D-E Right To Self-Organization (Compiled)

LPU LABREL 2nd SEM 2011-2012
ANNIE, CHAM, JB, JO, JOEB, KIM & MELAI
SINGER SEWING MACHINE CO V. DRILON 193 SCRA 270 (1990)

FACTS: The SIMACUB, respondent union filed a petition for direct certification as the
sole and exclusive bargaining agent of all collectors of the Singer Sewing Machine
Company, Baguio City branch (hereinafter referred to as "the Company").
The Company opposed the petition mainly on the ground that the union members are
actually not employees but are independent contractors as evidenced by the collection
agency agreement which they signed.
The respondent Med-Arbiter, finding that there exists an employer-employee
relationship between the union members and the Company, granted the petition for
certification election.
On appeal, Secretary of Labor Franklin M. Drilon affirmed it. The motion for
reconsideration of the Secretary's resolution was denied.
Hence, this petition in which the Company alleges that public respondents acted in
excess of jurisdiction and/or committed grave abuse of discretion in that the public
respondents patently erred in finding that there exists an employer-employee
relationship.
The respondents rely on other features to strengthen their position that the collectors
are employees. They quote paragraph 2 of the Collection Agency Agreement, which
states that an agent shall utilize only receipt forms authorized and issued by the
Company. They also note paragraph 3 which states that an agent has to submit and
deliver at least once a week or as often as required a report of all collections made
using report forms furnished by the Company.
ISSUE: WON there exist an employee-employer relationship.
HELD: NO.
The present case mainly calls for the application of the control test, which if not
satisfied, would lead us to conclude that no employer-employee relationship exists.
Hence, if the union members are not employees, no right to organize for purposes of
bargaining, nor to be certified as such bargaining agent can ever be recognized. The
following elements are generally considered in the determination of the employeremployee relationship; "(1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct although the latter is the most important element"
The nature of the relationship between a company and its collecting agents depends on
the circumstances of each particular relationship. Not all collecting agents are
employees and neither are all collecting agents independent contractors. The collectors
could fall under either category depending on the facts of each case.

The Agreement confirms the status of the collecting agent in this case as an
independent contractor not only because he is explicitly described as such but also
because the provisions permit him to perform collection services for the company
without being subject to the control of the latter except only as to the result of his work.
After a careful analysis of the contents of the agreement, we rule in favor of the
petitioner.
The requirement that collection agents utilize only receipt forms and report forms issued
by the Company and that reports shall be submitted at least once a week is not
necessarily an indication of control over the means by which the job of collection is to be
performed. The agreement itself specifically explains that receipt forms shall be used for
the purpose of avoiding a co-mingling of personal funds of the agent with the money
collected on behalf of the Company. Likewise, the use of standard report forms as well
as the regular time within which to submit a report of collection are intended to facilitate
order in office procedures. Even if the report requirements are to be called control
measures, any control is only with respect to the end result of the collection since the
requirements regulate the things to be done after the performance of the collection job
or the rendition of the service.
The monthly collection quota is a normal requirement found in similar contractual
agreements and is so stipulated to encourage a collecting agent to report at least the
minimum amount of proceeds.
The Court finds that since private respondents are not employees of the Company, they
are not entitled to the constitutional right to join or form a labor organization for
purposes of collective bargaining. Accordingly, there is no constitutional and legal basis
for their "union" to be granted their petition for direct certification.
The question of whether employer-employee relationship exists is a primordial
consideration before extending labor benefits under the workmen's compensation,
social security, medicare, termination pay and labor relations law. It is important in the
determination of who shall be included in a proposed bargaining unit because, it is
the sine qua non, the fundamental and essential condition that a bargaining unit be
composed of employees. Failure to establish this juridical relationship between the
union members and the employer affects the legality of the union itself. It means the
ineligibility of the union members to present a petition for certification election as well as
to vote therein.

TROPICAL HUT EMPLOYEES UNION V. TROPICAL HUT 181 SCRA 173 (1990)
FACTS: The rank and file workers of the Tropical Hut Food Market Incorporated
organized a local union Tropical Hut Employees Union (THEU. THEU affiliated with
National Association of Trade Union (NATU).
1. Officers of the local union inform NATU that THEU was disaffiliating from the
NATU federation and decided to affiliate with Confederation of General Workers
(CGW), which was consented and acknowledged by its members.
2. Upon NATUs request Tropical Hut, dismissed Encinas, THEU-CGW President
and the other officers of THEU-CGW in view of his violation of Section 3 of Art.
III of the CBA.
3. The Secretary of THEU-NATU, notified the entire rank and file employees of the
company that they will be given 48 hrs upon receipt of the notice to affirm their
membership with THEU-NATU otherwise, they shall enforce the union security
clause set forth in the CBA to dismiss them. In view of this notification several
employees were dismissed, hence an unnumbered cases were filed by the
petitioners against Tropical Hut Food Market Inc.
4. NLRC issued an order directing the holding of a certification election among the
rank and file workers of the respondent company between the THEU-NATU and
THEU-CGW. LA ordered the reinstatement of the dismissed employees. Upon
appeal, NLRC reversed the decision favoring the respondent company in
sustained the dismissal of the said employees, which was then affirmed by the
CA, hence this petition.
ISSUE: WON the dismissal of petitioner employees resulting from their unions
disaffiliation from the mother federation was illegal and constituted unfair labor practice
on the part of respondent company and federation.
HELD: The SC held that the validity of the dismissal pursuant to the union security
clause in the CBA hinges on the validity of the disaffiliation of the local union from the
federation.
The right of a local union to disaffiliate from its mother federation is well-settled. A local
union, being a separate and voluntary association, is free to serve the interest of
all its members including the freedom to disaffiliate when circumstances warrant.
This right is consistent with the constitutional guarantee of freedom of
association
All employees enjoy the right to self organization and to form and join labor
organizations of their own choosing for the purpose of collective bargaining and
to engage in concerted activities for their mutual aid or protection. This is a
fundamental right of labor that derives its existence from the Constitution. In interpreting
the protection to labor and social justice provisions of the Constitution and the labor
laws or rules or regulations, We have always adopted the liberal approach which favors
the exercise of labor rights.

The inclusion of the word NATU after the name of the local union THEU in the
registration with the Department of Labor is merely to stress that the THEU is NATU's
affiliate at the time of the registration. It does not mean that the said local union cannot
stand on its own. Neither can it be interpreted to mean that it cannot pursue its own
interests independently of the federation. A local union owes its creation and continued
existence to the will of its members and not to the federation to which it belongs.
There is nothing in the constitution of the NATU or in the constitution of the THEUNATU that the THEU was expressly forbidden to disaffiliate from the federation. The
alleged non-compliance of the local union with the provision in the NATU Constitution
requiring the service of three months notice of intention to withdraw did not produce the
effect of nullifying the disaffiliation for the following grounds: firstly, NATU was not even
a legitimate labor organization, it appearing that it was not registered at that time with
the Department of Labor, and therefore did not possess and acquire, in the first place,
the legal personality to enforce its constitution and laws, much less the right and
privilege under the Labor Code to organize and affiliate chapters or locals within its
group, and secondly, the act of non-compliance with the procedure on withdrawal is
premised on purely technical grounds which cannot rise above the fundamental right of
self-organization.
There is no merit in the contention of the respondents that the act of disaffiliation
violated the union security clause of the CBA and that their dismissal as a consequence
thereof is valid. A perusal of the collective bargaining agreements shows that the
THEU-NATU, and not the NATU federation, was recognized as the sole and
exclusive collective bargaining agent for all its workers and employees in all
matters concerning wages, hours of work and other terms and conditions of
employment. Although NATU was designated as the sole bargaining agent in the
check-off authorization form attached to the CBA, this simply means it was acting only
for and in behalf of its affiliate. The NATU possessed the status of an agent while
the local union remained the basic principal union which entered into contract
with the respondent company.

PIER 8 ARRASTRE V. ROLDAN-CONFESOR 241 SCRA 294 (1995)

FACTS: Petitioner corporation and private respondent labor union entered into a 3-year
CBA which was set to expire in November 1991. During the freedom period, the
National Federation of Labor Unions (NAFLU) questioned the majority status of the
private respondent through a petition for certification election. In the election, the private
respondent won as the sole and exclusive bargaining agent of petitioners rank-and-file
employees
1. Respondents consist of various foremen and legal secretaries, as well as timekeeper of petitioner. Respondents subsequently joined private respondent labor
union.
2. In June 1992, private respondent and petitioner engaged in collective bargaining;
because of a bargaining deadlock, private respondent filed a notion of strike with
the National Conciliation and Mediation Board (NMCB), which failed to settle the
parties controversy
3. Thereafter, public respondent Secretary of Labor assumed jurisdiction over the
dispute by issuing an order which included foremen, legal secretaries, etc as
members of the private respondent union
4. Petitioner now questions the public respondent for including foremen, legal
secretaries, and time-keepers from the bargaining unit composed of rank-and-file
employees represented by private respondent labor union. ISSUE:
ISSUE: WON the public respondent committed grave abuse in including respondents
as members of private respondent labor union
HELD: Yes, as to most of respondents. Art 245 Labor Code states that: managerial
employees are not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in a labor organization of the rank-andfile employees but may join, assist or form separate labor organizations of their own.
The test of supervisory or managerial status is whether an employee possesses
authority to act in the interest of his employer which authority is not merely routinary or
clerical in nature but requires use of independent judgment. What governs the
determination of the nature of employment is not the employee's title, but his job
description. If the nature of the employee's job does not fall under the definition of
"managerial" or "supervisory" in the Labor Code, he is eligible to be a member of the
rank-and-file bargaining unit.
Foremen are chief and often especially-trained workmen who work with and are
commonly in charge of a group of employees in an industrial plant or in construction
work. They are the persons designated by the employer-management to direct the work
of employees and to superintend and oversee them. They are representatives of the
employer-management with authority over particular groups of workers, processes,
operations, or sections of a plant or an entire organization. In the modern industrial
plant, they are at once a link in the chain of command and the bridge between the

management and labor. In the performance their work, foremen definitely use their
independent judgment and are empowered to make recommendations for managerial
action with respect to those employees under their control. Foremen fall squarely
under the category of supervisory employees, and cannot be part of rank-and-file
unions.
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. Thus, the ineligibility of managerial employees to form,
assist or join a labor union equally applies to them.
As for the timekeeper and assistant timekeeper it is clear from petitioner's own
pleadings that they are neither managerial nor supervisory employees. They are
merely tasked to report those who commit infractions against company rules and
regulations. This reportorial function is routinary and clerical. They do not
determine the fate of those who violate company policy rules and regulations
function. It follows that they are included in the subject bargaining unit.

PLANTERS PRODUCTS EMPLOYEES UNION V. PLANTERS PRODUCTS G.R. NO

78524 (1989)
FACTS: The complainants and Complainants-Intervenors were all regular employees of
the Respondent until their respective dates of retirement/retrenchment. All the
Complainants, except the Complainants-Intervenors, are members of either one of the
following Unions of workers/employees of the Respondent:
a. Planters Product Employees Union ('PPEU' for brevity);
b. First Line Association of Management Employees ('FLAME' for brevity); and
c. Super 21, and/or were represented by said unions as their respective agents.
Unions of former employees of Respondent have always had collective bargaining
agreements. On October 11, 1982, the Respondent instituted a Retirement and Pension
Plan (RPP' hereafter for brevity) for all employees, which was to be effective retroactive
to March 31, 1982, (Exhs. 'P' to 'P-14 a'). This non-contributory RPP was funded
exclusively by PPI.
PPI to institutionalize the RPP, entered into a Trust Agreement with Philippine Trust
Co., Inc. ('PTC' for brevity), under the terms of which, PTC shall administer and manage
the fund.
There were subsequent deposits made into the RPP trust account, so that by December
31, 1984, the trust fund in the RPP amounted to P23,789,690.00, more or less a CBA
for 1984-1987 was signed between PPI and the directors and principal officers of its
unions The CBA modified the provisions in the previous CBAs on 'termination
allowance' or benefit, and limited its scope to separation from the service of PPI by
reason solely of disability. The 1984-87 CBA was never formally submitted to the
membership of the Unions for ratification.
PPI issued a circular to all employees announcing the funding of the RPP (Exh. 'B'/'10)
and its approval by the BIR pursuant to R.A. 4917.
On September 15, 1985, without formally informing the PPI employees-beneficiaries of
the RPP, the RPP was unilaterally amended by the company, particularly its Part IV,
paragraphs 3-5, pursuant to Section J, Part 7 of the RPP and a copy was later
submitted to the BIR for approval on 22 October 1985 and the amendments were
approved by the BIR pursuant to the provisions of R.A. 4197
On September 27, 1985, individual letters were sent to each employee notifying them of
their formal termination and the termination benefits that they would be granted Mr.
Roberto Orig, for PPI, issued to the individual Complainants/Complainants- Intervenors
computer print-outs reflecting the respective computations of their separation benefits
for all employees terminated during the said periods

Effective 15 September 1985, before the Complainants and Complainants-Intervenors

were retired/retrenched, the company amended PPI's RPP particularly Part. IV, Par. D
(4) and (5), pursuant to which Complainants and Complainants- Intervenors were paid
their separation pay/benefits on the basis of their basic salary.
The labor arbiter rendered judgment against Planters Products, Inc., holding it guilty of
unfair labor practice. This was affirmed on appeal to the NLRC, with the modification
that it set aside the award for actual, exemplary and moral damages, and attorney's
fees.
ISSUE: WON NLRC and the Labor Arbiter have jurisdiction over the present suit.
HELD: PPI contends that the public respondents have no jurisdiction over the case as
there is no longer an existing employer-employee relationship between the private
parties. The relationship having been severed, it is believed that the complainants
should have sought reinstatement for the present action to fall under said respondents'
jurisdiction.
Money claims of workers as in the instant case, fall within the original and exclusive
jurisdiction of labor arbiters when these claims have some reasonable causal
connection with the employer-employee relationship It is a fact that the complainants
and complainants-intervenors were all regular employees of PPI until their respective
dates of retirement/retrenchment (p. 46, Rollo- 78524). They now seek to improve the
terminal benefits granted to them on the allegation that a different computation was
used for the other employees. Their claims clearly arose from the employer-employee
relationship.
PPI next contends that this should be a purely civil suit against the duly designated
corporate trustee because it is specifically against the Retirement Fund which was
separately administered and managed by said trustee.
We disagree. It is stated in the stipulation of facts that the Retirement and Pension Plan
(RPP hereafter) was managed by a Retirement and Pension Committee of Planters
Products, Inc. Moreover, the RPP was solely funded by PPI.
The questioned provision in the 1984-87 Collective Bargaining Agreement limited the
application of the termination allowance only to those separated from the service due to
disability
The prior CBAs from 1975 upwards granted a termination allowance, upon the
employee's separation, of at least three (3) weeks to one (1) month's pay for each year
of service depending upon the total years of service.
It is contended that the 1984-1987 CBA was not only negotiated in bad faith but was
also not formally ratified. There was allegedly bad faith in limiting the application of the
termination allowance as the company already had plans to retrench the workers.

We apply the established rule, that a CBA is the Law among the parties, to the 19841987 CBA.
Bad faith in the negotiations was not present considering that the provision on
termination allowance was made to apply to everybody including those subsequently
retrenched or retired after the complainants' and complainants- intervenors'
retrenchment. There was no singling out of the complainants and intervenorscomplainants.
Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing
Rules, the parties to a collective agreement are required to furnish copies to the
appropriate Regional Office with accompanying proof of ratification by the majority of all
the workers in the bargaining unit. This was not done in the case at bar. But we do not
declare the 1984-1987 CBA invalid or void considering that the employees have
enjoyed benefits from it. They cannot receive benefits under provisions favorable to
them and later insist that the CBA is void simply because other provisions turn out not to
the liking of certain employees. Moreover, the two CBAs prior to the 1984-1987 CBA
were not also formally ratified, yet the employees are basing their present claims on
these CBAs. It is inequitous to receive benefits from a CBA and later on disclaim its
validity.
There is nothing in the records before us to show that PPI was guilty of unfair labor
practice. However, PPI erred in not integrating the allowances with the basic salary in
the computation of the separation pay. The salary base properly used in computing the
separation pay should include not just the basic salary but also the regular allowances
that an employee has been receiving.

BESA V. TRAJANO 146 SCRA 501 (1986)

FACTS: Respondent Kaisahan ng Mangagawang Pilipino, a legitimate labor union filed
a Petition for Certification Election.
Petitioner opposed it alleging that:
There is no employer-employee relationship between Besa's and
the petitioners-signatories to the petition (shoe shiners).
Med-Arbiter, issued an order declaring that there was an employer-employee
relationship between the parties and directed that an election be conducted.
ISSUE: WON Employer-Employee relationship exists between shoe shiners and Besa
HELD: NO. Shoe shiner is different from a piece worker:

Piece Worker
Shoe shiner
1 paid for work accomplished
1 Contributes something to the
and does not contribute
capital of the employer
anything to the capital of the
employer
2 the employer pays his wages
2 paid directly by his customer
3 paid for work accomplished
3 the proceeds derived from the
without concern to the profit
trade are always divided
derived by employer
share and share it with
respondent BESA.
Also,
they can take his share of the
proceeds everyday if he
wanted to.
4 the employer supervises and
4 respondent does not exercise
controls his work
control
Thus, shoe shiners are not employees of the company, but are partners,
because there is no control by the owner and shoe shiners have their own
customers from whom they charge the fee and divide the proceeds equally with
the owner, which make the owner categorized them as on purely commission
basis.

UST FACULTY UNION V. BITONIO G.R. NO 131235 (1999)

FACTS: On September 21, 1996, the University of Santo Tomas Faculty Union
(USTFU) wrote a letter to all its members informing them of a General Assembly (GA)
that was to be held on October 5, 1996. The letter contained an agenda for the GA
which included an election of officers. The then incumbent president of the USTFU was
Atty. Eduardo J. Mario, Jr. On October 2, 1996, Fr. RodelAligan, O.P., Secretary
General of the UST, issued a Memorandum allowing the request of the Faculty Clubs of
the university to hold a convocation. Upon learning that the convocation was intended to
be an election, members of the USTFU walked out. The Mario Group filed a complaint
for ULP against the UST with the Arbitration Branch of the NLRC. a Collective
Bargaining Agreement (CBA) was entered into by the Gamilla Group and the UST.
The union has a 5-year CBA with its employer and is set to expire on May 31, 1998. On
October 5, 1996 various UST club presidents requested a general faculty assembly thus
union and non-union faculty members convened. New set of officers were elected,
violative of the CBL and that the GA was held with non-union members present. Union
officers were served with a notice to vacate the union office, and CBA was ratified by an
overwhelming majority. Med-Arbiter declared the election violative of the CBL while BLR
director Bitonio upheld the decision with a ruling that the CBL which constituted the
covenant between the union and its members could not be suspended during the
general assembly of all faculty members, since it has not been authorized by the union.
ISSUE: WON the public respondent committed grave abuse of discretion in refusing to
recognize the officers elected during the general assembly.
HELD: Self-organization is a fundamental right guaranteed by the Constitution and the
Labor Code.
Corollary to this right is the prerogative not to join, affiliate with or assist a labor union.
Therefore, to become a union member, an employee must not only signify the intent to
become one, but also take some positive steps to realize that intent. The procedure for
union membership is usually embodied in the unions CBL. An employee who becomes
a union member acquires the rights and he concomitant obligations that go with the new
status and becomes bound by the unions rules and regulations.

ARIZALA V. CA 189 SCRA 584

FACTS: Under the Industrial Peace Act, government-owned or controlled corporations
had the duty to bargain collectively and were otherwise subject to the obligations and
duties of employers in the private sector. The Act also prohibited supervisors to
become, or continue to be, members of labor organizations composed of rank-and-file
employees, and prescribed criminal sanctions for breach of the prohibition.
Under the regime of said Industrial Peace Act that the Government Service Insurance
System (GSIS, for short) became bound by a collective bargaining agreement executed
between it and the labor organization representing the majority of its employees, the
GSIS Employees Association. The agreement contained a "maintenance-ofmembership" clause
The petitioners occupied supervisory positions in the GSIS. Pablo Arizala and Sergio
Maribao were, respectively, the Chief of the Accounting Division, and the Chief of the
Billing Section of said Division, inthe Central Visayas Regional Office of the GSIS.
Leonardo Joven and Felino Bulandus were, respectively, the Assistant Chief of the
Accounting Division (sometimes Acting Chief in the absence of the Chief) and the
Assistant Chief of the Field Service and Non-Life Insurance Division (and Acting
Division Chief in the absence of the Chief), of the same Central Visayas Regional Office
of the GSIS. Demands were made on all four of them to resign from the GSIS
Employees Association, in view of their supervisory positions. They refused to do so.
Consequently, two (2) criminal cases for violation of the Industrial Peace Act were
lodged against them in the City Court of Cebu: one involving Arizala and Maribao and
the other, Joven and Bulandus, which resulted to their conviction.
ISSUE: WON government employees cannot form their own Collective bargaining unit.
RULING: YES. the right of self-organization and collective bargaining had been
withdrawn by the Labor Code from government employees including those in
government-owned and controlled corporations-chiefly for the reason that the terms and
conditions of government employment, all embraced in civil service, may not be
modified by collective bargaining because set by law. It is therefore immaterial, they
say, whether supervisors are members of rank-and-file unions or not; after all, the
possibility of the employer's control of the members of the union thru supervisors thus
rendering collective bargaining illusory, which is the main reason for the prohibition, is
no longer of any consequence the disappearance from the law of the prohibition on
supervisors being members of labor organizations composed of employees under their
supervision. The Labor Code (PD 442) allowed supervisors (if not managerial) to join
rank-and-file unions. And under the Implementing Rules of RA 6715, supervisors who
were members of existing labor organizations on the effectivity of said RA 6715 were
explicitly authorized to "remain therein. "that the maintenance by supervisors of
membership in a rank-and-file labor organization even after the enactment of a statute
imposing a prohibition on such membership, is not only not a crime, but is explicitly
allowed, under present law.

