1. [G.R. No.
157086, February 18, 2013] in Websters Third International Dictionary, 1986 as a boss, foreman
LEPANTO CONSOLIDATED MINING COMPANY, Petitioner, v. THE
LEPANTO CAPATAZ UNION,Respondents.
DECISION
BERSAMIN, J.:
Capatazes are not rank-and-file employees because they perform
supervisory functions for the management; hence, they may form their
own union that is separate and distinct from the labor organization of
rank-and-file employees.
The Case
Lepanto Consolidated Mining Company (Lepanto) assails the Resolution
promulgated on December 18, 2002,1 whereby the Court of Appeals (CA)
dismissed its petition for certiorari on the ground of its failure to first file
a motion for reconsideration against the decision rendered by the
Secretary of the Department of Labor and Employment (DOLE); and the
resolution promulgated on January 31, 2003,2whereby the CA denied
Lepantos motion for reconsideration.
Antecedents
As a domestic corporation authorized to engage in large-scale mining,
Lepanto operated several mining claims in Mankayan, Benguet. On May
27, 1998, respondent Lepanto Capataz Union (Union), a labor
organization duly registered with DOLE, filed a petition for consent
election with the Industrial Relations Division of the Cordillera Regional
Office (CAR) of DOLE, thereby proposing to represent 139 capatazes of
Lepanto.3
In due course, Lepanto opposed the petition, 4 contending that the Union
was in reality seeking a certification election, not a consent election, and
would be thereby competing with the Lepanto Employees Union (LEU),
the current collective bargaining agent. Lepanto pointed out that
the capatazes were already members of LEU, the exclusive
representative of all rank-and-file employees of its Mine Division.
On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a
ruling to the effect that the capatazes could form a separate bargaining
unit due to their not being rank-and-file employees,5viz:
xxxx
We agree with petitioner that its members perform a function totally
different from the rank-and-file employees. The word capataz is defined
and an overseer. The employer did not dispute during the hearing
that the capatazes indeed take charge of the implementation of
the job orders by supervising and instructing the miners,
mackers and other rank-and-file workers under them, assess and
evaluate their performance, make regular reports and
recommends (sic) new systems and procedure of work, as well
as guidelines for the discipline of employees. As testified to by
petitioners president, the capatazes are neither rank-and-file
nor supervisory and, more or less, fall in the middle of their
rank. In this respect, we can see that indeed the capatazes differ
from the rank-and-file and can by themselves constitute a
separate bargaining unit.
While it is claimed by the employer that historically, the capatazes have
been considered among the rank-and-file and that it is only now that
they seek a separate bargaining unit such history of affiliation with the
rank-and-file association of LEU cannot totally prevent the capatazes
from disaffiliating and organizing themselves separately. The
constitutional right of every worker to self-organization essentially gives
him the freedom to join or not to join an organization of his own
choosing.
The fact that petitioner seeks to represent a separate bargaining unit
from the rank-and-file employees represented by the LEU renders the
contract bar rule inapplicable. While the collective bargaining agreement
existing between the LEU and the employer covering the latters rank-
and-file employee covers likewise the capatazes, it was testified to and
undisputed by the employer that the capatazes did not anymore
participate in the renegotiation and ratification of the new CBA upon
expiration of their old one on 16 November 1998. Their nonparticipation
was apparently due to their formation of the new bargaining unit. Thus,
while the instant petition was filed on 27 May 1998, prior to the freedom
period, in the interest of justice and in consonance with the constitutional
right of workers to self-organization, the petition can be deemed to have
been filed at the time the 60-day freedom period set in. After all, the
petition was still pending and unresolved during this period.
WHEREFORE, the petition is hereby granted and a certification election
among the capataz employees of the Lepanto Consolidated Mining
Company is hereby ordered conducted, subject to the usual pre-election
and inclusion/exclusion proceedings, with the following choices:
1. Lepanto Capataz Union; and
2. No Union.
The employer is directed to submit to this office within ten (10) days
from receipt hereof a copy of the certified list of its capataz employees
and the payroll covering the said bargaining unit for the last three (3)
months prior to the issuance hereof.
1
SO DECIDED. 6
Lepanto appealed to the DOLE Secretary.7
On July 12, 2000, then DOLE Undersecretary Rosalinda Dimapilis-Baldoz
(Baldoz), acting by authority of the DOLE Secretary, affirmed the ruling of
Med-Arbiter Lontoc,8 pertinently stating as follows:
xxxx
The bargaining unit sought to be represented by the appellee are the
capataz employees of the appellant. There is no other labor organization
of capatazes within the employer unit except herein appellant. Thus,
appellant is an unorganized establishment in so far as the bargaining
unit of capatazes is concerned. In accordance with the last paragraph of
Section 11, Rule XI, Department Order No. 9 which provides that in a
petition filed by a legitimate labor organization involving an unorganized
establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code,
automatically order the conduct of certification election after
determining that the petition has complied with all requirements under
Section 1, 2 and 4 of the same rules and that none of the grounds for
dismissal thereof exists, the order for the conduct of a certification
election is proper.
Finally, as to the issue of whether the Med-Arbiter exhibited ignorance of
the law when she directed the conduct of a certification election when
appellee prays for the conduct of a consent election, let it be stressed
that appellee seeks to be recognized as the sole and exclusive
bargaining representative of all capataz employees of appellant. There
are two modes by which this can be achieved, one is by voluntary
recognition and two, by consent or certification election. Voluntary
recognition under Rule X, Department Order No. 9 is a mode whereby the
employer voluntarily recognizes the union as the bargaining
representative of all the members in the bargaining unit sought to be
represented. Consent and certification election under Rules XI and XII of
Department Order No. 9 is a mode whereby the members of the
bargaining unit decide whether they want a bargaining representative
and if so, who they want it to be. The difference between a consent
election and a certification election is that the conduct of a consent
election is agreed upon by the parties to the petition while the conduct of
a certification election is ordered by the Med-Arbiter. In this case, the
appellant withdrew its consent and opposed the conduct of the election.
Therefore, the petition necessarily becomes one of a petition for
certification election and the Med-Arbiter was correct in granting the
same.9
xxxx
In the ensuing certification election held on November 28, 2000, the
Union garnered 109 of the 111 total valid votes cast. 10
On the day of the certification election, however, Lepanto presented an
opposition/protest.11 Hence, on February 8, 2001, a hearing was held on
Lepantos opposition/protest. Although the parties were required in that
hearing to submit their respective position papers, Lepanto later opted
not to submit its position paper,12 and contended that the issues
identified during the hearing did not pose any legal issue to be
addressed in a position paper. 13
On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-
CAR rendered a decision certifying the Union as the sole and exclusive
bargaining agent of all capatazes of Lepanto.14
On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-
Ulep to the DOLE Secretary.
By her Resolution dated September 17, 2002,15 DOLE Secretary Patricia
A. Sto. Tomas affirmed the decision dated April 26, 2001, holding and
disposing thus:
Appellant accused Med-Arbiter Ulep of grave abuse of discretion
amounting to lack of jurisdiction based on her failure to resolve
appellants motion to modify order to submit position papers and on
rendering judgment on the basis only of appellees position paper.
We deny.
Section 5, Rule XXV of Department Order No. 9, otherwise known as the
New Rules Implementing Book V of the Labor Code, states that in all
proceedings at all levels, incidental motions shall not be given due
course, but shall remain as part of the records for whatever they may be
worth when the case is decided on the merits.
Further, the motion to modify order to submit position papers filed by
appellant is without merit. Appellant claimed that the issues over which
Med-Arbiter Ulep directed the submission of position papers were: (1)
failure to challenge properly; (2) failure (especially of LEU) to participate
actively in the proceedings before the decision calling for the conduct of
certification election; and (3) validity of earlier arguments. According to
appellant, the first issue was for appellee LCU to reply to in its position
paper, the second issue was for the LEU and the third issue for appellant
company to explain in their respective position paper. It was the position
of appellant company that unless the parties filed their position paper on
each of their respective issues, the other parties cannot discuss the
issues they did not raise in the same position papers and have to await
receipt of the others position paper for their appropriate reply.
Section 9, Rule XI of Department Order No. 9, which is applied with equal
2
force in the disposition of protests on the conduct of election, states that
the Med-Arbiter shall in the same hearing direct all concerned parties,
including the employer, to simultaneously submit their respective
position papers within a non-extendible period of ten days. The issues
as recorded in the minutes of 28 February 2001 hearing before the Med-
Arbiter are clear. The parties, including appellant company were
required to submit their respective positions on whether there was
proper challenge of the voters, whether LEU failed to participate in the
proceedings, if so, whether it should be allowed to participate at this
belated stage and whether the arguments raised during the pre-election
conferences and in the protests are valid. The parties, including appellant
company were apprised of these issues and they agreed thereto. The
minutes of the hearing even contained the statement that no order will
issue and that the parties are informed accordingly. If there is any
matter that had to be clarified, appellant should have clarified the same
during the said hearing and refused to file its position paper
simultaneously with LCU and LEU. It appears that appellant did not do so
and acquiesced to the filing of its position paper within fifteen days from
the date of said hearing.
Neither is there merit in appellants contention that the Med-Arbiter
resolved the protest based solely on appellee LCUs position paper. Not
only did the Med-Arbiter discuss the demerits of appellants motion to
modify order to submit position papers but likewise the demerits of its
protest. We do not, however, agree with the Med-Arbiter that the protest
should be dismissed due to appellants failure to challenge the individual
voters during the election. We take note of the minutes of the pre-
election conference on 10 November 2000, thus:
It was also agreed upon (by union and managements legal officer) that
all those listed will be allowed to vote during the certification election
subject to challenge by management on ground that none of them
belongs to the bargaining unit. (Underscoring supplied)
It is therefore, not correct to say that there was no proper challenge
made by appellant company. The challenge was already manifested
during the pre-election conference, specifying that all listed voters were
being challenged because they do not belong to the bargaining unit of
capatazes. Likewise, the formal protest filed by appellant company on
the day of the election showed its protest to the conduct of the election
on the grounds that (1) none of the names submitted and included (with
pay bracket 8 and 9) to vote qualifies as capataz under the five-point
characterization made in 02 May 2000 decision calling for the conduct of
certification election; (2) the characterization made in the 02 May 2000
decision pertains to shift bosses who constitutes another union, the
Lepanto Local Staff Union; and (3) the names listed in the voters list are
members of another union, the Lepanto Employees Union. This
constitutes proper challenge to the eligibility of all the voters named in
the list which includes all those who cast their votes. The election officer
should have not canvassed the ballots and allowed the Med-Arbiter to
first determine their eligibility.
Notwithstanding the premature canvass of the votes, we note that
appellant company failed to support its grounds for challenge with
sufficient evidence for us to determine the validity of its claim. No job
description of the challenged voters was submitted by appellant from
which we can verify whether the said voters are indeed disqualified from
the alleged five-point characterization made in the 02 May 2000
decision, either before the Med-Arbiter or on appeal. Neither was the job
description of the shift bosses whom appellant company claims pertain
to the alleged five-point characterization submitted for our perusal. The
challenge must perforce fail for lack of evidence.
As to the alleged membership of appellee LCUs member with another
union LEU, the issue has been resolved in the 02 May 200 0 decision of
Med-Arbiter Lontoc which we affirmed on 12 July 2000.
WHEREFORE, the appeal is hereby DENIED for lack of merit and the
decision of the Med-Arbiter dated 26 April 2001, certifying Lepanto
Capataz Union as the sole and exclusive bargaining agent of all capataz
workers of Lepanto Consolidated Mining Company, is AFFIRMED.
SO RESOLVED.16
Ruling of the CA
Still dissatisfied with the result, but without first filing a motion for
reconsideration, Lepanto challenged in the CA the foregoing decision of
the DOLE Secretary through a petition for certiorari.
On December 18, 2002, the CA dismissed Lepantos petition
for certiorari, stating in its first assailed resolution:
Considering that the petitioner failed to file a prior motion for
reconsideration of the Decision of the public respondent before
instituting the present petition as mandated by Section 1 of Rule 65 of
the 1997 Rules of Civil Procedure, as amended, the instant Petition for
Certiorari Under Rule 65 with Prayer for Temporary Restraining Order
and Injunction is hereby DISMISSED.
Well-settled is the rule that the filing of a petition for certiorari under
Rule 65 without first moving for reconsideration of the assailed
resolution generally warrants the petitions outright dismissal. As we
consistently held in numerous cases, a motion for reconsideration by a
concerned party is indispensable for it affords the NLRC an opportunity
to rectify errors or mistakes it might have committed before resort to the
courts can be had.
3
It is settled that certiorari will lie only if there is no appeal or any other
plain, speedy and adequate remedy in the ordinary course of law against
acts of public respondents. Here, the plain and adequate remedy
expressly provided by law was a motion for reconsideration of the
impugned resolution, based on palpable or patent errors, to be made
under oath and filed within ten (10) days from receipt of the questioned
resolution of the NLRC, a procedure which is jurisdictional. Further, it
should be stressed that without a motion for reconsideration seasonably
filed within the ten-day reglementary period, the questioned order,
resolution or decision of NLRC, becomes final and executory after ten
(10) calendar days from receipt thereof. (Association of Trade
Unions (ATU), Rodolfo Monteclaro and Edgar Juesan v. Hon.
Commissioners Oscar N. Abella, Musib N. Buat, Leon Gonzaga,
Jr., Algon Engineering Construction Corp., Alex Gonzales and
Editha Yap. 323 SCRA 50).
SO ORDERED.17
Lepanto moved to reconsider the dismissal, but the CA denied its motion
for reconsideration through the second assailed resolution. 18
Issues
Hence, this appeal by Lepanto based on the following errors, namely:
I the ruling in National Federation of Labor v. Laguesma21 (recognizing the
THE COURT OF APPEALS ERRED IN SUMMARILY DISMISSING THE PETITION
FOR CERTIORARI ON THE GROUND THAT NO PRIOR MOTION FOR
RECONSIDERATION WAS FILED. THE DECISION OF THE SECRETARY BEING
FINAL AND EXECUTORY, A MOTION FOR RECONSIDERATION WAS NOT AN
AVAILABLE REMEDY FOR PETITIONER.
II
ON THE MERITS, THE SECRETARY OF LABOR ACTED WITHOUT OR IN
EXCESS OF JURISDICTION, [O]R WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUNG THE
DECISION DATED SEPTEMBER 17, 2002, WHEN SHE DELIBERATELY
IGNORED THE FACTS AND RULED IN FAVOR OF THE RESPONDENT UNION,
DESPITE HER OWN FINDING THAT THERE HAD BEEN A PREMATURE
CANVASS OF VOTES. 19
Lepanto argues that a motion for reconsideration was not an available
remedy due to the decision of the DOLE Secretary being already
classified as final and executory under Section 15, Rule XI, Book V of
Omnibus Rules Implementing the Labor Code, as amended by
Department Order No. 9, series of 1997;20 that the Unions petition for
consent election was really a certification election; that the Union failed
to give a definite description of the bargaining unit sought to be
represented; and that the capatazes should be considered as rank-and-
file employees.
The issues to be resolved are, firstly, whether a motion for
reconsideration was a pre-requisite in the filing of its petition
for certiorari; and, secondly, whether the capatazes could form their own
union independently of the rank-and-file employees.
Ruling
The petition for review has no merit.
I.
The filing of the motion for reconsideration
is a pre-requisite to the filing of a petition for
certiorari to assail the decision of the DOLE Secretary
We hold to be untenable and not well taken Lepantos submissions that:
(1) a motion for reconsideration was not an available remedy from the
decision of the DOLE Secretary because of Section 15, Rule XI, Book V of
the Omnibus Rules Implementing the Labor Code, as amended; and (2)
remedy of certiorari against the decision of the DOLE Secretary to be
filed initially in the CA) actually affirms its position that an immediate
recourse to the CA on certiorari is proper even without the prior filing of a
motion for reconsideration.
To start with, the requirement of the timely filing of a motion for
reconsideration as a precondition to the filing of a petition for certiorari
accords with the principle of exhausting administrative remedies as a
means to afford every opportunity to the respondent agency to resolve
the matter and correct itself if need be.22
And, secondly, the ruling in National Federation of Labor v. Laguesma
reiterates St. Martins Funeral Home v. National Labor Relations
Commission,23 where the Court has pronounced that the special civil
action of certiorari is the appropriate remedy from the decision of the
National Labor Relations Commission (NLRC) in view of the lack of any
appellate remedy provided by the Labor Code to a party aggrieved by
the decision of the NLRC. Accordingly, any decision, resolution or ruling
of the DOLE Secretary from which the Labor Code affords no remedy to
the aggrieved party may be reviewed through a petition
for certiorari initiated only in the CA in deference to the principle of the
hierarchy of courts.
4
Yet, it is also significant to note that National Federation of Labor v.
Laguesma also reaffirmed the dictum issued in St. Martins Funeral
Homes v. National Labor Relations Commission to the effect that the
remedy of the aggrieved party is to timely file a motion for
reconsideration as a precondition for any further or subsequent remedy,
and then seasonably avail of the special civil action of certiorari under
Rule 65 x x x.24
Indeed, the Court has consistently stressed the importance of the
seasonable filing of a motion for reconsideration prior to filing the
certiorari petition. In SMC Quarry 2 Workers Union-February Six
Movement (FSM) Local Chapter No. 1564 v. Titan Megabags Industrial
Corporation25 and Manila Pearl Corporation v. Manila Pearl Independent
Workers Union,26 the Court has even warned that a failure to file the
motion for reconsideration would be fatal to the cause of the
petitioner.27 Due to its extraordinary nature as a remedy, certiorari is to
be availed of only when there is no appeal, or any plain, speedy or
adequate remedy in the ordinary course of law.28 There is no question
that a motion for reconsideration timely filed by Lepanto was an
adequate remedy in the ordinary course of law in view of the possibility
of the Secretary of Justice reconsidering her disposition of the matter,
thereby according the relief Lepanto was seeking.
Under the circumstances, Lepantos failure to timely file a motion for
reconsideration prior to filing its petition for certiorari in the CA rendered
the September 17, 2002 resolution of the DOLE Secretary beyond
challenge.
II.
Capatazes are not rank-and-file employees;
hence, they could form their own union
Anent the second issue, we note that Med-Arbiter Lontoc found in her
Decision issued on May 2, 2000 that the capatazes were performing
functions totally different from those performed by the rank-and-file
employees, and that the capatazes were supervising and instructing the
miners, mackers and other rank-and-file workers under them, assess[ing]
and evaluat[ing] their performance, mak[ing] regular reports and
recommend[ing] new systems and procedure of work, as well as
guidelines for the discipline of employees.29 Hence, Med-Arbiter Lontoc
concluded, the capatazes differ[ed] from the rank-and-file and [could]
by themselves constitute a separate bargaining unit.30
Agreeing with Med-Arbiter Lontocs findings, then DOLE Undersecretary
Baldoz, acting by authority of the DOLE Secretary, observed in the
resolution dated July 12, 2000, thus:31
The bargaining unit sought to be represented by the appellee are the
capataz employees of the appellant. There is no other labor organization
of capatazes within the employer unit except herein appellant. Thus,
appellant is an unorganized establishment in so far as the bargaining
unit of capatazes is concerned. In accordance with the last paragraph of
Section 11, Rule XI, Department Order No. 9 which provides that in a
petition filed by a legitimate labor organization involving an unorganized
establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code,
automatically order the conduct of certification election after
determining that the petition has complied with all requirements under
Section 1, 2 and 4 of the same rules and that none of the grounds for
dismissal thereof exists, the order for the conduct of a certification
election is proper.32
We cannot undo the affirmance by the DOLE Secretary of the correct
findings of her subordinates in the DOLE, an office that was undeniably
possessed of the requisite expertise on the matter in issue. In dealing
with the matter, her subordinates in the DOLE fairly and objectively
resolved whether the Union could lawfully seek to be the exclusive
representative of the bargaining unit of capatazes in the company. Their
factual findings, being supported by substantial evidence, are hereby
accorded great respect and finality. Such findings cannot be made the
subject of our judicial review by petition under Rule 45 of the Rules of
Court, because:
x x x [T]he office of a petition for review on certiorari under Rule 45 of
the Rules of Court requires that it shall raise only questions of law. The
factual findings by quasi-judicial agencies, such as the Department of
Labor and Employment, when supported by substantial evidence, are
entitled to great respect in view of their expertise in their respective
field. Judicial review of labor cases does not go far as to evaluate the
sufficiency of evidence on which the labor officials findings rest. It is not
our function to assess and evaluate all over again the evidence,
testimonial and documentary, adduced by the parties to an appeal,
particularly where the findings of both the trial court (here, the DOLE
Secretary) and the appellate court on the matter coincide, as in this case
at bar. The Rule limits that function of the Court to review or revision of
errors of law and not to a second analysis of the evidence. Here,
petitioners would have us re-calibrate all over again the factual basis and
the probative value of the pieces of evidence submitted by the Company
to the DOLE, contrary to the provisions of Rule 45. Thus, absent any
showing of whimsical or capricious exercise of judgment, and unless lack
of any basis for the conclusions made by the appellate court may be
amply demonstrated, we may not disturb such factual findings. 33
In any event, we affirm that capatazes or foremen are not rank-and-file
employees because they are an extension of the management, and as
such they may influence the rank-and-file workers under them to engage
in slowdowns or similar activities detrimental to the policies, interests or
business objectives of the employers.34
WHEREFORE, the Court DENIES the petition for review for lack of merit,
5
and AFFIRMS the resolutions the Court of Appeals promulgated on
December 18, 2002 and January 31, 2003.
