed the peti ti on f or certification election filed by NSBPI

ISSUE:

Whether the Undersecretary of Labor committed grave abuse of discretion in granting NSBPI's petition
for certification election

HELD:

YES. I t ha s been t he pol i c y of t he BL R t o enc our age t he f ormati on of an empl oyer
uni t unl ess ci rcumst ances o t h e r wi s e r e q u i r e . I n o t h e r wo r d s , o n e e mp l o y e r
enterprise constitutes only one bargaining unit. The more solid the employees are, the stronger is
their bargaining capacity. However, t he "one uni on one company" rul e i s not without
exception. The exclusion of the subject employees f rom t he rank-and-fi l e bargai ni ng uni t and
t he CBA i s i ndef i ni t el y a " c ompel l i ng r ea s on" f or i t c ompl et el y deprived them of the
chance to bargain collectively with petitioner and are thus left with no recourse but to group
themselves into a separate and distinct bargaining unit and form their own organization. The usual
exception, of course, is where the employer unit has to give way to the other units like the craft unit,
plant unit, or a subdivision thereof; the recognition of these excepti ons takes i nt o
account ant the pol i cy t o assure employees of the fullest freedom in exercising their rights.
Otherwise stated, the one company-one union policy must yi el d t o the ri ght of the empl oyees t o
f orm uni ons or associ ati ons f or purposes not cont rary t o l aw, t o sel f -or gani z at i on and
t o ent er i nt o c ol l ec t i v e ba r gai ni ng negot i a t i ons , a mong ot her s , whi c h t he
Cons t i t ut i on guarantees.


5. PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH INTERNATIONAL-UNITED LUMBER AND
GENERALWORKERS OF THE PHILS. vs. FERRER-CALLEJA

FACTS:

T h e p e t i t i o n e r i s t h e r e c o g n i z e d c o l l e c t i v e bargaining agent of the rank-and-file
employees of Triumph International with which the latter has a valid and existing collective bargaining
agreement effective up to September 24, 1989.

In 1987, a petition for certification election was filed by the respondent union with the Department
of Labor and Employment.

A motion to dismiss the petition for certification el ecti on was fi l ed by Tri umph Int ernati onal
on the grounds t hat the respondent uni on cannot l awful l y represent managerial employees
and that the petition cannot prosper by virtue of the contract-bar rule.

But the Labor Arbiter issued an order granting the peti ti on f or cert i fi cati on el ecti on and
di recti ng the holding of a certification election to determine the sole and exclusive bargaining
representative of all monthly-pai d admi ni st rati ve, t echni cal , confi denti al and supervisory
employees of Triumph International.


Issue:

Whether or not the public respondent gravely abused its discretion in ordering the immediate holding
of a certification election among the workers sought to be represented by the respondent union.

Held:

Wh e r e t h e s u p e r v i s o r y e mp l o y e e s s o u g h t t o b e represented by the union are actually
NOT INVOLVED in policy making, and their recommendatory powers are not even instantly effective since
they are subject to revi ew by at l east three (3) managers (dept . mgr. , personnel mgr. And
general manager), then it is evident t hat t hes e empl oy ees doe s not pos s es s ma nager i al
status.
The fact that their work designations are either ma n a g e r i a l o r s u p e r v i s o r y i s o f n o
mo me n t , considering that it is the nature of their functions and NOT SAID NOMENCLATURES which
determines their respective status.
A careful examination of the records of this case reveals n o e v i d e n c e t h a t r u l e s o u t t h e
c o mm o n a l i t y o r community of interest among the rank-and-file members of the petitioners, and
the herein declared rank-and-file members of the respondent union. Instead of forming another
bargai ni ng uni t , the l aw requi res them t o be members of the existing one.
The ends of union is mare better served if all the rank-and-file members wi th substanti al l y t he
same i nt erest s and who invoke their right to self-organization are part of a si ngl e uni t so t hey
can deal wi t h thei r ER wi t h J UST ONE AND YET POTENT VOI CE. The Ees
b a r g a i n i n g p o w e r w i t h m a n a g e m e n t i s strengthened thereby.
In the case at bar, there is no dispute that the petitioner is the exclusive bargaining representative of
the rank-and-file employees of Triumph International.