SAN JOSE ELECTRIC SERVICE (SAJELCO) V. MINISTRY OF LABOR 173 SCRA

697 (1989)
FACTS: Private respondent Manggagawang Nagkakaisa ng SAJELCO-Association of
Democratic Labor Organization (MAGKAISAA-ADLO) filed a petition for direct
certification election with the regional office of DOLE. The petition alleged that
MAGKAISA-ADLO is a legitimate labor organization duly registered with MOLE
a. There are 54 more or less rank and file employees in SAJELCO and almost
62% of the employees sought to be represented have supported the filing of
the petition
b. There has been no valid certification election held in SAJELCO for the past
12 months prior to the filing of the petition and there is no other union in the
bargaining unit
1. SAJELCO opposed the petition for direct certification election contending that the
employees who sought to be represented by the private respondent are
members-consumers of the cooperative itself and at the same time composed
the General Assembly, which according to the By-laws, is also the final arbiter of
any dispute arising in the cooperative
2. The Med-Arbiter granted the petition for direct certification election on the basis
of the pleadings filed, citing that while some of the members of the respondent
union are the members of the cooperative, it cannot be denied that they are also
the employees within the contemplation of the Labor Code and as such, they are
entitled to all the benefits of employees including the right to self-organization
3. In its appeal, SAJELCO asserted that under in electric cooperatives, there is a
merger of the consumer-members that comprise the assembly and that of the
rank-and-file members of the union into one person or juridical status thus
rendering the proposed collective bargaining agent ineffective
4. The Director of Bureau of Labor Relations dismissed the appeal and sustained
the ruling of the Med-Arbiter
ISSUE: WON the employees-members of an electric cooperative can organize
themselves for purposes of collective bargaining
HELD: Yes. 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.
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. The 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 provisions of the SAJELCOs By-laws, however, mention two types of employees:
the members-consumers and the members of their immediate families. With regard to
the employees of SAJELCO who are members-consumers, the rule is settled that
they are not qualified to form, join or assist labor organizations for purposes of
collective bargaining. The reason for withholding from employees of a
cooperative who are members-co-owners the right to collective bargaining is
clear: an owner cannot bargain with himself. However, employees who are not
members-consumers may form, join or assist labor organizations for purposes of
collective bargaining notwithstanding the fact that employees of SAJELCO who
are not members-consumers were employed ONLY because they are members of
the immediate family of members-consumers. The fact remains that they are not
themselves members-consumers, and as such, they are entitled to exercise the
rights of all workers to organization, collective bargaining, negotiations and others as
are Constitution, Labor Code and other related special laws.

BENGUET ELECTRIC COOPERATIVE V. CALEJA 180 SCRA 740

FACTS: 1985 Beneco Worker's Labor Union-Association of Democratic Labor
Organizations (hereinafter referred to as BWLU- ADLO) filed a petition for direct
certification as the sole and exclusive bargaining representative of all the rank and file
employees of Benguet Electric Cooperative, Inc. (hereinafter referred to as BENECO)
That BENECO has in its employ 214 rank and file employees; that 198 or 92.5% of
these employees have supported the filing of the petition; that no certification election
has been conducted for the last 12 months; that there is no existing collective
bargaining representative of the rank and file employees sought to represented by
BWLU- ADLO; and, that there is no collective bargaining agreement in the cooperative.
An opposition to the petition was filed by the Beneco Employees Labor Union
(hereinafter referred to as BELU) contending that it was certified as the sole and
exclusive bargaining representative of the subject workers.
BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a
non-profit electric cooperative engaged in providing electric services to its members and
patron-consumers in the City of Baguio and Benguet Province; and, that the employees
sought to be represented by BWLU-ADLO are not eligible to form, join or assist labor
organizations of their own choosing because they are members and joint owners of
the cooperative.
The Med-arbiter issued an order giving due course to the petition for certification
election. However, the med-arbiter limited the election among the rank and file
employees of petitioner who are non-members thereof and without any involvement in
the actual ownership of the cooperative. (There are 37 non-members.)
The ordered certification election was held on October 1, 1986. On June 23, 1987,
Bureau of Labor Relations (BLR) director Pura Ferrer-Calleja affirmed the med-arbiter's
order and certified BELU as the sole and exclusive bargaining agent of all the rank and
file employees of BENECO.
Under Article 256 of the Labor Code [Pres. Decree 442] to have a valid certification
election, "at least a majority of all eligible voters in the unit must have cast their votes.
The labor union receiving the majority of the valid votes cast shall be certified as the
exclusive bargaining agent of all workers in the unit." Petitioner BENECO asserts that
the certification election held on October 1, 1986 was null and void since membersemployees of petitioner cooperative who are not eligible to form and join a labor union
for purposes of collective bargaining were allowed to vote therein.c
ISSUE: WON respondent director is correct in declaring respondent BELU as the sole
and exclusive bargaining representative of the rank and file employees of BENECO.
HELD: NO.

The issue of whether or not employees of a cooperative are qualified to form or join a
labor organization for purposes of collective bargaining has already been resolved. The
right to collective bargaining is not available to an employee of a cooperative who at
the same time is a member and co-owner thereof. With respect, however, to employees
who are neither members nor co-owners of the cooperative they are entitled to exercise
the rights to self-organization, collective bargaining and negotiation as mandated by the
1987 Constitution and applicable statutes.
The fact that the members-employees of petitioner do not participate in the actual
management of the cooperative does not make them eligible to form, assist or join a
labor organization for the purpose of collective bargaining with petitioner.
It is the fact of ownership of the cooperative, and not involvement in the management
thereof, which disqualifies a member from joining any labor organization within the
cooperative. Thus, irrespective of the degree of their participation in the actual
management of the cooperative, all members thereof cannot form, assist or join a labor
organization for the purpose of collective bargaining.
It is important to note that, in her order dated September 2, 1985, med-arbiter Elnora V.
Balleras made a specific finding that there are only thirty-seven (37) employees of
petitioner who are not members of the cooperative and who are, therefore, the only
employees of petitioner cooperative eligible to form or join a labor union for purposes of
collective bargaining. However, the minutes of the certification election show that a total
of 83 employees were allowed to vote and of these, 49 voted for respondent union.
Thus, even if We agree with respondent union's contention that the 37 employees who
were originally non-members of the cooperative can still vote in the certification election
since they were only "forced and compelled to join the cooperative on pain of
disciplinary action," the certification election held on October 1, 1986 is still null and void
since even those who were already members of the cooperative at the time of the
issuance of the med-arbiter's order, and therefore cannot claim that they were forced to
join the union were allowed to vote in the election.

REPUBLIC OF THE PHILIPPINES REPRESENTED BY SSS V.

COOBERATIVE [2007]
ASIAPRO
FACTS: Respondent Asiapro, as a cooperative is composed of owner-members. The

objective of the respondent company is to provide savings and credit facilities and to
develop other livelihood services for its owners-members.
1. Respondent cooperative entered into several service contracts with Stanfilco.
The owner-members do not receive compensation or wages from respondent
cooperative instead they receive a share in the service surplus which the
respondent cooperative from different areas of trade it engages in such as the
income derived from the service contract with Stanfilco.
2. The owner-members of the respondent who were assigned to Stanfilco
requested to be registered with SSS as self employed and to remit their
contributions.
3. Petitioner SSS denied the request and contends that the based on the service
contract it executed with Stanfilco, respondent cooperative is actually a
manpower contracter supplying employees to Stanfilco thus it is an employer of
its owners-members working with Stanfilco.
4. Petitioner SSS further adds that respondent cooperative should register itself
with SSS as an employer and make corresponding report and remittance of
premium contributions in accordance with the SS law.
5. Respondent cooperative asserted that it is not an employer because its ownersmembers are the cooperative itself; hence it cannot be its own employer.
ISSUE: WON there is an employer-employee relationship between respondent
cooperative and its owners-members.
HELD: The Court held that there is an employee-employer relationship actually exists
between the respondent cooperative and its owners-members. First, the respondent
cooperative has the exclusive discretion in the selection and engagement of the ownermembers as well as its team leaders who will b assigned at Stanfilco. Second, wages
are given by the respondent cooperative to its owners-members in the form of weekly
stipends. Third, respondent cooperative has the power to investigate, discipline and
remove the owners-members and team leaders who were rendering services at
Stanfilco. Fourth, 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. Also, the respondent cooperative is solely
and entirely responsible for its owners-members, team leaders and other
representatives at Stanfilco. All these clearly prove that, indeed, there is an employeremployee relationship between the respondent cooperative and its owners-members.
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.

In Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja 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.
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 ownermember. 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.

VILLUGA V. NLRC 225 SCRA 537 (1993)

FACTS: Petitioner Villuga was employed as a cutter in the tailoring shop owned by
private respondent Zapanta. As cutter, he was task to distribute work to the shops
tailors or sewers when both the shops manager and assistant manager would be
absent. He saw to it that their work conformed with the pattern he had prepared and if
not, he had them redone, repaired or re-sewn
1. From February 17 to 22, 1978, Villuga failed to report for work allegedly due to
illness. For not properly notifying his employer, he was considered to have
abandoned his work
2. Villuga, then, filed a complaint for illegal termination, nonpayment of overtime
pay, holiday pay and premium pay, service incentive leave pay and 13 th month
pay. Villuga alleged that the was terminated due to his active participation in the
union organized by private respondents tailors
3. LA held in favor of private respondent and dismissed the complaint for lack of
merit but ordered the payment of Villugas claim for 13th month pay for the years
1976, 1977 and 1980. NLRC affirmed the same
ISSUE: WON petitioner falls within the category of a managerial employee
HELD: No, Villuga is a rank-and-file employee.
Under Rule 1, Section 2(c), Book III of IRR of Labor Code, to be a member of a
managerial staff, the following elements must concur or co-exist: (1) that his
primary duty consists of the performance of work directly related to management
policies; (2) that he customarily and regularly exercises discretion and
independent judgment in the performance of his functions; (3) that he regularly
and directly assists in the management of the establishment; and (4) that he does
not devote his twenty per cent of his time to work other than those described
above.
Applying the above criteria to petitioner Villuga's case, it is undisputed that his primary
work or duty is to cut or prepare patterns for items to be sewn, not to lay down or
implement any of the management policies, as there is a manager and an assistant
manager who perform said functions. It is true that in the absence of the manager the
assistant manager, he distributes and assigns work to employees but such duty, though
involving discretion, is occasional and not regular or customary. He had also the
authority to order the repair or re-sewing of defective item but such authority is part and
parcel of his function as cutter to see to it that the items cut are sewn correctly lest the
defective nature of the workmanship be attributed to his "poor cutting." Elias Villuga
does not participate in policy-making. Rather, the functions of his position
involve execution of approved and established policies. In Franklin Baker Company
of the Philippines v. Trajano, it was held that employees who do not participate in policymaking but are given ready policies to execute and standard practices to observe are
not managerial employees.

The test of "supervisory or managerial status" depends on whether a person

possesses authority that is not merely routinary or clerical in nature but one that
requires use of independent judgment. In other words, the functions of the
position are not managerial in nature if they only execute approved and
established policies leaving little or no discretion at all whether to implement said
policies or not.

SIM V. NLRC 534 SCRA 515 (2007)

FACTS: Corazon Sim (petitioner) filed a case for illegal dismissal with the Labor Arbiter,
alleging that she was initially employed by Equitable PCI-Bank (respondent) in 1990 as
Italian Remittance Marketing Consultant to the Frankfurt Representative Office.
Eventually, she was promoted to Manager position, until September 1999, when she
received a letter from Remegio David -- the Senior Officer, European Head of PCIBank,
and Managing Director of PCIB- Europe -- informing her that she was being dismissed
due to loss of trust and confidence based on alleged mismanagement and
misappropriation of funds.
Respondent denied any employer-employee relationship between them, and sought the
dismissal of the complaint.
On September 3, 2001, the Labor Arbiter rendered its Decision dismissing the case for
want of jurisdiction and/or lack of merit. According to the Labor Arbiter:
It should be stressed at this juncture that the labor relations system in the Philippines
has no extra-territorial jurisdiction. It is limited to the relationship between labor and
capital within the Philippines. Since complainant was hired and assigned in a foreign
land, although by a Philippine Corporation, it follows that the law that govern their
relationship is the law of the place where the employment was executed and her place
of work or assignment. On this premise, the Italian law allegedly provides severance
pay which was applied and extended to herein complainant
Complainant, as General Manager is an employee whom the respondent company
reposed its trust and confidence. In other words, she held a position of trust. It is wellsettled doctrine that the basic premise for dismissal on the ground of loss of confidence
is that the employee concerned holds a position of trust and confidence
ISSUE: WON she would be dismissed based on breach of trust or confidence.
HELD:The rule is that the Court is bound by the findings of facts of the Labor Arbiter or
the NLRC, unless it is shown that grave abuse of discretion or lack or excess of
jurisdiction has been committed by said quasi-judicial bodies. The Court will not deviate
from said doctrine without any clear showing that the findings of the Labor Arbiter, as
affirmed by the NLRC, are bereft of sufficient substantiation.
Petitioner does not deny having withdrawn the amount of P3,000,000.00 lire from the
bank's account. What petitioner submits is that she used said amount for the Radio
Pilipinas sa Roma radio program of the company. Respondent, however, countered that
at the time she withdrew said amount, the radio program was already off the air.
Respondent is a managerial employee. Thus, loss of trust and confidence is a valid
ground for her dismissal.14 The mere existence of a basis for believing that a managerial
employee has breached the trust of the employer would suffice for his/her dismissal.

When an employee accepts a promotion to a managerial position or to an office

requiring full trust and confidence, she gives up some of the rigid guaranties available to
ordinary workers. Infractions which if committed by others would be overlooked or
condoned or penalties mitigated may be visited with more severe disciplinary action. A
company's resort to acts of self-defense would be more easily justified

GOLDEN FARMS INC. V. SEC. OF LABOR 234 SCRA 517 (1994)

FACTS: Petitioner Golden Farms, Inc., is engaged in the production and marketing of
bananas for export.
Respondent Progressive Federation of Labor (PFL) filed a petition for the holding
of a certification election among the monthly paid office and technical rank-andfile employees of petitioner Golden Farms.
Petitioner moved to dismiss the petition on three (3) grounds.
First, respondent PFL failed to show that it was organized as a chapter
within petitioner's establishment.
Second, there was already an existing collective bargaining agreement
between the rank-and-file employees represented by the National
Federation of Labor (NFL) and petitioner.
Third, the employees represented by PFL had allegedly been disqualified
by the Court.
ISSUE: WON petitioner's monthly paid rank-and file employees can constitute a
bargaining unit separate from the existing bargaining unit of its daily paid rank-and-file
employees.
HELD: YES. The monthly paid office and technical rank-and-file employees of petitioner
Golden Farms enjoy the constitutional right to self-organization and collective
bargaining.
A "bargaining unit" has been 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 the best suited to serve the reciprocal rights and duties
of the parties under the collective bargaining provisions of the law.
Community or mutuality of interests test ordered the
formation of a single bargaining unit
In this case, the monthly paid rank-and-file employees primarily perform
administrative or clerical work. While the daily paid rank-and-file employees
mainly work in the cultivation of bananas in the fields.
It is clear that the monthly paid are different from daily paid employees in terms
of duties and obligations, working conditions, salary rates, and skills.
This dissimilarity of interests warrants the formation of a separate and
distinct bargaining unit for the monthly paid rank-and-file employees of the
petitioner. To rule otherwise would deny this distinct class of employees
the right to self-organization for purposes of collective bargaining. Without

the shield of an organization, it will also expose them to the exploitations of

management.
Petitioner contends that these monthly paid office and technical employees are
managerial employees. They allegedly include those in the accounting and personnel
department, cashier, and other employees holding positions with access to classified
information. The SC was not persuaded.
Under the Art. 212, par. (m) of the LC, the monthly paid office and technical
employees, accountants, and cashiers of the petitioner are not managerial
employees for they do not participate in policy-making but are given cut out
policies to execute and standard practices to observe. In the main, the discharge
of their duties does not involve the use of independent judgment.
Also, the decision in Golden Farms, Inc., vs. Honorable Pura Ferrer Calleja, does
not pose any obstacle in holding a certification election among petitioners monthly
paid rank-and-file employees.
The issue brought to fore in that case was totally different, i.e., whether or not
petitioners confidential employees, considering the nature of their work, should be
included in the bargaining unit of the daily paid rank-and-file employees. In the case at
bench, the monthly paid rank-and-file employees of petitioner are being
separated as a bargaining unit from its daily paid rank-and-file and employees, on
the ground that they have different interest to protect. The principle of res
judicata is, therefore, inapplicable.

PHILIPS INDUSTRIAL DEVELOPMENT V. NLRC 210 SCRA 339

FACTS: PIDI is a domestic corporation engaged in the manufacturing and marketing of
electronic products Since 1971.
It had a total of six (6) collective bargaining agreements (CBAs) with private
respondent Philips Employees Organization-FFW (PEO-FFW), a registered labor
union and the certified bargaining agent of all the rank and file employees of
PIDI.
In the first CBA (1971-1974), the supervisors referred to in R.A. No. 875,
confidential employees, security guards, temporary employees and sales
representatives were excluded from the bargaining unit.
In the second to the fifth CBAs (1975-1977; 1978-1980; 1981-1983; and 19841986), the sales force, confidential employees and heads of small units, together
with the managerial employees, temporary employees and security personnel,
were specifically excluded from the bargaining unit.
The confidential employees are the division secretaries of light/telecom/data and
consumer electronics, marketing managers, secretaries of the corporate planning
and business manager, fiscal and financial system manager and audit and EDP
manager, and the staff of both the General Management and the Personnel
Department.
In the sixth CBA covering the years 1987 to 1989, it was agreed upon, among
others, that the subject of inclusion or exclusion of service engineers, sales
personnel and confidential employees in the coverage of the bargaining unit
would be submitted for arbitration.
Pursuant thereto, on June 1987, PEO-FFW filed a petition before the Bureau of
Labor Relations (BLR) praying for an order "directing the parties to select a
voluntary arbitrator in accordance with its rules and regulations." As the parties
failed to agree on a voluntary arbitrator, the BLR endorsed the petition to the
Executive Labor Arbiter of the National Capital Region for compulsory arbitration
pursuant to Article 228 of the Labor Code.
respondent NLRC reversed the decision of the Executive Labor Arbiter and held
that PIDI's "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."
ISSUE: WON NLRC is correct in its decision
HELD: NO. Respondent NLRC committed grave abuse of discretion in reversing the
decision of the Executive Labor Arbiter and in decreeing that PIDI's "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 PEOFFW 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.

GOLDEN FARMS V. SEC. OF LABOR 234 SCRA 517

FACTS: Petitioner Golden Farms, Inc., is a corporation engaged in the production and
marketing of bananas for export. On February 27, 1992, private respondent Progressive
Federation of Labor (PFL) filed a petition before the Med-Arbiter praying for the holding
of a certification election among the monthly paid office and technical rank-and-file
employees of petitioner Golden Farms.
Petitioner moved to dismiss the petition claiming that there was already an
existing collective bargaining agreement between the rank-and-file employees
represented by the National Federation of Labor (NFL) and petitioner
Respondent PFL opposed petitioner's Motion to Dismiss. It countered that the
monthly paid office and technical employees should be allowed to form a
separate bargaining unit because they were expressly excluded from coverage in
the Collecting Bargaining Agreement (CBA) between petitioner and NFL.
ISSUE: WON petitioner's monthly paid rank-and file employees can constitute a
bargaining unit separate from the existing bargaining unit of its daily paid rank-and-file
employees.
HELD: The monthly paid office and technical rank-and-file employees of petitioner
Golden Farms enjoy the constitutional right to self-organization and collective
bargaining. A "bargaining unit" has been 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 the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law. The community or mutuality of interest is
therefore the essential criterion in the grouping. "And this is so because 'the basic test
of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective
bargaining rights.' In the case at bench, the evidence established that the monthly paid
rank-and-file employees of petitioner primarily perform administrative or clerical work. In
contradistinction, the petitioner's daily paid rank-and-file employees mainly work in the
cultivation of bananas in the fields. It is crystal clear the monthly paid rank-and-file
employees of petitioner have very little in common with its daily paid rank-and-file
employees in terms of duties and obligations, working conditions, salary rates, and
skills. To be sure, the said monthly paid rank-and-file employees have even been
excluded from the bargaining unit of the daily paid rank-and-file employees. This
dissimilarity of interests warrants the formation of a separate and distinct bargaining unit
for the monthly paid rank-and-file employees of the petitioner. To rule otherwise would
deny this distinct class of employees the right to self-organization for purposes of
collective bargaining.

PEPSI COLA PRODUCTS PHILS V. SECRETARY OF LABOR 312 SCRA 104 (1999)
FACTS: Private respondent Pepsi-Cola Employees Organization-UEOF (Union) filed a
petition for certification election with the Med-Arbiter seeking to be the exclusive
bargaining agent of the supervisors of Pepsi-Cola Philippines
1. The Med-Arbiter granted the petition, expressly stating that the Union was an
affiliate of Union de Obreros Estivadores de Filipinas (Federation) together with 2
rank-and-file unions: Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola Employees
Union of the Philippines (PCEUP)
2. Subsequently, PEPSI filed with the Bureau of Labor Relations a petition to set
aside, cancel and/or revoke the charter affiliation of the union on the grounds that
the members of the union were managers and that the supervisors union cannot
affiliate with a federation whose members include the rank and file union of the
same company
3. The Secretary of Labor held that Art 245 Labor Code does not preclude the
supervisors union and the rank-and-file union from being affiliated with the same
federation since a federation of local union is not the labor organization
contemplated in Art 245 Labor Code but it only becomes entitled to all the rights
enjoyed by the labor organization when it has complied with the registration
requirements found in Art 234 and 237 Labor Code. What is prohibited by Art 245
is membership of supervisory employees in a labor union of rank-and-file
employees
4. Pepsi assailed the Secretary of Labors decision that credit and collection
managers and accounting managers are eligible for membership in a
supervisors union
ISSUE: WON confidential employees can join the labor union of the rank-and-file
employees
HELD: No. A confidential employee is one entrusted with confidence on delicate
matters, or with the custody, handling, or care and protection of the employer's
property. While Art 245 Labor Code singles out managerial employee as ineligible
to join, assist or form any labor organization, under the doctrine of necessary
implication, confidential employees are similarly disqualified. This doctrine states
that what is implied in a statute is as much a part thereof as that which is expressed.
In 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
interests 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 confidential
employees considered as included in the disqualification found in Art 245; it is 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. As held in Golden Farms v. Ferrer-Calleja,
"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 spy or spies of either party to a collective
bargaining agreement.
Route Managers, Chief Checkers and Warehouse Operations Managers are
supervisors while Credit & Collection Managers and Accounting Managers are highly
confidential employees. Designation should be reconciled with the actual job description
of subject employees. What is essential is the nature of the employee's function and not
the nomenclature or title given to the job which determines whether the employee has
rank and file or managerial status, or whether he is a supervisory employee.