Petitioner to pay the costs of suit.
SO ORDERED.
2.
G.R. No. 172132, July 23, 2014
THE HERITAGE HOTEL MANILA, ACTING THROUGH ITS OWNER,
GRAND PLAZA HOTEL CORPORATION, Petitioner, v. SECRETARY OF
LABOR AND EMPLOYMENT; MED-ARBITER TOMAS F. FALCONITIN;
AND NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT
AND ALLIED INDUSTRIESHERITAGE HOTEL MANILA SUPERVISORS
CHAPTER (NUWHRAIN-HHMSC), Respondents.
DECISION
BERSAMIN, J.:
Although case law has repeatedly held that the employer was but a
bystander in respect of the conduct of the certification election to decide
the labor organization to represent the employees in the bargaining unit,
and that the pendency of the cancellation of union registration brought
against the labor organization applying for the certification election
should not prevent the conduct of the certification election, this review
has to look again at the seemingly never-ending quest of the petitioner
employer to stop the conduct of the certification election on the ground
of the pendency of proceedings to cancel the labor organizations
registration it had initiated on the ground that the membership of the
labor organization was a mixture of managerial and supervisory
employees with the rank-and-file employees.
Under review at the instance of the employer is the decision
promulgated on December 13, 2005,1whereby the Court of Appeals (CA)
dismissed its petition for certiorari to assail the resolutions of
respondent Secretary of Labor and Employment sanctioning the conduct
of the certification election initiated by respondent labor organization.
Antecedents
On October 11, 1995, respondent National Union of Workers in Hotel
Restaurant and Allied Industries-Heritage Hotel Manila Supervisors
Chapter (NUWHRAIN-HHMSC) filed a petition for certification
election,3 seeking to represent all the supervisory employees of Heritage
Hotel Manila. The petitioner filed its opposition, but the opposition was
deemed denied on February 14, 1996 when Med-Arbiter Napoleon V.
Fernando issued his order for the conduct of the certification election.
The petitioner appealed the order of Med-Arbiter Fernando, but the
appeal was also denied. A pre-election conference was then scheduled.
On February 20, 1998, however, the pre-election conference was
suspended until further notice because of the repeated non-appearance
of NUWHRAIN-HHMSC.
On January 29, 2000, NUWHRAIN-HHMSC moved for the conduct of the
pre-election conference. The petitioner primarily filed its comment on the
list of employees submitted by NUWHRAIN-HHMSC, and simultaneously
sought the exclusion of some from the list of employees for occupying
either confidential or managerial positions.5 The petitioner filed a motion
to dismiss on April 17, 2000,6raising the prolonged lack of interest of
NUWHRAIN-HHMSC to pursue its petition for certification election.
On May 12, 2000, the petitioner filed a petition for the cancellation of
NUWHRAIN-HHMSCs registration as a labor union for failing to submit its
annual financial reports and an updated list of members as required by
Article 238 and Article 239 of the Labor Code, docketed as Case No. NCR-
OD-0005-004-IRD entitled The Heritage Hotel Manila, acting through its
owner, Grand Plaza Hotel Corporation v. National Union of Workers in the
Hotel, Restaurant and Allied Industries-Heritage Hotel Manila Supervisors
Chapter (NUWHRAIN-HHSMC).7 It filed another motion on June 1, 2000 to
seek either the dismissal or the suspension of the proceedings on the
basis of its pending petition for the cancellation of union registration.
The following day, however, the Department of Labor and Employment
(DOLE) issued a notice scheduling the certification elections on June 23,
2000.
Dissatisfied, the petitioner commenced in the CA on June 14, 2000 a
special civil action for certiorari,10 alleging that the DOLE gravely abused
its discretion in not suspending the certification election proceedings. On
June 23, 2000, the CA dismissed the petition for certiorari for non-
exhaustion of administrative remedies.
The certification election proceeded as scheduled, and NUWHRAIN-
HHMSC obtained the majority vote of the bargaining unit. 12 The petitioner
filed a protest (with motion to defer the certification of the election
results and the winner),13 insisting on the illegitimacy of NUWHRAIN-
HHMSC.
Ruling of the Med-Arbiter
On January 26, 2001, Med-Arbiter Tomas F. Falconitin issued an
order,14 ruling that the petition for the cancellation of union registration
was not a bar to the holding of the certification election, and disposing
thusly:
6
WHEREFORE, premises considered, respondent employer/protestants
protest with motion to defer certification of results and winner is hereby
dismissed for lack of merit.
Accordingly, this Office hereby certify pursuant to the rules that
petitioner/protestee, National Union of Workers in Hotels, Restaurants
and Allied Industries-Heritage Hotel Manila Supervisory Chapter
(NUWHRAIN-HHSMC) is the sole and exclusive bargaining agent of all
supervisory employees of the Heritage Hotel Manila acting through its
owner, Grand Plaza Hotel Corporation for purposes of collective
bargaining with respect to wages, and hours of work and other terms and
conditions of employment.
SO ORDERED.
The petitioner timely appealed to the DOLE Secretary claiming that: (a)
the membership of NUWHRAIN-HHMSC consisted of managerial,
confidential, and rank-and-file employees; (b) NUWHRAIN-HHMSC failed
to comply with the reportorial requirements; and (c) Med-Arbiter
Falconitin simply brushed aside serious questions on the illegitimacy of
NUWHRAIN-HHMSC.15 It contended that a labor union of mixed
membership of supervisory and rank-and-file employees had no legal
right to petition for the certification election pursuant to the
pronouncements in Toyota Motor Philippines Corporation v. Toyota Motor
Philippines Corporation Labor Union16(Toyota Motor) and Dunlop
Slazenger (Phils.) v. Secretary of Labor and Employment17(Dunlop
Slazenger).
Ruling of the DOLE Secretary
On August 21, 2002, then DOLE Secretary Patricia A. Sto. Tomas issued a
resolution denying the appeal,18 and affirming the order of Med-Arbiter
Falconitin, viz:
WHEREFORE, the appeal is DENIED. The order of the Med-Arbiter dated
26 January 2001 is hereby AFFIRMED.
SO RESOLVED.
DOLE Secretary Sto. Tomas observed that the petitioners reliance
on Toyota Motor and Dunlop Slazenger was misplaced because both
rulings were already overturned by SPI Technologies, Inc. v. Department
of Labor and Employment,19 to the effect that once a union acquired a
legitimate status as a labor organization, it continued as such until its
certificate of registration was cancelled or revoked in an independent
action for cancellation.
The petitioner moved for reconsideration.
In denying the motion on October 21, 2002, the DOLE Secretary declared
that the mixture or co-mingling of employees in a union was not a
ground for dismissing a petition for the certification election under
Section 11, par. II, Rule XI of Department Order No. 9; that the
appropriate remedy was to exclude the ineligible employees from the
bargaining unit during the inclusion-exclusion proceedings; 20 that the
dismissal of the petition for the certification election based on the
legitimacy of the petitioning union would be inappropriate because it
would effectively allow a collateral attack against the unions legal
personality; and that a collateral attack against the personality of the
labor organization was prohibited under Section 5, Rule V of Department
Order No. 9, Series of 1997.
Upon denial of its motion for reconsideration, the petitioner elevated the
matter to the CA by petition for certiorari.
Ruling of the CA
On December 13, 2005,23 the CA dismissed the petition for certiorari,
giving its following disquisition:
The petition for certiorari filed by the petitioner is, in essence, a
continuation of the debate on the relevance of the Toyota Motor, Dunlop
Slazenger and Progressive Development cases to the issues raised.
Toyota Motor and Dunlop Slazenger are anchored on the provisions of
Article 245 of the Labor Code which prohibit managerial employees from
joining any labor union and permit supervisory employees to form a
separate union of their own. The language naturally suggests that a
labor organization cannot carry a mixture of supervisory and rank-and-
file employees. Thus, courts have held that a union cannot become a
legitimate labor union if it shelters under its wing both types of
employees. But there are elements of an elliptical reasoning in the
holding of these two cases that a petition for certification election may
not prosper until the composition of the union is settled therein. Toyota
Motor, in particular, makes the blanket statement that a supervisory
union has no right to file a certification election for as long as it counts
rank-and-file employees among its ranks. More than four years
after Dunlop Slazenger, the Court clarified in Tagaytay Highlands
International Golf Club Inc vs Tagaytay Highlands Employees Union-
PTGWO that while Article 245 prohibits supervisory employees from
joining a rank-and-file union, it does not provide what the effect is if a
rank-and-file union takes in supervisory employees as members, or vice
versa. Toyota Motor and Dunlop Slazenger jump into an unnecessary
conclusion when they foster the notion that Article 245 carries with it the
authorization to inquire collaterally into the issue wherever it rears its
ugly head.
Tagaytay Highlands proclaims, in the light of Department Order 9, that
7
after a certificate of registration is issued to a union, its legal personality
cannot be subject to a collateral attack. It may be questioned only in an
independent petition for cancellation. In fine, Toyota and Dunlop
Slazenger are a spent force. Since Tagaytay Highlands was handed down
after these two cases, it constitutes the latest expression of the will of
the Supreme Court and supersedes or overturns previous rulings
inconsistent with it. From this perspective, it is needless to discuss
whether SPI Technologies as a mere resolution of the Court may prevail
over a full-blown decision that Toyota Motor or Dunlop Slazenger was.
The ruling in SPI Technologies has been echoed in Tagaytay
Highlands, for which reason it is with Tagaytay Highlands, not SPI
Technologies, that the petitioner must joust.
The fact that the cancellation proceeding has not yet been resolved
makes it obvious that the legal personality of the respondent union is still
very much in force. The DOLE has thus every reason to proceed with the
certification election and commits no grave abuse of discretion in
allowing it to prosper because the right to be certified as collective
bargaining agent is one of the legitimate privileges of a registered
union. It is for the petitioner to expedite the cancellation case if it wants
to put an end to the certification case, but it cannot place the issue of
the unions legitimacy in the certification case, for that would be
tantamount to making the collateral attack the DOLE has staunchly
argued to be impermissible.
The reference made by the petitioner to another Progressive
Development case that it would be more prudent for the DOLE to
suspend the certification case until the issue of the legality of the
registration is resolved, has also been satisfactorily answered. Section
11, Rule XI of Department Order 9 provides for the grounds for the
dismissal of a petition for certification election, and the pendency of a
petition for cancellation of union registration is not one of them.
Like Toyota Motor and Dunlop Slazenger, the second Progressive case
came before Department Order 9.
IN VIEW OF THE FOREGOING, the disputed resolutions of the Secretary of
Labor and Employment are AFFIRMED, and the petition is DISMISSED.
SO ORDERED.
The petitioner sought reconsideration,24 but its motion was denied.
Issues
Hence, this appeal, with the petitioner insisting that:
I of the annual financial statements and the list of members in the period
THE COURT OF APPEALS ERRED IN RULING THAT TAGAYTAY
HIGHLANDS APPLIES TO THE CASE AT BAR
II
[THE HONORABLE COURT OF APPEALS] SERIOUSLY ERRED WHEN IT
DISREGARDED PROGRESSIVE DEVELOPMENT CORPORATION PIZZA HUT
V. LAGUESMA WHICH HELD THAT IT WOULD BE MORE PRUDENT TO
SUSPEND THE CERTIFICATION CASE UNTIL THE ISSUE OF THE LEGALITY
OF THE REGISTRATION OF THE UNION IS FINALLY RESOLVED
III
BECAUSE OF THE PASSAGE OF TIME, RESPONDENT UNION NO LONGER
POSSESSES THE MAJORITY STATUS SUCH THAT A NEW CERTIFICATION
ELECTION IS IN ORDER25chanrobleslaw
The petitioner maintains that the ruling in Tagaytay Highlands
International Golf Club Inc v. Tagaytay Highlands Employees Union-
PTGWO26 (Tagaytay Highlands) was inapplicable because it involved the
co-mingling of supervisory and rank-and-file employees in one labor
organization, while the issue here related to the mixture of membership
between two employee groups one vested with the right to self-
organization (i.e., the rank-and-file and supervisory employees), and the
other deprived of such right (i.e., managerial and confidential
employees); that suspension of the certification election was appropriate
because a finding of illegal mixture of membership during a petition for
the cancellation of union registration determined whether or not the
union had met the 20% representation requirement under Article 234(c)
of the Labor Code; 27 and that in holding that mixed membership was not
a ground for canceling the union registration, except when such was
done through misrepresentation, false representation or fraud under the
circumstances enumerated in Article 239(a) and (c) of the Labor Code,
the CA completely ignored the 20% requirement under Article 234(c) of
the Labor Code.
The petitioner posits that the grounds for dismissing a petition for the
certification election under Section 11, Rule XI of Department Order No.
9, Series of 1997, were not exclusive because the other grounds
available under the Rules of Court could be invoked; that in Progressive
Development Corporation v. Secretary, Department of Labor and
Employment,28 the Court ruled that prudence could justify the suspension
of the certification election proceedings until the issue of the legality of
the union registration could be finally resolved; that the non-submission
from 1996 to 1999 constituted a serious challenge to NUWHRAIN-
HHMSCs right to file its petition for the certification election; and that
8
from the time of the conduct of the certification election on June 23,
2000, the composition of NUWHRAIN-HHMSC had substantially changed,
thereby necessitating another certification election to determine the true
will of the bargaining unit.
In short, should the petition for the cancellation of union registration
based on mixed membership of supervisors and managers in a labor
union, and the non-submission of reportorial requirements to the DOLE
justify the suspension of the proceedings for the certification elections or
even the denial of the petition for the certification election?
Ruling
We deny the petition for review on certiorari.
Basic in the realm of labor union rights is that the certification election is
the sole concern of the workers,29 and the employer is deemed an
intruder as far as the certification election is concerned. 30Thus, the
petitioner lacked the legal personality to assail the proceedings for the
certification election,31 and should stand aside as a mere bystander who
could not oppose the petition, or even appeal the Med-Arbiters orders
relative to the conduct of the certification election.32 As the Court has
explained in Republic v. Kawashima Textile Mfg., Philippines,
Inc.33 (Kawashima):
Except when it is requested to bargain collectively, an employer is a
mere bystander to any petition for certification election; such proceeding
is non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their
collective bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot interfere with, much
less oppose, the process by filing a motion to dismiss or an appeal from
it; not even a mere allegation that some employees participating in a
petition for certification election are actually managerial employees will
lend an employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed
thereof.
The petitioners meddling in the conduct of the certification election
among its employees unduly gave rise to the suspicion that it intended
to establish a company union.34 For that reason, the challenges it posed
against the certification election proceedings were rightly denied.
Under the long established rule, too, the filing of the petition for the
cancellation of NUWHRAIN-HHMSCs registration should not bar the
conduct of the certification election.35 In that respect, only a final order
for the cancellation of the registration would have prevented NUWHRAIN-
HHMSC from continuing to enjoy all the rights conferred on it as a
legitimate labor union, including the right to the petition for the
certification election.36 This rule is now enshrined in Article 238-A of the
Labor Code, as amended by Republic Act No. 9481,37 which reads:
Article 238-A. Effect of a Petition for Cancellation of Registration. A
petition for cancellation of union registration shall not suspend the
proceedings for certification election nor shall it prevent the filing of a
petition for certification election.
xxxx
Still, the petitioner assails the failure of NUWHRAIN-HHMSC to submit its
periodic financial reports and updated list of its members pursuant to
Article 238 and Article 239 of the Labor Code. It contends that the
serious challenges against the legitimacy of NUWHRAIN-HHMSC as a
union raised in the petition for the cancellation of union registration
should have cautioned the Med-Arbiter against conducting the
certification election.
The petitioner does not convince us.
In The Heritage Hotel Manila v. National Union of Workers in the Hotel,
Restaurant and Allied Industries-Heritage Hotel Manila Supervisors
Chapter (NUWHRAIN-HHMSC),38 the Court declared that the dismissal of
the petition for the cancellation of the registration of NUWHRAIN-HHMSC
was proper when viewed against the primordial right of the workers to
self-organization, collective bargaining negotiations and peaceful
concerted actions, viz:
xxxx
[Articles 238 and 239 of the Labor Code] give the Regional Director
ample discretion in dealing with a petition for cancellation of a union's
registration, particularly, determining whether the union still meets the
requirements prescribed by law. It is sufficient to give the Regional
Director license to treat the late filing of required documents as sufficient
compliance with the requirements of the law. After all, the law requires
the labor organization to submit the annual financial report and list of
members in order to verify if it is still viable and financially sustainable as
an organization so as to protect the employer and employees from
fraudulent or fly-by-night unions. With the submission of the required
documents by respondent, the purpose of the law has been achieved,
though belatedly.
We cannot ascribe abuse of discretion to the Regional Director and the
DOLE Secretary in denying the petition for cancellation of respondent's
registration. The union members and, in fact, all the employees
belonging to the appropriate bargaining unit should not be deprived of a
bargaining agent, merely because of the negligence of the union officers
who were responsible for the submission of the documents to the BLR.
9

Labor authorities should, indeed, act with circumspection in treating
petitions for cancellation of union registration, lest they be accused of
interfering with union activities. In resolving the petition, consideration
must be taken of the fundamental rights guaranteed by Article XIII,
Section 3 of the Constitution, i.e., the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful
concerted activities. Labor authorities should bear in mind that
registration confers upon a union the status of legitimacy and the
concomitant right and privileges granted by law to a legitimate labor
organization, particularly the right to participate in or ask for certification
election in a bargaining unit. Thus, the cancellation of a certificate of
registration is the equivalent of snuffing out the life of a labor
organization. For without such registration, it loses - as a rule - its rights
under the Labor Code.
It is worth mentioning that the Labor Code's provisions on cancellation of
union registration and on reportorial requirements have been recently
amended by Republic Act (R.A.) No. 9481, An Act Strengthening the
Workers Constitutional Right to Self-Organization, Amending for the
Purpose Presidential Decree No. 442, As Amended, Otherwise Known as
the Labor Code of the Philippines, which lapsed into law on May 25, 2007
and became effective on June 14, 2007. The amendment sought to
strengthen the workers right to self-organization and enhance the
Philippines' compliance with its international obligations as embodied in
the International Labor Organization (ILO) Convention No. 87, pertaining
to the non-dissolution of workers organizations by administrative
authority. Thus, R.A. No. 9481 amended Article 239 to read:
ART. 239. Grounds for Cancellation of Union Registration.--The following
may constitute grounds for cancellation of union registration:
(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:
(a) Its constitution and by-laws, or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification of
the constitution and by-laws within thirty (30) days from adoption or
ratification of the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters
within thirty (30) days from election;
(c) Its annual financial report within thirty (30) days after the close of
every fiscal year; and
(d) Its list of members at least once a year or whenever required by the
Bureau.
Failure to comply with the above requirements shall not be a
ground for cancellation of union registration but shall subject
the erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.
xxxx
The ruling thereby wrote finis to the challenge being posed by the
petitioner against the illegitimacy of NUWHRAIN-HHMSC.
The remaining issue to be resolved is which among Toyota Motor, Dunlop
Slazenger and Tagaytay Highlands applied in resolving the dispute
arising from the mixed membership in NUWHRAIN-HHMSC.
This is not a novel matter. In Kawashima,39 we have reconciled our
rulings in Toyota Motor, Dunlop Slazenger and Tagaytay Highlands by
emphasizing on the laws prevailing at the time of filing of the petition for
the certification election.
Toyota Motor and Dunlop Slazenger involved petitions for certification
election filed on November 26, 1992 and September 15, 1995,
respectively. In both cases, we applied the Rules and Regulations
Implementing R.A. No. 6715 (also known as the 1989 Amended Omnibus
Rules), the prevailing rule then.
The 1989 Amended Omnibus Rules was amended on June 21, 1997 by
Department Order No. 9, Series of 1997. Among the amendments was
the removal of the requirement of indicating in the petition for the
certification election that there was no co-mingling of rank-and-file and
supervisory employees in the membership of the labor union. This was
the prevailing rule when the Court promulgated Tagaytay Highlands,
declaring therein that mixed membership should have no bearing on the
legitimacy of a registered labor organization, unless the co-mingling was
due to misrepresentation, false statement or fraud as provided in Article
239 of the Labor Code.40cralawlawlibrary
Presently, then, the mixed membership does not result in the illegitimacy
10
of the registered labor union unless the same was done through
misrepresentation, false statement or fraud according to Article 239 of
the Labor Code. In Air Philippines Corporation v. Bureau of Labor
Relations,41 we categorically explained that
Clearly, then, for the purpose of de-certifying a union, it is not enough to
establish that the rank-and-file union includes ineligible employees in its
membership. Pursuant to Article 239 (a) and (c) of the Labor Code, it
must be shown that there was misrepresentation, false statement or
fraud in connection with the adoption or ratification of the constitution
and by-laws or amendments thereto, the minutes of ratification, or in
connection with the election of officers, minutes of the election of
officers, the list of voters, or failure to submit these documents together
with the list of the newly elected-appointed officers and their postal
addresses to the BLR.
We note that NUWHRAIN-HHMSC filed its petition for the certification
election on October 11, 1995. Conformably with Kawashima, the
applicable law was the 1989 Amended Omnibus Rules, and the prevailing
rule was the pronouncement in Toyota Motor and Dunlop Slazenger to
the effect that a labor union of mixed membership was not possessed
with the requisite personality to file a petition for the certification
election.
