SAN MIGUEL CORPORATION EMPLOYEES UNIONPHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU

PTGWO) vs. SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA NG MANGGAGAWANG PILIPINO
(SMPPEUPDMP)| 12 September 2007| J. Chico-Nazario
Short Version: SMCEU-PTGWO challenges the legitimacy of SMPPEU-PDMP, a charter of PDMP, as a labor organization. The Court
held that PDMP cannot create a charter because it is merely a trade union center. Trade union centers are not given by the Labor
Code or any statute the power to create locals or charters therefore, SMPPEU-PDMP must comply with the strict requirements
provided for in Art. 234, LC.
Nature: Review on Certiorari under Rule 45 of the Revised Rules of Court, assailing CA decision affirming the decision of the
petitioner Bureau of Labor Relations (BLR) of DOLE which upheld the Certificate of Registration of respondent SAN MIGUEL
PACKAGING PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP); and its
resolution denying petitioners MR
Characters in the case
-Petitioner(s): SMCEU-PTGWO 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 (1987 to 1997).
-Respondent(s): SMPPEU-PDMP is registered as a chapter PDMP.

Facts
PDMP issued a charter certificate to respondent on 15 June 1999. In compliance with registration requirements,
respondent submitted the requisite documents to the BLR for the purpose of acquiring legal personality.
Upon submission of its charter certificate and other documents, respondent was issued Certificate of Creation of Local or
Chapter by the BLR on 6 July 1999.
Respondent filed with the Med-Arbiter of the DOLE Regional Officer in NCR (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.
17 August 1999: petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's registration and its
dropping from the rolls of legitimate labor organizations, accusing respondent of committing fraud and falsification, and
non-compliance with registration requirements in obtaining its certificate of registration.
o It alleged that respondent violated Articles 239 (a), (b) and (c) and 234 (c) of the Labor Code. Moreover, petitioner
claimed that PDMP is not a legitimate labor organization, but a trade union center, hence, it cannot directly create
a local or chapter.
14 July 2000: DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations. He 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 who granted the petition. The BLR ruled that as a chartered local union, 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. Thus, the revocation of its registration based on non-compliance with the 20%
membership requirement does not have any basis in the rules.
The BLR also held that although PDMP is considered as a trade union center, it is a holder of a Registration Certificate issued
by the BLR on 14 February 1991, which bestowed upon it the status of a legitimate labor organization with all the rights and
privileges to act as representative of its members for purposes of collective bargaining agreement. On this basis, PDMP can
charter or create a local, in accordance with the provisions of Department Order No. 9.
BLR denied petitioners appeal. CA affirmed BLR decision holding that Department Order No. 9 provides that a registered
federation or national union may directly create a local by submitting to the BLR copies of the charter certificate, the local's
constitution and by-laws, the principal office address of the local, and the names of its officers and their addresses. Upon
complying with the documentary requirements, the local shall be issued a certificate and included in the roster of legitimate
labor organizations. Thus there is no need for SMPPEU to show a membership of 20% of the employees of the bargaining
unit in order to be recognized as a legitimate labor union.
Issue: WON respondent is a legitimate labor organization even if it failed to comply with the 20% requirement as provided in Art.
234, LC. NO.

Dispositive: Petition GRANTED. CA REVERSED AND SET ASIDE.

Ruling
A legitimate labor organization is defined as "any labor organization duly registered with the DOLE, and includes any branch
or local thereof."
Why does the Labor Code demand strict compliance with the requirements on registration?
o 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.
o A legitimate labor organization is entitled to specific rights under the Labor Code, 21 and are involved in activities
directly affecting matters of public interest. 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.
o 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.
Records show that respondent was chartered by PDMP. Article 234, LC provides that an independent labor organization
acquires legitimacy only upon its registration with the BLR. However, the creation of a branch, local or chapter is treated
differently.
o In Progressive Development Corporation v. Secretary, Department of Labor and Employment, the Court 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 and Sec. 2, 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 union's bargaining powers respecting terms and conditions of labor.
Petitioners argue that PDMP is not a legitimate labor organization, thus cannot form a charter. The Court held that the
personality of a labor organization cannot be attacked collaterally. 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.
Heres the twist: PDMP is a trade union center, THEREFORE IT CANNOT CREATE LOCALS OR CHARTERS.
Trade union center was never mentioned in the Labor Code. It first appeared only in the Implementing Rules of
Department Order No. 9 which defined a trade union center as 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.
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, a trade union center, on the other hand, is
composed of a group of registered national unions or federations.
o The Implementing Rules, as amended by Department Order No. 9, provide that only "a duly registered federation
or national union" may directly create a local or chapter.
DO 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 (Sec. 1 (i), Rule 1, Book V of the Implementing Rules,
as amended by DO No. 9)
RA 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 into law on 25
May 2007 and became effective on 14 June 2007. This law further amends the Labor Code provisions on Labor Relations,
including trade union centers in Art. 234. However, it still makes no mention that such organizations can create a local or a
charter. [Expressio unius est exclusio alterius, the expression of one thing is the exclusion of another. 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. ]
o 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.

WHY? To prevent circumvention of labor union requirements. 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.
Digest by Paula P.