SUGBUANON RURAL BANK V. NLRC 324 SCRA 425 [2000]

FACTS: Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-registered
banking institution.
Private respondent SRBI-Association of Professional, Supervisory, Office, and
Technical Employees Union (APSOTEU) is a legitimate labor organization affiliated with
the Trade Unions Congress of the Philippines (TUCP).
The union filed a petition for certification election of the supervisory employees of SRBI.
SRBI filed a motion to dismiss the union's petition. It sought to prevent the holding of a
certification election because the members of APSOTEU-TUCP were in fact managerial
or confidential employees.That they were disqualified from forming, joining, or assisting
any labor organization.
ISSUE: WON the members of the respondent union are managerial employees and/or
highly-placed confidential employees, hence prohibited by law from joining labor
organizations and engaging in union activities?
HELD: NO. 'Managerial employee is one who is vested with powers or prerogatives to
lay down and execute management policies and/or hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.
Petitioner failed to show that the employees in question were vested with the power to
recommend the hiring and appointment of his subordinates, as well as the power to
recommend any promotion and/or increase. At best they only had recommendatory
powers subject to evaluation, review, and final decision by the bank's management. The
job description forms submitted by petitioner clearly show that the union members in
question may not transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees. Moreover, the forms also do not show that the Cashiers, Accountants, and
Acting Chiefs of the loans Department formulate and execute management policies
which are normally expected of management officers.
The Cashiers, Accountant, and Acting Chief of the Loans Department of the petitioner
did not possess managerial powers and duties. We are, therefore, constrained to
conclude that they are not managerial employees.
Confidential employees are those who (1) assist or act in a confidential capacity, in
regard (2) to persons who formulate, determine, and effectuate management policies
[specifically in the field of labor relations. The two criteria are cumulative, and both must
be met if an employee is to be considered a confidential employee-that is, the

confidential relationship must exist between the employee and his superior officer; and
that officer must handle the prescribed responsibilities relating to labor relations.
Article 245 of the Labor Code does not directly, prohibit confidential employees from
engaging in union activities. However, under the doctrine of necessary implication, the
disqualification of managerial employees equally applies to confidential employees. The
confidential-employee rule justifies exclusion of confidential employees because in the
normal course of their duties they become aware of management policies relating to
labor relations. It must be stressed, however, that when the employee does not have
access to confidential labor relations information, there is no legal prohibition against
confidential employees from forming, assisting, or joining a union.
Petitioner's explanation, however, does not state who among the employees has access
to information specifically relating to its labor relations policies. As secretary of the
bank's governing body, Patricia Maluya serves the bank's management, but could not
be deemed to have access to confidential information specifically relating to SRBI's
labor relations policies, absent a clear showing on this matter.

SAN MIGUEL FOODS INC. V. SAN MIGUEL CORP SUPERVISORS AND EXEMPT
UNION [2011]
FACTS: In the case of San Miguel Corp Supervisors and Exempt Union vs Laguesma,
the court held that even if they handle confidential data regarding technical and internal
business operations, supervisory employees 3 and 4 and the exempt employees of
SMFI are not to be considered confidential employees, because the same do not
pertain to labor relations, particularly negotiation and settlement of grievances.
1. Pursuant to the Courts decision, DOLE-NCR conducted pre-election conference.
However, there was a discrepancy in the list of eligible voters. The Med-Arbiter
issued an order directing the Election Officer to proceed with the conduct
certification election, thus a certification election was conducted.
2. Petitioner filed the Omnibus Objections and Challenge to Voters, questioning the
eligibility to vote by some of its employees on the grounds that some employees
do not belong to the bargaining unit which respondent seeks to represent. It
argued that certain employees should not be allowed to vote as they are
confidential employees.
3. Base on the results, the Med-Arbiter issued an order that respondent is certified
to be the exclusive bargaining agent of the supervisors and exempt employees of
pertitioners Magnolia Poultry Products Plants in Cabuyao, San Fernando, and
Otis.
4. On appeal, the Acting DOLE Undersecretary sustained the decision. CA also
affirmed with modification that those holding the position of Human Resource
Assistant and Personnel Assistant are excluded from the bargaining unit.
ISSUE: WON the CA erred in not excluding the position of Payroll Master and all other
positions with access to salary and compensation data be excluded from the bargaining
unit in the definition of a confidential employee.
HELD: The CA correctly held that the position of Payroll Master does not involve
dealing with confidential labor relations information in the course of the performance of
his functions. Since the nature of his work does not pertain to company rules and
regulations and confidential labor relations, it follows that he cannot be excluded from
the subject bargaining unit.
A confidential employee is one entrusted with confidence on delicate, or with the
custody, handling or care and protection of the employers property. Confidential
employees, such as accounting personnel, should be excluded from the bargaining unit,
as their access to confidential information may become the source of undue advantage.
However, such fact does not apply to the position of Payroll Master and the whole
gamut of employees who, as perceived by petitioner, has access to salary and
compensation data.
Confidential employees are defined as those who (1) assist or act in a confidential
capacity, in regard (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. 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.
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 for their separate category and disqualification
to join any labor organization is similar to the inhibition for managerial
employees, because if allowed to be affiliated with a union, the latter might not be
assured of their loyalty in view of evident conflict of interests and the union can
also become company-denominated with the presence of managerial employees
in the union membership.
Having access to confidential information,
confidential employees may also become the source of undue advantage. Said
employees may act as a spy or spies of either party to a collective bargaining
agreement.
The CA correctly ruled that the positions of Human Resource Assistant and Personnel
Assistant belong to the category of confidential employees and, hence, are excluded
from the bargaining unit. As Human Resource Assistant, the scope of ones work
necessarily involves labor relations, recruitment and selection of employees, access to
employees' personal files and compensation package, and human resource
management. As regards a Personnel Assistant, one's work includes the recording of
minutes for management during collective bargaining negotiations, assistance to
management during grievance meetings and administrative investigations, and securing
legal advice for labor issues from the petitioners team of lawyers, and implementation
of company programs. Therefore, in the discharge of their functions, both gain access
to vital labor relations information which outrightly disqualifies them from union
membership.
A certification election is the sole concern of the workers; hence, an employer
lacks the personality to dispute the same. The general rule is that an employer
has no standing to question the process of certification election, since this is the
sole concern of the workers. Law and policy demand that employers take a strict,
hands-off stance in certification elections. The bargaining representative of employees
should be chosen free from any extraneous influence of management. A labor
bargaining representative, to be effective, must owe its loyalty to the employees alone
and to no other. The only exception is where the employer itself has to file the petition
pursuant to Article 258 of the Labor Code because of a request to bargain collectively.

DE LA SALLE UNIVERSITY V. DLSU-EMPLOYEES ASSOCIATION 330 SCRA 363

(2000)
FACTS: DLSU and DLSU Employees Association-National Federation of Teachers and
Employees Union (DLSU-NAFTEU)which is comprised of regular non-academic rankand-file employeesentered into a CBA for 3 years, which was set to expire in
December 1989.
1. During the freedom period (60 days before the expiration of the CBA), the union
initiated negotiations with the university for a new CBA. However, it turned out to
be unsuccessful and as such, the union filed a notice to strike with the National
Conciliation and Mediation Board (NCMB)
2. After several meetings, 5 out of 11 issues raised in the notice to strike were
resolved by both parties. A partial CBA then was executed by the university and
the union.
3. Thereafter, both parties entered into a submission agreement and identified 6
issues to be resolved for arbitration, to wit: scope of the bargaining unit, union
security clause, security of tenure, salary increases in for the 3 rd and 4th year of
the CBA, indefinite union leave, reduction of union presidents work load, special
leave and duration of the CBA.
4. On the scope of the bargaining unit, the Voluntary Arbitrator (VA) held that: the
computer operators at the Computer Services Center (CSC) should be included
as members of the bargaining unit since said operators were doing clerical and
routinary work and had nothing to do with the setting of management policies for
the university. While they may have access to vital information regarding the
universitys operation, they are not necessarily confidential employees. With
respect to the employees of the College of St. Benilde, the VA found that CSB
has a personality separate and distinction from DLSU and as such, the CSB
employees are outside of the bargaining unit of DLSU-NAFTEU
5. The university, then filed a petition for certiorari with TRO and/or preliminary
injunction assailing the decision of the VA as having been rendered in excess of
jurisdiction and/or with grave abuse of discretion
6. DLSU argued that the computer operators of CSC and discipline officers are
confidential employees, whose status has been recognized even by the union as
confidential employees.
a. The computer operators process data that are needed for strategic planning
and evaluation of systems and in fact, handle the universitys confidential
information and data including those involving and/or pertinent to labor
relations.
b. As to the discipline officers, the university maintained that they were also
excluded from the bargaining unit of the rank-and-file employees under the
parties 1986 CBA. Since the discipline officers are the alter egos of
management as they perform tasks which are inherent in management (e.g.
enforce discipline, act as peace officers, secure peace and safety of the
students inside campus, conduct investigations on violations of university
regulations etc). Discipline officers are also privy to highly confidential
information ordinarily accessible only to management

ISSUE: WON the computer operators assigned at CSC and the universitys discipline
officers may be considered as confidential employees and should therefore be excluded
from the bargaining unit which is composed of rank-and-file employees of the university
HELD: No, computer operators and discipline officers are not confidential employees
and are as such, eligible to join the labor union. The express exclusion of the computer
operators and discipline officers from the bargaining unit of rank-and-file employees in
the 1986 collective bargaining agreement does not bar any re-negotiation for the future
inclusion of the said employees in the bargaining unit. During the freedom period, the
parties may not only renew the existing collective bargaining agreement but may also
propose and discuss modifications or amendments thereto. With regard to the alleged
confidential nature of the said employees' functions, after a careful consideration of the
pleadings filed before this Court, we rule that the said computer operators and discipline
officers are not confidential employees. As carefully examined by the Solicitor General,
the service record of a computer operator reveals that his duties are basically clerical
and non-confidential in nature. As to the discipline officers, we agree with the voluntary
arbitrator that based on the nature of their duties, they are not confidential employees
and should therefore be included in the bargaining unit of rank-and-file employees.
With regard to the employees of CSB, they should be excluded from the bargaining unit
of the rank-and-file employees of DLSU, because the two educational institutions have
their own separate juridical personality and no sufficient evidence was shown to justify
the piercing of the veil of corporate fiction.

SAN MIGUEL CORP SUPERVISORY AND EXEMPT EMPLOYEES UNION V.

LAGUESMA 277 SCRA 370
FACTS: Petitioner union filed before the Department of Labor and Employment (DOLE)
a Petition for District 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 ordering the conduct of certification
among the supervisors and exempt employees of the SMC Magnolia Poultry Products
Plants of Cabuyao, San Fernando and Otis as one bargaining unit.
San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing
out, among others, the Med-Arbiters error in grouping together all three (3) separate
plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including
supervisory levels 3 and above whose positions are confidential in nature.
Laguesma, granted respondent companys 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 the appropriate bargaining unit.
ISSUE: WON Supervisors and Exempt Employees are allowed to join the Union.
HELD: This Court rules that said employees do not fall within the term confidential
employees who may be prohibited from joining a union.
There is no question that the said employees, supervisors and the exempt employees,
are not vested with the powers and prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss
employees. They are, therefore, 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. In the very same provision, 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. The only question that need be addressed is whether
these employees are properly classified as confidential employees or not.
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.[5]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 employees 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 questions frequently considered is the employees necessary access

to confidential labor relations information
Granting arguendo that an employee has access to confidential labor relations
information but such is merely incidental to his duties and knowledge thereof is not
necessary in the performance of such duties, said access does not render the employee
a confidential employee.[ If access to confidential labor relations information is to be a
factor in the determination of an employees confidential status, such information must
relate to the employers labor relations policies. Thus, an employee of a labor union, or
of a management association, must have access to confidential labor information with
respect to his employer, the union, or the association, to be regarded a confidential
employee, and knowledge of labor relations information pertaining to the companies
with which the union deals, or which the association represents, will not clause an
employee to be excluded from the bargaining unit representing employees of the union
or association. Access to information which is regarded by the employer to be
confidential from the business standpoint, such as financial information or technical
trade secrets, will not render an employee a confidential employee
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

KAPISANAN NG MANGGAGAWA AT TAC SA IRRI V. SEC OF LABOR 190 SCRA

130
FACTS:
The ICMC case.
The International Catholic Migration Commission (ICMC) was accredited by the
Philippine government to operate the refugee processing center.
ICMC was duly registered with the United Nations Economic and Social Council
and enjoys consultative status and is parallel to those of the international
committee for migration and the international of the red cross.
Trade Unions of the Philippines applied for certification election among the rank
and file members employed by ICMC. The latter opposed the petition on the
ground that it is an international organization registered with the United Nations
and hence, enjoys diplomatic immunity.
The IRRI case
The International Rice Research Institute (IRRI) was a fruit of memorandum of
understanding between the Philippine government and the Ford and Rochefeller
Foundations. It was intended to be an autonomous, philanthropic tax-free, nonprofit, non stock organization designed to carry out the principal objective of
conducting basic research on the rice plant.
By virtue of P.D no. 1620, IRRI was granted the status, prerogatives, privileges
and immunities of an international organization.
The Kapisanan filed a petition for direct certification election. IRRI opposed the
petition invoking Pres. Decree no.1620 conferring upon it the status of an
international organization and granting it immunity from all civil, criminal, and
administrative proceedings under Philippine laws.
ISSUES: WON International Organization registered with the UN can organize for the
purpose of collective bargaining
RULING: NO.
The term international organization (IO) is capable of exercising specific rights, duties
and powers. They are organized to conduct general international business in which the
member states have an interest.

The United Nations is an IO dedicated to the propagation of world peace.

Agencies which have wide international responsibilities are to be brought into
relationship with the United Nations by agreements entered into between them and the
Economic and Social Council, are then to be known as specialized agencies.
Section 31 of the Convention on the Privileges and Immunities of the Specialized
Agencies of the United Nations provides that each specialized agency shall
make provision for appropriate modes of settlement of:
o disputes arising out of contracts or other disputes of private
character to which the specialized agency is a party.
Moreover, pursuant to Article IV of the Memorandum of Agreement between
ICMC and the Philippine Government, whenever there is any abuse of
privilege by ICMC, the Government is free to withdraw the privileges and
immunities accorded.
Neither are the employees of IRRI without remedy in case of dispute with
management as, in fact, there had been organized a forum for better
management-employee relationship
The existence of this Union factually and tellingly belies the argument that Pres. Decree
No. 1620, which grants to IRRI the status, privileges and Immunities of an international
organization, deprives its employees of the right to self-organization.
It is inaccurate to state that a certification election is beyond the scope of that
immunity enjoyed by International Organizations.
A certification election could trigger off a series of events in the collective
bargaining process together with related incidents and/or concerted activities, which
could inevitably involve ICMC in the legal process, which includes any penal,
civil and administrative proceedings.
The eventuality of Court litigation is neither remote and from which international
organizations are precisely shielded to safeguard them from the disruption of
their functions. Clauses on jurisdictional immunity are said to be standard provisions in
the constitutions of international organizations. The immunity covers the organization
concerned, its property and its assets. It is equally applicable to proceedings in
personam and proceedings in rem.
Hence, employees of ICMC, an IO registered with the UN cannot organize themselves
for the purposes of collective bargaining.

GERMAN AGENCY FOR TECHNICAL COOPERATION (GTZ) VS. CA G.R. NO

152318 (2009)
FACTS: GTZ is a federal enterprise based in Eschborn near Frankfurt am Main which is
a corporation fully owned by the German gov't.
GTZs own website elicits that petitioner is "federally owned," a "federal
enterprise," and "founded in 1975 as a company under private law."
In the said website, it stated that it was organized under private law. It did
not adduce evidence that it had not consented to being sued.
It appears that GTZ was actually organized not through a legislative public
charter, but under private law, in the same way that Philippine corporations
can be organized under the Corporation Code even if fully owned by the
Philippine government.
Later, GTZ's employees filed a complaint for illegal dismissal.
GTZ sought the dismissal of the complaint on the ground of state
immunity.
ISSUE: WON the complaint for illegal dismissal filed by its employees was proper.
HELD: YES. In international law, a state cannot be sued without its consent. Corollarily,
an agent who acts on its behalf likewise cannot be sued.
GTZ is a corporation expressly shown to be incorporated under private law. Because
GTZ failed to adduce evidence of German laws regarding corporations organized under
private law, it must be presumed that the laws of Germany are the same with that of the
Phils.
Under Phil law, corporations organized under the Corporation Code are considered as
PRIVATE CORPORATIONS, and not agencies of the gov't. In that wise, they have
expressly consented to being sued. Since GTZ was organized under private law, it
follows that it can be sued. Hence, the complaint for dismissal is proper.

ARIZALA V. CA 189 SCRA 584

FACTS: Under the Industrial Peace Act, government-owned or controlled corporations
had the duty to bargain collectively and were otherwise subject to the obligations and
duties of employers in the private sector. The Act also prohibited supervisors to
become, or continue to be, members of labor organizations composed of rank-and-file
employees, and prescribed criminal sanctions for breach of the prohibition.
Under the regime of said Industrial Peace Act that the Government Service Insurance
System (GSIS, for short) became bound by a collective bargaining agreement executed
between it and the labor organization representing the majority of its employees, the
GSIS Employees Association. The agreement contained a "maintenance-ofmembership" clause
The petitioners occupied supervisory positions in the GSIS. Pablo Arizala and Sergio
Maribao were, respectively, the Chief of the Accounting Division, and the Chief of the
Billing Section of said Division, inthe Central Visayas Regional Office of the GSIS.
Leonardo Joven and Felino Bulandus were, respectively, the Assistant Chief of the
Accounting Division (sometimes Acting Chief in the absence of the Chief) and the
Assistant Chief of the Field Service and Non-Life Insurance Division (and Acting
Division Chief in the absence of the Chief), of the same Central Visayas Regional Office
of the GSIS. Demands were made on all four of them to resign from the GSIS
Employees Association, in view of their supervisory positions. They refused to do so.
Consequently, two (2) criminal cases for violation of the Industrial Peace Act were
lodged against them in the City Court of Cebu: one involving Arizala and Maribao and
the other, Joven and Bulandus, which resulted to their conviction.
ISSUE: WON government employees cannot form their own Collective bargaining unit.
RULING: YES. the right of self-organization and collective bargaining had been
withdrawn by the Labor Code from government employees including those in
government-owned and controlled corporations-chiefly for the reason that the terms and
conditions of government employment, all embraced in civil service, may not be
modified by collective bargaining because set by law. It is therefore immaterial, they
say, whether supervisors are members of rank-and-file unions or not; after all, the
possibility of the employer's control of the members of the union thru supervisors thus
rendering collective bargaining illusory, which is the main reason for the prohibition, is
no longer of any consequence the disappearance from the law of the prohibition on
supervisors being members of labor organizations composed of employees under their
supervision. The Labor Code (PD 442) allowed supervisors (if not managerial) to join
rank-and-file unions. And under the Implementing Rules of RA 6715, supervisors
whowere members of existing labor organizations on the effectivity of said RA 6715
were explicitly authorized to "remain therein. "that the maintenance by supervisors of
membership in a rank-and-file labor organization even after the enactment of a statute
imposing a prohibition on such membership, is not only not a crime, but is explicitly
allowed, under present law.

PHILIPPINE PHOSPHATE V. TORRES 231 SCRA 335 (1994)

FACTS: Philphos Movement for Progress Inc (PMPI) filed with DOLE a petition for
certification election among the supervisory employees of petitioner Phil Phosphate,
seeking to represent the supervisory employees of Phil Phosphate
1. Petitioner welcomed the creation of a supervisory employees union provided that
the necessary requisites of law were properly observed and that the companys
superintendents who were managerial and not supervisory employees. Phil
Phosphate also maintained that its professional or technical employees were not
within the definition of supervisory employees under the Labor Code.
2. Consequently, petitioner prayed for the exclusion of its superintendents and
professional/technical employees from PMPI supervisory union
3. Med-Arbiter ordered the certification election among supervisory excluding
superintendents and the professional and technical employees
4. PMPI filed an amended petition with the Med-Arbiter seeking to represent not
only supervisory employees of petitioner but also its professional/technical and
confidential employees. The Med-Arbiter granted the petition. Secretary of Labor
affirmed the same
ISSUE: WON professional/technical and confidential employees may validly join
respondent PMPI union which is composed of supervisors
HELD: No, being a supervisory union, PMPI cannot represent professional/technical
and confidential employees of petitioner since such positions are more of a rank-and-file
status than supervisory.
Under Art 212(m) Labor Code, supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of independent
judgment." The definition of managerial employees is limited to those having authority to
hire and fire, while those who only recommend effectively the hiring or firing or transfer
of personnel; are considered closer to rank and file employees. The exclusion therefore
of mid-level executives from the category of managers has brought about a third
classification, the supervisory employees. The peculiar role of supervisors is such that
while they are not managers, when they recommend action implementing management
policy or ask for the discipline or dismissal of subordinates, they identify with the
interests of the employer and may act contrary to the interests of the rank and file.
The
certification
of
Personnel
Officer
Duhaylungsod
that
its
professional/technical employees occupy positions that are non-supervisory is
evidence that said employees belong to the rank and file. Quite obviously, these
professional/technical employees cannot effectively recommend managerial
actions with the use of independent judgment because they are under the
supervision of superintendents and supervisors. Because it is unrefuted that
these professional/technical employees are performing non-supervisory
functions, hence they should be classified, at least for purposes of this case, as

rank and file employees. Consequently, these professional/technical employees

cannot be allowed to join a union composed of supervisors. Conversely,
supervisory employees cannot join a labor organization of employees under their
supervision but may validly form a separate organization of their own.
This is precisely the situation which the law prohibits. It would create an obvious conflict
of views among the members, or at least between 2 groups of members espousing
opposing interests. The intent of the law is to avoid a situation where supervisors would
merge with the rank and file, or where the supervisors' labor organization would
represent conflicting interests, especially where, as in the case at bar, the supervisors
will be commingling with those employees whom they directly supervise in their own
bargaining unit. Members of the supervisory union might refuse to carry out disciplinary
measures against their co-member rank and file employees.
Supervisors have the right to form their own union or labor organization. What
the law prohibits is a union whose membership comprises of supervisors
merging with the rank and file employees because this is where conflict of
interests may arise in the areas of discipline, collective bargaining and strikes.
The professional/technical employees of petitioner therefore may join the existing
rank and file union, or form a union separate and distinct from the existing union
organized by the rank and file employees of the same company.
As to the confidential employees of the petitioner, the latter has not shown any proof or
compelling reason to exclude them from joining respondent PMPI and from participating
in the certification election, unless these confidential employees are the same
professional/technical employees whom we find to be occupying rank and file positions.