Nonetheless, we still rule in favor of NUWHRAIN-HHMSC. We expound.
In both Toyota Motor and Dunlop Slazenger, the Court was convinced that
the concerned labor unions were comprised by mixed rank-and-file and
supervisory employees. In Toyota Motor, the employer submitted the job
descriptions of the concerned employees to prove that there were
supervisors in the petitioning union for rank-and-file employees.
In Dunlop Slazenger, the Court observed that the labor union of
supervisors included employees occupying positions that apparently
belonged to the rank-and-file. In both Toyota Motor and Dunlop
Slazenger, the employers were able to adduce substantial evidence to
prove the existence of the mixed membership. Based on the records
herein, however, the petitioner failed in that respect. To recall, it raised
the issue of the mixed membership in its comment on the list of
members submitted by NUWHRAIN-HHMSC, and in its protest. In the
comment, it merely identified the positions that were either confidential
or managerial, but did not present any supporting evidence to prove or
explain the identification. In the protest, it only enumerated the positions
that were allegedly confidential and managerial, and identified two
employees that belonged to the rank-and-file, but did not offer any
description to show that the positions belonged to different employee
groups.
Worth reiterating is that the actual functions of an employee, not his job
designation, determined whether the employee occupied a managerial,
supervisory or rank-and-file position.42 As to confidential employees who
were excluded from the right to self-organization, they must (1) assist or
act in a confidential capacity, in regard (2) to persons who formulated,
determined, and effectuated management policies in the field of labor
relations.43 In that regard, mere allegations sans substance would not be
enough, most especially because the constitutional right of workers to
self-organization would be compromised.
At any rate, the members of NUWHRAIN-HHSMC had already spoken, and
elected it as the bargaining agent. As between the rigid application
of Toyota Motors and Dunlop Slazenger, and the right of the workers to
self-organization, we prefer the latter. For us, the choice is clear and
settled. What is important is that there is an unmistakeable intent of the
members of [the] union to exercise their right to organize. We cannot
impose rigorous restraints on such right if we are to give meaning to the
protection to labor and social justice clauses of the
Constitution. 44cralawlawlibrary
WHEREFORE, the Court DENIES the petition for review
on certiorari; AFFIRMS the decision promulgated on December 13, 2005
by the Court of Appeals; and ORDERS the petitioner to pay the costs of
suit.
SO ORDERED
3.
LEGEND INTERNATIONAL RESORTS LIMITED, G.R. No.
169754
Petitioner,- versus -
KILUSANG MANGGAGAWA NG LEGENDA (KML-
INDEPENDENT),Respondent. February 23,
2011
x-----------------------------------------------
--------------------x
D E C I S I O N DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the September 18, 2003
Decision of the Court of Appeals in CA-G.R. SP No. 72848 which found no
grave abuse of discretion on the part of the Office of the Secretary of the
Department of Labor and Employment (DOLE) which ruled in favor
of Kilusang Manggagawa ng Legenda (KML). Also assailed is the
11
September 14, 2005 Resolution denying petitioners motion for
reconsideration.
Factual Antecedents
On June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San
Fernando, Pampanga, a Petition for Certification Election[1] docketed as
Case No. RO300-0106-RU-001.KML alleged that it is a legitimate labor
organization of the rank and file employees of Legend International
Resorts Limited (LEGEND). KML claimed that it was issued its Certificate
of Registration No. RO300-0105-UR-002 by the DOLE on May 18, 2001.
LEGEND moved to dismiss[2] the petition alleging that KML is not a
legitimate labor organization because its membership is a mixture of
rank and file and supervisory employees in violation of Article 245 of the
Labor Code. LEGEND also claimed that KML committed acts of fraud and
misrepresentation when it made it appear that certain employees
attended its general membership meeting on April 5, 2001 when in
reality some of them were either at work; have already resigned as of
March 2001; or were abroad.
In its Comment,[3] KML argued that even if 41 of its members are indeed
supervisory employees and therefore excluded from its membership, the
certification election could still proceed because the required number of
the total rank and file employees necessary for certification purposes is
still sustained. KML also claimed that its legitimacy as a labor union could
not be collaterally attacked in the certification election proceedings but
only through a separate and independent action for cancellation of union
registration. Finally, as to the alleged acts of misrepresentation, KML
asserted that LEGEND failed to substantiate its claim.
Ruling of the Med-Arbiter
On September 20, 2001, the Med-Arbiter[4] rendered
judgment[5] dismissing for lack of merit the petition for certification
election. The Med-Arbiter found that indeed there were several
supervisory employees in KMLs membership. Since Article 245 of the
Labor Code expressly prohibits supervisory employees from joining the
union of rank and file employees, the Med-Arbiter concluded that KML is
not a legitimate labor organization. KML was also found to have
fraudulently procured its registration certificate by misrepresenting that
70 employees were among those who attended its organizational
meeting on April 5, 2001 when in fact they were either at work or
elsewhere.
KML thus appealed to the Office of the Secretary of the DOLE.
Ruling of the Office of the Secretary of DOLE
On May 22, 2002, the Office of the Secretary of DOLE rendered its
Decision[6] granting KMLs appeal thereby reversing and setting aside the
Med-Arbiters Decision. The Office of the Secretary of DOLE held that
KMLs legitimacy as a union could not be collaterally attacked, citing
Section 5,[7] Rule V of Department Order No. 9, series of 1997.
The Office of the Secretary of DOLE also opined that Article 245 of the
Labor Code merely provides for the prohibition on managerial employees
to form or join a union and the ineligibility of supervisors to join the union
of the rank and file employees and vice versa. It declared that any
violation of the provision of Article 245 does not ipso facto render the
existence of the labor organization illegal. Moreover, it held that Section
11, paragraph II of Rule XI which provides for the grounds for dismissal of
a petition for certification election does not include mixed membership in
one union.
The dispositive portion of the Office of the Secretary of DOLEs Decision
reads:
WHEREFORE, the appeal is hereby GRANTED and the order of the Med-
Arbiter dated 20 September 2001 is REVERSED and SET ASIDE.
Accordingly, let the entire record of the case be remanded to the regional
office of origin for the immediate conduct of the certification election,
subject to the usual pre-election conference, among the rank and file
employees of LEGEND INTERNATIONAL RESORTS LIMITED with the
following choices:
1. KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT);
and
2. NO UNION.
Pursuant to Rule XI, Section II.1 of D.O. No. 9, the employer is hereby
directed to submit to the office of origin, within ten days from receipt of
the decision, the certified list of employees in the bargaining unit for the
last three (3) months prior to the issuance of this decision.
SO DECIDED.[8]
LEGEND filed its Motion for Reconsideration[9] reiterating its earlier
arguments. It also alleged that on August 24, 2001, it filed a
Petition[10] for Cancellation of Union Registration of KML docketed as Case
No. RO300-0108-CP-001 which was granted [11] by the DOLE Regional
Office No. III of San Fernando, Pampanga in its Decision [12] dated
November 7, 2001.
In a Resolution[13] dated August 20, 2002, the Office of the Secretary of
DOLE denied LEGENDs motion for reconsideration. It opined that Section
11, paragraph II(a), Rule XI of Department Order No. 9 requires a final
order of cancellation before a petition for certification election may be
dismissed on the ground of lack of legal personality. Besides, it noted
that the November 7, 2001 Decision of DOLE Regional Office No. III
12
of San Fernando, Pampanga in Case No. RO300-0108-CP-001 was
reversed by the Bureau of Labor Relations in a Decision dated March 26,
2002.
Ruling of the Court of Appeals
Undeterred, LEGEND filed a Petition for Certiorari[14] with the Court of
Appeals docketed as CA-G.R. SP No. 72848. LEGEND alleged that the
Office of the Secretary of DOLE gravely abused its discretion in reversing
and setting aside the Decision of the Med-Arbiter despite substantial and
overwhelming evidence against KML.
For its part, KML alleged that the Decision dated March 26, 2002 of the
Bureau of Labor Relations in Case No. RO300-0108-CP-001 denying
LEGENDs petition for cancellation and upholding KMLs legitimacy as a
labor organization has already become final and executory, entry of
judgment having been made on August 21, 2002.[15]
The Office of the Secretary of DOLE also filed its Comment[16] asserting
that KMLs legitimacy cannot be attacked collaterally. Finally, the Office of
the Secretary of DOLE stressed that LEGEND has no legal personality to
participate in the certification election proceedings.
On September 18, 2003, the Court of Appeals rendered its
Decision[17] finding no grave abuse of discretion on the part of the Office
of the Secretary of DOLE. The appellate court held that the issue on the
legitimacy of KML as a labor organization has already been settled with
finality in Case No. RO300-0108-CP-001. The March 26, 2002 Decision of
the Bureau of Labor Relations upholding the legitimacy of KML as a labor
organization had long become final and executory for failure of LEGEND
to appeal the same. Thus, having already been settled that KML is a
legitimate labor organization, the latter could properly file a petition for
certification election. There was nothing left for the Office of the
Secretary of DOLE to do but to order the holding of such certification
election.
The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing, and finding that no grave abuse of
discretion amounting to lack or excess of jurisdiction has been
committed by the Department of Labor and Employment, the assailed
May 22, 2002 Decision and August 20, 2002 Resolution in Case No.
RO300-106-RU-001 are UPHELD and AFFIRMED. The instant petition is
DENIED due course and, accordingly, DISMISSED for lack of merit. [18]
LEGEND filed a Motion for Reconsideration[19] alleging, among others,
that it has appealed to the Court of Appeals the March 26, 2002 Decision
in Case No. RO300-0108-CP-001 denying its petition for cancellation and
that it is still pending resolution.
On September 14, 2005, the appellate court denied LEGENDs motion for
reconsideration.
Hence, this Petition for Review on Certiorari raising the lone assignment
of error, viz:
WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERRORS IN THE APPLICATION OF LAW IN DENYING THE
PETITIONERS PETITION FOR CERTIORARI.[20]
Petitioners Arguments
LEGEND submits that the Court of Appeals grievously erred in ruling that
the March 26, 2002 Decision denying its Petition for Cancellation of KMLs
registration has already become final and executory. It asserts that it has
seasonably filed a Petition for Certiorari[21] before the CA docketed as CA-
G.R. SP No. 72659 assailing said Decision. In fact, on June 30, 2005, the
Court of Appeals granted the petition, reversed the March 26, 2002
Decision of the Bureau of Labor Relations and reinstated the November
7, 2001 Decision of the DOLE Regional Office III ordering the cancellation
of KMLs registration.
Finally, LEGEND posits that the cancellation of KMLs certificate of
registration should retroact to the time of its issuance. [22] It thus claims
that the petition for certification election and all of KMLs activities should
be nullified because it has no legal personality to file the same, much
less demand collective bargaining with LEGEND.[23]
LEGEND thus prays that the September 20, 2001 Decision of the Med-
Arbiter dismissing KMLs petition for certification election be reinstated. [24]
Respondents Arguments
In its Comment filed before this Court dated March 21, 2006, KML insists
that the Decision of the Bureau of Labor Relations upholding its
legitimacy as a labor organization has already attained finality [25] hence
there was no more hindrance to the holding of a certification
election.Moreover, it claims that the instant petition has become moot
because the certification election sought to be prevented had already
been conducted.
Our Ruling
The petition is partly meritorious.
LEGEND has timely appealed the March 26, 2002 Decision of the
Bureau of Labor Relations to the Court of Appeals.
We cannot understand why the Court of Appeals totally disregarded
LEGENDs allegation in its Motion for Reconsideration that the March 26,
13
2002 Decision of the Bureau of Labor Relations has not yet attained
finality considering that it has timely appealed the same to the Court of
Appeals and which at that time is still pending resolution. The Court of
Appeals never bothered to look into this allegation and instead dismissed
outright LEGENDs motion for reconsideration. By doing so, the Court of
Appeals in effect maintained its earlier ruling that the March 26, 2002
Decision of the Bureau of Labor Relations upholding the legitimacy of
KML as a labor organization has long become final and executory for
failure of LEGEND to appeal the same.
This is inaccurate. Records show that (in the cancellation of registration
case) LEGEND has timely filed on September 6, 2002 a petition
for certiorari[26] before the Court of Appeals which was docketed as CA-
G.R. SP No. 72659 assailing the March 26, 2002 Decision of the Bureau of
Labor Relations. In fact, KML received a copy of said petition on
September 10, 2002[27] and has filed its Comment thereto on December
2, 2002.[28] Thus, we find it quite interesting for KML to claim in its
Comment (in the certification petition case) before this Court dated
March 21, 2006[29] that the Bureau of Labor Relations Decision in the
petition for cancellation case has already attained finality. Even in its
Memorandum[30] dated March 13, 2007 filed before us, KML is still
insisting that the Bureau of Labor Relations Decision has become final
and executory.
Our perusal of the records shows that on June 30, 2005, the Court of
Appeals rendered its Decision[31] in CA-G.R. SP No. 72659 reversing the
March 26, 2002 Decision of the Bureau of Labor Relations and reinstating
the November 7, 2001 Decision of the Med-Arbiter which canceled the
certificate of registration of KML.[32] On September 30, 2005, KMLs motion
for reconsideration was denied for lack of merit.[33] On November 25,
2005, KML filed its Petition for Review on Certiorari[34] before this Court
which was docketed as G.R. No. 169972.However, the same was denied
in a Resolution[35] dated February 13, 2006 for having been filed out of
time. KML moved for reconsideration but it was denied with finality in a
Resolution[36] dated June 7, 2006. Thereafter, the said Decision canceling
the certificate of registration of KML as a labor organization became final
and executory and entry of judgment was made on July 18, 2006. [37]
The cancellation of KMLs certificate of registration should not
retroact to the time of its issuance.
Notwithstanding the finality of the Decision canceling the certificate of
registration of KML, we cannot subscribe to LEGENDs proposition that the
cancellation of KMLs certificate of registration should retroact to the time
of its issuance. LEGEND claims that KMLs petition for certification
election filed during the pendency of the petition for cancellation and its
demand to enter into collective bargaining agreement with LEGEND
should be dismissed due to KMLs lack of legal personality.
This issue is not new or novel. In Pepsi-Cola Products Philippines, Inc. v.
Secretary of Labor,[38] we already ruled that:
Anent the issue of whether or not the Petition to cancel/revoke
registration is a prejudicial question to the petition for certification
election, the following ruling in the case of Association of the Court of
Appeals Employees (ACAE) v. Hon. Pura Ferrer-Calleja, x x x is in point, to
wit:
x x x It is well-settled rule that a certification proceedings is not a
litigation in the sense that the term is ordinarily understood, but an
investigation of a non-adversarial and fact finding character. (Associated
Labor Unions (ALU) v. Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine
Telegraph and Telephone Corporation v. NLRC, 183 SCRA 451
[1990]. Thus, the technical rules of evidence do not apply if the decision
to grant it proceeds from an examination of the sufficiency of the petition
as well as a careful look into the arguments contained in the position
papers and other documents.
At any rate, the Court applies the established rule correctly followed by
the public respondent that an order to hold a certification
election is properdespite the pendency of the petition for
cancellation of the registration certificate of the respondent
union. The rationale for this is that at the time the respondent
union filed its petition, it still had the legal personality to
perform such act absent an order directing the cancellation.
[39]
(Emphasis supplied.)
In Capitol Medical Center, Inc. v. Hon. Trajano,[40] we also held that the
pendency of a petition for cancellation of union registration does not
preclude collective bargaining.[41] Citing the Secretary of Labor, we
held viz:
That there is a pending cancellation proceedings against the
respondent Union is not a bar to set in motion the mechanics of
collective bargaining. If a certification election may still be
ordered despite the pendency of a petition to cancel the unions
registration certificate x x x more so should the collective
bargaining process continue despite its pendency. [42] (Emphasis
supplied.)
In Association of Court of Appeals Employees v. Ferrer-Calleja,[43] this
Court was tasked to resolve the issue of whether the certification
proceedings should be suspended pending [the petitioners] petition for
the cancellation of union registration of the UCECA[44].[45] The Court
resolved the issue in the negative holding that an order to hold a
certification election is proper despite the pendency of the
petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the
14
respondent union filed its petition, it still had the legal personality to
perform such act absent an order directing a cancellation. [46] We
reiterated this view in Samahan ng Manggagawa sa Pacific Plastic v. Hon.
Laguesma[47] where we declared that a certification election can be
conducted despite pendency of a petition to cancel the union
registration certificate. For the fact is that at the time the respondent
union filed its petition for certification, it still had the legal personality to
perform such act absent an order directing its cancellation. [48]
Based on the foregoing jurisprudence, it is clear that a certification
election may be conducted during the pendency of the cancellation
proceedings. This is because at the time the petition for certification was
filed, the petitioning union is presumed to possess the legal personality
to file the same. There is therefore no basis for LEGENDs assertion that
the cancellation of KMLs certificate of registration should retroact to the
time of its issuance or that it effectively nullified all of KMLs activities,
including its filing of the petition for certification election and its demand
to collectively bargain.
The legitimacy of the legal personality of KML cannot be
collaterally attacked in a petition for certification election.
We agree with the ruling of the Office of the Secretary of DOLE that the
legitimacy of the legal personality of KML cannot be collaterally attacked
in a petition for certification election proceeding. This is in consonance
with our ruling in Laguna Autoparts Manufacturing Corporation v. Office
of the Secretary, Department of Labor and Employment[49] that such legal
personality may not be subject to a collateral attack but only through a
separate action instituted particularly for the purpose of assailing it.
[50]
We further held therein that:
This is categorically prescribed by Section 5, Rule V of the Implementing
Rules of Book V, which states as follows:
SEC. 5.[51] 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.
Hence, to raise the issue of the respondent unions legal personality is not
proper in this case. The pronouncement of the Labor Relations Division
Chief, that the respondent union acquired a legal personality x x x
cannot be challenged in a petition for certification election.
The discussion of the Secretary of Labor and Employment on this point is
also enlightening, thus:
. . . Section 5, Rule V of D.O. 9 is instructive on the matter. It provides
that the legal personality of a union cannot be the subject of collateral
attack in a petition for certification election, but may be questioned only
in an independent petition for cancellation of union registration. This has
been the rule since NUBE v. Minister of Labor, 110 SCRA 274
(1981). What applies in this case is the principle that once a union
acquires a legitimate status as a labor organization, it continues as such
until its certificate of registration is cancelled or revoked in an
independent action for cancellation.
Equally important is Section 11, Paragraph II, Rule IX of D.O. 9, which
provides for the dismissal of a petition for certification election based on
the lack of legal personality of a labor organization only in the following
instances: (1) appellant is not listed by the Regional Office or the BLR in
its registry of legitimate labor organizations; or (2) appellants legal
personality has been revoked or cancelled with finality. Since appellant is
listed in the registry of legitimate labor organizations, and its legitimacy
has not been revoked or cancelled with finality, the granting of its
petition for certification election is proper. [52]
[T]he legal personality of a legitimate labor organization x x x cannot be
subject to a collateral attack. The law is very clear on this matter. x x x
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 a collateral
attack. In may be questioned only in an independent petition for
cancellation in accordance with Section 5 of Rule V, Book V of the
Implementing Rules.[53]
WHEREFORE, in view of the foregoing, the petition is PARTLY
GRANTED. The Decision of the Court of Appeals dated September 18,
2003 in CA-G.R. SP No. 72848 insofar as it affirms the May 22, 2002
Decision and August 20, 2002 Resolution of the Office of the Secretary of
Department of Labor and Employment is AFFIRMED. The Decision of the
Court of Appeals insofar as it declares that the March 26, 2002 Decision
of the Bureau of Labor Relations in Case No. RO300-0108-CP-001
upholding that the legitimacy of KML as a labor organization has long
become final and executory for failure of LEGEND to appeal the same,
is REVERSED and SET ASIDE.
SO ORDERED.
4.
G.R. No.169745 July 18, 2014
15
REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE
SECRETARY OF LABOR AND EMPLOYMENT (DOLE), Petitioner, vs.
NAMBOKU PEAK, INC., Respondent.
x-----------------------x
G.R. No.170091
PHIL-JAPAN WORKERS UNIONSOLIDARITY OF UNIONS IN THE
PIDLIPPINES FOR EMPOWERMENT AND REFORMS (P JWU-SUPER),
MEDARBITER CLARISSA G. BELTRANLERIOS and SECRETARY
PATRICIA A. STO. TOMAS OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, Petitioners, vs.PHIL-JAPAN INDUSTRIAL
MANUFACTURING CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
The court or tribunal exercising quasi-judicial functions is bereft of any
right or personality to question the decision of an appellate court
reversing its decision.1
These consolidated Petitions for Review on Certiorari2 assail the
Decisions of the Court of Appeals (CA)issued in two separate petitions,
but involving the same issue of whether Section 17, Rule VIII of
Department Order No. 40-03 is unconstitutional. The first is the Decision3
dated March 18, 2005 in CA-G.R. SP No. 80603, which granted the
Petition for Certiorari4 filed by herein respondent Namboku Peak, Inc.
(Namboku) challenging the October 22, 2003 letter-resolution5 of
Secretary of Labor and Employment Patricia A. Sto. Tomas. Said letter-
resolution affirmedthe Med-Arbiters Order6 dated June 17, 2003 denying
Nambokus motion to defer the conduct of certification election pending
resolution of its appeal.