SUGBUANON RURAL BANK V. NLRC 324 SCRA 425 [2000]

FACTS: Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-registered
banking institution.
Private respondent SRBI-Association of Professional, Supervisory, Office, and
Technical Employees Union (APSOTEU) is a legitimate labor organization affiliated with
the Trade Unions Congress of the Philippines (TUCP).
The union filed a petition for certification election of the supervisory employees of SRBI.
SRBI filed a motion to dismiss the union's petition. It sought to prevent the holding of a
certification election because the members of APSOTEU-TUCP were in fact managerial
or confidential employees.That they were disqualified from forming, joining, or assisting
any labor organization.
ISSUE: WON the members of the respondent union are managerial employees and/or
highly-placed confidential employees, hence prohibited by law from joining labor
organizations and engaging in union activities?
HELD: NO. 'Managerial employee is one who is vested with powers or prerogatives to
lay down and execute management policies and/or hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.
Petitioner failed to show that the employees in question were vested with the power to
recommend the hiring and appointment of his subordinates, as well as the power to
recommend any promotion and/or increase. At best they only had recommendatory
powers subject to evaluation, review, and final decision by the bank's management. The
job description forms submitted by petitioner clearly show that the union members in
question may not transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees. Moreover, the forms also do not show that the Cashiers, Accountants, and
Acting Chiefs of the loans Department formulate and execute management policies
which are normally expected of management officers.
The Cashiers, Accountant, and Acting Chief of the Loans Department of the petitioner
did not possess managerial powers and duties. We are, therefore, constrained to
conclude that they are not managerial employees.
Confidential employees are those who (1) assist or act in a confidential capacity, in
regard (2) to persons who formulate, determine, and effectuate management policies
[specifically in the field of labor relations. The two criteria are cumulative, and both must
be met if an employee is to be considered a confidential employee-that is, the

confidential relationship must exist between the employee and his superior officer; and
that officer must handle the prescribed responsibilities relating to labor relations.
Article 245 of the Labor Code does not directly, prohibit confidential employees from
engaging in union activities. However, under the doctrine of necessary implication, the
disqualification of managerial employees equally applies to confidential employees. The
confidential-employee rule justifies exclusion of confidential employees because in the
normal course of their duties they become aware of management policies relating to
labor relations. It must be stressed, however, that when the employee does not have
access to confidential labor relations information, there is no legal prohibition against
confidential employees from forming, assisting, or joining a union.
Petitioner's explanation, however, does not state who among the employees has access
to information specifically relating to its labor relations policies. As secretary of the
bank's governing body, Patricia Maluya serves the bank's management, but could not
be deemed to have access to confidential information specifically relating to SRBI's
labor relations policies, absent a clear showing on this matter.

ATLAS LITHOGRAPHIC V. USEC LAGUESMA 205 SCRA 12

FACTS: The supervisory, administrative personnel, production, accounting and
confidential employess of Atlas Lithrographic Services, Inc. (ALSI) affiliated with private
respondent Kaisaha ng Manggawang Pilipino, a national labor organization. The local
union adopted the name Atlas Lithographic Services, Inc. Supervisory, Administrative,
Personnel, Production, Accounting and Confidential Employees Association or ALSISAPPACEA-KAMPIL.
1. Kampil-Katipunan filed on behalf of the supervisors union a petition for
certification election so that it could be the sole and exclusive bargaining agent of
the supervisory employees.
2. Petitoners opposed the private respondents petition claiming that under Art. 245
of the LC the private respondent cannot represent the supervisory employees for
collective bargaining purposes because the private respondent also represents
the rank-and-file- employees union, to allow the supervisors of those employees
to affiliate with the private respondent is t o allow the circumvention of the
principle of the separation of unions under said article.
3. Med-Arbiter issued and order in favor of private respondent and DOLE affirmed
the resolution of the Med-Arbiter. DOLE contends that despite affiliation with a
national federation, the local union does not lose its personality which is separate
and distinct from the national federation.
ISSUE: WON under Art. 245 of the LC, a local union of supervisory employees may be
allowed to affiliate with a national federation of labor organizations of rank-and-file
employees and which national federation actively represents its affiliate in collective
bargaining negotiations with the same employer of the supervisors and in the
implementation of resulting CBA.
HELD: The private respondent is disqualified from affiliating with a national
federation of labor organizations which includes the petitioners rank-and-file
employees.
Employees were classified into three groups, namely: (1) managerial employees; (2)
supervisors; and (3) rank-and file employees. Supervisors, who were considered
employees in relation to their employer could join a union but not a union of rank-andfile employees.
The government recognizes the right of supervisors to organize with the
qualification that they shall not join or assist in the organization of rank-and-file
employees. The interests of supervisors on the one hand, and the rank-and-file
employees on the other, are separate and distinct. The functions of supervisors,
being recommendatory in nature, are more identified with the interests of the
employer. The performance of those functions may, thus, run counter to the
interests of the rank-and-file.

The peculiar role of supervisors is such that while they are not managers, when they
recommend action implementing management policy or ask for the discipline or
dismissal of subordinates, they identify with the interests of the employer and may act
contrary to the interests of the rank-and-file. A conflict of interest may arise in the areas
of discipline, collective bargaining and strikes. Members of the supervisory union might
refuse to carry out disciplinary measures against their co-member rank-and-file
employees. In the area of bargaining, their interests cannot be considered identical. The
needs of one are different from those of the other. Moreover, in the event of a strike, the
national federation might influence the supervisors' union to conduct a sympathy strike
on the sole basis of affiliation.
The rank-and file employees are directly under the supervisors organized by one and
the same federation. In Sec. 3 of the Industrial Peace Act is to prohibit supervisors from
joining a labor organization of employees under their supervision. Sec. 3 of the
Industrial Peace Act provides: Individuals employed as supervisors shall not be eligible
for membership in a labor organization of employees under their supervision but may
form separate rganizations of their own.
Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715 provides:
Art. 245. Ineligibility of managerial employees to join any labor organization: right of
supervisory employees. Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.
The Court construes Article 245 to mean that, as in Section 3 of the Industrial
Peace Act, supervisors shall not be given an occasion to bargain together with
the rank-and-file against the interests of the employer regarding terms and
conditions of work.
The prohibition against a supervisors' union joining a local union of rank-and-file is
replete with jurisprudence. The Court emphasizes that the limitation is not confined to a
case of supervisors wanting to join a rank-and-file local union. The prohibition extends
to a supervisors' local union applying for membership in a national federation the
members of which include local unions of rank-and-file employees. The intent of the law
is clear especially where, as in the case at bar, the supervisors will be co-mingling with
those employees whom they directly supervise in their own bargaining unit.
Supervisors are not prohibited from forming their own union. What the law
prohibits is their membership in a labor organization of rank-and-file employees
(Art. 245, Labor Code) or their joining a national federation of rank-and-file
employees that includes the very local union which they are not allowed to
directly join.

ADAMSON & ADAMSON V. CIR 127 SCRA 268 (1984)

FACTS: Adamson and Adamson Inc Supervisory Union (FFW) informed petitioner that
it had organized and established a union on the same date the Adamson & Adamson
Salesmen Association (FFW) advised the petitioner that the rank-and-file salesmen had
formed their union.
1. Petitioner questioned the legality of the affiliation of both unions with FFW.
Adamson & Adamson Inc filed a petition to set aside the orders of respondent
CIR which held that Adamson & Adamson supervisory Union (FFW) can legally
represent supervisors of the petitioner corporation despite the affiliation of the
rank and file union of the same company with the same labor federation, the
Federation of Free Workers (FFW). CIR dismissed the petition
2. Subsequently and during the pendency of the present petition, the rank-and-file
employees formed their own union, naming it Adamson & Adamson Independent
Workers (FFW)
3. Petitioner argued that the affiliation of the respondent union of supervisors, the
salesmen association and the Adamson & Adamson Independent Workers union
of rank-and-file personnel with the same federation (FFW) violates Sec 3 of the
Industrial Peace Act because:
a. It results in the indirect affiliation of supervisors and rank-and-file employees
with one labor organization
b. Since the respondent union and the unions of non-supervisors in the same
company are governed by the same constitution and by-laws of the national
federation, in effect, there is only one union
c. Such would result in the respondent unions losing its independence because
it became the alter ego of the federation
4. The petitioner also argued that should affiliation be allowed, this would violate the
requirement of separateness of bar units under Sec 12 of the Act because only
one union will in fact represent both supervisors and rank-and-file employees of
the company
5. On the other hand, the respondents contended that even if the salesmen of the
petitioner are under the supervision of the members of the supervisory union, the
prohibition does not apply because the salesmen and the supervisory employees
of the company have their separate and distinct labor organizations, as
evidenced by the facts that their respective unions sent separate proposals for
CBAs. Respondents further argued that the FFW has, as its affiliates,
supervisory as well as rank-and-file employees. Should both the supervisory and
rank-and-file employees of a certain employer who have separate certificates of
registration affiliate with the same federation, the prohibition does not apply since
the federation is not the organization of the supervisory employees contemplated
in the law.
ISSUE: WON a supervisors union may affiliate with a federation with which unions of
rank-and-file employees of the same employer are also affiliated

HELD: Yes. As held in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, the
locals are separate and distinct units primarily designed to secure and maintain the
equality of bargaining power between the employer and their employee-member in the
economic struggle for the fruits of the joint productive effort of labor and capital; and the
association of the locals into the national union was in the furtherance of the
same end. These associations are consensual entities capable of entering into such
legal relations with their members. The essential purpose was the affiliation of the
local unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association; free to serve their own and the
common-interest of all, subject to the restraints imposed by the Constitution and
By-laws of the Association; and free also to renounce the affiliation for mutual
welfare upon the terms laid down in the agreement which brought it into
existence.
CIR correctly pointed out that the confusion seems to have stemmed from the prefix of
FFW after the name of the local unions in the registration of both. Nonetheless, the
inclusion of FWW in the registration is merely to stress that they are its affiliates
at the time of registrations. It does not mean that said local unions cannot stand
on their own Neither can it be construed that their personalities are so merged
with the mother federation that for one difference or another they cannot pursue
their own ways, independently of the federation. This is borne by the fact that
FFW, like other federation is a legitimate labor organization separate and distinct
from its locals and affiliates and to construe the registration certificates of the
aforecited unions, along the line of the Company's argument. would tie up any
affiliates to the shoe string of the federation.
The Adamson and Adamson Supervisory Union and the Adamson and Adamson, Inc.,
Salesmen Association (FFW), have their own respective constitutions and by-laws.
They are separately and independently registered of each other. Both sent their
separate proposals for collective bar agreements with their employer. There could be no
employer influence on rank-and-file organizational activities nor could there be any rank
and file influence on the supervisory function of the supervisors because of the
representation sought to be proscribed.

LIBERTY COTTON MILLS WORKERS UNION V. LCM 66 SCRA 512

FACTS: The Liberty Cotton Mills Workers Union, hereinafter referred to as the Union,
adopted its Constitution and By-laws on January 1, 1959
The Liberty Cotton Mills Workers Union-Paflu shall be affiliated with the Philippine
Association of Free Labor Unions, otherwise known as PAFLU, and shall remain an
affiliate as long as ten or more of its members evidence their desire to continue the said
local union's affiliation, in accordance with the Paflu Constitution
Any member or officer of the Liberty Cotton Mills Workers Union-Paflu may be charged,
tried or impeached if an officer, in accordance with this and the PAFLU
CONSTITUTION. On March 13, 1964, while the Collective Bargaining Agreement was
in full force, Marciano Castillo and Rafael Nepomuceno, President and Vice-President,
respectively, of the local union, wrote PAFLU, its mother federation, complaining about
the legal counsel assigned by the PAFLU to assist them in a ULP case (Case No. 4001)
they filed against the Company. In said letter, the local union expressed its
dissatisfaction and loss of confidence in the PAFLU lawyers, claiming that PAFLU never
lifted a finger regarding this particular complaint.
On May 17, 1964, thirty two (32) out of the 36 members of the local union disaffiliated
themselves from respondent PAFLU pursuant to their local union's Constitution and ByLaws, PAFLU wrote the Company quoting en toto Article III of the Collective Bargaining
Agreement on "Union Security" and requesting the termination of the employment of
Rafael Nepomuceno, Marciano Castillo, Nelly Acevedo, Enrique Managan, Rizalino
Castillo and Rafael Combalicer, all petitioners herein. PAFLU at the same time expelled
the aforementioned workers from their' union membership in the mother federation for
allegedly "instigating union disaffiliation.".
ISSUE: WON the dismissal of the complaining employees, petitioners herein, was
justified or not
HELD: PAFLU, acting for and in behalf of its affiliate, had the status of an agent while
the local union remained the basic unit of the association free to serve the common
interest of all its members including the freedom to disaffiliate when the circumstances
warrant. This is clearly provided in its Constitution and By-Laws, specifically Article X on
Union Affiliation
We find that the respondent court failed to notice the fact that not all signatories to the
resolution of disaffiliation dated May 17, 1964, took part in the retraction. Only a number
of employees, 16 to be exact, retracted. Also, and this is a significant factor, the
retraction is dated June 3, 1964, or four days after the petitioners herein had been
dismissed. There is no use in saying that the retraction obliterated the act of
disaffiliation when they were already out of the service when it was done. The
disaffiliation, coming as it did from the greater majority of its members, is more than
enough to show the collective desire of the members of the Liberty Cotton Mills Workers

Union to sever their relations from the mother federation. The right of disaffiliation is
inherent in the compact and such act should not have been branded as an act of
disloyalty, especially considering the cause which impelled the union to take such a
step.
We find that it was hastily and summarily done. The PAFLU received the resolution to
disaffiliate on or about May 25, 1964, after which it wrote the Company about its stand,
first on the 27th of May followed by its letter of the 29th requesting for the termination of
petitioners herein for 'disloyalty in having instigated disaffiliation'. The Company the
acting on the request of the mother federation sent notices of termination to the officers
of the local union immediately on the day following, or on May 30, 1964, heavily relying
on the Collective Bargaining Agreement, viz:
... for disloyalty to the union shall be dismissed from employment by the
Company upon request in writing by the Union, which shall hold the
COMPANY free from any liability arising from or caused by such
dismissal.
While the above quoted provision may have been the basis for the Company's
actuation, as in fact it was alleged by the Company in its Brief, We are of the opinion
that such stipulation does not bind the courts much less released the Company from
liability should a finding for unfair labor practice be positive. In the case at bar, however,
considering that the dispute revolved around the mother federation and its local, with
the company dismissing the workers at the instance of the mother federation, We
believe that the Company's liability should be limited to the immediate reinstatement of
the workers.
Considering, however, that their dismissal was effected without previous hearing, and at
the instance of PAFLU, this mother federation should be, as it is hereby, held liable to
the petitioners for the payment of their back wages.

PHILIPS INDUSTRIAL DEVELOPMENT V.
NLRC 210 SCRA 339 (1992)
FACTS: Since 1971, PHILIPS INDUSTRIAL DEVELOPMENT Inc. (PIDI) had a total of
six CBAs with respondent Philips Employees Organization.
1st CBA - the supervisors, confidential employees, security guards, temporary
employees and sales representatives were excluded from the bargaining unit.
2nd 5th CBAs - the sales force, confidential employees and heads of small
units, together with the managerial employees, temporary employees and
security personnel, were specifically excluded from the bargaining unit.
6th CBA - it was agreed upon that the subject of inclusion or exclusion of service
engineers, sales personnel and confidential employees in the coverage of the
bargaining unit would be submitted for arbitration.
In NLRCs decision it stated that:
. all workers, except managerial employees and security personnel, are
qualified to join or be a part of the bargaining unit. . . .
ISSUE: WON security guards may be a part of the existing bargaining unit for the rank
and file employees of PIDI.
HELD: YES
At the time this Case was filed in 1987, security personnel were no longer disqualified
from joining or forming a union.
Section 6 of E.O. No. 111, enacted on 24 December 1986, repealed the original
provisions of Article 245 of the Labor Code, reading as follows:
Art. 245. Ineligibility of security personnel to join any labor
organization. Security guards and other personnel employed for the
protection and security of the person, properties and premises of the
employer shall not be eligible for membership, in any labor organization.
and substituted it with the following provision:
Art. 245. Right of employees in the public service. By virtue of
such repeal and substitution, security guards became eligible for
membership in any labor organization.

VICTORIANO V. ELIZALDE 59 SCRA 54

FACTS: Benjamin Victoriano is a member of the religious sect known as the "Iglesia ni Cristo",
had been employed by Elizalde Rope Factory, Inc. As such employee, he was a member of the
Elizalde Rope Workers' Union which had with the Company a collective bargaining agreement
containing a closed shop provision which reads as follows: Membership in the Union shall be
required as a condition of employment for all permanent employees workers covered by this
Agreement.
Under Republic Act No. 875, the employer was not precluded "from making an agreement with
a labor organization to require as a condition of employment membership therein, if such labor
organization is the representative of the employees."
Then Republic Act No. 3350 was enacted, introducing an amendment to section 4 of Republic
Act No. 875, as follows: ... "but such agreement shall not cover members of any religious sects
which prohibit affiliation of their members in any such labor organization".
Being a member of a religious sect that prohibits the affiliation of its members with any labor
organization, Victoriano presented his resignation to Union. The Union wrote a formal letter to
the Company asking the latter to separate him from the service in view of the fact that he was
resigning from the Union as a member. The management of the Company in turn notified
Victoriano and his counsel that unless Victoriano could achieve a satisfactory arrangement with
the Union, the Company would be constrained to dismiss him from the service.
ISSUE: WON Republic Act No. 3350 discriminatorily favors those religious sects which ban their
members from joining labor unions
HELD: No. The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not spiritual
or religious or holy and eternal. It was intended to serve the secular purpose of advancing the
constitutional right to the free exercise of religion, by averting that certain persons be refused
work, or be dismissed from work, or be dispossessed of their right to work and of being impeded
to pursue a modest means of livelihood, by reason of union security agreements.
Congress acted merely to relieve the exercise of religion, by certain persons, of a burden that is
imposed by union security agreements. It was Congress itself that imposed that burden when it
enacted the Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it so deems
advisable, could take away the same burden.
The means adopted by the Act to achieve that purposeexempting the members of said
religious sects from coverage of union security agreementsis reasonable.
It may not be amiss to point out here that the free exercise of religious profession or belief is
superior to contract rights. In case of conflict, the latter must, therefore, yield to the former. The
Supreme Court of the United States has also declared on several occasions that the rights in
the First Amendment, which include freedom of religion, enjoy a preferred position in the
constitutional system. Religious freedom, although not unlimited, is a fundamental personal right
and liberty, and has a preferred position in the hierarchy of values. Contractual rights, therefore,
must yield to freedom of religion. It is only where unavoidably necessary to prevent an
immediate and grave danger to the security and welfare of the community that infringement of
religious freedom may be justified, and only to the smallest extent necessary to avoid the
danger.

KAPATIRAN SA MEAT & CANNING DIVISION V. CALLEJA ET. AL. 162 SCRA 367
FACTS: From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining
representative of the workers in the Meat and Canning Division of the Universal Robina
Corporation, with a 3-year collective bargaining agreement (CBA) which was to expire
on November 15, 1987.
On October 8, 1987, the NEW ULO, composed mostly of workers belonging to
the IGLESIA NI KRISTO sect, registered as a labor union.
October 13, 1987, NEW ULO, claiming that it has "the majority of the daily wage
rank and file employees numbering 191," filed a petition for a certification election
at the Bureau of Labor Relations ).
TUPAS moved to dismiss the petition for being defective in form and that the
members of the NEW ULO were mostly members of the Iglesia ni Kristo sect
which three (3) years previous refused to affiliate with any labor union. It also
accused the company of using the NEW ULO to defeat TUPAS' bargaining rights
Issue: whether or not the member of the INC may form their own union.
Held: Y es . As held in the case of Victoriano vs. Elizalde Rope Workers' Union,
upholding the right of members of the IGLESIA NI KRISTO sect not to join a labor union
for being contrary to their religious beliefs, does not bar the members of that sect from
forming their own union. It shall be observed that the recognition of the tenets of the
sect should not infringe on the basic right of self organization granted by the constitution
to workers, regardless of religious affiliation.

VILLAR V. INCIONG 121 SCRA 444 (1983)

FACTS: Petitioners were members of the Amigo Employees Union-PAFLU, a duly
registered labor organization which was the existing bargaining agent of the employees
in Amigo Manufacturing Inc. The company and Amigo Employees Union-PAFLU had a
CBA governing their labor relations which was set to expire on February 28, 1977
1. On January 5, 1977, upon written authority of at least 30% of the employees, the
Federation of Unions of Rizal (FUR) filed a petition for certification election with
Med-Arbiter. This was opposed by PAFLU on the ground that Amigo Employees
Union was, at the time, affiliated with PAFLU. Consequently, FUR withdrew its
petition
2. Immediately thereafter, petitioner Villar, representing herself to be the authorized
representative of the Amigo Employees Union, filed a petition for certification
election.
3. Amigo Employees Union-PAFLU moved for the dismissal of the petition for
certification on the following grounds citing that the petition lacked the mandatory
requisite of at least 30% of the employees of the bargaining unit and Villar had no
legal personality to sign the petition since she was not an officer of the union nor
is there a factual claim that she was the authorized representative of the union.
Med-Arbiter dismissed the petition
4. PAFLU, then, formed a trial committee to investigate the local unions charges
against petitioners Villar for acts of disloyalty inimical to the interest of the local
union.
5. Meanwhile, Amigo Employees Union-PAFLU and the company concluded a new
CBA which provided for union security clause
6. In their answer petitioners stated that their disaffiliation of the Amigo Employees
Union form PAFLU or the filing for a petition for certification election do not
constitute acts of disloyalty as these were in the exercise of their constitutional
right to self-organization. Moreover, PAFLU had no jurisdiction to investigate their
case since the charges were intra-union problems within the Amigo Employees
Union-PAFLU and should be conducted pursuant to the local unions constitution
and by-laws.
7. PAFLU found the petitioners guilty of the charges. Pursuant to the union security
clause in the CBA and upon PAFLUs demand, the company terminated the
petitioners
8. The regional office granted the application of the company for clearance to
terminate petitioners. Upon appeal, Inciong affirmed the same
ISSUE: WON petitioners acts were an exercise of their right to self-organization
HELD: Petitioners insist that their disaffiliation from PAFLU and filing a petition for
certification election are not acts of disloyalty but an exercise of their right to selforganization. They contend that these acts were done within the 60-day freedom period
when questions of representation may freely be raised. Such arguments are untenable.

In the first place, had petitioners merely disaffiliated from the. Amigo Employees UnionPAFLU, there could be no legal objections thereto for it was their right to do so. But
what petitioners did by the very clear terms of their "Sama-Samang Kapasiyahan"
was to disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an act which
they could not have done with any effective consequence because they
constituted the minority in the Amigo Employees Union-PAFLU.
It is clear from the facts that petitioners were among the ninety-six (96) who signed the
"Sama-Samang Kapasiyahan" whereas there are two hundred thirty four (234) union
members in the Amigo Employees Union-PAFLU. Hence, petitioners constituted a
small minority for which reason they could not have successfully disaffiliated the
local union from PAFLU. Since only 96 wanted disaffiliation, it can be inferred that
the majority wanted the union to remain an affiliate of PAFLU and this is not
denied or disputed by petitioners. The action of the majority must, therefore,
prevail over that of the minority members.
Neither is there merit to petitioners' contention that they had the right to present
representation issues within the 60-day freedom period. It is true, as contended by
petitioners, that under Art 257 Labor Code and Section 3, Rule 2, Book 2 IRR,
questions of exclusive bargaining representation are entertainable within the 60 days
prior to the expiry date of an existing CBA, and that they did file a petition for
certification election within that period. But the petition was filed in the name of the
Amigo Employees Union which had not disaffiliated from PAFLU, the mother union.
Petitioners being a mere minority of the local union may not bind the majority members
of the local union.
Moreover, the Amigo Employees Union, as an independent union, is not duly
registered as such with the Bureau of Labor Relations. As such unregistered
union, it acquires no legal personality and is not entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the
certificate of registration.
A closed-shop is a valid form of union security, and a provision in a collective bargaining
agreement is not a restriction of the right of freedom of association guaranteed by the
Constitution. Where in a closed-shop agreement it is stipulated that union members who
cease to be in good standing shall immediately be dismissed, such dismissal does not
constitute an unfair labor practice exclusively cognizable by the CIR.

FACTS: In1968, the rank and file workers of the Tropical Hut Food Market Incorporated,
referred to herein as respondent company, organized a local union called the Tropical
Hut Employees Union, known for short as the THEU. It applied to be affiliated with the
National Association of Trade Unions (NATU). It appears, however, that NATU itself as
a labor federation, was not registered with the Department of Labor.
This is included in their Agreement:
Sec. 3-Any employee who is expelled from the UNION for joining another federation or
forming another union, or who fails or refuses to maintain his membership therein as
required, . . . shall, upon written request of the UNION be discharged by the
COMPANY. This was incorporated in the CBA
Arturo Dilag, incumbent President of THEU-NATU, was appointed by the respondent
company as Assistant Unit Manager. On July 24, 1973, he wrote the general
membership of his union that for reason of his present position, he was resigning as
President of the THEU-NATU effective that date. As a consequence thereof, his VicePresident, Jose Encinas, assumed and discharged the duties of the presidency of the
THEU-NATU.
In 1973, NATU received a letter dated December 15, 1973, jointly signed by the
incumbent officers of the local union informing the NATU that THEU was disaffiliating
from the NATU federation.
Secretary of the THEU, Nemesio Barro, made an announcement in an open letter to the
general membership of the THEU, concerning the latter's disaffiliation from the NATU
and its affiliation with the Confederation of General Workers (CGW).
On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, Jr., wrote
Vidal Mantos, requiring the latter to assume immediately the position of President of the
THEU-NATU in place of Jose Encinas, but the position was declined by Mantos. On the
same day, Lontok, Jr., informed Encinas in a letter, concerning the request made by the
NATU federation to the respondent company to dismiss him (Encinas) in view of his
violation of Section 3 of Article III of the Collective Bargaining Agreement.
In view of NATU's request, the respondent company, on the same day, which was
January 11, 1974, suspended Encinas pending the application for clearance with the
Department of Labor to dismiss him.
Members of the THEU-CGW passed a resolution protesting the suspension of Encinas
and reiterated their ratification and approval of their union's disaffiliation from NATU and
their affiliation with the Confederation of General Workers (CGW). It was Encinas'
suspension that caused the filing of NLRC Case No. LR-2511 on January 11, 1974
against private respondents herein, charging them of unfair labor practice.

Upon the request of NATU, respondent company applied for clearance with the
Secretary of Labor to dismiss the other officers and members of THEU-CGW. The
company also suspended them effective that day.
Lontok, acting as temporary chairman, presided over the election of officers of the
remaining THEU-NATU.
ISSUES:
1) WON the disaffiliation of the local union from the national federation was valid;
2) WON the dismissal of petitioner employees resulting from their unions
disaffiliation for the mother federation was illegal and constituted unfair labor
practice on the part of respondent company and federation.
HELD:
1. YES.
2. YES. We held that the validity of the dismissals pursuant to the union security
clause in the collective bargaining agreement hinges on the validity of the
disaffiliation of the local union from the federation.
1. The right of a local union to disaffiliate from its mother federation is well-settled. A
local union, being a separate and voluntary association, is free to serve the interest of
all its members including the freedom to disaffiliate when circumstances warrant. This
right is consistent with the constitutional guarantee of freedom of association.
All employees enjoy the right to self organization and to form and join labor
organizations of their own choosing for the purpose of collective bargaining and to
engage in concerted activities for their mutual aid or protection. This is a fundamental
right of labor that derives its existence from the Constitution. In interpreting the
protection to labor and social justice provisions of the Constitution and the labor laws or
rules or regulations, We have always adopted the liberal approach which favors the
exercise of labor rights.
The inclusion of the word NATU after the name of the local union THEU in the
registration with the Department of Labor is merely to stress that the THEU is NATU's
affiliate at the time of the registration. It does not mean that the said local union cannot
stand on its own. Neither can it be interpreted to mean that it cannot pursue its own
interests independently of the federation. A local union owes its creation and continued
existence to the will of its members and not to the federation to which it belongs.
When the local union withdrew from the old federation to join a new federation, it was
merely exercising its primary right to labor organization for the effective enhancement
and protection of common interests. In the absence of enforceable provisions in the
federation's constitution preventing disaffiliation of a local union a local may sever its
relationship with its parent.

The alleged non-compliance of the local union with the provision in the NATU
Constitution requiring the service of three months notice of intention to withdraw did not
produce the effect of nullifying the disaffiliation for the following grounds: firstly, NATU
was not even a legitimate labor organization, it appearing that it was not registered at
that time with the Department of Labor, and therefore did not possess and acquire, in
the first place, the legal personality to enforce its constitution and laws, much less the
right and privilege under the Labor Code to organize and affiliate chapters or locals
within its group, and secondly, the act of non-compliance with the procedure on
withdrawal is premised on purely technical grounds which cannot rise above the
fundamental right of self-organization.
(Public respondents considered the existence of Arturo Dilag's group as the remaining
true and valid union.)
No. Records show that Arturo Dilag had resigned in the past as President of THEUNATU because of his promotion to a managerial or supervisory position as Assistant
Unit Manager of respondent Company. Petitioner Jose Encinas replaced Dilag as
President and continued to hold such position at the time of the disaffiliation of the union
from the federation. It is therefore improper and contrary to law for Dilag to reassume
the leadership of the remaining group which was alleged to be the true union since he
belonged to the managerial personnel who could not be expected to work for the
betterment of the rank and file employees. Besides, managers and supervisors are
prohibited from joining a rank and file union.
2. With regard to the process by which the workers were suspended or dismissed, this
Court finds that it was hastily and summarily done without the necessary due process.
The respondent company sent a letter to petitioners herein, advising them of
NATU/Dilag's recommendation of their dismissal and at the same time giving them fortyeight (48) hours within which to comment (p. 637, Rollo). When petitioners failed to do
so, respondent company immediately suspended them and thereafter effected their
dismissal. This is certainly not in fulfillment of the mandate of due process, which is to
afford the employee to be dismissed an opportunity to be heard.
The prerogative of the employer to dismiss or lay-off an employee should be done
without abuse of discretion or arbitrariness, for what is at stake is not only the
employee's name or position but also his means of livelihood. Thus, the discharge of an
employee from his employment is null and void where the employee was not formally
investigated and given the opportunity to refute the alleged findings made by the
company.
Likewise, an employer can be adjudged guilty of unfair labor practice for having
dismissed its employees in line with a closed shop provision if they were not given a
proper hearing

PROGRESSIVE DEVELOPMENT V. SECRETARY 205 SCRA 802

FACTS: Respondent Pambansang Kilusan ng Paggawa (KILUSAN) TUCP filed with
DOLE a petition for certification election among the rank-and-file employees of the
petitioner alleging that it is a legitimate labor federation and its local chapter,
Progressive Development Employees Union was issues charter certificate.
1. PDC filed a motion to dismiss contending that the local union failed to comply
with Rule II Section 3, Book V of the Rules Implementing the Labor code, which
requires the submission of: (a) constitution and by-law; (b) names, addresses
and list of officers and/or members; and (c) books of account.
2. Kilusan claims that it had submitted necessary documentary requirements for
registration such as the constitution and by-laws of the local union, and the list of
officers/members with their addresses. It further averred that no books of
accounts could be submitted as the local union was only recently organized.
3. Med-Arbiter Held that there was substantial compliance with the requirements for
the formation of the chapter and stated that mere issuance of the charter
certificate by the federation was sufficient compliance with the rules.
4. Solicitor General avers that there was a substantial compliance with the
requirements for the formation of a chapter. Moreover, he invokes Art. 257 of the
LC which mandates he automatic conduct by the Med-Arbiter of a certification
election in any establishment where there is no certified bargaining agreement.
ISSUE: When does a branch, local or affiliate of a federation become a legitimate labor
organization?
HELD: A local or chapter becomes a legitimate labor organization only upon submission
of the following to the BLR:
1) A charter certificate, within 30 days from its issuance by the labor federation or
national union, and
2) The constitution and by-laws, a statement on the set of officers, and the books of
accounts all of which are certified under oath by the secretary or treasurer, as the case
may be, of such local or chapter, and attested to by its president.
Absent compliance with these mandatory requirements, the local or chapter does not
become a legitimate labor organization.
In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the
required documents under oath is fatal to its acquisition of a legitimate status.
In the case of union registration, the rationale for requiring that the submitted
documents and papers be certified under oath by the secretary or treasurer, as the case
may be, and attested to by president is apparent. The submission of the required
documents (and payment of P50.00 registration fee) becomes the Bureau's basis for

approval of the application for registration. Upon approval, the labor union acquires
legal personality and is entitled to all the rights and privileges granted by law to a
legitimate labor organization. The employer naturally needs assurance that the union it
is dealing with is a bona fide organization, one which has not submitted false
statements or misrepresentations to the Bureau. The inclusion of the certification and
attestation requirements will in a marked degree allay these apprehensions of
management. Not only is the issuance of any false statement and misrepresentation a
ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is also a
ground for a criminal charge of perjury.
The certification and attestation requirements are preventive measures against
the commission of fraud. They likewise afford a measure of protection to
unsuspecting employees who may be lured into joining unscrupulous or fly-bynight unions whose sole purpose is to control union funds or to use the union for
dubious ends.
Article 212(h) defines a legitimate labor organization as "any labor organization
duly registered with the DOLE and includes any branch or local thereof."
(Emphasis supplied) Rule I, Section 1 (j), Book V of the Implementing Rules
likewise defines a legitimate labor organization as "any labor organization duly
registered with the DOLE and includes any branch, local or affiliate thereof.

SAN MIGUEL FOOD INC V. LAGUESMA 263 SCRA 68 (1996)

FACTS: Private respondent Ilaw at Buklod ng Manggawa (IBM) filed a petition for
certification election, seeking to represent the rank-and-file employees of petitioner
SMFI
1. Petitioner filed a motion to dismiss the petition on the ground that a similar
petition was pending involving the same parties for the same cause of action
2. IBM filed an opposition to the motion to dismiss, contending that the case
referred by SMFI had already been resolved by Med-Arbiter in which the petition
for certification election was denied due to IBMs failure to company with certain
mandatory requirements of the law. Since there was no pending petition, another
petition for certification election may be re-filed as soon as the said requirements
are met
3. Subsequently, Med-Arbiter granted the second petition for certification election
4. SMFI appealed to the DOLE Secretary alleging that the local chapter of IBM at
SMFI was not a legitimate labor organization for the reason that:
a. The authenticity and due execution of the Charter Certificate submitted by
IBM cannot be ascertained since the legitimate and authorized representative
of IBM Federation is yet to be identified
b. IBM at SMFI was not issued a certificate of registration by the Bureau of
Labor Relations pursuant to Art 234 Labor Code
5. Laguesma denied the petitioners appeal
6. Petitioner argues that IBM at SMFI is not a legitimate labor organization despite
the fact that it is a local or chapter of the IBM Federation because under Art 234
Labor Code, a labor organization shall acquire legal personality only upon
issuance of a certificate of registration by the Bureau of Labor Relations
ISSUE: WON IBM of SMFI is entitled to certification election
HELD: Yes. Art 212 Labor Code defines a legitimate labor organization as one
duly registered with DOLE, including nay local or chapter thereof. Ordinarily, a
labor organizations attains the status of legitimacy only upon the issuance in its name of
a Certificate of Registration by the Bureau of Labor Relations pursuant to Arts 234 and
235 Labor Code. The foregoing procedure is not the only way by which a labor union
may become legitimate, however. When an unregistered union becomes a branch, local
or chapter of a federation, some of the aforementioned requirements for registration are
no longer required.
In Progressive Development Corp v. Secretary of Labor, the SC held that a local
or chapter therefore becomes a legitimate labor organization only upon
submission of the following to the BLR:
a. A charter certificate, within 30 days from its issuance by the labor
federation or national union, and
b. The constitution and by-laws, a statement on the set of officers, and the
books of accounts all of which are certified under oath by the secretary or

treasurer, as the case may be, of such local or chapter, and attested to by
its president.
Absent compliance with these mandatory requirements, the local or chapter does
not become a legitimate labor organization.
Corollarily, the satisfaction of all these requirements by the local or chapter shall
vest upon it the status of legitimacy with all its concomitant statutory privileges,
one of which is the right to be certified as the exclusive representative of all the
employees in an appropriate bargaining unit.
In the case at bar, a close scrutiny of the records shows that at the time of the filing of
the subject petition on 24 September 1993 by the petitioner Ilaw at Buklod ng
Manggagawa, for and in behalf of its local affiliate IBM at SMFI-CEBU B-MEG, the latter
has been clothed with the status and/or character of a legitimate labor organization.
This is so, because on 19 July 1993, petitioner submitted to the Bureau of Labor
Relations (BLR), this Department, the following documents: charter certificate,
constitution and by-laws, names and addresses of the union officers and certification of
the union's secretary on the non-availability of the union's Books of Accounts. Said
documents (expect the charter certificate) are certified under oath and attested to by the
local union's secretary and President, respectively.
The contention of the respondent that unless and until the issue on who is the legitimate
national president of IBM is resolved, the petitioner cannot claim that is has a valid
charter certificate necessary for it to acquire legal personality is untenable. The
resolution of the said issue will not, in any way, affect the validity of the charter
certificate issued by the IBM in favor of the local union. It must be borne in mind that the
said charter certificate was issued by the IBM in its capacity as a labor organization, a
juridical entity which has a separate and distinct legal personality from its members.
Since there is no showing that the Federation acting as a separate entity is questioning
the legality of the issuance of the said charter certificate, the legality of the issuance of
the same in favor of the local union is presumed.

UNITED SEAMENS UNION V. DAVAO SHIPOWNERS ASSN. 20 SCRA 1226

FACTS: On August 4, 1959 petitioner United Seamen's Union of the Philippines
(hereinafter referred to as USUP) presented a set of demands to respondent Davao
Shipowners Association (hereinafter referred to as Shipowners) representing
respondent shipping companies, for union recognition, union security, standardization of
wages and other benefits. In its answer, the Shipowners invited USUP's attention to the
existence of a collective bargaining agreement with the Davao Marine Association
(hereinafter referred to as Association), to which all the crewmen of their launches
belonged. Since the Shipowners were bound by said collective bargaining agreement
until the end of that year (1959), it suggested that USUP first take the necessary steps
to be certified as the collective bargaining agent of the employees before they could
negotiate in connection with its proposals.
However, even before receiving the Shipowners' answer to its set of demands, USUP
had filed with Regional Office No. 8 of the Department of Labor of Davao City a notice
of strike against all the individual shipowners. The Chief of the Labor Operations
Section of the Davao Regional Office requested USUP and the Shipowners to a
conference with a view to settling the conflict. On August 20, 1959 the USUP, the
Shipowners and the Association reached an agreement.
Meanwhile, subsequent to the covenant of August 20, the respondent shipping
companies separately served notices of termination of service upon sixty-four(64)
employees, effective December 31, 1959, for reasons ranging from stoppage of
operations due to the death of a partner to business losses and reversals.
Because of these notices of termination of service upon USUP members (who,
admittedly, were also members of the Association), USUP reported the matter to
Regional Office No. 8 of the Department of Labor in Davao City and requested at the
same time the assistance of said office. The Regional Office thereupon called the
parties to a conference, but apparently it did not do much good, for in a letter dated
December 29, 1959 USUP formally notified the Regional Office, Department of Labor,
the City Mayor of Davao, the Chief of Police, the Philippine Constabulary, the Bureau of
Customs and the general public that they would declare a strike on January 1, 1960.
On February 11, 1960 the respondent shipping companies filed a petition for a writ of
injunction (Case No. 3-INJ-DB) with the court a quo, alleging that a restraining order
was necessary "to forestall substantial and irreparable damage to petitioners' (now
respondents') properties and public weal," citing specific acts of coercion, violence and
illegal picketing being committed by defendants (now petitioners).
On February 24, 1960 USUP filed an unfair labor practice case against herein
respondents (Case No. 49-ULP-DB), alleging that "while its petition for certification
election is still pending consideration before this Honorable Court, respondents herein
by their respective officers interfered with and have been interfering with their
employees' guaranteed right to self-organization and discriminated and have been

discriminating against their respective employees, who are members of the

complainant, in regard to hire or tenure of office or condition of employment in order to
deter organizational activity amongst employees, to induce those already organized to
drop from the rank, disrupt union morale and ultimately to break up the complainant
union
ISSUE: Did the Court of Industrial Relations gravely abuse its discretion, as claimed, in
declaring the strike staged by the members of the USUP unjustified and illegal?
HELD: It must be noted that USUP filed its Notice of Strike even before it received the
Shipowners' answer to its set of demands. It seems that regardless of whether the
Shipowners would be willing to negotiate with USUP or not, USUP was already
predisposed to go on with the strike. There could only be one reason for USUP to
anticipate the Shipowners' negative stand: USUP was aware of the existence of a valid
collective bargaining agreement between the Shipowners and the Association which
would operate as a legal bar for the Shipowners to entertain USUP's demands.
USUP completely disturbed and impaired the status quo by going on strike pending
resolution of its petition for certification election. That status quo referred expressly "to
the normal and original operating practices of loading, unloading, departures, manning,
and the performance of any and/or all jobs incident to the businesses of the members of
the said Shipowners Association." By striking, USUP had impaired or disturbed the
existing collective bargaining agreement between the Shipowners and the Association
which recognized "the right of the Employer to hire, promote and transfer and for legal
cause suspend, lay-off or discharge employees subject to the right of the union
(referring to the Association) to notification and to ask reconsideration of any action of
the Employer in the premises
Even assuming arguendo that the shipping companies were also bound by the
covenant, still the termination of services of the affected employees could not be
considered a violation of the covenant. Sustained by the court a quo, in specific cases,
was the companies' contention that the dismissals made were predicated on legitimate
reasons the existence of a collective bargaining agreement should have been sufficient
to deter USUP from acts tending to force the issue of union recognition.
Undoubtedly, the parties adopted a graduated procedure in the settlement of their labor
disputes because of their desire to maintain harmonious relations and prevent as much
as possible the declaration of a strike, which in the last analysis works adversely to both
capital and labor.
The employees concerned who after all were bound by the collective bargaining
agreement, as members of the Association, totally disregarded, the procedure laid down
therein by immediately going on strike without coursing their complaints through the
grievance committee for possible settlement. Having failed to take advantage of a legal
right granted them under the agreement, they are in no position to demand relief from
the consequences of their own impulsive acts.

Where, "in carrying out the strike, coercion, force, intimidation, violation with physical
injuries, sabotage and the use of unnecessary and obscene language or epithets were
committed by the top officials and members of the union in an attempt to prevent the
other willing laborers to go to work," it was held that "a strike hold under those
circumstances cannot be justified in a regime of law for that would encourage abuses
and terrorism and could subvert the very purpose of the law which provides for
arbitration and peaceful settlement of labor disputes." (Liberal Labor vs. Phil.
Can, supra).
A labor organization is wholesome if it serves its legitimate purpose of promoting the
interests of labor without unnecessary labor disputes. That is why it is given personality
and recognition in concluding collective bargaining agreements. But if it is made use of
as a subterfuge, or as a means to subvert valid commitments, it defeats its own
purpose, for it tends to undermine the harmonious relations between management and
labor. The situation does not deserve any approving sanction from the Court.

UNIVERSITY OF PANGASINAN VS. NLRC, 218 SCRA 65

FACTS: Petitioner Union thru its president filed several complaints against the
University of Pangasinan for the nonpayment of benefits and ECOLA to the faculty
members who were also members of the union.
ISSUE: WON petitioner Unions president has the capacity to represent its members in
filing a complaint.
HELD: YES.
Petitioner Union has been registered with the then Ministry of Labor and Employment.
As such, petitioner possessed the legal personality to sue and be sued under its
registered name. Corollarily, its president correctly filed the complaints even if some of
them involved rights and interest purely or exclusively appertaining to individual
employees, it appearing that she signed the complaints "for and in behalf of the
University of Pangasinan Faculty Union."
The University's contention that petitioner had no legal personality to institute and
prosecute money claims must, therefore, fail.
To quote then Associate Justice Teehankee in Heirs of Teodelo M. Cruz v. CIR, "what
should be borne in mind is that the interest of the individual worker can be better
protected on the whole by a strong union aware of its moral and legal obligations
to represent the rank and file faithfully and secure for them the best wages and
working terms and conditions.
. . . Although this was stated within the context of collective bargaining, it applies
equally well to cases, such as the present wherein the union, through its
president, presented its individual members' grievances through proper
proceedings.
While the complaints might not have disclosed the identities of the individual employees
claiming monetary benefits, such technical defect should not be taken against the
claimants, especially because the University appears to have failed to demand a bill of
particulars during the proceedings before the Labor Arbiter.