The second is the Decision7 dated January 19, 2005 in CA-G.R. SP. No.
80106, which granted the Petition for Certiorari8 filed by
hereinrespondent PhilJapan Industrial Manufacturing Corporation (Phil-
Japan) seeking to declare Section 17, Rule VIII of Department Order No.
40-03 unconstitutional for unduly depriving it of its right to appeal the
August 25, 2003 Decision9 of the MedArbiter. Said Decision of the Med-
Arbiter, in turn, granted the Petition 10 of PhilJapan Workers Union-
Solidarity of Unionsin the Philippines for Empowerment and Reforms
(PJWU-SUPER) seeking to determine the exclusive bargaining
representative in Phil-Japan and ordered the conduct of certification
election.
Factual Antecedents
The facts, insofar as G.R. No. 169745 is concerned and as culled from the
records, are as follows:
Namboku is a domestic corporation engaged in the business of providing
manpower services to variousclients, mainly airline companies. On April
28, 2003, the Philippine Aircraft Loaders and Cargo Employees
AssociationSolidarity of Unions in the Philippines for Empowerment and
Reforms (PALCEA-SUPER) filed a Petition11 for direct certification election
before the Med-Arbiter seeking to represent the rank-and-file employees
of Namboku assigned at the Cargo and Loading Station of the Philippine
Airlines (PAL) in Ninoy Aquino International Airport. In support of its
Petition, PALCEA-SUPER alleged that it is a local chapter affiliate of
Solidarity of Unions in the Philippines for Empowerment and Reforms;
that its members are composed of regular rank-and-file employees of
Namboku assigned at said Cargo and Loading Station of PAL; that out of
the 155 regular rank-and-file employees of Namboku, 122 or 78% are its
members; and, that Namboku is an unorganized establishment.
Namboku opposed the Petition12 on the ground of inappropriateness. It
claimed that the members of the PALCEA-SUPER are project employees.
Hence, they cannot represent its regular rank-and-file employees. It
emphasized that their individual ProjectEmployee Contract clearly
provides that their employment is for a fixed period of time and
dependent upon its Services Agreement13 with PAL. However, PALCEA-
SUPER misrepresented the status of its members by claimingthat they
are regular employees of Namboku.
On June 17, 2003, the Med-Arbiter issued an Order14 holding that the
members of PALCEA-SUPER are regular employees of Namboku. She
explained that while Namboku informed them at the time of their
engagement that their employment is for a fixed period of time, it did
not, however, apprise them that the same is for a specific activity, nor
was the completion or termination made known to them at the time
oftheir engagement. Also, asopposed to the nature of its business, the
tasks for which Namboku engaged their services do not appear to be
separate and independent activities with pre-determined duration or
completion. The Med-Arbiter thus granted the Petition and ordered the
conduct of certification election. The dispositive portion of the Order
reads:
WHEREFORE, premises considered, certification election is hereby
ordered among the regular rank and file employees of NAMBOK[U] PEAK,
INC., subject to pre-election conference, with the following choices:
1. Philippine Aircraft Loaders and Cargo Employees Association
Solidarity of Unions in the Philippines for Empowerment and Reforms
(PALCEA-SUPER); and
2. No Union.
16
Accordingly, Employer and Petitioner are hereby directed to submit
within ten (10) days from receipt hereof, the certified list of employees in
the bargaining unit, or where necessary, the payrolls covering the
members of the bargaining unit for the last three months prior to this
issuance.
SO ORDERED.15
Namboku appealed16 the Med-Arbiters Order to the Secretary of the
Labor, maintaining that the members of PALCEA-SUPER are mere project
employees. It insisted that the combination of project and regular
employees would render a bargaining unit inappropriate for lack of
substantial-mutual interest.
In the meantime, on July 29, 2003, Namboku received a summons setting
the pre-election conference on July 31, 2003 and stating that the Order
granting the conduct of a certification election in an unorganized
establishment is not appealable.17
Whereupon, Namboku filed a Manifestation and Motion,18 as well as a
Supplemental Motion and Manifestation,19 seeking to suspend the
conduct of certification election pending resolution of its appeal. It
contended that Section 17,20 Rule VIII of Department Order No. 40-03
prohibiting the filing of an appeal from an order granting the conduct of a
certification election in an unorganized establishment is unconstitutional
because it runs counter to Article 25921 of the Labor Code.
In a letter-resolution 22dated October 22, 2003, however, the Secretary
of Labor denied the appeal and affirmed the Med-Arbiters June 17, 2003
Order. In rejecting Nambokus contention that Section 17, Rule VIII of
Department Order No. 40-03 is unconstitutional, the Secretary of Labor
ratiocinated that unless said Department Order is declared by a
competent court as unconstitutional, her office would treat the same as
valid.
Undeterred, Namboku filed before the CA a Petition for Certiorari,23
which was docketed as CA-G.R. SP No. 80630. Namboku imputed grave
abuse of discretion on the part of the Secretary ofLabor in (i) not
resolving the issue of appropriateness and (ii) rejecting its appeal based
on an invalid provision of Department Order 40-03.
With regard to G.R. No. 170091, an examination ofthe records reveals the
following facts:
Phil-Japan is a domestic corporation engaged in manufacturing mufflers,
chassis and other car accessories for local and international markets. On
June 6, 2003, PJWU-SUPER filed before the Med-Arbiter a Petition24
seeking to determine the sole and exclusive bargaining representative of
rank-and-file employees in Phil-Japan. PJWU-SUPER alleged that it is a
legitimate labor organization; that out of the 100 rank-and-file
employeesof Phil-Japan, 69 or 69% are members of PJWU-SUPER; that
Phil-Japan is an unorganized establishment; and, that there has been no
certification election conducted during the last 12 months prior to the
filing of its Petition.
Phil-Japan opposed the Petition,25 claiming that the members of
PJWUSUPER are not its employees. It alleged that the listed members of
PJWUSUPER have either resigned, finished their contracts, orare
employees of its job contractors CMC Management and PEPC
Management Services. Itthus prayed for the dismissal of the Petition or,
inthe alternative, suspension of the proceedings pending determination
of the existence of employer-employee relationship.
On August 25, 2003, the Med-Arbiter rendered a Decision26 ordering the
conduct of certification election. It held, among others, that the
documents submitted are not sufficient to resolve the issue of the
existence of employeremployee relationship.Considering, however, that
Section 15,Rule VIII of the Rules Implementing Book V ofthe Labor Code
prohibits the suspension of proceedings based on the pendency of such
issue, she allowed the employees to vote. Their votes, however, shall be
segregated, and the determination of whether the number of such
segregated ballots is material to the outcome of the election shall be
made after the conduct of the election. The dispositive portion of the
Decision reads:
WHEREFORE, premises considered, this petition for certification election
is hereby GRANTED. Certification election is hereby ordered conducted
among the regular rank-and-file workers of Phil-Japan Ind. Mfg.
Corporation with the following choices:
1. Phil-Japan Workers Union-Solidarityof Unions in the Philippines for
Empowerment and Reforms (PJWU-SUPER); and
2. No Union.
Accordingly, Employer and Petitioner are hereby directed to submit
within ten (10) days from receipt hereof, the certified list of employees in
the bargaining unit, or where necessary, the payrolls covering the
members of the bargaining unit for the last three months prior to this
issuance.
SO ORDERED.27
Aggrieved, Phil-Japan appealed28 the Decision of the Med-Arbiter to the
Office of the Secretary of Labor asserting that the Med-Arbiter gravely
abused her discretion in not resolving the issue ofwhether employer-
employee relationship existed between the parties.
In a hearing held on October 7, 2003, Hearing Officer Lourdes T. Ching
informed Phil-Japan that its appeal will not be acted upon pursuant to
Section 17, Rule VIII of Department Order No. 40-03and that the
certification election will proceed accordingly.
17

Undaunted, Phil-Japan filed before the CA a Petition for Certiorari,29
which was docketed asCA-G.R. SP No. 80106. Phil-Japan ascribedgrave
abuse of discretion on the part of the Med-Arbiter in refusing torule on
the existence of employer-employee relationship despite the presence of
sufficient evidence on the matter. It also claimed thatthe Secretary of
Labor gravely abused her discretion in refusing to act on its appeal
despite the existence of such right. As to the Secretary of Labors
reliance on Section 17, Rule VIII of Department Order No. 40-03,
PhilJapan asserted that the samecannot overturn the clear provision of
Article 259 of the Labor Code.
Rulings of the Court of Appeals
On March 18, 2005, the CA issued its Decision30 in CA-G.R. SP No. 80603
(now subject of G.R. No. 169745)granting Nambokus Petition and
reversing the October 22, 2003 letter-resolution of the Secretary of
Labor. It sustained Nambokus position that the members of PALCEA-
SUPER are project employees and, hence, they are not similarly situated
with the companys regular rank-and-file employees. The CA also
nullified Section 17, Rule VIII of Department Order No. 40-03 for being in
conflict with Article 259 of the Labor Code.
The Secretary of Labor filed a Motion for Reconsideration.31 This
prompted Namboku to file a Motion to Expunge32 on the ground that the
Secretary of Labor is a mere nominalparty who has no legal standing to
participate or prosecute the case. It argued that the Secretary of Labor
should have refrained from filing the said Motion for Reconsideration and
should havemaintained the cold neutrality of an impartial judge.
On September 15, 2005, the CA issued a Resolution33 denying the
Secretary of Labors Motion for Reconsideration on the ground, among
others, that she is merely a nominal party to the case and has no
personal interest therein.
Anent CA-G.R. No. 80106 (now subject of G.R.170091), the CA, in its
January 19, 2005 Decision,34 reversed and set aside the ruling of the
Med-Arbiter. It likewise agreed with Phil-Japan that before extending
labor benefits, the determination of whether anemployer-employee
relationship exists is a primordial consideration. And based on the
documents submitted, the CA was convinced that out of the 69 members
of PJWU-SUPER, 67 were not employees of Phil-Japan.
The CA further declared that for being violative of Article 259 of the
Labor Code, Section 17, Rule VIII of Department Order No. 40-03 has no
legal force and effect.
PJWU-SUPER and DOLE filed separate Motions for Reconsideration.35 On
September 12, 2005, the CA issued a Resolution36 denying both motions
and upholding its January 19, 2005 Decision.
Issues
On November 3, 2005, the Secretary of Labor filed before this Court a
Petition for Review on Certiorari docketed as G.R. No. 170091 assailing
the January 19, 2005 Decision in CA-G.R. SP No. 80106. She avers that:
THE COURT OF APPEALS ERRED IN DECLARING AS OF NO LEGAL FORCE
AND EFFECT SECTION 17, RULE VIII OFD.O. 40-03.37
Then on November 11, 2005,the Secretary of Laborfiled another Petition
for Review on Certiorari docketed as G.R. No. 169745 challenging the
March 18, 2005 Decision in CA-G.R. SP No. 80603. She anchors her
Petition on the following issues:
I.
WHETHER X X X THE COURT OF APPEALS COMMITTED GRAVE ERROR IN
DECLARING SECTION 17, RULE VIII OF DEPARTMENT ORDER NO. 40-03
NULL AND VOID FOR BEING IN CONFLICT WITH ARTICLE 259 OF THE
LABOR CODE, AS AMENDED.
II.
WHETHER PROJECT EMPLOYEES MAY BE INCLUDED IN THE PETITION FOR
CERTIFICATION ELECTION INVOLVING REGULAR EMPLOYEES.38
Since both Petitions seek to uphold the validity of Section 17, Rule VIII of
Department Order No. 40-03, this Court ordered their consolidation.39
Secretary of Labors Arguments
The Secretary of Labor insists that Section 17, Rule VIII of Department
Order No. 40-03 is in harmony with Article 259 of the Labor Code for it
does not deny the aggrieved party in an unorganized establishment the
right to appeal. It merely defers the exercise of such rightuntil after the
certification election shall have been conducted. In the meantime, the
aggrieved party may raise any issue arising therefrom as a protest. Such
rule, according to the Secretary of Labor, is in consonance with the policy
of the State toencourage the workers to organize and with the mandate
ofthe Med-Arbiter to automatically conduct a certification election.
The Secretary of Labor likewise argues that Article 259 applies only when
there is a violation of the rules and regulations in the conduct of the
certification election. It does not cover the order ofthe Med-Arbiter
granting the conduct of certification election. Moreover, the appeal
contemplated under Article 259 must be filed by a party to the
certification election proceedings, to which the employer, Namboku, is a
mere stranger.
18
The Secretary of Labor further contends that the combination of regular
rank-and-file employees and project employees in a certified bargaining
unit does not pose any legal obstacle.
Nambokus Arguments
In opposing the Petition, Namboku questions the locus standi of the
Secretary of Labor, insisting that she is merely a nominal party in the
Petitions for Certiorari filed with the CA. Namboku strongly stresses that
as a quasi-judicial officer, the Secretary of Labor should detach herself
from cases where her decision is appealed to a higher court for review.
Besides,her office never participated or defended the validity of Section
17 beforethe CA. It was only after the CA rendered its Decision nullifying
the subject provision of Department Order No. 40-03 that the Secretary
of Labor took an active stance to defend the validity thereof.
With respect to the substantive aspect, Namboku remains steadfast in its
position that Section 17, Rule VIII of Department Order No. 40-03 is
unconstitutional for it unduly restricts the statutory right of the
management to appeal the decision of the Med-Arbiter to the Secretary
of Labor in an unorganized establishment. It created a distinction that
does not appear in Article 259 of the Labor Code that it seeks to
implement.
Namboku likewise echoes the ruling of the CA that there exists a
statutory difference between regular and project employees.1wphi1
Theyhave divergent duties, responsibilities, and status and duration of
employment. They do not receive the same benefits. Hence, they cannot
unite into a homogenous or appropriate bargaining unit.
Phil-Japans Arguments
In defending the Decision of the CA, Phil-Japan argues that Section 17,
Rule VIII of Department Order No. 40-03 restricting the statutory right of
the employer to appeal will not stand judicial scrutiny. It stresses that the
authority of the Med-Arbiter to determine the existence of an employer-
employee relationship and the right of a party to appeal the formers
decision thereon to the Secretary of Labor are already settled. Phil-Japan
insists that under Article 259 of the Labor Code the remedy of appeal
isavailable to any party for the purpose of assailing the disposition of the
Med-Arbiter allowing the conduct of certification election without any
distinction whether the establishment concerned is organized or
unorganized.
Our Ruling
The Petitions are denied. The Secretary of Labor isnot the real party-
ininterest vested with personality to file the present petitions. A real
party-in-interest is the party who stands to bebenefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit.40 As
thus defined, the real parties-in-interest in these cases would have been
PALCEA-SUPER and PJWU-SUPER. It would have been their duty to appear
and defend the ruling of the Secretary of Labor for they are the ones who
were interested that the same be sustained. Of course, they had the
option not to pursue the case beforea higher court, as what they did in
these cases. As to the Secretary of Labor, she was impleaded in the
Petitions for Certiorari filed before the CA as a nominal party because
one of the issues involved therein was whether she committed an error
of jurisdiction. But that does not make her a real party-in-interest or
vests her withauthority to appeal the Decisions of the CA in case it
reverses her ruling. Under Section 1,41 Rule 45 of the Rules of Court,
only real parties-in-interest who participated in the litigation of the case
before the CA canavail of an appeal by certiorari. In Judge Santiago v.
Court of Appeals,42 Judge Pedro T. Santiago rejected the
amicablesettlement submitted by the parties in an expropriation
proceeding pending before his sala for being manifestly iniquitous to the
government. When the CA reversed his decision, Judge Santiago,
apparently motivated by his sincere desire to protect the government,
filed a petition before this Court seeking the reinstatement of his ruling.
In denying his petition, this Court ruled that:
x x x Section 1 of Rule 45 allows a party to appeal by certiorari from a
judgment of the Court of Appeals by filing withthis Court a petition for
review on certiorari. But petitioner judge was not a party either in the
expropriation proceedings or in the certiorari proceeding in the Court of
Appeals. His being named as respondent in the Court of Appeals was
merely to comply with the rule that in original petitions for certiorari, the
court or the judge, in his capacity as such, should be named as party
respondent because the question in such a proceeding is the jurisdiction
of the court itself. (See Mayol v. Blanco, 61 Phil. 547 [1935], cited in
Commentson the Rules of Court, Moran, Vol. II, 1979 ed., p. 471). "In
special proceedings, the judge whose order is under attack is merely a
nominal party; wherefore, a judge in his official capacity, should not be
made to appear as a party seeking reversal of a decision that is
unfavorable to the action taken by him. A decent regard for the judicial
hierarchy bars a judge from suing against the adverse opinion of a higher
court, x x x." (Alcasid v. Samson, 102 Phil. 735, 740 [1957]).43
A similar ruling was arrived at in Government Service Insurance System
v. The Hon. Court of Appeals (8th Div.).44 In that case, upon petition of
GSIS, the Securities and Exchange Commission (SEC) issued a cease and
desist order restraining the use of proxies during the scheduled annual
stockholders meeting of Manila Electric Company.When the private
respondents therein filed a petition for certiorari and prohibition, the CA
invalidated the SECs cease and desist order. Uncomfortable with the
CAs ruling, SEC appealed to this Court. In denying SECs appeal, this
Court ratiocinated as follows:
x x x Under Section 1 of Rule45, which governs appeals by certiorari, the
right to file the appeal is restricted to "a party," meaning that only the
real parties-ininterest who litigated the petition for certiorari before the
Court of Appeals are entitled to appeal the same under Rule 45. The SEC
19
and its two officers may have been designated as respondents in the
petition for certiorari filed with the Court of Appeals, but under Section 5
ofRule 65 they are not entitled to be classified as real parties-in-interest.
Under the provision, the judge, court, quasijudicial agency, tribunal,
corporation, board, officer or person to whom grave abuse of discretion is
imputed (the SEC and its two officers in this case) are denominated only
as public respondents.The provision further states that "public
respondents shall not appear in or file an answer or comment to the
petition or any pleading therein." Justice Regalado explains:
[R]ule 65 involves an original special civil action specifically directed
against the person, court, agency or party a quo which had committed
not only a mistake of judgment but an error of jurisdiction, hence should
be made public respondents in that action brought to nullify their
invalidacts. It shall, however be the duty of the party litigant, whether in
an appeal under Rule 45 or in a special civil action in Rule65, to defend in
his behalf and the party whose adjudication is assailed, as he is the one
interested in sustaining the correctness of the disposition or the validity
of the proceedings.45
It does not escape the attention of this Court that G.R. No. 170091 was
cleverly captioned as "Phil-Japan Workers Union Solidarity of Unions in
the Philippines for Empowerment and Reforms (PJWU-SUPER), Med-
Arbiter Clarissa G. Beltran-Lerios and Secretary Patricia Sto.Tomas of the
Department of Labor and Employment, petitioners, versus Court of
Appeals46 and Phil-Japan Industrial Manufacturing Corporation." But the
same was actually filed by the Secretary of Labor all by herself. The body
of the Petition does not include PJWU-SUPER as one of the parties.
Neither did its agent or representative sign the verification and
certification against forum-shopping. In other words, PJWUSUPER had no
participation in the preparation and filing of the Petition in G.R. No.
170091.
Another reason that heavily militates against entertaining these Petitions
is that the Secretary of Laborshould have remained impartial and
detached from the cases she has decided even if the same are appealed
to a higher court for review.
In Pleyto v. PNP-Criminal Investigation & Detection Group,47 the
Ombudsman ordered the dismissal of Salvador A. Pleyto from the
service. When Pleyto filed a Petition for Review questioning his dismissal
before the CA, the Ombudsman intervened. The Ombudsman argued
that as a competent disciplining body, it has the right "to defend its own
findings of factand law relative to the imposition of its decisions and
ensure that its judgments inadministrative disciplinary cases [are] upheld
by the appellate court."48 Further, as "the agency which rendered the
assailed Decision, it is bestequipped with the knowledgeof the facts, laws
and circumstances that led to the finding of guilt against petitioner."49
The CA allowed the Ombudsman to intervene and admitted the latters
Comment and Memorandum.
In ruling that the CA erred in allowing the Ombudsman to actively
participate in the case, this Court declared that:
It is a well-known doctrine that a judge should detach himself from cases
where his decision is appealed toa higher court for review. The raison
d'etrefor such doctrine is the fact that a judgeis not an active combatant
in such proceeding and must leave the opposing parties to contend their
individual positions and the appellate court to decide the issues without
his active participation. When a judge actively participates in the appeal
of his judgment, he, in a way, ceases to be judicial and has become
adversarial instead.
The court or the quasi-judicial agency must be detached and impartial,
not only when hearing and resolving the case before it, but even when its
judgment is brought on appeal before a higher court. The judge of a
court or the officer of a quasi-judicial agency must keep in mind thathe is
an adjudicator who must settle the controversies between parties in
accordance with the evidence and the applicable laws, regulations,
and/or jurisprudence. His judgment should already clearly and
completely state his findings of fact and law. There must be no more
need for him to justify further his judgment when it is appealed before
appellate courts. When the court judge orthe quasi-judicial officer
intervenes as a party in the appealed case, he inevitably forsakes his
detachment and impartiality, and his interest in the case becomes
personal since his objective now is no longer only to settle the
controversy between the original parties (which he had already
accomplished by rendering his judgment), but more significantly, to
refute the appellants assignment of errors, defend his judgment, and
prevent it from being overturned on appeal.50
But the Secretary of Labor next contends that with the nullification of
Department Order No. 40-03, she has now become a party adversely
affected by the CA ruling. In support of her contention, the Secretary of
Labor poses the question: who may now appeal the Decisionsof the CA to
the Supreme Court? Certainly, neither Namboku nor Phil-Japan would
appeala favorable decision.