PAFLU V. SEC. OF LABOR 27 SCRA 41

FACTS: Section 23(b) of Republic Act No. 875 provides:
(b) Any labor organization, association or union of workers duly organized for the
material, intellectual and moral well-being of its members shall acquire legal
personality and be entitled to all the rights and privileges granted by law to
legitimate labor organizations within thirty days of filing with the office of the
Secretary of Labor notice of its due organization and existence and the following
documents, together with the amount of five pesos as registration fee, except as
provided in paragraph d of this section:
(1) A copy of the constitution and by-laws of the organization together with
a list of all officers of the association, their addresses and the address of the
principal office of the organization; chanroblespublishingcompany
(2) A sworn statement of all officers of the said organization, association
or union to the effect that they are not members of the Communist Party and that
they are not members of any organizations which teaches the overthrow of the
Government by force or by any illegal or unconstitutional method; and
(3) If the applicant organization has been in existence for one or more
years, a copy of its last annual financial report.
PAFLU, the SSSEA, Alfredo Fajardo "and all the officers and members" of the
SSSEA commenced the present action, for the purpose stated at the beginning of
this decision, upon the ground that Section 23 of Republic Act No. 875 violates
their freedom of assembly and association, and is inconsistent with the Universal
Declaration of Human Rights; that it unduly delegates judicial power to an
administrative agency; that said Section 23 should be deemed repealed by ILOConvention No. 87; that respondents have acted without or in excess of jurisdiction
and with grave abuse of discretion in promulgating, on November 19, 1963, its
decision dated October 22, 1963, beyond the 30-day period provided in Section
23(c) of Republic Act No. 875; that "there is no appeal or any other plain, speedy
and adequate remedy in the ordinary course of law"; that the decision complained
of had not been approved by the Secretary of Labor; and that the cancellation of
the SSSEA's certificate of registration would cause irreparable injury
ISSUE: WON said provision violated the Constitution
HELD: Sec 23 of R.A. 875 requiring labor organizations to register does not violate the
constitutional right to self-organization, which may be exercised with or without
registration. It is merely a condition sine qua non for the acquisition of legal personality
on the part of such organizations.
Sec 23 is a valid exercise of police power, ensuring the welfare of both labor and the
public, considering that the activities in which the labor organizations involve
themselves are impressed with public interest.

PROTECTION TECHNOLOGY V. SEC. OF LABOR 242 SCRA 99 [1995]

FACTS: On 12 January 1994, private respondent Samahan ng Manggagawa sa
Protection Alliance of Nationalist and Genuine Labor Organizations ("Union"), a
newly organized union affiliated with a federation, filed a Petition for direct certification
or for certification election to determine the exclusive collective bargaining
representative of the regular rank and file employees of petitioner Protection
Technology Inc.
In its Comment on the petition, petitioner Company stated that the Union was not
a legitimate labor organization capable of filing the petition because it had failed
to submit its books of account with the Bureau of Labor Relations ("BLR") at the
time it was registered as a legitimate labor organization. Submission of such
documentation is a "mandatory" requirement before a union can exercise the
rights and privileges of a legitimate labor organization.
Med Arbiter Brigida C. Fadrigon dismissed the Union's petition and held further
that the submission of the books of account, consisting of journals, ledgers and
other accounting books, was one of several "preventive measures against
commission of fraud" arising from "improper or incorrect recording of union funds,
inefficient administration and even malversation of union funds." The Union
appealed to the Secretary, DOLE, contending that the Labor Code and
Progressive Development "never mentioned journals and ledgers" as part of the
documentation requirements for registration of a newly-organized local union.
ISSUE: whether or not books of accounting are mandatory requirements for
registration?
HELD: yes.
The policy of the law in conferring greater bargaining power upon labor unions must be
balanced with the policy of providing preventive measures against the commission of
fraud. A local or chapter therefore becomes a legitimate labor organization only upon
submission of the following to the BLR: 1) A chapter certificate within 30 days from its
issuance by the labor federation or national union, and 2) The constitution and by-laws,
a statement on the set of officers and the books of accounts all of which are certified
under oath by the secretary or treasurer, as the case may be, of such local or chapter,
and attested to by its president.
Absent compliance with these mandatory requirements, the local or chapter does not
become a legitimate labor organization.

PHOENIX IRON V. SECRETARY OF LABOR 244 SCRA 173 (1995)

FACTS: Private respondent PISCOR Workers Union-Alliance of Nationalist and
Genuine Labor Organization (PISCOR-ANGLO), asserting to be a legitimate labor
organization, filed a petition for certification of election with the Med-Arbiter.
1. Phoenix Iron and Steel Corp (Phoenix) questioned the legal personality of the
PISCOR-ANGLO
2. The Med-Arbiter subsequently found that the union failed to attain the status of a
legitimate labor organization for failing to comply with the requisites of the law
since:
a. No books of account were filed before the Bureau of Labor relations
b. The constitution, by-laws and the list of members who ratified the same were
not attested to by the union president
c. The constitution and by-laws were not verified under oath
d. The supporting documents submitted were not duly notarized
3. The Med-Arbiter cited the case of Progressive v. Secretary of Labor in which the
SC held that failure to certify the required documents under oath is fatal to the
acquisition of a legitimate status
4. Upon appeal, the Secretary of Labor issued a resolution calling for the immediate
conduct of a certification election and held that the union is not required to
submitted duly certified copies of its constitution and by-laws to establish its
legitimacy the account that doubts should be resolved in favor of its regularity
and not as adversely affecting the legal standing of the union
ISSUE: WON PISCOR-ANGLOs failure to comply with the requisites for registration of
legitimate labor organization is a mere technicality
HELD: No, as held in the Progressive case, a local or chapter becomes a legitimate
labor organization only upon submission of the following to the BLR:
3) A charter certificate, within 30 days from its issuance by the labor federation or
national union, and
4) The constitution and by-laws, a statement on the set of officers, and the books of
accounts all of which are certified under oath by the secretary or treasurer, as the
case may be, of such local or chapter, and attested to by its president.
Absent compliance with these mandatory requirements, the local or chapter does
not become a legitimate labor organization.
In the case of union registration, the submission of the required documents (and
payment of P50.00 registration fee) becomes the Bureau's basis for approval of
the application for registration. Upon approval, the labor union acquires legal
personality and is entitled to all the rights and privileges granted by the law to a
legitimate labor organization. The employer naturally needs assurance that the
union it is dealing with is a bona-fide organization, one which has not submitted
false statements or misrepresentations to the Bureau. The inclusion of the
certification and attestation requirements will in a marked degree allay these

apprehensions of management. Not only is the issuance of any false statement and
misrepresentation a ground for cancellation of registration, it is also a ground for a
criminal charge of perjury.
The certification and attestation requirements are preventive measures against the
commission of fraud. They likewise afford a measure of protection to unsuspecting
employees who may be lured into joining unscrupulous or fly-by-night unions whose
sole purpose is to control union funds or to use the union for dubious ends.
In the case of union affiliation with a federation, the documentary requirements are
found in Rule II, Section 3 (e), Book V of the Implementing Rules provides that: "The
local or chapter of a labor federation or national union shall have and maintain a
constitution and by-laws, set of officers and books of accounts. For reporting purposes,
the procedure governing the reporting of independently registered unions, federations or
national unions shall be observed"

SAN MIGUEL EMPLOYEES UNION-PTGWO V. SAN MIGUEL PACKAGING

PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG MANGGAGAWANG
PILIPINO (PDMP) 533 SCRA 125 [2007]
FACTS: Petitioner is the incumbent bargaining agent for the bargaining unit comprised
of the regular monthly-paid rank and file employees of the three divisions of San Miguel
Corporation (SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel
Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all
offices and plants of SMC, including the Metal Closure and Lithography Plant in Laguna.
It had been the certified bargaining agent for 20 years from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino
(PDMP).
It filed with the Med-Arbiter of the DOLE Regional Officer in the National Capital Region
(DOLE-NCR), three separate petitions for certification election to represent SMPP,
SMCSU, and SMBP. All three petitions were dismissed, on the ground that the separate
petitions fragmented a single bargaining unit.
On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the
cancellation of respondents registration and its dropping from the rolls of legitimate
labor organizations. In its petition, petitioner accused respondent of committing fraud
and falsification, and non-compliance with registration requirements in obtaining its
certificate of registration. Moreover, petitioner claimed that PDMP is not a legitimate
labor organization, but a trade union center, hence, it cannot directly create a local or
chapter.
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order
dismissed the petition with respect to the allegations of fraud and misrepresentation.
Regional Director Lim further ruled that respondent is allowed to directly create a local
or chapter. However, he found that respondent did not comply with the 20%
membership requirement and, thus, ordered the cancellation of its certificate of
registration and removal from the rolls of legitimate labor organizations. Respondent
appealed to the BLR. While the BLR agreed with the findings of the DOLE Regional
Director dismissing the allegations of fraud and misrepresentation, and in upholding that
PDMP can directly create a local or a chapter, it reversed the Regional Directors ruling
that the 20% membership is a requirement for respondent to attain legal personality as
a labor organization. Petitioner thereafter filed a Motion for Reconsideration with the
BLR. The Court of Appeals, dismissed the petition and affirmed the Decision of the
BLR.
ISSUE: WON THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR IN RULING THAT PRIVATE RESPONDENT IS NOT REQUIRED TO SUBMIT
THE NUMBER OF EMPLOYEES AND NAMES OF ALL ITS MEMBERS COMPRISING
AT LEAST 20% OF THE EMPLOYEES IN THE BARGAINING UNIT WHERE IT SEEKS
TO OPERATE.

HELD: YES. There is merit in petitioners contentions.

A legitimate labor organization is defined as any labor organization duly registered with
the Department of Labor and Employment, and includes any branch or local thereof.
The mandate of the Labor Code is to ensure strict compliance with the requirements on
registration because a legitimate labor organization is entitled to specific rights under
the Labor Code, and are involved in activities directly affecting matters of public interest.
Registration requirements are intended to afford a measure of protection to
unsuspecting employees who may be lured into joining unscrupulous or fly-by-night
unions whose sole purpose is to control union funds or use the labor organization for
illegitimate ends. Legitimate labor organizations have exclusive rights under the law
which cannot be exercised by non-legitimate unions, one of which is the right to be
certified as the exclusive representative of all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining. 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.
A perusal of the records reveals that respondent is registered with the BLR as a local
or chapter of PDMP and was issued Charter Certificate No. 112 on 15 June 1999.
Hence, respondent was directly chartered by PDMP.
The procedure for registration of a local or chapter of a labor organization is provided in
Book V of the Implementing Rules of the Labor Code, as amended by Department
Order No. 9 which took effect on 21 June 1997, and again by Department Order No. 40
dated 17 February 2003. The Implementing Rules as amended by D.O. No. 9 should
govern the resolution of the petition at bar since respondents petition for certification
election was filed with the BLR in 1999; and that of petitioner on 17 August 1999.
The applicable Implementing Rules enunciates a two-fold procedure for the creation of
a chapter or a local. The first involves the affiliation of an independent union with a
federation or national union or industry union. The second, finding application in the
instant petition, involves the direct creation of a local or a chapter through the process of
chartering.
A duly registered federation or national union may directly create a local or chapter by
submitting to the DOLE Regional Office or to the BLR two copies of the following:
(a) A charter certificate issued by the federation or national union indicating the
creation or establishment of the local/chapter;
(b) The names of the local/chapters officers, their addresses, and the principal office
of the local/chapter; and
(c) The local/chapters constitution and by-laws; Provided, That where the
local/chapters constitution and by-laws is the same as that of the federation or
national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary
or the Treasurer of the local/chapter and attested to by its President.

The Implementing Rules stipulate that a local or chapter may be directly created by a
federation or national union. A duly constituted local or chapter created in accordance
with the foregoing shall acquire legal personality from the date of filing of the complete
documents with the BLR. The issuance of the certificate of registration by the BLR or
the DOLE Regional Office is not the operative act that vests legal personality upon a
local or a chapter under Department Order No. 9. Such legal personality is acquired
from the filing of the complete documentary requirements enumerated in Section 1,
Rule VI.
Petitioner insists that Section 3 of the Implementing Rules, as amended by Department
Order No. 9, violated Article 234 of the Labor Code when it provided for less stringent
requirements for the creation of a chapter or local. This Court disagrees.
Article 234 of the Labor Code provides that an independent labor organization acquires
legitimacy only upon its registration with the BLR:
Any applicant labor organization, association or group of unions or workers shall
acquire legal personality and shall be entitled to the rights and privileges granted by law
to legitimate labor organizations upon issuance of the certificate of registration based on
the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the
workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of
its adoption or ratification, and the list of the members who participated in it.
(Italics supplied.)
It is emphasized that the foregoing pertains to the registration of an independent labor
organization, association or group of unions or workers.
However, the creation of a branch, local or chapter is treated differently. This Court, in
the landmark case of Progressive Development Corporation v. Secretary, Department
of Labor and Employment, declared that when an unregistered union becomes a
branch, local or chapter, some of the aforementioned requirements for registration are
no longer necessary or compulsory. Whereas an applicant for registration of an
independent union is mandated to submit, among other things, the number of
employees and names of all its members comprising at least 20% of the employees in
the bargaining unit where it seeks to operate, as provided under Article 234 of the Labor
Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no
longer required of a branch, local or chapter. The intent of the law in imposing less
requirements in the case of a branch or local of a registered federation or national union
is to encourage the affiliation of a local union with a federation or national union in order

to increase the local unions bargaining powers respecting terms and conditions of
labor.
Subsequently, in Pagpalain Haulers, Inc. v. Trajano where the validity of Department
Order No. 9 was directly put in issue, this Court was unequivocal in finding that there is
no inconsistency between the Labor Code and Department Order No. 9.
As to petitioners claims that respondent obtained its Certificate of Registration through
fraud and misrepresentation, this Court finds that the imputations are not impressed
with merit. In the instant case, proof to declare that respondent committed fraud and
misrepresentation remains wanting. This Court had, indeed, on several occasions,
pronounced that registration based on false and fraudulent statements and documents
confer no legitimacy upon a labor organization irregularly recognized, which, at best,
holds on to a mere scrap of paper. Under such circumstances, the labor organization,
not being a legitimate labor organization, acquires no rights.
This Court emphasizes, however, that a direct challenge to the legitimacy of a labor
organization based on fraud and misrepresentation in securing its certificate of
registration is a serious allegation which deserves careful scrutiny. Allegations thereof
should be compounded with supporting circumstances and evidence. The records of the
case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this
doctrine applies with greater force in labor cases. Findings of fact of administrative
agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise
because their jurisdiction is confined to specific matters, are generally accorded not only
great respect but even finality.
Still, petitioner postulates that respondent was not validly and legitimately created, for
PDMP cannot create a local or chapter as it is not a legitimate labor organization, it
being a trade union center.
Petitioners argument creates a predicament as it hinges on the legitimacy of PDMP as
a labor organization. Firstly, this line of reasoning attempts to predicate that a trade
union center is not a legitimate labor organization. In the process, the legitimacy of
PDMP is being impugned, albeit indirectly. Secondly, the same contention premises that
a trade union center cannot directly create a local or chapter through the process of
chartering.
Anent the foregoing, as has been held in a long line of cases, the legal personality of a
legitimate labor organization, such as PDMP, cannot be subject to a collateral attack.
The law is very clear on this matter. Article 212 (h) of the Labor Code, as amended,
defines a legitimate labor organization as any labor organization duly registered with
the DOLE, and includes any branch or local thereof. On the other hand, a trade union
center is any group of registered national unions or federations organized for the mutual
aid and protection of its members; for assisting such members in collective bargaining;
or for participating in the formulation of social and employment policies, standards, and

programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of
the Implementing Rules.
The Implementing Rules stipulate that a labor organization shall be deemed registered
and vested with legal personality on the date of issuance of its certificate of registration.
Once a certificate of registration is issued to a union, its legal personality cannot be
subject to collateral attack.[40] It may be questioned only in an independent petition for
cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.
The aforementioned provision is enunciated in the following:
Sec. 5. Effect of registration. The labor organization or workers association shall
be deemed registered and vested with legal personality on the date of issuance of its
certificate of registration. Such legal personality cannot thereafter be subject to
collateral attack, but may be questioned only in an independent petition for cancellation
in accordance with these Rules.
PDMP was registered as a trade union center and issued Registration Certificate No.
FED-11558-LC by the BLR on 14 February 1991. Until the certificate of registration of
PDMP is cancelled, its legal personality as a legitimate labor organization subsists.
Once a union acquires legitimate status as a labor organization, it continues to be
recognized as such until its certificate of registration is cancelled or revoked in an
independent action for cancellation. It bears to emphasize that what is being directly
challenged is the personality of respondent as a legitimate labor organization and not
that of PDMP. This being a collateral attack, this Court is without jurisdiction to entertain
questions indirectly impugning the legitimacy of PDMP.
Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate
labor organization,[42] and continues to be recognized as such until its certificate of
registration is successfully impugned and thereafter cancelled or revoked in an
independent action for cancellation.
We now proceed to the contention that PDMP cannot directly create a local or a
chapter, it being a trade union center. This Court reverses the finding of the appellate
court and BLR on this ground, and rules that PDMP cannot directly create a local or
chapter.
After an exhaustive study of the governing labor law provisions, both statutory and
regulatory, we find no legal justification to support the conclusion that a trade union
center is allowed to directly create a local or chapter through chartering. Apropos, we
take this occasion to reiterate the first and fundamental duty of this Court, which is to
apply the law. The solemn power and duty of the Court to interpret and apply the law
does not include the power to correct by reading into the law what is not written therein.
Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972.
Being a legislation on social justice, the provisions of the Labor Code and the
Implementing Rules have been subject to several amendments, and they continue to
evolve, considering that labor plays a major role as a socio-economic force. The Labor

Code was first amended by Republic Act No. 6715, and recently, by Republic Act No.
9481. Incidentally, the term trade union center was never mentioned under Presidential
Decree No. 442, even as it was amended by Republic Act No. 6715. The term trade
union center was first adopted in the Implementing Rules, under Department Order No.
9.
Culling from its definition as provided by Department Order No. 9, a trade union center
is any group of registered national unions or federations organized for the mutual aid
and protection of its members; for assisting such members in collective bargaining; or
for participating in the formulation of social and employment policies, standards, and
programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of
the Implementing Rules.[46] The same rule provides that the application for registration
of an industry or trade union center shall be supported by the following:
(a) The list of its member organizations and their respective presidents and, in the
case of an industry union, the industry where the union seeks to operate;
(b) The resolution of membership of each member organization, approved by the
Board of Directors of such union;
(c) The name and principal address of the applicant, the names of its officers and
their addresses, the minutes of its organizational meeting/s, and the list of
member organizations and their representatives who attended such meeting/s;
and
(d) A copy of its constitution and by-laws and minutes of its ratification by a majority
of the presidents of the member organizations, provided that where the
ratification was done simultaneously with the organizational meeting, it shall be
sufficient that the fact of ratification be included in the minutes of the
organizational meeting.
Evidently, while a national union or federation is a labor organization with at least ten
locals or chapters or affiliates, each of which must be a duly certified or recognized
collective bargaining agent;[48] a trade union center, on the other hand, is composed of
a group of registered national unions or federations.
The Implementing Rules, as amended by Department Order No. 9, provide that a duly
registered federation or national union may directly create a local or chapter. The
provision reads:
Section 1. Chartering and creation of a local/chapter. A duly registered
federation or national union may directly create a local/chapter by submitting to the
Regional Office or to the Bureau two (2) copies of the following:
(a) A charter certificate issued by the federation or national union indicating the
creation or establishment of the local/chapter;
(b) The names of the local/chapters officers, their addresses, and the principal office
of the local/chapter; and
(c) The local/chapters constitution and by-laws; provided that where the
local/chapters constitution and by-laws is the same as that of the federation or
national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary
or the Treasurer of the local/chapter and attested to by its President.
Department Order No. 9 mentions two labor organizations either of which is allowed to
directly create a local or chapter through chartering a duly registered federation or a
national union. Department Order No. 9 defines a chartered local as a labor
organization in the private sector operating at the enterprise level that acquired legal
personality through a charter certificate, issued by a duly registered federation or
national union and reported to the Regional Office in accordance with Rule III, Section
2-E of these Rules.
Republic Act No. 9481 or An Act Strengthening the Workers Constitutional Right to
Self-Organization, Amending for the Purpose Presidential Decree No. 442, As
Amended, Otherwise Known as the Labor Code of the Philippines lapsed[52] into law
on 25 May 2007 and became effective on 14 June 2007.[53] This law further amends
the Labor Code provisions on Labor Relations.
Pertinent amendments read as follows:
SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines, is hereby further amended to read as
follows:
ART. 234. Requirements of Registration. A federation, national union or
industry or trade union center or an independent union shall acquire legal personality
and shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the following
requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the
workers who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its members
comprising at least twenty percent (20%) of all the employees in the bargaining
unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it.
SECTION 2. A new provision is hereby inserted into the Labor Code as Article
234-A to read as follows:
ART. 234-A. Chartering and Creation of a Local Chapter. A duly registered
federation or national union may directly create a local chapter by issuing a charter
certificate indicating the establishment of the local chapter. The chapter shall acquire
legal personality only for purposes of filing a petition for certification election from the
date it was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a legitimate labor
organization only upon the submission of the following documents in addition to its
charter certificate:

(a) The names of the chapters officers, their addresses, and the principal office of
the chapter; and
(b) The chapters constitution and by-laws: Provided, That where the chapters
constitution and by-laws are the same as that of the federation or the national
union,
this
fact
shall
be
indicated
accordingly.
The additional supporting requirements shall be certified under oath by the
secretary or treasurer of the chapter and attested by its president. (Emphasis
ours.)
Article 234 now includes the term trade union center, but interestingly, the provision
indicating the procedure for chartering or creating a local or chapter, namely Article 234A, still makes no mention of a trade union center.
Also worth emphasizing is that even in the most recent amendment of the implementing
rules, there was no mention of a trade union center as being among the labor
organizations allowed to charter.
This Court deems it proper to apply the Latin maxim expressio unius est exclusio
alterius. Under this maxim of statutory interpretation, the expression of one thing is the
exclusion of another. When certain persons or things are specified in a law, contract, or
will, an intention to exclude all others from its operation may be inferred. If a statute
specifies one exception to a general rule or assumes to specify the effects of a certain
provision, other exceptions or effects are excluded. Where the terms are expressly
limited to certain matters, it may not, by interpretation or construction, be extended to
other matters. Such is the case here. If its intent were otherwise, the law could have so
easily and conveniently included trade union centers in identifying the labor
organizations allowed to charter a chapter or local. Anything that is not included in the
enumeration is excluded therefrom, and a meaning that does not appear nor is intended
or reflected in the very language of the statute cannot be placed therein. The rule is
restrictive in the sense that it proceeds from the premise that the legislating body would
not have made specific enumerations in a statute if it had the intention not to restrict its
meaning and confine its terms to those expressly mentioned. Expressium facit cessare
tacitum. What is expressed puts an end to what is implied. Casus omissus pro omisso
habendus est. A person, object or thing omitted must have been omitted intentionally.
Therefore, since under the pertinent status and applicable implementing rules, the
power granted to labor organizations to directly create a chapter or local through
chartering is given to a federation or national union, then a trade union center is without
authority to charter directly.
The ruling of this Court in the instant case is not a departure from the policy of the law to
foster the free and voluntary organization of a strong and united labor movement, and
thus assure the rights of workers to self-organization. The mandate of the Labor Code in
ensuring strict compliance with the procedural requirements for registration is not
without reason. It has been observed that the formation of a local or chapter becomes a
handy tool for the circumvention of union registration requirements. Absent the

institution of safeguards, it becomes a convenient device for a small group of

employees to foist a not-so-desirable federation or union on unsuspecting co-workers
and pare the need for wholehearted voluntariness, which is basic to free unionism. As a
legitimate labor organization is entitled to specific rights under the Labor Code and
involved in activities directly affecting public interest, it is necessary that the law afford
utmost protection to the parties affected. However, as this Court has enunciated in
Progressive Development Corporation v. Secretary of Department of Labor and
Employment, it is not this Courts function to augment the requirements prescribed by
law. Our only recourse, as previously discussed, is to exact strict compliance with what
the law provides as requisites for local or chapter formation.
In sum, although PDMP as a trade union center is a legitimate labor organization, it has
no power to directly create a local or chapter. Thus, SMPPEU-PDMP cannot be created
under the more lenient requirements for chartering, but must have complied with the
more stringent rules for creation and registration of an independent union, including the
20% membership requirement.