The National Appellate Board v. P/Insp. Mamauag51 provides the
complete answer. Thus:
However, the government party that can appeal is not the disciplining
authority or tribunal which previously heard the case and imposed the
penalty of demotion or dismissal from the service. The government party
appealing must be one that is prosecuting the administrative case
against the respondent. Otherwise, an anomalous situation will result
where the disciplining authority or tribunal hearing the case, instead of
being impartial and detached, becomes an active participant in
prosecuting the respondent. Thus, in Mathay, Jr. v. Court of Appeals,
decided after Dacoycoy, the Court declared:
20
To be sure, when the resolutions of the Civil Service Commission were
brought before the Court of Appeals, the Civil Service Commission was
included only as a nominal party. As a quasi-judicial body, the Civil
Service Commission can be likened to a judge who should "detach
himself from cases where his decision is appealed to a higher court for
review."
In instituting G.R. No. 126354, the Civil Service Commission dangerously
departed from its role as adjudicator and became an advocate. Its
mandated function is to "hear and decide administrative cases instituted
by or brought before it directly or on appeal, including contested
appointments and to review decisions and actions of its offices and
agencies," not to litigate.52
Here, both cases emanated from the petitions for certification election
filed with the Med-Arbiter and subsequently appealed to the Secretary of
Labor. She had occasion to hear the parties respective contentions and
rule thereon. As the officer who rendered the decision now subject of
these cases, the Secretary of Labor should have remained impartial and
detached from the time the cases reached her until the same were being
scrutinized on appeal.53
True, the issue of whether Section 17, Rule VIII ofDepartment Order No.
40-03 is unconstitutional is a matter of great concern and deserves
everyones attention. But this Court cannot pass upon and resolve the
same in these Petitions. Otherwise, it will countenance the objectionable
actions of the Secretary of Labor and run afoul of the abovecited settled
decisions. WHEREFORE, for the foregoing reasons, the Petitions in G.R.
Nos. 169745 and 170091 are DENIED.
SO ORDERED.
5.
REPUBLIC OF THE PHILIPPINES, represented by Department of
Labor and Employment (DOLE), Petitioner, - versus -
KAWASHIMA TEXTILE MFG., PHILIPPINES, INC., Respondent.
July 23, 2008
x-----------------------------------------------
-----------x
G.R. No. 160352
The Republic of the Philippines assails by way of Petition for Review
on Certiorari under Rule 45 of the Rules of Court, the December 13, 2002
Decision[1] of the Court of Appeals (CA), which reversed the August 18,
2000 Decision[2] of the Department of Labor and Employment (DOLE),
and reinstated the May 17, 2000 Order[3] of Med-
Arbiter Anastacio L. Bactin, dismissing the petition of Kawashima Free
Workers Union-PTGWO Local Chapter No. 803 (KFWU) for the conduct of
a certification election in Kawashima Textile Mfg. Phils., Inc. (respondent);
and the October 7, 2003 CA Resolution[4] which denied the motion for
reconsideration.
The relevant facts are of record.
On January 24, 2000, KFWU filed with DOLE Regional Office No. IV, a
Petition for Certification Election to be conducted in the bargaining unit
composed of 145 rank-and-file employees of respondent.[5] Attached to
its petition are a Certificate of Creation of Local/Chapter[6] issued
on January 19, 2000 by DOLE Regional Office No. IV, stating that it
[KFWU] submitted to said office a Charter Certificate issued to it by the
national federation Phil. Transport & General Workers Organization
(PTGWO), and a Report of Creation of Local/Chapter. [7]
Respondent filed a Motion to Dismiss[8] the petition on the ground that
KFWU did not acquire any legal personality because its membership of
mixed rank-and-file and supervisory employees violated Article 245 of
the Labor Code, and its failure to submit its books of account
contravened the ruling of the Court in Progressive Development
Corporation v. Secretary, Department of Labor and Employment. [9]
In an Order dated May 17, 2000, Med-Arbiter Bactin found KFWUs legal
personality defective and dismissed its petition for certification election,
thus:
We scrutinize the facts and evidences presented by the parties and
arrived at a decision that at least two (2) members of [KFWU],
namely: Dany I. Fernandez and Jesus R. Quinto, Jr. are supervisory
employees, having a number of personnel under them. Being supervisory
employees, they are prohibited under Article 245 of the Labor Code, as
amended, to join the union of the rank and file employees. Dany I.
Fernandez and Jesus R. Quinto, Jr., Chief Engineers of the Maintenance
and Manufacturing Department, respectively, act as foremen to the line
engineers, mechanics and other non-skilled workers and responsible [for]
the preparation and organization of maintenance shop fabrication and
schedules, inventory and control of materials and supplies and tasked to
implement training plans on line engineers and evaluate the
performance of their subordinates. The above-stated actual functions
of Dany I. Fernandez and Jesus R. Quinto, Jr. are clear manifestation that
they are supervisory employees.
xxxx
Since petitioners members are mixture of rank and file and
supervisory employees, petitioner union, at this point [in] time,
has not attained the status of a legitimate labor organization.
Petitioner should first exclude the supervisory employees from it
21
membership before it can attain the status of a legitimate labor
organization. The above judgment is supported by the decision of the
Supreme Court in the Toyota Case[10] wherein the High Tribunal ruled:
As respondent unions membership list contains the names of at least
twenty seven (27) supervisory employees in Level Five Positions, the
union could not prior to purging itself of its supervisory employee
members, attain the status of a legitimate labor organization. Not being
one, it cannot possess the requisite personality to file a petition for
certification election. (Underscoring omitted.)
xxxx
Furthermore, the commingling of rank and file and supervisory
employees in one (1) bargaining unit cannot be cured in the exclusion-
inclusion proceedings [at] the pre-election conference. The above ruling
is supported by the Decision of the Supreme Court in Dunlop Slazenger
(Phils.), Inc. vs. Honorable Secretary of Labor and Employment, et al.,
G.R. No. 131248 dated December 11, 1998 [11] x x x.
xxxx
WHEREFORE, premises considered, the petition for certification election
is hereby dismissed for lack of requisite legal status of petitioner to file
this instant petition.
SO ORDERED.[12] (Emphasis supplied)
On the basis of the aforecited decision, respondent filed with DOLE
Regional Office No. IV a Petition for Cancellation of Charter/Union
Registration of KFWU,[13] the final outcome of which, unfortunately,
cannot be ascertained from the records.
Meanwhile, KFWU appealed[14] to the DOLE which issued a Decision
on August 18, 2000, the dispositive portion of which reads:
WHEREFORE, the appeal is GRANTED. The Order dated 17 May 2000 of
the Med-Arbiter is REVERSED and SET ASIDE. Accordingly, let the entire
records of the case be remanded to the office of origin for the immediate
conduct of certification election, subject to the usual pre-election
conference, among the rank-and-file employees of Kawashima Textile
Manufacturing Philippines, Inc. with the following choices:
1. Kawashima Free Workers Union-PTGWO Local Chapter No. 803;
and
2. No union.
Pursuant to Rule XI, Section 11.1 of the New Implementing Rules, the
employer is hereby directed to submit to the office of origin the certified
list of current employees in the bargaining unit for the last three months
prior to the issuance of this decision.
SO DECIDED.[15]
The DOLE held that Med-Arbiter Bactin's reliance on the decisions of the
Court in Toyota Motor Philippines Corporation v. Toyota Motor Philippines
Corporation Labor Union[16] and Dunlop Slazenger, Inc. v. Secretary of
Labor and Employment[17] was misplaced, for while Article 245 declares
supervisory employees ineligible for membership in a labor organization
for rank-and-file employees, the provision did not state the effect of such
prohibited membership on the legitimacy of the labor organization and
its right to file for certification election. Neither was such mixed
membership a ground for cancellation of its registration. Section 11,
Paragraph II, Rule XI of Department Order No. 9 provides for the
dismissal of a petition for certification election based on lack of legal
personality of a labor organization only on the following grounds: (1)
[KFWU] is not listed by the Regional Office or the Bureau of Labor
Relations in its registry of legitimate labor organizations; or (2) [KFWU's]
legal personality has been revoked or canceled with finality. [18] The DOLE
noted that neither ground existed; on the contrary, KFWU's legal
personality was well-established, for it held a certificate of creation and
had been listed in the registry of legitimate labor organizations.
As to the failure of KFWU to file its books of account, the DOLE held that
such omission was not a ground for revocation of union registration or
dismissal of petition for certification election, for under Section 1, Rule VI
of Department Order No. 9, a local or chapter like KFWU was no longer
required to file its books of account.[19]
Respondent filed a Motion for Reconsideration[20] but the DOLE denied the
same in its September 28, 2000 Resolution.[21]
However, on appeal by respondent, the CA rendered the December 13,
2002 Decision assailed herein, reversing the August 18, 2000 DOLE
Decision, thus:
Since respondent union clearly consists of both rank and file and
supervisory employees, it cannot qualify as a legitimate labor
organization imbued with the requisite personality to file a
petition for certification election. This infirmity in union
membership cannot be corrected in the inclusion-exclusion
proceedings during the pre-election conference.
Finally, contrary to the pronouncement of public respondent, the
application of the doctrine enunciated in Toyota Motor Philippines
Corporation vs. Toyota Motor Philippines Corporation Labor Union was
not construed in a way that effectively denies the fundamental right of
respondent union to organize and seek bargaining representation x x x.
For ignoring jurisprudential precepts on the matter, the Court finds that
the Undersecretary of Labor, acting under the authority of the Secretary
of Labor, acted with grave abuse of discretion amounting to lack or
excess of jurisdiction.
22

WHEREFORE, premises considered, the Petition is hereby GRANTED. The
Decision dated 18 August 2000 of the Undersecretary of Labor, acting
under the authority of the Secretary, is hereby REVERSED and SET
ASIDE. The Order dated 17 May 2000 of the Med-Arbiter dismissing the
petition for certification election filed by Kawashima Free Workers Union-
PTGWO Local Chapter No. 803 is REINSTATED.
SO ORDERED.[22] (Emphasis supplied)
KFWU filed a Motion for Reconsideration [23] but the CA denied it.
The Republic of the Philippines (petitioner) filed the present petition to
seek closure on two issues:
First, whether a mixed membership of rank-and-file and supervisory
employees in a union is a ground for the dismissal of a petition for
certification election in view of the amendment brought about by D.O. 9,
series of 1997, which deleted the phraseology in the old rule that [t]he
appropriate bargaining unit of the rank-and-file employee shall not
include the supervisory employees and/or security guards; and
Second, whether the legitimacy of a duly registered labor organization
can be collaterally attacked in a petition for a certification election
through a motion to dismiss filed by an employer such as Kawashima
Textile Manufacturing Phils., Inc.[24]
The petition is imbued with merit.
The key to the closure that petitioner seeks could have been Republic Act
(R.A.) No. 9481.[25]Sections 8 and 9 thereof provide:
Section 8. Article 245 of the Labor Code is hereby amended to read as
follows:
"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 the collective
bargaining unit of the rank-and-file employees but may join, assist or
form separate collective bargaining units and/or legitimate labor
organizations of their own. The rank and file union and the supervisors'
union operating within the same establishment may join the same
federation or national union."
Section 9. A new provision, Article 245-A is inserted into the Labor Code
to read as follows:
"Art. 245-A. Effect of Inclusion as Members of Employees Outside the
Bargaining Unit. - The inclusion as union members of employees
outside the bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of
said union."(Emphasis supplied)
Moreover, under Section 4, a pending petition for cancellation of
registration
will not hinder a legitimate labor organization from initiating a
certification election, viz:
Sec. 4. A new provision is hereby inserted into the Labor Code as Article
238-A to read as follows:
"Art. 238-A. Effect of a Petition for Cancellation of Registration. - A
petition for cancellation of union registration shall not suspend
the proceedings for certification election nor shall it prevent the
filing of a petition for certification election.
In case of cancellation, nothing herein shall restrict the right of the union
to seek just and equitable remedies in the appropriate courts."
(Emphasis supplied)
Furthermore, under Section 12 of R.A. No. 9481, employers have no
personality to interfere with or thwart a petition for certification election
filed by a legitimate labor organization, to wit:
Sec. 12. A new provision, Article 258-A is hereby inserted into the Labor
Code to read as follows:
"Art. 258-A. Employer as Bystander. - In all cases, whether the petition
for certification election is filed by an employer or a legitimate labor
organization, the employer shall not be considered a party thereto
with a concomitant right to oppose a petition for certification
election. The employer's participation in such proceedings shall
be limited to: (1) being notified or informed of petitions of such
nature; and (2) submitting the list of employees during the pre-
election conference should the Med-Arbiter act favorably on the
petition." (Emphasis supplied)
However, R.A. No. 9481 took effect only on June 14, 2007;[26] hence, it
applies only to labor representation cases filed on or after said date.
[27]
As the petition for certification election subject matter of the present
petition was filed by KFWU on January 24, 2000,[28] R.A. No. 9481 cannot
apply to it. There may have been curative labor legislations [29] that were
given retrospective effect,[30] but not the aforecited provisions of R.A. No.
9481, for otherwise, substantive rights and interests already vested
would be impaired in the process.[31]
Instead, the law and rules in force at the time of the filing by KFWU of the
petition for certification election on January 24, 2000 are R.A. No. 6715,
[32]
amending Book V of Presidential Decree (P.D.) No. 442 (Labor Code),
[33]
as amended, and the Rules and Regulations Implementing R.A. No.
6715,[34] as amended by Department Order No. 9, series of 1997. [35]
23

It is within the parameters of R.A. No. 6715 and the Implementing Rules
that the Court will now resolve the two issues raised by petitioner.
If there is one constant precept in our labor laws be it Commonwealth Act
No. 213 (1936),[36]R.A. No. 875 (1953),[37] P.D. No. 442 (1974), Executive
Order (E.O.) No. 111 (1986)[38] or R.A. No. 6715 (1989) - it is that only a
legitimate labor organization may exercise the right to be certified as the
exclusive representative of all the employees in an appropriate collective
bargaining unit for purposes of collective bargaining. [39] What has varied
over the years has been the degree of enforcement of this precept, as
reflected in the shifting scope of administrative and judicial scrutiny of
the composition of a labor organization before it is allowed to exercise
the right of representation.
One area of contention has been the composition of the membership of a
labor organization, specifically whether there is a mingling of supervisory
and rank-and-file employees and how such questioned mingling affects
its legitimacy.
It was in R.A. No. 875, under Section 3, that such questioned mingling
was first prohibited,[40] to wit:
Sec. 3. Employees right to self-organization. Employees shall have the
right to self-organization and to form, join or assist labor organizations of
their own choosing for the purpose of collective bargaining through
representatives of their own choosing and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or
protection. Individuals employed as supervisors shall not be
eligible for membership in a labor organization of employees
under their supervision but may form separate organizations of
their own. (Emphasis supplied)
Nothing in R.A. No. 875, however, tells of how the questioned mingling
can affect the legitimacy of the labor organization. Under Section 15, the
only instance when a labor organization loses its legitimacy is when it
violates its duty to bargain collectively; but there is no word on whether
such mingling would also result in loss of legitimacy. Thus, when the
issue of whether the membership of two supervisory employees impairs
the legitimacy of a rank-and-file labor organization came before the
Court En Banc in Lopez v. Chronicle Publication Employees Association,
[41]
the majority pronounced:
It may be observed that nothing is said of the effect of such ineligibility
upon the union itself or on the status of the other qualified members
thereof should such prohibition be disregarded. Considering that the law
is specific where it intends to divest a legitimate labor union of any of the
rights and privileges granted to it by law, the absence of any
provision on the effect of the disqualification of one of its
organizers upon the legality of the union, may be construed to
confine the effect of such ineligibility only upon the membership
of the supervisor. In other words, the invalidity of membership of
one of the organizers does not make the union illegal, where the
requirements of the law for the organization thereof are,
nevertheless, satisfied and met.[42] (Emphasis supplied)
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of
R.A. No. 875. The provision in the Labor Code closest to Sec. 3 is Article
290,[43] which is deafeningly silent on the prohibition against supervisory
employees mingling with rank-and-file employees in one labor
organization. Even the Omnibus Rules Implementing Book V of the Labor
Code[44] (Omnibus Rules) merely provides in Section 11, Rule II, thus:
Sec. 11. Supervisory unions and unions of security guards to cease
operation. All existing supervisory unions and unions of security guards
shall, upon the effectivity of the Code, cease to operate as such and their
registration certificates shall be deemed automatically cancelled.
However, existing collective agreements with such unions, the life of
which extends beyond the date of effectivity of the Code shall be
respected until their expiry date insofar as the economic benefits
granted therein are concerned.
Members of supervisory unions who do not fall within the
definition of managerial employees shall become eligible to join
or assist the rank and file organization. The determination of who
are managerial employees and who are not shall be the subject of
negotiation between representatives of supervisory union and the
employer. If no agreement s reached between the parties, either or both
of them ma bring the issue to the nearest Regional Office for
determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted
the Court to declare in Bulletin v. Sanchez[45] that supervisory employees
who do not fall under the category of managerial employees may join or
assist in the formation of a labor organization for rank-and-file
employees, but they may not form their own labor organization.
While amending certain provisions of Book V of the Labor Code, E.O.
No. 111 and its implementing rules[46] continued to recognize the right of
supervisory employees, who do not fall under the category of managerial
employees, to join a rank-and-file labor organization.[47]
Effective 1989, R.A. No. 6715 restored the prohibition against the
questioned mingling in one labor organization, viz:
Sec. 18. Article 245 of the same Code, as amended, is hereby further
amended to read as follows
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. (Emphasis
supplied)
24
Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted
specifying the exact effect any violation of the prohibition would
bring about on the legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989
Amended Omnibus Rules) which supplied the deficiency by introducing
the following amendment to Rule II (Registration of Unions):
Sec. 1. Who may join unions. x x x Supervisory employees and
security guards 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; Provided, that
those supervisory employees who are included in an existing rank-and-
file bargaining unit, upon the effectivity of Republic Act No. 6715, shall
remain in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the
Omnibus Rules, viz:
Sec. 1. Where to file. A petition for certification election may be filed with
the Regional Office which has jurisdiction over the principal office of the
employer. The petition shall be in writing and under oath.
Sec. 2. Who may file. Any legitimate labor organization or the employer,
when requested to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain,
among others:
xxxx
(c) description of the bargaining unit which shall be the
employer unit unless circumstances otherwise require; and
provided further, that the appropriate bargaining unit of the
rank-and-file employees shall not include supervisory employees
and/or security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise
legitimate and duly registered labor organization from exercising its right
to file a petition for certification election.
Thus, when the issue of the effect of mingling was brought to the fore
in Toyota,[48] the Court, citing Article 245 of the Labor Code, as amended
by R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both
rank-and-file and supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-
file and supervisory employees cannot possess any of the rights
of a legitimate labor organization, including the right to file a
petition for certification election for the purpose of collective
bargaining. It becomes necessary, therefore, anterior to the
granting of an order allowing a certification election, to inquire
into the composition of any labor organization whenever the
status of the labor organization is challenged on the basis of
Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the
names of at least twenty-seven (27) supervisory employees in Level Five
positions, the union could not, prior to purging itself of its supervisory
employee members, attain the status of a legitimate labor organization.
Not being one, it cannot possess the requisite personality to file a
petition for certification election.[49] (Emphasis supplied)
In Dunlop,[50] in which the labor organization that filed a petition for
certification election was one for supervisory employees, but in which
the membership included rank-and-file employees, the Court reiterated
that such labor organization had no legal right to file a certification
election to represent a bargaining unit composed of supervisors for as
long as it counted rank-and-file employees among its members. [51]
It should be emphasized that the petitions for certification election
involved in Toyota and Dunlop were filed on November 26, 1992 and
September 15, 1995, respectively; hence, the 1989 Rules was applied in
both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was
further amended by Department Order No. 9, series of 1997 (1997
Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c)
of the 1989 Amended Omnibus Rules - that the petition for certification
election indicate that the bargaining unit of rank-and-file employees has
not been mingled with supervisory employees - was removed. Instead,
what the 1997 Amended Omnibus Rules requires is a plain description of
the bargaining unit, thus:
Rule XI
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing
and under oath and shall contain, among others, the following:
x x x (c) The description of the bargaining unit.[52]
In Pagpalain Haulers, Inc. v. Trajano,[53] the Court had occasion to uphold
the validity of the 1997 Amended Omnibus Rules, although the specific
provision involved therein was only Sec. 1, Rule VI, to wit:
Sec. 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
25
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.
which does not require that, for its creation and registration, a local or
chapter submit a list of its members.
Then came Tagaytay Highlands Intl. Golf Club, Inc. v. Tagaytay Highlands
Employees Union-PGTWO[54] in which the core issue was whether
mingling affects the legitimacy of a labor organization and its right to file
a petition for certification election. This time, given the altered legal
milieu, the Court abandoned the view in Toyota and Dunlop and reverted
to its pronouncement in Lopez that while there is a prohibition against
the mingling of supervisory and rank-and-file employees in one labor
organization, the Labor Code does not provide for the effects thereof.