SAN MIGUEL CORP [MANDAUE PPP] VS. MANDAUE PACKING PRODUCTS

PLANTS SAN MIGUEL CORPORATION MONTHLIES AND RANK-AND-FILE
UNION FFW, 467 SCRA 107 [2005]
FACTS: Respondent as an affiliate of Federation of Free Workers (FFW), filed a
petition for certification election with DOLE.
1. Respondent sought to be certified and to represent the permanent rank-and-file
monthly paid employees of the petitioner. Documents were attached to the
petition namely: (1) Charter Certificate issued by FFW certifying that respondent
was duly certified as a local chapter of FFW; (2) copy of the constitution of
respondent prepared by its Secretary and attested by its President; (3) list of
respondents officers and their respective addresses prepared and attested by
the Secretary and President; (4) certification signifying by respondent had just
been organizes and no amount had been collected from its members signed by
the treasurer and attested by its President; and (5) list of all the rank-and-file
monthly paid employees of the petitioner.
2. Petitioner filed a motion to dismiss the petition for certification election on the
sole ground that respondent is not listed or included in the roster of legitimate
labor organizations based on the certification issued by DOLE.
3. Respondent submitted to the BLR the same documents earlier attached to its
petition of certification.
4. The Chief of Labor Relations Division of DOLE issues a Certificate of Creation of
Local/Chapter, certifying that from July 30, 1998, respondent has acquired legal
personality as a labor organization/workers association, having submitted all the
required documents.
5. Petitioner filed a petition to cancel the union registration of respondent. DOLE
and the CA both ruled that respondent had acquired legal personality on the
same day it filed the petition for certification election.
ISSUE: WON the respondent has legal personality in filing the petition for certification
election.
HELD: The Court held that respondent has acquired legal personality upon the
issuance of the charter certificate by the duly registered federation or national union.
Department Order No. 40, now in effect, has eased the requirements by which a
local/chapter may acquire legal personality. Interestingly, Department Order No.
40 no longer uses the term local/chapter, utilizing instead chartered local,
which is defined as a labor organization in the private sector operating at the
enterprise level that acquired legal personality through the issuance of a charter
certificate by a duly registered federation or national union, and reported to the
Regional Office. The first step to be undertaken in the creation of a chartered
local is the issuance of a charter certificate by the duly registered federation or
national union. Said federation or national union is then obligated to report to the

Regional Office the creation of such chartered local, attaching thereto the charter
certificate it had earlier issued.
Since the instant petition for certification was filed in 1998, the Implementing Rules, as
amended by Department Order No. 9, should govern the resolution of this petition.
The local/chapter acquires legal personality from the date of the filing of the
complete documentary requirements, and not from the issuance of a certification
to such effect by the Regional Office or Bureau. On the other hand, a labor
organization is deemed to have acquired legal personality only on the date of
issuance of its certificate of registration, which takes place only after the Bureau
of Labor Relations or its Regional Offices has undertaken an evaluation process
lasting up until thirty (30) days, within which period it approves or denies the
application.
Apart from promoting a policy of affiliation of local unions with national unions, there is
a practical reason for sanctioning a less onerous procedure for the registration of a
local/chapter, as compared to the national union. The local/chapter relies in part on
the legal personality of the federation or national union, which in turn, had
already undergone evaluation and approval from the Bureau of Legal Relations
or Regional Office. Based on Department Order No. 9, the duty of the Bureau of
Labor Relations to recognize the local/chapter upon the submission of the documentary
requirements is not ministerial, insofar as the Bureau is obliged to adjudge the
authenticity of the documents required to be submitted.
Under the present Implementing Rules as amended by Department Order No. 40, it
appears that the local/chapter (or now, chartered local) acquires legal personality upon
the issuance of the charter certificate by the duly registered federation or national union.
This might signify that the creation of the chartered local is within the sole discretion of
the federation or national union and thus beyond the review or interference of the
Bureau of Labor Relations or its Regional Offices. However, Department Order No. 40
also requires that the federation or national union report the creation of the chartered
local to the Regional Office.
In regular order, it is the federation or national union, already in possession of legal
personality, which initiates the creation of the local/chapter. It issues a charter
certificate indicating the creation or establishment of the local/chapter. It then submits
this charter certificate, along with the names of the local/chapters officers, constitution
and by-laws to the Regional Office or Bureau. It is the submission of these documents,
certified under oath by the Secretary or Treasurer of the local/chapter and attested by
the President, which vests legal personality in the local/chapter, which is then free to file
on its own a petition for certification election.
In this case, the FFW, did not submit any of these documentary requirements to the
Regional Office or Bureau. It did however issue a charter certificate to the putative
local/chapter (herein respondent). Respondent then submitted the charter certificate

along with the other documentary requirements to the Regional Office, but not for the
specific purpose of creating the local/chapter, but for filing the petition for certification
election. It could be properly said that at the exact moment respondent was filing the
petition for certification, it did not yet possess any legal personality, since the requisites
for acquisition of legal personality under Section 3, Rule VI of Department Order No. 9
had not yet been complied with. It could also be discerned that the intention of the Labor
Code and its Implementing Rules that only those labor organizations that have acquired
legal personality are capacitated to file petitions for certification elections
The Court ruled that respondent acquired the requisite legal personality at the
same time it filed the petition for certification election. In doing so, the Court
acknowledges that the strict letter of the procedural rule was not complied with.
However, labor laws are generally construed liberally in favor of labor, especially if
doing so affirms the constitutionally guaranteed right to self-organization. True enough,
there was no attempt made by the national federation, or the local/chapter for that
matter, to submit the enumerated documentary requirements to the Regional Office or
Bureau for the specific purpose of creating the local/chapter. However, these same
documents were submitted by the local/chapter to the Regional Office as
attachments to its petition for certification election. Under Section 3, Rule VI of
Department Order No. 9, it is the submission of these same documents to the
Regional Office or Bureau that operates to vest legal personality on the
local/chapter.

THE HERITAGE HOTEL MANILA V. PIGLAS-HERITAGE G.R. NO 177024 (2009)

FACTS: Some rank-and-file employees of petitioner Heritage Hotel Manila formed the
Heritage Hotel Employees Union (HHE union). DOLE later issued a certificate of
registration to this union
1. HHE union filed a petition for certification election which petitioner company
opposed. The company alleged that the HHE union misrepresented itself to be
an independent union but in truth, it was a local chapter of NUWHRAIN.
Petitioner claimed that that HHE union intentionally omitted disclosure of its
affiliation with NUWHRAIN because the companys supervisors union was
already affiliated with it
2. Med-Arbiter granted HHE unions petition for certification election.
3. Subsequently, the rank-and-file employees of petitioner formed another union,
PIGLAS-Heritage Manila. HHE union, then, filed a petition for cancellation of its
union registration
4. When PIGLAS union filed a petition for certification election, the petitioner
opposed the same alleging that the new unions officers and members were also
those who belonged to the old union. The company averred that this was an
attempt to circumvent the CAs injunction against the holding of certification
election sought by HHE union. Despite this, Med-Arbiter granted the petition
5. Thereafter, petitioner filed a petition to cancel the union registration of PIGLAS,
claiming that the unions application for registration bore false information.
Petitioner 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
company further alleged that 33 members of respondent PIGLAS union were
members of the defunct HHE union
6. 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. Bureau of Labor Relations affirmed the same
ISSUE: WON the union made fatal misrepresentation in its application for union
registration
HELD: No, the Labor and its implementing rules 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.
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. 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. Finally, the 100 names submitted by respondent was substantial
compliance with the LC requisite on the names of members in the bargaining unit, for
20% of the employees in petitioner corporation is merely 50 members.
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.

EAGLE RIDGE GOLF AND COUNTRY CLUB V. COURT OF APPEALS AND EAGLE
RIDGE EMPLOYEES UNION [EREU] G.R. NO 178989 (2010)
FACTS: Petitioner Eagle Ridge Golf and Country Club(Eagle Ridge), which has around
112 rank-and-file employees, alleges that Eagle Ridge Employees Union(EREU)
committed fraud, misrepresentation and false statement when it filed for its registration
and that EREU failed to comply with the membership requirement for the registration as
a labor organization. Eagle Ridge seeks to have EREUs registration cancelled when
the Union filed a petition for certification election. 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.
DOLE Regional Director granted Eagle Ridges petition and delisted EREU from the
roster of legitimate labor organizations. EREU appealed to the BLR, which initially
affirmed the order of the Regional Director, but upon filing of the EREU of a motion for
reconsideration it was reinstated in the roster of legitimate labor organizations. Eagle
Ridge filed a motion for reconsideration but was denied, thus a petition for certiorari to
the CA. The CA dismissed Eagle Ridges petition for being deficient as 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
denied a motion for reconsideration.
ISSUE: Did the CA commit grave abuse of discretion in denying Eagle Ridges petition
to cancel EREUs registration?
HELD: No. A scrutiny of the records fails to show any misrepresentation, false
statement, or fraud committed by EREU to merit cancellation of its registration. 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. EREU complied with the mandatory minimum 20%
membership requirement under Art. 234(c). when it had 30 employees as member
when it registered. 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.
In the issue of the affidavits of retraction executed by six union members, 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. 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. 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, the six
affidavits of retraction are inadmissible as evidence against the Union in the instant
case. Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would
require a union membership of at least 22 employees. 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. Prior to
their withdrawal, the six employees who retracted were bona fide union members. With
the withdrawal of six union members, there is still compliance with the mandatory
membership requirement under Art. 234(c), for the remaining

THE HERITAGE HOTEL MANILA V. NATIONAL UNION OF WORKERS IN THE

HOTEL, RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA
SUPERVISORS CHAPTER (NUWHRAIN-HHMSC) G.R. NO 178296 (2011)
FACTS: Respondent filed with the DOLE-NCR a petition for certification election.
The petition was granted and holding of a certification election was ordered.
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.
Petitioner filed a Petition for Cancellation of Registration of respondent, for the
non-submission of the said documents.
ISSUE: WON failure to submit annual financial report is a ground for cancellation of
union registration
HELD: NO.
The Labor Code's provisions on cancellation of union registration have been
recently amended by Republic Act (R.A.) No. 9481.
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;
b. Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of
voters;
c. Voluntary dissolution by the members.
R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:
ART. 242-A. Reportorial Requirements.-The following are documents required to be
submitted to the Bureau by the legitimate labor organization concerned:
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;

a. Its list of officers, minutes of the election of officers, and list of voters
within thirty (30) days from election;
b. Its annual financial report within thirty (30) days after the close of every
fiscal year; and
c. 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.
It is the misrepresentation that serves as a ground for cancellation.

RURAL BANK OF ALAMINOS EMPLOYEES UNION V. NLRC 317 SCRA 669 (1999)
FACTS: NLRC Case No. 0097-89 charged RBAI with unfair labor practice and the
Labor Arbiter concluded that the Bank employed all available means to further delay the
resolution of the dispute, thus creating a scenario of an illegal lock-out.
The Rural Bank of Alaminos, Inc. appealed to the National Labor Relations
Commission, which promulgated, on January 31, 1991 its assailed Resolution
setting aside the ruling of the Labor Arbiter and ordering the remand of all the
three cases to wit:
xxx In the broader interest of justice, We deem it best to remand all the
afore-numbered cases to Regional Arbitration Branch of origin for further
proceedings.
WHEREFORE, premises considered, all the aforenumbered cases are
hereby remanded to the Regional Arbitration Branch of origin for further
proceedings.
SO ORDERED.
The reversal by the respondent Commission of the Labor Arbiters original
Resolution prompted petitioners to bring the present petition imputing grave
abuse of discretion amounting to lack of or excess jurisdiction to the respondent
Commission.
ISSUE: WON the NLRC was right in ordering the remand of Case No.0097-89 for
further proceedings.
HELD: YES. A lock-out means the temporary refusal of an employer to furnish work as
a result of an industrial or labor dispute. As correctly found by the NLRC, in the case
under consideration evidence of illegal lock-out is wanting such that there can be no
conclusive determination by the NLRC as to the charge. Petitioners failed to present
sufficient proof to support the allegation of illegal lock-out. No evidence was adduced by
the Union to show that the Bank really refused them employment during the pendency
of the strike.
As to the allegation that the Bank was interfering with and restraining the employees in
the exercise of their right to self-organization, suffice it to state that filing a petition for
cancellation of the Unions registration is not per se an act of unfair labor practice.
It must be shown by substantial evidence that the filing of the petition for
cancellation of union registration by the employer was aimed to oppress the
Union.

SAN MIGUEL EMPLOYEES UNION-PTGWO V. SAN MIGUEL PACKAGING

PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG MANGGAGAWANG
PILIPINO (PDMP) 533 SCRA 125 [2007]
FACTS: Petitioner is the incumbent bargaining agent for the bargaining unit comprised
of the regular monthly-paid rank and file employees of the three divisions of San Miguel
Corporation (SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel
Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all
offices and plants of SMC
Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang
Pilipino (PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15
June 1999.5 In compliance with registration requirements, respondent submitted
the requisite documents to the BLR for the purpose of acquiring legal
personality.6 Upon submission of its charter certificate and other documents,
respondent was issued Certificate of Creation of Local or Chapter PDMP-01 by
the BLR on 6 July 1999.
petitioner filed with the DOLE-NCR a petition seeking the cancellation of
respondent's registration and its dropping from the rolls of legitimate labor
organizations. In its petition, petitioner accused respondent of committing fraud
and falsification, and non-compliance with registration requirements in obtaining
its certificate of registration.
ISSUE: WON the respondent as a legitimate labor organization
HELD: A legitimate labor organization is defined as "any labor organization duly
registered with the Department of Labor and Employment, and includes any branch or
local thereof." The mandate of the Labor Code is to ensure strict compliance with the
requirements on registration because a legitimate labor organization is entitled to
specific rights under the Labor Code, and are involved in activities directly affecting
matters of public interest. Registration requirements are intended to afford a measure of
protection to unsuspecting employees who may be lured into joining unscrupulous or
fly-by-night unions whose sole purpose is to control union funds or use the labor
organization for illegitimate ends. Legitimate labor organizations have exclusive rights
under the law which cannot be exercised by non-legitimate unions, one of which is the
right to be certified as the exclusive representative of all the employees in an
appropriate collective bargaining unit for purposes of collective bargaining. 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.
A perusal of the records reveals that respondent is registered with the BLR as a "local"
or "chapter" of PDMP and was issued Charter Certificate No. 112 on 15 June 1999.
Hence, respondent was directly chartered by PDMP.

SAMMA-LIKHA V. SAMMA CORP G.R. NO 167141 (2009)

FACTS: Petitioner SAMMA-LIKHA filed a petition for certification election. Claiming that
it was a local chapter of the LIKHA Federation, it sought to represent the rank-and-file
employees of SAMMA Corp.
1. Respondent SAMMA Corp moved for the dismissal of the petition on the
following grounds:
a. LIKHA Federation failed to establish its legal personality
b. SAMMA-LIKHA failed to prove its existence as a local chapter
c. It had a prohibited mixture of supervisory and rank-and-file employees
2. The Med-Arbiter dismissed the petition. Subsequently, the Secretary of Labor
reversed the decision of the Med-Arbiter and held that the legal personality of a
union cannot be collaterally attacked but may only be questioned in an
independent petition for cancellation of registration. Thus, he directed the holding
of a certification election among the rank-and-file employees of the respondent
3. Meanwhile, the regional director of DOLE issued a resolution revoking the
charter certificate of petitioner as a local chapter of LIKHA Federation on the
account of having a mixture of supervisory and rank-and-file employees in the
union
ISSUE: WON the inclusion of a supervisory employee in the union of rank-and-file
employees is a ground to impugn the unions legitimacy as a labor organization
HELD: No, the erroneous inclusion of one supervisory employee in the union of rankand-file employees is not a ground to impugn its legitimacy as a legitimate labor
organization.
LIKHA was granted legal personality as a federation. Subsequently, petitioner as its
local chapter was issued its charter certificate. With certificates of registration issued
in their favor, they are clothed with legal personality as legitimate labor
organizations. Such legal personality cannot thereafter be subject to collateral
attack, but may be questioned only in an independent petition for cancellation of
certificate of registration. Unless petitioners union registration is cancelled in
independent proceedings, it shall continue to have all the rights of a legitimate
labor organization, including the right to petition for certification election.
Furthermore, the grounds for dismissal of a petition for certification election based on
the lack of legal personality of a labor organization are the following: (a) petitioner is not
listed by the Regional Office or the Bureau of Labor Relations in its registry of legitimate
labor organizations or (b) its legal personality has been revoked or cancelled with finality
in accordance with the rules.
Respondent filed a petition for cancellation of the registration of SAMMA-LIKHA on
December 14, 2002. In a resolution dated April 14, 2003, petitioners charter certificate
was revoked by the DOLE. But on May 6, 2003, petitioner moved for the
reconsideration of this resolution. Neither of the parties alleged that this resolution

revoking petitioners charter certificate had attained finality. However, in this petition,
petitioner prayed that its charter certificate be "reinstated in the roster of active
legitimate labor [organizations]." The proceedings on a petition for cancellation of
registration are independent of those of a petition for certification election. This
case originated from the latter. If it is shown that petitioners legal personality had
already been revoked or cancelled with finality in accordance with the rules, then
it is no longer a legitimate labor organization with the right to petition for a
certification election.

CRUZ V. CALLEJA 188 SCRA 520

FACTS: Allied Bank Employees Union (ABEU), which was then a mere chapter of the
National Union of Bank Employees (NUBE), elected its officers, whose term of office
would expire on February 10, 1987.
Before the expiration of the old CBA between the ABEU and Allied Bank on June 30,
1984, the ABEU negotiated for a new CBA. However, because the Union and the Bank
could not agree on major economic proposals, a bargaining deadlock ensued.
On March 2, 1989, the public respondent, Director Pura Calleja of the BLR, issued a
resolution whose dispositive portion reads as follows:
WHEREFORE, premises considered, the election conducted in Allied Bank Employees
Union on February 10, 1988 is hereby declared null and void.
Another election is hereby ordered conducted in accordance with the express tenor of
the Med-Arbiter's Order dated 4 January 1988, that a general membership meeting shall
first be held where the mechanics of the election shall be fully threshed out.
In the meantime, the officers who were elected on 10 February 1988 and whose
election to office we now declare null and void are hereby temporarily charged with the
safekeeping of the union funds subject to accounting before the new set of officers
which shall be elected in accordance with this Order.
The respondent Bank is likewise enjoined to observe absolute neutrality during these
activities, they being purely an internal affair of the union.
ISSUE: WON Pura Ferrer-Calleja, Director of the Bureau of Labor Relations, gravely
abused her discretion in nullifying the resolution of the Board of Administrators of the
Allied Bank Employees Union which extended for one year the term of office of the
union officers which should have expired on February 10, 1987 and postponed to
February 10, 1988 the holding of the election.
HELD: NO. There is no merit in the petitioners' contention that the public respondent
gravely abused her discretion in annulling the February 10, 1988 election of officers.
The public respondent correctly noted that in ordering the postponement of the election
for one year (in effect extending their term of office for one year), the ABEU Interim
Board "overstepped its bounds" for it was constituted and authorized only "to sign for
and in behalf of the union the Collective Bargaining Agreement with the Bank and
administer the CBA and the operation of the union."
Instead of calling a regular election of officers of ABEU on 11 February 1987, as
mandated by the Union's Constitution and by-laws, respondents submitted in a

"referendum" the extension of their term of office for yet another year, from 11 February
1987 to 10 February 1988.chanroblesvirtualawlibrary chanrobles virtual law library
From the very inception the referendum process initiated by the Interim Board was
improper. The results therefrom are therefore, invalid. It may be true, that the task of
administering the operation of the union was given to the ABEU-Interim Board at the
time it was constituted, to fill in the vacuum in the local union's leadership during that
time. Nonetheless said task could not be exercised beyond the regular term of the
regular officers. Stated simply, the exercise of said task is only coterminous with the
term of the regular officers, in whose shoes, the members of the ABEU-Interim Board
merely stepped into.chanroblesvirtualawlibrary chanrobles virtual law library
When the term of the union's regular officers expired on February 11, 1987 the election
of officers should have been held, in accordance with the provision of the union
constitution and by laws. With the expiration of the term of the regular officers, the term
of the ABEU-Interim Board, expired too. In calling the referendum therefore, the ABEUInterim Board clearly overstepped its bounds.
Consequently, the one-year extension of the CBSA is valid. The extension was
approved by the Union in a referendum which was properly supervised by the
Department of Labor. It was accepted by the Bank which gave a "signing bonus" to the
employees who voted for it. Since the holding of the referendum was within the authority
of the Interim Board "to administer the CBA and operate the union," and the extension
was acceptable to both of the parties to the agreement, and did not violate any law, it is
valid and binding on them.

PALACOL V. CALLEJA, 182 SCRA 710

FACTS: Respondent Manila CCBPI Sales Force Union, as the collective bargaining
agent of all regular salesmen, regular helpers, and relief helpers of the Manila Plant and
Metro Manila Sales Office of the respondent Coca-Cola Bottlers concluded a new CBA
with the latter. Among the compensation benefits granted to the employees was a
general salary increase to be given in lump sum recomputation of actual commissions
earned based on the new rates of increase.
1. The President of the Union submitted to the Company the ratification by the
union members of the new CBA and authorization for the Company to deduct
union dues equivalent to P20 every month and, in addition 10% by way of special
assessment, from the CBA lump-sum pay granted to the union members. The
purpose of the special assessment sought to be levied is to put up a cooperative
and credit union; purchase vehicles and other items needed for the benefit of the
officers and the general membership; and for the payment for services rendered
by union officers, consultants and others.
2. The Authorization and CBA Ratification was obtained by the Union through a
secret referendum. 672 members originally authorized the 10% special
assessment, while 173 opposed the same.
3. Subsequently however, members of the Union submitted documents to the
Company stating, they are withdrawing or disauthorizing the deduction of any
amount from their CBA lump sum. There were a total of 528 objectors and 272
for the supporters.
4. The company, being in quandary as to whom to remit the payment. Petitioners,
who are regular rank-and-file employees of the Company and bona fide
members of the union file a complaint for intervention, claiming that they belong
to be among those union members who retracted their signature therefrom.
5. Med-Arbiter ruled in favor of petitioners, directing the Company to remit the
amount it had kept in trust directly to the rank-and-file personnel. BLR reversed
the Med-Arbiters decision upholding the claim of the Union that the special
assessment is authorized under Article 241 (n) of the LC, and that the Union has
complied with the requirements therein.
ISSUE: Can a special assessment be validly deducted by a labor union from the lumpsum pay of its members, granted under a CBA, notwithstanding a subsequent
disauthorization of the same by a majority of the union members?
HELD: The deduction of the 10% special assessment by the Union was not made
in accordance with the requirements provided by law. The Court held that the
questioned special assessment is a violation of Article 241, paragraphs (n) and
(o), and Article 222 (b) of the Labor Code.
The failure of the Union to comply strictly with the requirements set out by the
law invalidates the questioned special assessment. Substantial compliance is not
enough in view of the fact that the special assessment will diminish the
compensation of the union members. Their express consent is required, and this

consent must be obtained in accordance with the steps outlined by law, which
must be followed to the letter. No shortcuts are allowed.
Under Art. 241(n), the Union must submit to the Company a written resolution of a
majority of all the members at a general membership meeting duly called for the
purpose. In addition, the secretary of the organization must record the minutes of
the meeting which, in turn, must include, among others, the list of all the
members present as well as the votes cast. The Union obviously failed to comply
with the requirements of paragraph (n). It held local membership meetings on separate
occasions, on different dates and at various venues, contrary to the express
requirement that there must be a general membership meeting. The contention of the
Union that "the local membership meetings are precisely the very general meetings
required by law" is untenable because the law would not have specified a general
membership meeting had the legislative intent been to allow local meetings in lieu of the
latter. It submitted only minutes of the local membership meetings when what is
required is a written resolution adopted at the general meeting. The minutes of three of
those local meetings held were recorded by a union director and not by the union
secretary. The minutes submitted to the Company contained no list of the members
present and no record of the votes cast. Since it is quite evident that the Union did not
comply with the law at every turn, the only conclusion that may be made therefrom is
that there was no valid levy of the special assessment pursuant to paragraph (n) of
Article 241 of the Labor Code.
Art. 241(o) on the other hand requires an individual written authorization duly
signed by every employee in order that a special assessment may be validly
checked-off. There can be no valid check-off considering that the majority of the union
members had already withdrawn their individual authorizations. A withdrawal of
individual authorizations is equivalent to no authorization at all. Hence, the ruling
in Galvadores that "no check-offs from any amounts due employees may be effected
without an individual written authorization signed by the employees ... " is applicable.
The principle "that employees are protected by law from unwarranted practices that
diminish their compensation without their known edge and consent" 8 is in accord with
the constitutional principle of the State affording full protection to labor.
The Med-Arbiter correctly ruled in his Order that:
The mandate of the majority rank and file have (sic) to be respected considering
they are the ones directly affected and the realities of the high standards of
survival nowadays. To ignore the mandate of the rank and file would enure to
destabilizing industrial peace and harmony within the rank and file and the
employer's fold, which we cannot countenance.
Moreover, it will be recalled that precisely union dues are collected from the
union members to be spent for the purposes alluded to by respondent. There is
no reason shown that the regular union dues being now implemented is not
sufficient for the alleged expenses. Furthermore, the rank and file have spoken in
withdrawing their consent to the special assessment, believing that their regular

union dues are adequate for the purposes stated by the respondent. Thus, the
rank and file having spoken and, as we have earlier mentioned, their sentiments
should be respected.

GABRIEL V. SECRETARY OF LABOR 328 SCRA 247 (2000)

FACTS: Petitioners comprise the executive board of the Solid Bank union, the duly
recognized bargaining agent for the rank-and-file employees of Solid Bank Corp while
private respondents are members of said union.
1. In 1991, the unions executive board decided to retain the services of Atty.
Lacsina as union counsel in connection with the negotiations for a new CBA. The
resolution confirming the same provided that 10% of the total economic benefits
that may be secured through the negotiations shall be given to Lacsina as
attorneys fees. It also contained an authorization for the company to check-off
said attorneys fees from the first lump sum payment of benefits to the employees
under the new CBA
2. The bank then, on request of the union, made payroll deductions for the
attorneys fees from the CBA benefits paid to union members
3. Private respondents, then, filed a complaint against petitioners and the union
counsel for illegal deduction of attorneys fees as well as for quantification of the
benefits in the CBA
4. The Med-Arbiter held in favor of private respondents and ordered the union
officers to return or refund the amount deducted as attorneys fees from the
package of benefits due the complainants under the new CBA
5. Upon appeal, the Secretary of Labor modified the Med-Arbiters resolution and
ordered that the refund shall be limited to those union members who have not
signified their conformity to the check-off of attorneys fees
6. Petitioners argue that the general membership resolution authorizing the bank to
check-off attorneys fees satisfies the legal requirements for such assessment
7. On the other hand, private respondents maintained that the check-off provision is
illegal because it was never submitted for approval at a general membership
meeting called for the purpose and that it failed to meet the formalities mandated
by Labor Code
ISSUE: WON the public respondent erred in ruling that the workers through their union
should be made to shoulder the attorneys fees
HELD: No.
In check-off, the employer, on agreement with the Union, or on prior authorization from
employees, deducts union dues or agency fees from the latter's wages and remits them
directly to the union. It assures continuous funding; for the labor organization. As this
Court has acknowledged, the system of check-off is primarily for the benefit of the union
and only indirectly for the individual employees. The pertinent legal provisions on checkoffs are found in Art 222(b) and Art 241(o) Labor Code.
Art 241 has three (3) requisites for the validity of the special assessment for union's
incidental expenses, attorney's fees and representation expenses:

1) Authorization by a written resolution of the majority of all the members at the

general membership meeting called for the purpose;
2) Secretary's record of the minutes of the meeting; and
3) Individual written authorization for check off duly signed by the employees
concerned.
Clearly, attorney's fees may not be deducted or checked off from any amount due to an
employee without his written consent.
Solid Bank Union did not satisfy the requirements laid down by law and
jurisprudence for the validity of the 10% special assessment for union's
incidental expenses, attorney's fees and representation expenses. There were no
individual written check off authorizations by the employees concerned and so
the assessment cannot be legally deducted by their employer.
In the case of ABS-CBN Supervisors Employees Union Members vs. ABS-CBN
Broadcasting Corp, the SC held that (1) the prohibition against attorney's fees in
Article 222, paragraph (b) of the Labor Code applies only when the payment of
attorney's fees is effected through forced contributions from the workers; and (2)
that no deduction must be taken from the workers who did not sign the check-off
authorization.
The obligation to pay the attorney's fees belongs to the union and cannot be shunted to
the workers as their direct responsibility. Neither the lawyer nor the union itself may
require the individual worker to assume the obligation to pay attorney's fees from their
own pockets. So categorical is this intent that the law makes it clear that any agreement
to the contrary shall be null and void ab initio.

VOLKSCHEL LABOR UNION V. BLR 137 SCRA 42

FACTS: Petitioner was once affiliated with the Associated Labor Union for Metal
Workers (ALUMETAL for short). On August 1, 1975, both unions, using the name
Volkschel Labor Union Associated Labor Union for Metal Workers, jointly entered into a
collective bargaining agreement with respondent companies. One of the subjects dealt
with is the payment of union dues which is provided for in Section 3, Article 1, of the
CBA, which reads:
Section 3. CHECK-OFF. The COMPANY agrees to make payroll deductions not
softener than twice a month of UNION membership dues and such special assessments
fees or fines as may be duly authorized by the UNION, provided that the same is
covered by the individual check-off authorization of the UNION members.
Majority of petitioner's members decided to disaffiliate from respondent federation in
order to operate on its own as an independent labor group pursuant to Article 241
(formerly Article 240) of the Labor Code of the Philippines, the pertinent portion of which
reads:
Incumbent affiliates of existing federations or national unions may
disaffiliate only for the purpose of joining a federation or national union in
the industry or region in which it properly belongs or for the purpose of
operating as an independent labor group.
Confronted with the predicament of whether or not to continue deducting from
employees' wages and remitting union dues to respondent, ALUMETAL which wrote
respondent companies advising them to continue deducting union dues and remitting
them to said federation, respondent companies sought the legal opinion of the
respondent Bureau as regards the controversy between the two unions. On November
11, 1976, Med-Arbiter George A. Eduvalla of respondent Bureau rendered a Resolution
which in effect found the disaffiliation legal but at the same time gave the opinion that,
petitioner's members should continue paying their dues to ALUMETAL in the concept of
agency fees
HELD: The right of a local union to disaffiliate from its mother union is well-settled. In
previous cases, it has been repeatedly held that a local union, being a separate and
voluntary association, is free to serve the interest of all its members including the
freedom to disaffiliate when circumstances warrant. 4 This right is consistent with the
Constitutional guarantee of freedom of association the Department of Labor is set on a
task to restructure the labor movement to the end that the workers will unite themselves
along industry lines. Carried to its complete fruition, only one union for every industry
will remain to bargain collectively for the workers. The clear policy therefore even now is
to conjoin workers and worker groups, not to dismember them. 5 This policy is
commendable. However, we must not lose sight of the constitutional mandate of
protecting labor and the workers' right to self-organization. In the implementation and
interpretation of the provisions of the Labor Code and its implementing regulations, the
workingman's welfare should be the primordial and paramount consideration. In the
case at bar, it would go against the spirit of the labor law to restrict petitioner's right to
self-organization due to the existence of the CBA. We agree with the Med-Arbiter's

opinion that "A disaffiliation does not disturb the enforceability and administration of a
collective agreement; it does not occasion a change of administrators of the contract nor
even an amendment of the provisions thereof." 6 But nowhere in the record does it
appear that the contract entered into by the petitioner and ALUMETAL prohibits the
withdrawal of the former from the latter.
ALUMETAL is entitled to receive the dues from respondent companies as long as
petitioner union is affiliated with it and respondent companies are authorized by their
employees (members of petitioner union) to deduct union dues. Without said affiliation,
the employer has no link to the mother union. The obligation of an employee to pay
union dues is coterminous with his affiliation or membership. "The employees' check-off
authorization, even if declared irrevocable, is good only as long as they remain
members of the union concerned." 7 A contract between an employer and the parent
organization as bargaining agent for the employees is terminated by the disaffiliation of
the local of which the employees are members. 8 Respondent companies therefore
were wrong in continuing the check-off in favor of respondent federation since they were
duly notified of the disaffiliation and of petitioner's members having already rescinded
their check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling further on
the last issue. Suffice it to state that respondent federation is not entitled to union dues
payments from petitioner's members. "A local union which has validly withdrawn from its
affiliation with the parent association and which continues to represent the employees of
an employer is entitled to the check-off dues under a collective bargaining contract.

FACTS: The rank and file workers of the Tropical organized a local union called the
Tropical Hut Employees Union (THEU) and immediately sought affiliation with the
National Association of Trade Unions (NATU). NATU accepted the THEU application
for affiliation.
It appears, however, that NATU itself as a labor federation, was not registered
with the Department of Labor.
Then, a Collective Bargaining Agreement was concluded between the parties.
Said agreement' contained these clear and unequivocal terms:
Article III
Union Membership and Union Check-off
Sec. 1 . . . Employees who are already members of the UNION
shall be required to maintain their membership therein as a
condition of continued employment.
Sec. 3Any employee who is expelled from the UNION for joining
another federation or forming another union, or who fails or refuses
to maintain his membership therein as required, . . . shall, upon
written request of the UNION be discharged by the COMPANY.
THEU informed NATU that they are disaffiliating from the NATU federation.
NATU federation requests the company to dismiss the petitioners in view of their
violation CBA.
ISSUE: WON the dismissal of petitioner employees resulting from their unions
disaffiliation for the mother federation constituted unfair labor practice on the part of
respondent company and federation.
HELD: YES.
The right of a local union to disaffiliate from its mother federation is well-settled. A local
union, being a separate and voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when circumstances warrant.
When the local union withdrew from the old federation to join a new federation, it was
merely exercising its primary right to labor organization for the effective enhancement
and protection of common interests.
Also, there is no merit in the contention of the respondents that the act of disaffiliation
violated the union security clause of the CBA and that their dismissal is valid.
A perusal of the collective bargaining agreements shows that the THEU-NATU,
and not the NATU federation, was recognized as the sole and exclusive collective
bargaining agent for all its workers and employees.

Although NATU was designated as the sole bargaining agent in the check-off
authorization form attached to the CBA, this simply means it was acting only for
and in behalf of its affiliate.
The NATU possessed the status of an agent while the local union remained the
basic principal union which entered into contract with the respondent company.
When the THEU disaffiliated from its mother federation, the former did not lose its
legal personality as the bargaining union under the CBA.
Clearly, since there is no violation of the union security provision in the CBA, there was
no sufficient ground to terminate the employment of petitioners.

FERRER V. NLRC 224 SCRA 410

FACTS: Petitioners were regular and permanent employees of the Occidental Foundry
Corporation (OFC) in Malanday, Valenzuela, Metro Manila which was under the
management of HuiKam Chang.
The Samahang Manggagawang Occidental Foundry Corporation-FFW
(SAMAHAN) and the OFC entered into a CBA which would be effective for the 3year period between October 1, 1988 and September 30, 1991.
Art II thereof provides for a union security clause thus:
Sec. 1 : The company agrees that all permanent and regular factory workers
in the company who are members in good standing of the union or who
thereafter may become members, shall as a condition of continued
employment, maintain their membership in the union in good standing for the
duration of the agreement. ---xxxxxxxxx--Sec. 3 : The parties agree that failure to retain membership in good standing
with the UNION shall be ground for the operation of paragraph 1 hereof and
the dismissal by the company of the aforesaid employee upon written request
by the union. The aforesaid request shall be accompanied by a verified
carbon original of the Board of (sic) Resolution by the UNION signed by at
least a majority of its officers/directors.
Some members, including petitioners, tried to unseat the SAMAHAN leadership
headed by Capitle due to the latter's alleged inattention to petitioners' demands
for the implementation of the P25- wage increase which took effect on July 1,
1989.
The intra-union controversy was such that petitioners even requested the FFW to
intervene to facilitate the enforcement of the said wage increase.
Petitioners sought the help of the FEDLU only after they had learned of the
termination of their employment upon the recommendation of Capitle.
ISSUE: WON the petitioners alleged application with federations other than the FFW is
considered as disloyalty to the SAMAHAN
HELD: NO. Their alleged application with federations other than the FFW can hardly be
considered as disloyalty to the SAMAHAN, nor may the filing of such applications
denote that petitioners failed to maintain in good standing their membership in the
SAMAHAN. The SAMAHAN is a different entity from FFW, the federation to which it
belonged. Neither may it, be inferred that petitioners sought disaffiliation from the FFW
for petitioners had not formed a union distinct from that of the SAMAHAN.
Parenthetically, the right of a local union to disaffiliate from a federation in the
absence of any provision in the federation's constitution preventing disaffiliation
of a local union is legal. Such right is consistent with the constitutional guarantee
of freedom of association.

Hence, while petitioners' act of holding a special election to oust Capitle, et al. may be
considered as an act of sowing disunity among the SAMAHAN members, and, perhaps,
disloyalty to the union officials, which could have been dealt with by the union as a
disciplinary matter, it certainly cannot be considered as constituting disloyalty to the
union. Faced with a SAMAHAN leadership which they had tried to remove as officials, it
was but a natural act of self-preservation that petitioners fled to the arms of the FEDLU
after the union and the OFC had tried to terminate their employment. Petitioners should
not be made accountable for such an act.

PHILIPPINE SKYLANDERS INC V. NLRC G.R. NO 127374 (2002)

FACTS: In November 1993 the Philippine Skylanders Employees Association (PSEA), a
local labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU)
September (PAFLU), won in the certification election conducted among the rank and file
employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately protested the result of the
election before the Secretary of Labor. Several months later, pending settlement of the
controversy, PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU's
supposed deliberate and habitual dereliction of duty toward its members. Attached to
the notice was a copy of the resolution adopted and signed by the officers and members
of PSEA authorizing their local union to disaffiliate from its mother federation. PSEA
subsequently affiliated itself with the National Congress of Workers (NCW), changed its
name to Philippine Skylanders Employees Association - National Congress of Workers
(PSEA-NCW), and to maintain continuity within the organization, allowed the former
officers of PSEA-PAFLU to continue occupying their positions as elected officers in the
newly-forged PSEA-NCW.
ISSUE: WON disaffiliation from mother company shall be allowed.
HELD: Yes. The right of a local union to disaffiliate from its mother federation is not a
novel thesis unillumined by case law. In the landmark case of Liberty Cotton Mills
Workers Union vs. Liberty Cotton Mills, Inc. We upheld the right of local unions to
separate from their mother federation on the ground that as separate and voluntary
associations, local unions do not owe their creation and existence to the national
federation to which they are affiliated but, instead, to the will of their members. The sole
essence of affiliation is to increase, by collective action, the common bargaining power
of local unions for the effective enhancement and protection of their interests.
Admittedly, there are times when without succor and support local unions may find it
hard, unaided by other support groups, to secure justice for themselves. Yet the local
unions remain the basic units of association, free to serve their own interests subject to
the restraints imposed by the constitution and by-laws of the national federation, and
free also to renounce the affiliation upon the terms laid down in the agreement which
brought such affiliation into existence.

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LPU LABREL 2nd SEM 2011-2012

ANNIE, CHAM, JB, JO, JOEB, KIM & MELAI

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LPU LABREL 2nd SEM 2011-2012

Effective 15 September 1985, before the Complainants and Complainants-Intervenors

LPU LABREL 2nd SEM 2011-2012

LPU LABREL 2nd SEM 2011-2012

BESA V. TRAJANO 146 SCRA 501 (1986)

HELD: NO. Shoe shiner is different from a piece worker:

LPU LABREL 2nd SEM 2011-2012

UST FACULTY UNION V. BITONIO G.R. NO 131235 (1999)

LPU LABREL 2nd SEM 2011-2012

ARIZALA V. CA 189 SCRA 584

LPU LABREL 2nd SEM 2011-2012

SAN JOSE ELECTRIC SERVICE (SAJELCO) V. MINISTRY OF LABOR 173 SCRA

LPU LABREL 2nd SEM 2011-2012

However, in so far as it involves cooperatives with employees who are not

LPU LABREL 2nd SEM 2011-2012

BENGUET ELECTRIC COOPERATIVE V. CALEJA 180 SCRA 740

LPU LABREL 2nd SEM 2011-2012

LPU LABREL 2nd SEM 2011-2012

REPUBLIC OF THE PHILIPPINES REPRESENTED BY SSS V.

FACTS: Respondent Asiapro, as a cooperative is composed of owner-members. The

LPU LABREL 2nd SEM 2011-2012

LPU LABREL 2nd SEM 2011-2012

VILLUGA V. NLRC 225 SCRA 537 (1993)

LPU LABREL 2nd SEM 2011-2012

The test of "supervisory or managerial status" depends on whether a person

LPU LABREL 2nd SEM 2011-2012

SIM V. NLRC 534 SCRA 515 (2007)

LPU LABREL 2nd SEM 2011-2012

When an employee accepts a promotion to a managerial position or to an office

LPU LABREL 2nd SEM 2011-2012

GOLDEN FARMS INC. V. SEC. OF LABOR 234 SCRA 517 (1994)

LPU LABREL 2nd SEM 2011-2012

the shield of an organization, it will also expose them to the exploitations of

LPU LABREL 2nd SEM 2011-2012

PHILIPS INDUSTRIAL DEVELOPMENT V. NLRC 210 SCRA 339

LPU LABREL 2nd SEM 2011-2012

LPU LABREL 2nd SEM 2011-2012

GOLDEN FARMS V. SEC. OF LABOR 234 SCRA 517

LPU LABREL 2nd SEM 2011-2012

LPU LABREL 2nd SEM 2011-2012

interest of the employers. Moreover, unionization of confidential employees for the

LPU LABREL 2nd SEM 2011-2012

SUGBUANON RURAL BANK V. NLRC 324 SCRA 425 [2000]

LPU LABREL 2nd SEM 2011-2012

LPU LABREL 2nd SEM 2011-2012

LPU LABREL 2nd SEM 2011-2012

cumulative, and both must be met if an employee is to be considered a

LPU LABREL 2nd SEM 2011-2012

DE LA SALLE UNIVERSITY V. DLSU-EMPLOYEES ASSOCIATION 330 SCRA 363

LPU LABREL 2nd SEM 2011-2012

LPU LABREL 2nd SEM 2011-2012

SAN MIGUEL CORP SUPERVISORY AND EXEMPT EMPLOYEES UNION V.