[55]
Thus, the Court held that after a labor organization has been
registered, it may exercise all the rights and privileges of a legitimate
labor organization. Any mingling between supervisory and rank-and-file
employees in its membership cannot affect its legitimacy for that is not
among the grounds for cancellation of its registration, unless such
mingling was brought about by misrepresentation, false statement or
fraud under Article 239 of the Labor Code. [56]
In San Miguel Corp. (Mandaue Packaging Products Plants)
v. Mandaue Packing Products Plants-San Miguel Packaging Products-San
Miguel Corp. Monthlies Rank-and-File Union-FFW, [57] the Court explained
that since the 1997 Amended Omnibus Rules does not require a local or
chapter to provide a list of its members, it would be improper for the
DOLE to deny recognition to said local or chapter on account of any
question pertaining to its individual members.[58]
More to the point is Air Philippines Corporation v. Bureau of Labor
Relations,[59] which involved a petition for cancellation of union
registration filed by the employer in 1999 against a rank-and-file labor
organization on the ground of mixed membership:[60] the Court therein
reiterated its ruling in Tagaytay Highlands that the inclusion in a union of
disqualified employees is not among the grounds for cancellation, unless
such inclusion is due to misrepresentation, false statement or fraud
under the circumstances enumerated in Sections (a) and (c) of Article
239 of the Labor Code.[61]
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended
Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San
Miguel and Air Philippines, had already set the tone for
it. Toyota and Dunlop no longer hold sway in the present altered state of
the law and the rules.
Consequently, the Court reverses the ruling of the CA and reinstates that
of the DOLE granting the petition for certification election of KFWU.
Now to the second issue of whether an employer like respondent may
collaterally attack the legitimacy of a labor organization by filing a
motion to dismiss the latters petition for certification election.
Except when it is requested to bargain collectively, [62] an employer is a
mere bystander to any petition for certification election; such proceeding
is non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their
collective bargaining with the employer.[63] The choice of their
representative is the exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot interfere with, much
less oppose, the process by filing a motion to dismiss or an appeal from
it;[64] not even a mere allegation that some employees participating in a
petition for certification election are actually managerial employees will
lend an employer legal personality to block the certification election.
[65]
The employer's only
right in the proceeding is to be notified or informed thereof.[66]
The amendments to the Labor Code and its implementing rules have
buttressed that policy even more.
WHEREFORE, the petition is GRANTED. The December 13, 2002
Decision and October 7, 2003 Resolution of the Court of Appeals and the
May 17, 2000 Order of Med-
Arbiter Anastacio L. Bactin are REVERSED and SET ASIDE, while the
August 18, 2000 Decision and September 28, 2000 Resolution of the
Department of Labor and Employment are REINSTATED.
No costs.
SO ORDERED.
6.
G.R. No. 179146 July 23, 2013
HOLY CHILD CATHOLIC SCHOOL, Petitioner, vs. HON. PATRICIA STO.
TOMAS, in her official capacity as Secretary of the Department of
Labor and Employment, and PINAG-ISANG TINIG AT LAKAS NG
ANAKPAWIS HOLY CHILD CATHOLIC SCHOOL TEACHERS AND
EMPLOYEES LABOR UNION (HCCS-TELU-PIGLAS), Respondents.
DECISION
PERALTA, J.:
26
Assailed in this petition for review on certiorari under Rule 45 of the
Rules of Civil Procedure are the April 18, 2007 Decision 1 and July 31,
2007 Resolution2 of the Court of Appeals in CA-G.R. SP No. 76175, which
affirmed the December 27, 2002 Decision 3 and February 13, 2003
Resolution4 of the Secretary of the Department of Labor and Employment
(SOLE) that set aside the August 10, 2002 Decision5 of the Med-Arbiter
denying private respondents petition for certification election.
The factual antecedents are as follows:
On May 31, 2002, a petition for certification election was filed by private
respondent Pinag-Isang Tinig at Lakas ng Anakpawis Holy Child Catholic
School Teachers and Employees Labor Union (HCCS-TELUPIGLAS),
alleging that: PIGLAS is a legitimate labor organization duly registered
with the Department of Labor and Employment (DOLE) representing
HCCS-TELU-PIGLAS; HCCS is a private educational institution duly
registered and operating under Philippine laws; there are approximately
one hundred twenty (120) teachers and employees comprising the
proposed appropriate bargaining unit; and HCCS is unorganized, there is
no collective bargaining agreement or a duly certified bargaining agent
or a labor organization certified as the sole and exclusive bargaining
agent of the proposed bargaining unit within one year prior to the filing
of the petition.6 Among the documents attached to the petition were the
certificate of affiliation with Pinag-Isang Tinig at Lakas ng Anakpawis
Kristiyanong Alyansa ng Makabayang Obrero (PIGLAS-KAMAO) issued by
the Bureau of Labor Relations (BLR), charter certificate issued by
PIGLASKAMAO, and certificate of registration of HCCS-TELU as a
legitimate labor organization issued by the DOLE.7
In its Comment8 and Position Paper,9 petitioner HCCS consistently noted
that it is a parochial school with a total of 156 employees as of June 28,
2002, broken down as follows: ninety-eight (98) teaching personnel,
twenty-five (25) non-teaching academic employees, and thirty-three (33)
non-teaching non-academic workers. It averred that of the employees
who signed to support the petition, fourteen (14) already resigned and
six (6) signed twice. Petitioner raised that members of private
respondent do not belong to the same class; it is not only a mixture of
managerial, supervisory, and rank-and-file employees as three (3) are
vice-principals, one (1) is a department head/supervisor, and eleven (11)
are coordinators but also a combination of teaching and non-teaching
personnel as twenty-seven (27) are non-teaching personnel. It insisted
that, for not being in accord with Article 24510 of the Labor Code, private
respondent is an illegitimate labor organization lacking in personality to
file a petition for certification election, as held in Toyota Motor Philippines
Corporation v. Toyota Motor Philippines Corporation Labor Union;11 and an
inappropriate bargaining unit for want of community or mutuality of
interest, as ruled in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor
and Employment12 and De La Salle University Medical Center and College
of Medicine v. Laguesma.13
Private respondent, however, countered that petitioner failed to
substantiate its claim that some of the employees included in the
petition for certification election holds managerial and supervisory
positions.14 Assuming it to be true, it argued that Section 11 (II), 15 Rule XI
of DOLE Department Order (D.O.) No. 9, Series of 1997, provided for
specific instances in which a petition filed by a legitimate organization
shall be dismissed by the Med-Arbiter and that "mixture of employees" is
not one of those enumerated. Private respondent pointed out that
questions pertaining to qualifications of employees may be threshed out
in the inclusion-exclusion proceedings prior to the conduct of the
certification election, pursuant to Section 2,16 Rule XII of D.O. No. 9.
Lastly, similar to the ruling in In Re: Globe Machine and Stamping
Company,17 it contended that the will of petitioners employees should be
respected as they had manifested their desire to be represented by only
one bargaining unit. To back up the formation of a single employer unit,
private respondent asserted that even if the teachers may receive
additional pay for an advisory class and for holding additional loads,
petitioners academic and non-academic personnel have similar working
conditions. It cited Laguna College v. Court of Industrial Relations, 18 as
well as the case of a union in West Negros College in Bacolod City, which
allegedly represented both academic and non-academic employees.
On August 10, 2002, Med-Arbiter Agatha Ann L. Daquigan denied the
petition for certification election on the ground that the unit which
private respondent sought to represent is inappropriate. She resolved:
A certification election proceeding directly involves two (2) issues
namely: (a) the proper composition and constituency of the bargaining
unit; and (b) the validity of majority representation claims. It is therefore
incumbent upon the Med-Arbiter to rule on the appropriateness of the
bargaining unit once its composition and constituency is questioned.
Section 1 (q), Rule I, Book V of the Omnibus Rules defines a "bargaining
unit" as a group of employees sharing mutual interests within a given
employer unit comprised of all or less than all of the entire body of
employees in the employer unit or any specific occupational or
geographical grouping within such employer unit. This definition has
provided the "community or mutuality of interest" test as the standard in
determining the constituency of a collective bargaining unit. This is so
because the basic test of an asserted bargaining units acceptability is
whether or not it is fundamentally the combination which will best assure
to all employees the exercise of their collective bargaining rights. The
application of this test may either result in the formation of an employer
unit or in the fragmentation of an employer unit.
In the case at bar, the employees of petitioner, may, as already
suggested, quite easily be categorized into (2) general classes: one, the
teaching staff; and two, the non-teaching-staff. Not much reflection is
needed to perceive that the community or mutuality of interest is
wanting between the teaching and the non-teaching staff. It would seem
obvious that the teaching staff would find very little in common with the
27
non-teaching staff as regards responsibilities and function, working
conditions, compensation rates, social life and interests, skills and
intellectual pursuits, etc. These are plain and patent realities which
cannot be ignored. These dictate the separation of these two categories
of employees for purposes of collective bargaining. (University of the
Philippines vs. Ferrer-Calleja, 211 SCRA 451) 19
Private respondent appealed before the SOLE, who, on December 27,
2002, ruled against the dismissal of the petition and directed the conduct
of two separate certification elections for the teaching and the non-
teaching personnel, thus:
We agree with the Med-Arbiter that there are differences in the nature of
work, hours and conditions of work and salary determination between
the teaching and non-teaching personnel of petitioner. These differences
were pointed out by petitioner in its position paper. We do not, however,
agree with the Med-Arbiter that these differences are substantial enough
to warrant the dismissal of the petition. First, as pointed out by private
respondent, "inappropriateness of the bargaining unit sought to be
represented is not a ground for the dismissal of the petition." In fact, in
the cited case of University of the Philippines v. Ferrer-Calleja, supra, the
Supreme Court did not order the dismissal of the petition but ordered the
conduct of a certification election, limiting the same among the non-
academic personnel of the University of the Philippines.
It will be recalled that in the U.P. case, there were two contending unions,
the Organization of Non-Academic Personnel of U.P. (ONAPUP) and All U.P.
Workers Union composed of both academic and nonacademic personnel
of U.P. ONAPUP sought the conduct of certification election among the
rank-and-file non-academic personnel only while the all U.P. Workers
Union sought the conduct of certification election among all of U.P.s
rank-and-file employees covering academic and nonacademic personnel.
While the Supreme Court ordered a separate bargaining unit for the U.P.
academic personnel, the Court, however, did not order them to organize
a separate labor organization among themselves. The All U.P. Workers
Union was not directed to divest itself of its academic personnel
members and in fact, we take administrative notice that the All U.P.
Workers Union continue to exist with a combined membership of U.P.
academic and non-academic personnel although separate bargaining
agreements is sought for the two bargaining units. Corollary, private
respondent can continue to exist as a legitimate labor organization with
the combined teaching and non-teaching personnel in its membership
and representing both classes of employees in separate bargaining
negotiations and agreements.
WHEREFORE, the Decision of the Med-Arbiter dated 10 August 2002 is
hereby REVERSED and SET ASIDE. In lieu thereof, a new order is hereby
issued directing the conduct of two certification elections, one among the
non-teaching personnel of Holy Child Catholic School, and the other,
among the teaching personnel of the same school, subject to the usual
pre-election conferences and inclusion-exclusion proceedings, with the
following choices:
A. Certification Election Among Petitioners Teaching Personnel:
1. Holy Child Catholic School Teachers and Employees Labor Union; and
2. No Union.
B. Certification Election Among Petitioners Non-Teaching Personnel:
1. Holy Child Catholic School Teachers and Employees Labor Union; and
2. No Union.
Petitioner is hereby directed to submit to the Regional Office of origin
within ten (10) days from receipt of this Decision, a certified separate list
of its teaching and non-teaching personnel or when necessary a separate
copy of their payroll for the last three (3) months prior to the issuance of
this Decision.20
Petitioner filed a motion for reconsideration21 which, per Resolution dated
February 13, 2003, was denied. Consequently, petitioner filed before the
CA a Petition for Certiorari with Prayer for Temporary Restraining Order
and Preliminary Injunction.22 The CA resolved to defer action on the
prayer for TRO pending the filing of private respondents
Comment.23 Later, private respondent and petitioner filed their
Comment24 and Reply,25respectively.
On July 23, 2003, petitioner filed a motion for immediate issuance of a
TRO, alleging that Hon. Helen F. Dacanay of the Industrial Relations
Division of the DOLE was set to implement the SOLE Decision when it
received a summons and was directed to submit a certified list of
teaching and non-teaching personnel for the last three months prior to
the issuance of the assailed Decision.26 Acting thereon, on August 5,
2003, the CA issued the TRO and ordered private respondent to show
cause why the writ of preliminary injunction should not be
granted.27 Subsequently, a Manifestation and Motion28 was filed by
private respondent, stating that it repleads by reference the arguments
raised in its Comment and that it prays for the immediate lifting of the
TRO and the denial of the preliminary injunction. The CA, however,
denied the manifestation and motion on November 21, 200329 and, upon
motion of petitioner,30 granted the preliminary injunction on April 21,
2005.31 Thereafter, both parties filed their respective Memorandum.32
On April 18, 2007, the CA eventually dismissed the petition. As to the
purported commingling of managerial, supervisory, and rank-and-file
employees in private respondents membership, it held that the Toyota
ruling is inapplicable because the vice-principals, department head, and
coordinators are neither supervisory nor managerial employees. It
reasoned:
28
x x x While it may be true that they wield power over other subordinate
employees of the petitioner, it must be stressed, however, that their
functions are not confined with policy-determining such as hiring, firing,
and disciplining of employees, salaries, teaching/working hours, other
monetary and non-monetary benefits, and other terms and conditions of
employment. Further, while they may formulate policies or guidelines,
nonetheless, such is merely recommendatory in nature, and still subject
to review and evaluation by the higher executives, i.e., the principals or
executive officers of the petitioner. It cannot also be denied that in
institutions like the petitioner, company policies have already been pre-
formulated by the higher executives and all that the mentioned
employees have to do is carry out these company policies and standards.
Such being the case, it is crystal clear that there is no improper
commingling of members in the private respondent union as to preclude
its petition for certification of (sic) election.33
Anent the alleged mixture of teaching and non-teaching personnel, the
CA agreed with petitioner that the nature of the formers work does not
coincide with that of the latter. Nevertheless, it ruled that the SOLE did
not commit grave abuse of discretion in not dismissing the petition for
certification election, since it directed the conduct of two separate
certification elections based on Our ruling in University of the Philippines
v. Ferrer-Calleja.34
A motion for reconsideration35 was filed by petitioner, but the CA denied
the same;36 hence, this petition assigning the alleged errors as follows:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE
RULING IN THE CASE OF TOYOTA MOTOR PHILIPPINES CORPORATION VS.
TOYOTA MOTOR PHILIPPINES CORPORATION LABOR UNION (268 SCRA
573) DOES NOT APPLY IN THE CASE AT BAR DESPITE THE
[COMMINGLING] OF BOTH SUPERVISORY OR MANAGERIAL AND RANK-
AND-FILE EMPLOYEES IN THE RESPONDENT UNION;
II
THE HONORABLE COURT OF APPEALS ERRED IN ITS CONFLICTING RULING
ALLOWING THE CONDUCT OF CERTIFICATION ELECTION BY UPHOLDING
THAT THE RESPONDENT UNION REPRESENTED A BARGAINING UNIT
DESPITE ITS OWN FINDINGS THAT THERE IS NO MUTUALITY OF INTEREST
BETWEEN THE MEMBERS OF RESPONDENT UNION APPLYING THE TEST
LAID DOWN IN THE CASE OF UNIVERSITY OF THE PHILIPPINES VS.
FERRER-CALLEJA (211 SCRA 451).37
We deny.
Petitioner claims that the CA contradicted the very definition of
managerial and supervisory employees under existing law and
jurisprudence when it did not classify the vice-principals, department
head, and coordinators as managerial or supervisory employees merely
because the policies and guidelines they formulate are still subject to the
review and evaluation of the principal or executive officers of petitioner.
It points out that the duties of the vice-principals, department head, and
coordinators include the evaluation and assessment of the effectiveness
and capability of the teachers under them; that such evaluation and
assessment is independently made without the participation of the
higher Administration of petitioner; that the fact that their
recommendation undergoes the approval of the higher Administration
does not take away the independent nature of their judgment; and that it
would be difficult for the vice-principals, department head, and
coordinators to objectively assess and evaluate the performances of
teachers under them if they would be allowed to be members of the
same labor union.
On the other hand, aside from reiterating its previous submissions,
private respondent cites Sections 9 and 12 38of Republic Act (R.A.) No.
9481 to buttress its contention that petitioner has no standing to oppose
the petition for certification election. On the basis of the statutory
provisions, it reasons that an employer is not a party-in-interest in a
certification election; thus, petitioner does not have the requisite right to
protect even by way of restraining order or injunction.
First off, We cannot agree with private respondents invocation of R.A.
No. 9481. Said law took effect only on June 14, 2007; hence, its
applicability is limited to labor representation cases filed on or after said
date.39 Instead, the law and rules in force at the time private respondent
filed its petition for certification election on May 31, 2002 are R.A. No.
6715, which amended Book V of Presidential Decree (P.D.) No. 442 (the
Labor Code), as amended, and the Rules and Regulations Implementing
R.A. No. 6715, as amended by D.O. No. 9, which was dated May 1, 1997
but took effect on June 21, 1997.40
However, note must be taken that even without the express provision of
Section 12 of RA No. 9481, the "Bystander Rule" is already well
entrenched in this jurisdiction. It has been consistently held in a number
of cases that a certification election is the sole concern of the workers,
except when the employer itself has to file the petition pursuant to
Article 259 of the Labor Code, as amended, but even after such filing its
role in the certification process ceases and becomes merely a
bystander.41 The employer clearly lacks the personality to dispute the
election and has no right to interfere at all therein.42 This is so since any
uncalled-for concern on the part of the employer may give rise to the
suspicion that it is batting for a company union. 43 Indeed, the demand of
the law and policy for an employer to take a strict, hands-off stance in
certification elections is based on the rationale that the employees
bargaining representative should be chosen free from any extraneous
influence of the management; that, to be effective, the bargaining
representative must owe its loyalty to the employees alone and to no
other.44
29
Now, going back to petitioners contention, the issue of whether a
petition for certification election is dismissible on the ground that the
labor organizations membership allegedly consists of supervisory and
rank-and-file employees is actually not a novel one. In the 2008 case of
Republic v. Kawashima Textile Mfg., Philippines, Inc., 45wherein the
employer-company moved to dismiss the petition for certification
election on the ground inter alia that the union membership is a mixture
of rank-and-file and supervisory employees, this Court had
conscientiously discussed the applicability of Toyota and Dunlop in the
context of R.A. No. 6715 and D.O. No. 9, viz.:
It was in R.A. No. 875, under Section 3, that such questioned mingling
was first prohibited, to wit:
Sec. 3. Employees' right to self-organization. - Employees shall have the
right to self-organization and to form, join or assist labor organizations of
their own choosing for the purpose of collective bargaining through
representatives of their own choosing and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or
protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision
but may form separate organizations of their own. (Emphasis supplied)
Nothing in R.A. No. 875, however, tells of how the questioned mingling
can affect the legitimacy of the labor organization. Under Section 15, the
only instance when a labor organization loses its legitimacy is when it
violates its duty to bargain collectively; but there is no word on whether
such mingling would also result in loss of legitimacy. Thus, when the
issue of whether the membership of two supervisory employees impairs
the legitimacy of a rank-and-file labor organization came before the
Court En Banc in Lopez v. Chronicle Publication Employees Association,
the majority pronounced:
It may be observed that nothing is said of the effect of such ineligibility
upon the union itself or on the status of the other qualified members
thereof should such prohibition be disregarded. Considering that the law
is specific where it intends to divest a legitimate labor union of any of the
rights and privileges granted to it by law, the absence of any provision
on the effect of the disqualification of one of its organizers upon the
legality of the union, may be construed to confine the effect of such
ineligibility only upon the membership of the supervisor. In other words,
the invalidity of membership of one of the organizers does not make the
union illegal, where the requirements of the law for the organization
thereof are, nevertheless, satisfied and met. (Emphasis supplied)
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of
R.A. No. 875. The provision in the Labor Code closest to Sec. 3 is Article
290, which is deafeningly silent on the prohibition against supervisory
employees mingling with rank-and-file employees in one labor
organization. Even the Omnibus Rules Implementing Book V of the Labor
Code (Omnibus Rules) merely provides in Section 11, Rule II, thus:
Sec. 11. Supervisory unions and unions of security guards to cease
operation. - All existing supervisory unions and unions of security guards
shall, upon the effectivity of the Code, cease to operate as such and their
registration certificates shall be deemed automatically cancelled.
However, existing collective agreements with such unions, the life of
which extends beyond the date of effectivity of the Code shall be
respected until their expiry date insofar as the economic benefits
granted therein are concerned.
Members of supervisory unions who do not fall within the definition of
managerial employees shall become eligible to join or assist the rank and
file organization. The determination of who are managerial employees
and who are not shall be the subject of negotiation between
representatives of supervisory union and the employer. If no agreement s
reached between the parties, either or both of them may bring the issue
to the nearest Regional Office for determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted
the Court to declare in Bulletin v. Sanchez that supervisory employees
who do not fall under the category of managerial employees may join or
assist in the formation of a labor organization for rank-and-file
employees, but they may not form their own labor organization.
While amending certain provisions of Book V of the Labor Code, E.O. No.
111 and its implementing rules continued to recognize the right of
supervisory employees, who do not fall under the category of managerial
employees, to join a rank- and-file labor organization.
Effective 1989, R.A. No. 6715 restored the prohibition against the
questioned mingling in one labor organization, viz.:
Sec. 18. Article 245 of the same Code, as amended, is hereby further
amended to read as follows:
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 (Emphasis supplied)
Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the
exact effect any violation of the prohibition would bring about on the
legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989
Amended Omnibus Rules) which supplied the deficiency by introducing
the following amendment to Rule II (Registration of Unions):
Sec. 1. Who may join unions. - x x x Supervisory employees and security
guards shall not be eligible for membership in a labor organization of the
30
rank-and-file employees but may join, assist or form separate labor
organizations of their own; Provided, that those supervisory employees
who are included in an existing rank-and-file bargaining unit, upon the
effectivity of Republic Act No. 6715, shall remain in that unit x x x.
(Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the
Omnibus Rules, viz.;
Sec. 1. Where to file. - A petition for certification election may be filed
with the Regional Office which has jurisdiction over the principal office of
the employer. The petition shall be in writing and under oath.
Sec. 2. Who may file. - Any legitimate labor organization or the employer,
when requested to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain,
among others:
xxxx
(c) description of the bargaining unit which shall be the employer unit
unless circumstances otherwise require; and provided further, that the
appropriate bargaining unit of the rank-and-file employees shall not
include supervisory employees and/or security guards. (Emphasis
supplied)
By that provision, any questioned mingling will prevent an otherwise
legitimate and duly registered labor organization from exercising its right
to file a petition for certification election.
Thus, when the issue of the effect of mingling was brought to the fore in
Toyota, the Court, citing Article 245 of the Labor Code, as amended by
R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both
rank-and-file and supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-file and
supervisory employees cannot possess any of the rights of a legitimate
labor organization, including the right to file a petition for certification
election for the purpose of collective bargaining. It becomes necessary,
therefore, anterior to the granting of an order allowing a certification
election, to inquire into the composition of any labor organization
whenever the status of the labor organization is challenged on the basis
of Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the
names of at least twenty-seven (27) supervisory employees in Level Five
positions, the union could not, prior to purging itself of its supervisory
employee members, attain the status of a legitimate labor organization.
Not being one, it cannot possess the requisite personality to file a
petition for certification election. (Emphasis supplied)
In Dunlop, in which the labor organization that filed a petition for
certification election was one for supervisory employees, but in which
the membership included rank-and-file employees, the Court reiterated
that such labor organization had no legal right to file a certification
election to represent a bargaining unit composed of supervisors for as
long as it counted rank-and-file employees among its members.
It should be emphasized that the petitions for certification election
involved in Toyota and Dunlop were filed on November 26, 1992 and
September 15, 1995, respectively; hence, the 1989 Rules was applied in
both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was
further amended by Department Order No. 9, series of 1997 (1997
Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c)
of the 1989 Amended Omnibus Rules - that the petition for certification
election indicate that the bargaining unit of rank-and-file employees has
not been mingled with supervisory employees - was removed. Instead,
what the 1997 Amended Omnibus Rules requires is a plain description of
the bargaining unit, thus:
Rule XI
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing
and under oath and shall contain, among others, the following: x x x (c)
The description of the bargaining unit."
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold
the validity of the 1997 Amended Omnibus Rules, although the specific
provision involved therein was only Sec. 1, Rule VI, to wit:
Sec. 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/chapter's officers, their addresses, and the
principal office of the local/chapter; and (c) the local/ chapter's
constitution and by-laws; provided that where the local/chapter's
constitution and by-laws is the same as that of the federation or national
union, this fact shall be indicated accordingly.
31
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.
which does not require that, for its creation and registration, a local or
chapter submit a list of its members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands
Employees Union-PTGWO in which the core issue was whether mingling
affects the legitimacy of a labor organization and its right to file a
petition for certification election. This time, given the altered legal milieu,
the Court abandoned the view in Toyota and Dunlop and reverted to its
pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor
organization, the Labor Code does not provide for the effects thereof.
Thus, the Court held that after a labor organization has been registered,
it may exercise all the rights and privileges of a legitimate labor
organization. Any mingling between supervisory and rank-and-file
employees in its membership cannot affect its legitimacy for that is not
among the grounds for cancellation of its registration, unless such
mingling was brought about by misrepresentation, false statement or
fraud under Article 239 of the Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue
Packing Products Plants-San Miguel Packaging Products-San Miguel Corp.
Monthlies Rank-and-File Union-FFW, the Court explained that since the
1997 Amended Omnibus Rules does not require a local or chapter to
provide a list of its members, it would be improper for the DOLE to deny
recognition to said local or chapter on account of any question pertaining
to its individual members.
More to the point is Air Philippines Corporation v. Bureau of Labor
Relations, which involved a petition for cancellation of union registration
filed by the employer in 1999 against a rank-and-file labor organization
on the ground of mixed membership: the Court therein reiterated its
ruling in Tagaytay Highlands that the inclusion in a union of disqualified
employees is not among the grounds for cancellation, unless such
inclusion is due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article 239 of the
Labor Code.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended
Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San
Miguel and Air Philippines, had already set the tone for it. Toyota and
Dunlop no longer hold sway in the present altered state of the law and
the rules.46
When a similar issue confronted this Court close to three years later, the
above ruling was substantially quoted in Samahang Manggagawa sa
Charter Chemical Solidarity of Unions in the Philippines for Empowerment
and Reforms (SMCC-Super) v. Charter Chemical and Coating
Corporation.47 In unequivocal terms, We reiterated that the alleged
inclusionof supervisory employees in a labor organization seeking to
represent the bargaining unit of rank-and-file employees does not divest
it of its status as a legitimate labor organization.48
Indeed, Toyota and Dunlop no longer hold true under the law and rules
governing the instant case. The petitions for certification election
involved in Toyota and Dunlop were filed on November 26, 1992 and
September 15, 1995, respectively; hence, the 1989 Rules and
Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules)
was applied. In contrast, D.O. No. 9 is applicable in the petition for
certification election of private respondent as it was filed on May 31,
2002.
Following the doctrine laid down in Kawashima and SMCC-Super, it must
be stressed that petitioner cannot collaterally attack the legitimacy of
private respondent by praying for the dismissal of the petition for
certification election:
Except when it is requested to bargain collectively, an employer is a
mere bystander to any petition for certification election; such proceeding
is non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their
collective bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot interfere with, much
less oppose, the process by filing a motion to dismiss or an appeal from
it; not even a mere allegation that some employees participating in a
petition for certification election are actually managerial employees will
lend an employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed
thereof.
The amendments to the Labor Code and its implementing rules have
buttressed that policy even more.49
Further, the determination of whether union membership comprises
managerial and/or supervisory employees is a factual issue that is best
left for resolution in the inclusion-exclusion proceedings, which has not
yet happened in this case so still premature to pass upon. We could only
emphasize the rule that factual findings of labor officials, who are
deemed to have acquired expertise in matters within their jurisdiction,
are generally accorded not only with respect but even finality by the
courts when supported by substantial evidence.50 Also, the jurisdiction of
this Court in cases brought before it from the CA via Rule 45 is generally
limited to reviewing errors of law or jurisdiction. The findings of fact of
the CA are conclusive and binding. Except in certain recognized
instances,51We do not entertain factual issues as it is not Our function to
analyze or weigh evidence all over again; the evaluation of facts is best
left to the lower courts and administrative agencies/quasi-judicial bodies
which are better equipped for the task.52
32
Turning now to the second and last issue, petitioner argues that, in view
of the improper mixture of teaching and non-teaching personnel in
private respondent due to the absence of mutuality of interest among its
members, the petition for certification election should have been
dismissed on the ground that private respondent is not qualified to file
such petition for its failure to qualify as a legitimate labor organization,
the basic qualification of which is the representation of an appropriate
bargaining unit.
We disagree.
The concepts of a union and of a legitimate labor organization are
different from, but related to, the concept of a bargaining unit:
Article 212(g) of the Labor Code defines a labor organization as "any
union or association of employees which exists in whole or in part for the
purpose of collective bargaining or of dealing with employers concerning
terms and conditions of employment." Upon compliance with all the
documentary requirements, the Regional Office or Bureau shall issue in
favor of the applicant labor organization a certificate indicating that it is
included in the roster of legitimate labor organizations. Any applicant
labor organization 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.53
In case of alleged inclusion of disqualified employees in a union, the
proper procedure for an employer like petitioner is to directly file a
petition for cancellation of the unions certificate of registration due to
misrepresentation, false statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as amended. 54 To reiterate,
private respondent, having been validly issued a certificate of
registration, should be considered as having acquired juridical
personality which may not be attacked collaterally.
On the other hand, 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 interests of all the
employees, consistent with equity to the employer, indicated to be best
suited to serve reciprocal rights and duties of the parties under the
collective bargaining provisions of the law."55 In determining the proper
collective bargaining unit and what unit would be appropriate to be the
collective bargaining agency, the Court, in the seminal case of
Democratic Labor Association v. Cebu Stevedoring Company,
Inc.,56 mentioned several factors that should be considered, to wit: (1)
will of employees (Globe Doctrine); (2) affinity and unity of employees'
interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions; (3) prior collective bargaining
history; and (4) employment status, such as temporary, seasonal and
probationary employees. We stressed, however, that the test of the
grouping is community or mutuality of interest, 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."57
As the SOLE correctly observed, petitioner failed to comprehend the full
import of Our ruling in U.P. It suffices to quote with approval the apt
disposition of the SOLE when she denied petitioners motion for
reconsideration:
Petitioner likewise claimed that we erred in interpreting the decision of
the Supreme Court in U.P. v. Ferrer-Calleja, supra. According to petitioner,
the Supreme Court stated that the non-academic rank-andfile employees
of the University of the Philippines shall constitute a bargaining unit to
the exclusion of the academic employees of the institution. Hence,
petitioner argues, it sought the creation of separate bargaining units,
namely: (1) petitioners teaching personnel to the exclusion of non-
teaching personnel; and (2) petitioners non-teaching personnel to the
exclusion of teaching personnel.
Petitioner appears to have confused the concepts of membership in a
bargaining unit and membership in a union. In emphasizing the phrase
"to the exclusion of academic employees" stated in U.P. v. Ferrer-Calleja,
petitioner believed that the petitioning union could not admit academic
employees of the university to its membership. But such was not the
intention of the Supreme Court.
A bargaining unit is a group of employees sought to be represented by a
petitioning union. Such employees need not be members of a union
seeking the conduct of a certification election. A union certified as an
exclusive bargaining agent represents not only its members but also
other employees who are not union members. As pointed out in our
assailed Decision, there were two contending unions in the U.P. case,
namely, the Organization of Non-Academic Personnel of U.P. (ONAPUP)
and the All U.P. Workers Union composed of both U.P. academic and non-
academic personnel. ONAPUP sought the conduct of a certification
election among the rank-and-file non-academic personnel only, while the
All U.P. Workers Union intended to cover all U.P. rank-and-file employees,
involving both academic and non-academic personnel.
The Supreme Court ordered the "non-academic rank-and-file employees
of U.P. to constitute a bargaining unit to the exclusion of the academic
employees of the institution", but did not order them to organize a
separate labor organization. In the U.P. case, the Supreme Court did not
dismiss the petition and affirmed the order for the conduct of a
certification election among the non-academic personnel of U.P., without
prejudice to the right of the academic personnel to constitute a separate
bargaining unit for themselves and for the All U.P. Workers Union to
institute a petition for certification election.
In the same manner, the teaching and non-teaching personnel of
petitioner school must form separate bargaining units.1wphi1 Thus, the
order for the conduct of two separate certification elections, one
33
involving teaching personnel and the other involving non-teaching
personnel. It should be stressed that in the subject petition, private
respondent union sought the conduct of a certification election among all
the rank-and-file personnel of petitioner school. Since the decision of the
Supreme Court in the U.P. case prohibits us from commingling teaching
and non-teaching personnel in one bargaining unit, they have to be
separated into two separate bargaining units with two separate
certification elections to determine whether the employees in the
respective bargaining units desired to be represented by private
respondent. In the U.P. case, only one certification election among the
non-academic personnel was ordered, because ONAPUP sought to
represent that bargaining unit only. No petition for certification election
among the academic personnel was instituted by All U.P. Workers Union
in the said case; thus, no certification election pertaining to its intended
bargaining unit was ordered by the Court.58
Indeed, the purpose of a certification election is precisely to ascertain the
majority of the employees choice of an appropriate bargaining unit to
be or not to be represented by a labor organization and, if in the
affirmative case, by which one.59
At this point, it is not amiss to stress once more that, as a rule, only
questions of law may be raised in a Rule 45 petition. In Montoya v.
Transmed Manila Corporation,60 the Court discussed the particular
parameters of a Rule 45 appeal from the CAs Rule 65 decision on a labor
case, as follows:
x x x In a Rule 45 review, we consider the correctness of the assailed CA
decision, in contrast with the review for jurisdictional error that we
undertake under Rule 65. Furthermore, Rule 45 limits us to the review of
questions of law raised against the assailed CA decision. In ruling for
legal correctness, we have to view the CA decision in the same context
that the petition for certiorari it ruled upon was presented to it; we have
to examine the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion in the
NLRC decision before it, not on the basis of whether the NLRC decision on
the merits of the case was correct. In other words, we have to be keenly
aware that the CA undertook a Rule 65 review, not a review on appeal, of
the NLRC decision challenged before it. This is the approach that should
be basic in a Rule 45 review of a CA ruling in a labor case. In question
form, the question to ask is: Did the CA correctly determine whether the
NLRC committed grave abuse of discretion in ruling on the case? 61
Our review is, therefore, limited to the determination of whether the CA
correctly resolved the presence or absence of grave abuse of discretion
in the decision of the SOLE, not on the basis of whether the latter's
decision on the merits of the case was strictly correct. Whether the CA
committed grave abuse of discretion is not what is ruled upon but
whether it correctly determined the existence or want of grave abuse of
discretion on the part of the SOLE.
WHEREFORE, the pet1t1on is DENIED. The April 18, 2007 Decision and
July 31, 2007, Resolution of the Court of Appeals in CA-G.R. SP No.
76175, which affirmed the December 27, 2002 Decision of the Secretary
of the Department of Labor and Employment that set aside the
August 10, 2002 Decision of the Med-Arbiter denying private
respondent's petition for certification election are hereby AFFIRMED.
SO ORDERED.
7.
G.R. No. 193798
COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner,
vs.
ILOCOS PROFESSIONAL AND TECHNICAL EMPLOYESS UNION
(IPTEU), Respondent.
DECISION
PERALTA, J.:
This petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure (Rules) seeks to reverse and set aside the March 17, 2010
Decision1 and September 16, 2010 Resolution2 of the Court of
Appeals (CA) in CA-G.R. SP No. 104043, which affirmed the May 6, 2008
Resolution3 of the Secretary of Labor and Employment (SOLE) dismissing
petitioner's appeal that assailed the Decision (On the Challenged
Voters )4 and Proclamation of the Winner,5 both dated October 22, 2007,
of the Mediator-Arbiter.
Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic
corporation duly organized and operating under the Philippine laws. It is
primarily engaged in the beverage business, which includes the
manufacture of carbonated soft drinks. On the other hand, respondent
Ilocos Professional and Technical Employees Union (IPTEU) is a registered
independent labor organization with address at CCBPI Ilocos Plant in
Barangay Catuguing, San Nicolas, Ilocos Norte.
On July 9, 2007, IPTEU filed a verified Petition 6 for certification election
seeking to represent a bargaining unit consisting of approximately
twenty-two (22) rank-and-file professional and technical employees of
CCBPI Ilocos Norte Plant. CCBPI prayed for the denial and dismissal of the
petition, arguing that the Sales Logistics Coordinator and Maintenance
Foreman are supervisory employees, while the eight (8) Financial
Analysts, five (5) Quality Assurance Specialists, Maintenance Manager
34
Secretary, Trade Promotions and Merchandising Assistant (TPMA), Trade
Asset Controller and Maintenance Coordinator (TACMC), Sales
Information Analyst (SIA), Sales Logistics Assistant, Product Supply
Coordinator, Buyer, Inventory Planner, and Inventory Analyst are
confidential employees;7 hence, ineligible for inclusion as members of
IPTEU. It also sought to cancel and revoke the registration of IPTEU for
failure to comply with the twenty percent (20%) membership
requirement based on all the supposed employees in the bargaining unit
it seeks to operate.
A preliminary hearing of the petition was scheduled and held on July 19,
2007. The possibility of voluntary recognition or consent election was not
acceded to by CCBPI.
Convinced that the union members are rank-and-file employees and not
occupying positions that are supervisory or confidential in nature,
Mediator-Arbiter Florence Marie A. Gacad-Ulep granted IPTEUS petition.
The dispositive portion of the August 23, 2007 Decision 8 ordered:
WHEREFORE, premises considered, the Petition is GRANTED. The
bargaining unit shall be all the rank-and-file Exempt (Professional and
Technical) Workers of CCBPI who are now excluded from the existing
bargaining units of the Coca-Cola Bottlers Philippines, Inc. Ilocos Plant.
The choices in the election shall be:
ILOCOS PROFESSIONAL AND TECHNICAL
[EMPLOYEES] UNION (IPTEU)
No Union
The Labor Relations Division of this office is hereby directed to conduct
the Pre-election Conference(s) within the periods set by law. The CCBPI is
hereby ordered to submit, not later than the date of the first pre-election
conference, its Certified List of Exempt (Professional and Technical)
rankand- file workers, or in its absence, the employee payrolls from May
to June 2007. In case Management fails or refuses to submit the same,
the Unions list shall be allowed, as provided for under the Rules.
SO ORDERED.9
On September 3, 2007, CCBPI filed an appeal before the SOLE. 10 The
Mediator-Arbiter acknowledged having received the Memorandum of
Appeal but informed that, pursuant to the Implementing Rules and
Regulations of the Labor Code, as amended, "[the] order granting
the conduct of a certification election in an unorganized establishment
shall not be subject to appeal. Any issue arising therefrom may be raised
by means of protest on the conduct and results of the certification
election."11 On September 5, 2007, CCBPI then filed an Urgent Motion to
Suspend Proceedings,12 alleging that the notice issued by the Assistant
Regional Director for the conduct of pre-election conference is premature
since the decision of the Mediator-Arbiter is not yet final and executory
and that the Mediator-Arbiter already lost jurisdiction over the case with
the filing of an appeal. Two days after, CCBPI filed a
Manifestation,13 stating that its participation in the pre-election
conference, certification election, and other proceedings is not a waiver,
withdrawal or abandonment of the pending appeal and motion to
suspend proceedings.
In the Pre-election Conference held on September 10, 2007, CCBPI and
IPTEU mutually agreed to conduct the certification election on September
21, 2007. On election day, only sixteen (16) of the twenty-two (22)
employees in the IPTEU list voted. However, no votes were canvassed.
CCBPI filed and registered a Protest14 questioning the conduct and
mechanics of the election and a Challenge to Votes15 on the ground that
the voters are supervisory and confidential employees.
By agreement, the parties met on September 26, 2007 for the opening
and counting of the challenged votes. On said date, CCBPI filed a motion
for inhibition, which the Mediator-Arbiter verbally denied on the grounds
that it was not verified and would cause undue delay on the proceedings
as there are no other Mediators-Arbiters in the Region. The parties were
informed that their agreement to have the ballots opened could not bind
the Mediator-Arbiter. Instead, they were directed to submit additional
evidence that would aid in the resolution of the challenged votes.
On October 22, 2007, the Mediator-Arbiter denied CCBPIs challenge to
the 16 votes. She found that the voters are rank-and-file employees
holding positions that are not confidential in nature, and who are not, or
used to be, members of Ilocos Monthlies Union (IMU) due to the
reclassification of their positions by CCBPI and have been excluded from
the CBA entered into by IMU and CCBPI from 1997 to 2005.
Consequently, the challenged votes were opened and canvassed. After
garnering 14 out of the 16 votes cast, IPTEU was proclaimed as the sole
and exclusive bargaining agent of the rank-and-file exempt workers in
CCBPI Ilocos Norte Plant.
CCBPI elevated the case to the SOLE, raising the following grounds:
1. The Honorable public [appellee] erred in disregarding the fact that
there is already an existing bargaining representative of the rank-andfile
professional and technical employees at the Ilocos Plant of appellant,
namely, the Ilocos Monthlies Union (IMU) [to] which the sixteen (16)
challenged voters should be members as long as they are not
disqualified by law [for] being confidential employees.
2. The Honorable public appellee erred in denying the challenge to the
sixteen (16) actual voters, and subsequently declaring that private
appellee is the sole and exclusive [bargaining] agent of the rank-andfile
exempt employees.
3. The Honorable public appellee erred in disregarding the fact that there
is a pending earlier appeal filed by appellant with the Honorable
35
Secretary of Labor, and so the Regional Office No. 1 of the Department of
Labor and Employment lost jurisdiction over the case including the
certification election conducted by the Election Officer.
4. The Honorable public appellee erred in disregarding the fact that there
is a pending Motion to Suspend Proceedings filed by appellant with the
Department of Labor and Employment, Regional Office No. 1, San
Fernando City, La Union[,] due to the pendency of its appeal with the
Honorable Secretary of Labor, and the same is not yet resolved.
5. The Honorable public appellee erred in disregarding the fact that there
is a need to suspend the conduct of election and other proceedings to
await for the final result of the earlier appeal made by herein appellant.
6. The Honorable public appellee erred in not declaring the certification
election on September 21, 2007 null and void.16
On May 6, 2008, the appeal of CCBPI was denied. The SOLE held that, as
shown by the certification of the IMU President and the CBAs forged
between CCBPI and IMU from 1997 to 2007, the 22 employees sought to
be represented by IPTEU are not part of IMU and are excluded from its
CBA coverage; that even if the 16 challenged voters may have access to
information which are confidential from the business standpoint, the
exercise of their right to self-organization could not be defeated because
their common functions do not show that there exist a confidential
relationship within the realm of labor relations; and that the order
granting the certification election and sustaining its validity despite the
pendency of appeal and motion to suspend is proper in view of Section
17, Rule VIII of Department Order No. 40, Series of 2003, which states
that the order granting the conduct of a certification election in an
unorganized establishment is not subject to appeal and that any issue
arising therefrom may be raised by means of protest on the conduct and
results of the certification election.
Confronted with an adverse ruling, CCBPI filed before the CA a petition
for certiorari with prayer for temporary restraining order and writ of
preliminary injunction.17 It reiterated that:
a. There is already an existing and incumbent sole and exclusive
bargaining agent in the bargaining unit which respondent IPTEU seeks to
represent, namely, the Ilocos Monthlies Union (IMU). The bargaining unit
which IPTEU seeks to represent is rank-and-file professional and technical
employees which the incumbent union, the IMU, presently represents.
b. Respondent IPTEU never sought to represent the alleged rank-and-file
Exempt employees because it is clearly indicated in its petition for
certification election that it seeks to represent rank-and-file professional
and technical employees only. Its Constitution and bylaws includes solely
and only professional and technical employees of CCBPI-ILOCOS PLANT
to its membership, and nothing more.
c. The sixteen (16) voters are not eligible for Union membership because
they are confidential employees occupying confidential positions.
d. The bargaining unit is organized due to the presence of the IMU, the
sole and exclusive bargaining unit of the rank-and-file professional and
technical employees at the Ilocos Plant of petitioner, and so the appeal of
the earlier decision of the respondent Med-Arbiter dated August 23, 2007
is in order, proper, valid and should have been given due course in
accordance with Sec. 17, Rule [VIII] of the Rules Implementing Book V of
the Labor Code.
e. The earlier appeal x x x together with the motion for suspension of the
proceedings x x x filed by petitioner on September 5, 2007 remain
unresolved to date, and there is a need to await for their final resolution
before any further action including the certification election could validly
proceed.18
On March 17, 2010, the Court of Appeals denied the petition. CCBPI filed
a motion for reconsideration,19 which was also denied in the September
16, 2010 Resolution; hence, this petition.
CCBPI contends that the CA Decision and Resolution are based on
misapprehension of facts relative to the proceedings before the Mediator-
Arbiter and that its pronouncement consists of inferences which are
manifestly mistaken and without factual/legal basis. It is argued that a
petition for certiorari was filed before the CA because the orders of the
SOLE and Mediator-Arbiter were issued in patent disregard of established
facts and existing jurisprudence, thus, tainted with grave abuse of
discretion
1) In considering respondent IPTEU as the sole and exclusive bargaining
agent of the purported rank-and-file exempt employees in the Ilocos
Plant; 2) In not declaring the certification election held on September 21,
2007 improper and void; 3) In disregarding the fact that the Ilocos
Monthlies Union (IMU) is the existing sole bargaining agent of the rank-
and-[file] professional and technical employees at the Ilocos Plant, to
which the sixteen (16) challenged voters should be members, if allowed
by law[;] and 4) [In] ruling that the concerned employees should not be
prohibited by joining any union.20
The petition is unmeritorious.
As proven by the certification of the IMU President as well as the CBAs
executed between IMU and CCBPI, the 22 employees sought to be
represented by IPTEU are not IMU members and are not included in the
CBAs due to reclassification of their positions. If these documents were
false, the IMU should have manifested its vigorous opposition.1wphi1 In
fact, the Mediator-Arbiter noted:
36
The most tenacious resistance to the granting of the Petition as well as
the holding of the CE has been Management. On the other hand, the
existing unions at CCBPI, especially the IMU of which most of the IPTEU
members were once part (until they were considered outside the ambit
of its existing bargaining unit) never once opposed the Petition and the
Certification election, whether verbally or in written Opposition.
Between Management and IMU, it is the latter which has more to lose, as
the creation of a separate bargaining unit would reduce the scope of
IMUs bargaining unit. Yet through all these proceedings, we take note of
the substantial moral support that has been extended to the Petitioner
by the other Unions of CCBPI, so much so that, until objected to by
Management, they were even willing to be present during the
Certification Election of 21 September 2007.21
As to whether the 16 voters sought to be excluded from the appropriate
bargaining unit are confidential employees,22 such query is a question of
fact, which is not a proper issue in a petition for review under Rule 45 of
the Rules.23 This holds more true in the present case in view of the
consistent findings of the Mediator-Arbiter, the SOLE, and the CA.
We reiterate that:
[T]he office of a petition for review on certiorari under Rule 45 of the
Rules of Court requires that it shall raise only questions of law. The
factual findings by quasi-judicial agencies, such as the Department of
Labor and Employment, when supported by substantial evidence, are
entitled to great respect in view of their expertise in their respective
fields. Judicial review of labor cases does not go so far as to evaluate the
sufficiency of evidence on which the labor official's findings rest. It is not
our function to assess and evaluate all over again the evidence,
testimonial and documentary, adduced by the parties to an appeal,
particularly where the findings of both the trial court (here, the DOLE
Secretary) and the appellate court on the matter coincide, as in this case
at bar. The Rule limits that function of the Court to the review or revision
of errors of law and not to a second analysis of the evidence. x x x Thus,
absent any showing of whimsical or capricious exercise of judgment, and
unless lack of any basis for the conclusions made by the appellate court
be amply demonstrated, we may not disturb such factual findings. 24
The determination of factual issues is vested in the Mediator-Arbiter and
the Department of Labor and Employment. Pursuant to the doctrine of
primary jurisdiction, the Court should refrain from resolving such
controversies unless the case falls under recognized and well-established
exceptions. The doctrine of primary jurisdiction does not warrant a court
to arrogate unto itself the authority to resolve a controversy the
jurisdiction over which is initially lodged with an administrative body of
special competence.25
In this case, organizational charts, detailed job descriptions, and training
programs were presented by CCBPI before the Mediator-Arbiter, the
SOLE, and the CA. Despite these, the Mediator-Arbiter ruled that
employees who encounter or handle trade secrets and financial
information are not automatically classified as confidential employees. It
was admitted that the subject employees encounter and handle financial
as well as physical production data and other information which are
considered vital and important from the business operations standpoint.
Nevertheless, it was opined that such information is not the kind of
information that is relevant to collective bargaining negotiations and
settlement of grievances as would classify them as confidential
employees. The SOLE, which the CA affirmed, likewise held that the
questioned voters do not have access to confidential labor relations
information.
We defer to the findings of fact of the Mediator-Arbiter, the SOLE, and the
CA. Certainly, access to vital labor information is the imperative
consideration. An employee must assist or act in a confidential capacity
and obtain confidential information relating to labor relations policies.
Exposure to internal business operations of the company is not per se a
ground for the exclusion in the bargaining unit.26
The Court sees no need to belabor the effects of the unresolved notice of
appeal and motion to suspend proceedings filed by CCBPI in September
2007. Suffice it to say that the substantial merits of the issues raised in
said pleadings are the same as what were already brought to and passed
upon by the Mediator-Arbiter, the SOLE, and the CA.
WHEREFORE, premises considered, the petition is DENIED. The March
17, 2010 Decision and September 16, 2010 Resolution of the Court of
Appeals in CA-G.R. SP No. 104043, which affirmed the May 6, 2008
Resolution of the Secretary of Labor and Employment, dismissing
petitioner's appeal that assailed the Decision (On the Challenged
Voters) and Proclamation of the Winner, both dated October 22, 2007, of
the Mediator-Arbiter, are hereby AFFIRMED.
SO ORDERED.
8.
G.R. No. 196276 June 4, 2014
37
TAKATA (PHILIPPINES) CORPORATION, Petitioner,
vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS
MANGGAGAWA NG TAKATA (SALAMAT), Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA
Philippines Corporation assailing the Decision 1 dated December 22, 2010
and the Resolution2 dated March 28, 2011 of the Court of Appeals in CA-
G.R. SP No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and
Employment (DOLE) Regional Office a Petition3for Cancellation of the
Certificate of Union Registration of Respondent Samahang Lakas
Manggagawa ng Takata (SALAMA1) on the ground that the latter is guilty
of misrepresentation, false statement and fraud with respect to the
number of those who participated in the organizational meeting, the
adoption and ratification of its Constitution and By-Laws, and in the
election of its officers. It contended that in the May 1, 2009
organizational meeting of respondent, only 68 attendees signed the
attendance sheet, and which number comprised only 17% of the total
number of the 396 regular rank- and-file employees which respondent
sought to represent, and hence, respondent failed to comply with the
20% minimum membership requirement. Petitioner insisted that the
document "Pangalan ng mga Kasapi ng Unyon" bore no signatures of the
alleged 119 union members; and that employees were not given
sufficient information on the documents they signed; that the document
"Sama-Samang Pahayag ng Pagsapi" was not submitted at the time of
the filing of respondent's application for union registration; that the 119
union members were actually only 117; and, that the total number of
petitioner's employees as of May 1, 2009 was 470, and not 396 as
respondent claimed.4
Respondent denied the charge and claimed that the 119 union members
were more than the 20% requirement for union registration. The
document "Sama-Samang Pahayag ng Pagsapi sa Unyon" which it
presented in its petition for certification election5 supported their claim of
119 members. Respondent also contended that petitioner was estopped
from assailing its legal personality as it agreed to a certification election
and actively participated in the pre-election conference of the
certification election proceedings.6 Respondent argued that the union
members were informed of the contents of the documents they signed
and that the 68 attendees to the organizational meeting constituted
more than 50% of the total union membership, hence, a quo rumexisted
for the conduct of the said meeting.7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez,
Sr., issued a Decision8 granting the petition for cancellation of
respondent's certificate of registration, the dispositive portion of which
reads:
WHEREFORE, from the foregoing considerations, the petition is hereby
GRANTED. Accordingly, the respondent Union Certificate of Registration
No. RO400A-2009-05-01-UR-LAG, dated May 19, 2009 is hereby
REVOCKED (sic) and /or CANCELLED pursuant to paragraph (a) & (b),
Section 3, Rule XIV of Department Order No. 40-03 and the Samahang
Lakas ng Manggagawa ng TAKATA (SALAMAT) is hereby delisted from the
roll of legitimate labor organization of this office.9
In revoking respondent's certificate of registration, the Regional Director
found that the 68 employees who attended the organizational meeting
was obviously less than 20% of the total number of 396 regular rank-
and-file employees which respondent sought to represent, hence, short
of the union registration requirement; that the attendance sheet which
contained the signatures and names of the union members totalling to
68 contradicted the list of names stated in the document denominated
as "Pangalan ng mga Kasaping Unyon." The document "Sama-Samang
Pahayag ng Pagsapi" was not attached to the application for registration
as it was only submitted in the petition for certification election filed by
respondent at a later date. The Regional Director also found that the
proceedings in the cancellation of registration and certification elections
are two different and entirely separate and independent proceedings
which were not dependent on each other.
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino
(BMP) Paralegal Officer, Domingo P. Mole, filed a Notice and
Memorandum of Appeal10 with the Bureau of Labor Relations (BLR).
However, on September 28,2009, respondent, through its counsels,
Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal
Memorandum with Formal Entry of Appearance11 to the Office of the
DOLE Secretary, which the latter eventually referred to the BLR.
Petitioner filed an Opposition to the Appeals 12 praying for their dismissal
on the ground of forum shopping as respondent filed two separate
appeals in two separate venues; and for failing to avail of the correct
remedy within the period; and that the certificate of registration was
tainted with fraud, misrepresentation and falsification.
In its Answer,13 respondent claimed that there was no forum shopping as
BMP's Paralegal Officer was no longer authorized to file an appeal on
behalf of respondent as the latter's link with BMP was already terminated
and only the Union President was authorized to file the appeal; and that
it complied with Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal
Memorandum with Formal Entry of Appearance and petitioner's Answer,
the BLR rendered its Decision14 reversing the Order of the Regional
Director, the decretal portion of which reads:
38
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional
Director Ricardo S. Martinez, Sr., dated 27 August 2009, is hereby
REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall
remain in the roster of labor organizations.15
In reversing, the BLR found that petitioner failed to prove that
respondent deliberately and maliciously misrepresented the number of
rank-and-file employees. It pointed out petitioner's basis for the alleged
noncompliance with the minimum membership requirement for
registration was the attendance of 68 members to the May 1, 2009
organizational meeting supposedly comprising only 17% of the total 396
regular rank-and-file employees. However, the BLR found that the list of
employees who participated in the organizational meeting was a
separate and distinct requirement from the list of the names of members
comprising at least 20% of the employees in the bargaining unit; and
that there was no requirement for signatures opposite the names of the
union members; and there was no evidence showing that the employees
assailed their inclusion in the list of union members.
Petitioner filed a motion for reconsideration, which was denied by the
BLR in a Resolution16 dated January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari under
Rule 65.
After the submission of the parties' respective pleadings, the case was
submitted for decision.
On December 22, 2010, the CA rendered its assailed decision which
denied the petition and affirmed the decision of the BLR. Petitioner's
motion for reconsideration was denied in a Resolution dated March 29,
2011.
Hence this petition for review filed by petitioner raising the following
issues, to wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS
ERROR IN AFFIRMING THE DECISION OF PUBLIC RESPONDENT BLR AND
NOT FINDING ANY VIOLATION BY SAMAHANG LAKAS MANGGAGAWA SA
TAKATA (SALAMAT) OF THE RULE ON FORUM SHOPPING IN THE FILING OF
TWO VERIFIED APPEALS FOR AND ITS BEHALF. BOTH OF THE APPEALS
SHOULD HAVE BEEN DISMISSED OUTRIGHT BY PUBLIC RESPONDENT BLR,
ON GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING
THAT THE APPLICATION FOR REGISTRATION OF SAMAHANG LAKAS
MANGGAGAWA SA TAKATA (SALAMAT) WAS COMPLIANT WITH THE LAW.
CONSIDERING THE CIRCUMSTANCES OBTAINING IN THE REGISTRATION
OF SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED WITH FRAUD,
MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT POSSESS
THE REQUIREDNUMBER OF MEMBERS AT THE TIME OF FILING OF ITS
APPLICATION FOR REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF
MISREPRESENTATION, AND FALSE STATEMENTS AND FRAUD IN
CONNECTION THEREWITH.17
Anent the first issue, petitioner contends that respondent had filed two
separate appeals with two different representations at two different
venues, in violation of the rule on multiplicity of suits and forum
shopping, and instead of dismissing both appeals, the appeal erroneously
filed before the Labor Secretary was the one held validly filed,
entertained and even granted; that it is not within the discretion of BLR
to choose which between the two appeals should be entertained, as it is
the fact of the filing of the two appeals that is being prohibited and not
who among the representatives therein possessed the authority.
We are not persuaded.
We find no error committed by the CA in finding that respondent
committed no forum shopping. As the CA correctly concluded, to wit:
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no
longer authorized to file an appeal on behalf of union SALAMAT and that
BMP was duly informed that its services was already terminated.
SALAMAT even submitted before the BLR its "Resolusyon Blg. 01-2009"
terminating the services of BMP and revoking the representation of Mr.
Domingo Mole in any of the pending cases being handled by him on
behalf of the union. So, considering that BMP Paralegal Officer Domingo
P. Mole was no longer authorized to file an appeal when it filed the Notice
and Memorandum of Appeal to DOLE Regional Office No. IV-A, the same
can no longer be treated as an appeal filed by union SALAMAT. Hence,
there is no forum shopping to speak of in this case as only the Appeal
Memorandum with Formal Entry of Appearance filed by Atty. Napoleon C.
Banzuela, Jr. and Atty. Jehn Louie W. Velandrez is sanctioned by
SALAMAT.18
Since Mole's appeal filed with the BLR was not specifically authorized by
respondent, such appeal is considered to have not been filed at all. It has
been held that "if a complaint is filed for and in behalf of the plaintiff who
is not authorized to do so, the complaint is not deemed filed.
An unauthorized complaint does not produce any legal effect."19
Respondent through its authorized representative filed its Appeal
Memorandum with Formal Entry of Appearance before the Labor
Secretary, and not with the BLR. As the appeal emanated from the
petition for cancellation of certificate of registration filed with the
Regional Office, the decision canceling the registration is appealable to
the BLR, and not with the Labor Secretary. However, since the Labor
Secretary motu propio referred the appeal with the BLR, the latter can
now act on it. Considering that Mole's appeal with the BLR was not
39
deemed filed, respondents appeal, through Banzuela and Associates,
which the Labor Secretary referred to the BLR was the only existing
appeal with the BLR for resolution. There is, therefore, no merit to
petitioner's claim that BLR chose the appeal of Banzuela and Associates
over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories
Employees Union20 cited by petitioner is not at all applicable in this case
as the issue therein is the authority of the Labor Secretary to review the
decision of the Bureau of Labor Relations rendered in the exercise of its
appellate jurisdiction over decision of the Regional Director in cases
involving cancellations of certificate of registration of labor unions. We
found no grave abuse of discretion committed by the Secretary of Labor
in not acting on therein petitioner's appeal. The decision of the Bureau of
Labor Relations on cases brought before it on appeal from the Regional
Director are final and executory. Hence, the remedy of the aggrieved
party is to seasonably avail of the special civil action of certiorari under
Rule 65 and the Rules of Court. In this case, after the Labor Secretary
motu propio referred respondent's appeal filed with it to the BLR which
rendered its decision reversing the Regional Director, petitioner went
directly to the CA via a petition for certiorari under Rule 65.
As to the second issue, petitioner seeks the cancellation of respondent's
registration on grounds offraud and misrepresentation bearing on the
minimum requirement of the law as to its membership, considering the
big disparity in numbers, between the organizational meeting and the list
of members, and so misleading the BLR that it obtained the minimum
required number of employees for purposes of organization and
registration.
We find no merit in the arguments.
Art. 234 of the Labor Code provides:
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."
And after the issuance of the certificate of registration, the labor
organization's registration could be assailed directly through cancellation
of registration proceedings in accordance with Articles 238 and 239 of
the Labor Code. And the cancellation of union certificate of registration
and the grounds thereof are as follows:
ART. 238. Cancellation of Registration. - The certificate of registration of
any legitimate labor organization, whether national or local, may be
cancelled by the Bureau, after due hearing, only on the grounds specified
in Article 239 hereof.
ART. 239. Grounds for Cancellation of Union Registration. - The following
may constitute grounds for cancellation of union registration:
(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.
Petitioner's charge that respondent committed misrepresentation and
fraud in securing its certificate of registration is a serious charge and
must be carefully evaluated. Allegations thereof should be compounded
with supporting circumstances and evidence.21 We find no evidence on
record to support petitioner's accusation.
Petitioner's allegation of misrepresentation and fraud is based on its
claim that during the organizational meeting on May 1, 2009, only 68
employees attended, while respondent claimed that it has 119 members
as shown in the document denominated as "Pangalan ng mga Kasapi ng
Unyon;" hence, respondent misrepresented on the 20% requirement of
the law as to its membership.
We do not agree.
It does not appear in Article 234 (b) of the Labor Code that the attendees
in the organizational meeting must comprise 20% of the employees in
the bargaining unit. In fact, even the Implementing Rules and
Regulations of the Labor Code does not so provide. It is only under Article
40
234 (c) that requires 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. Clearly, the 20% minimum requirement pertains to the
employees membership in the union and not to the list of workers who
participated in the organizational meeting. Indeed, Article 234 (b) and (c)
provide for separate requirements, which must be submitted for the
union's registration, and which respondent did submit. Here, the total
number of employees in the bargaining unit was 396, and 20% of which
was about 79. Respondent submitted a document entitled "Pangalan ng
Mga Kasapi ng Unyon" showing the names of 119 employees as union
members, thus respondent sufficiently complied even beyond the 20%
minimum membership requirement. Respondent also submitted the
attendance sheet of the organizational meeting which contained the
names and signatures of the 68 union members who attended the
meeting. Considering that there are 119 union members which are more
than 20% of all the employees of the bargaining unit, and since the law
does not provide for the required number of members to attend the
organizational meeting, the 68 attendees which comprised at least the
majority of the 119 union members would already constitute a quorum
for the meeting to proceed and to validly ratify the Constitution and By-
laws of the union. There is, therefore, no basis for petitioner to contend
that grounds exist for the cancellation of respondent's union registration.
For fraud and misrepresentation to be grounds for cancellation of union
registration under Article 239 of the Labor Code, the nature of the fraud
and misrepresentation must be grave and compelling enough to vitiate
the consent of a majority of union members.22
Petitioner's claim that the alleged union members signed documents
without adequate information is not persuasive. The one who alleges a
fact has the burden of proving it and a mere allegation is not
evidence.23 In fact, we note that not one of those listed in the document
denominated as "Pangalan ng Mga Kasaping Unyon" had come forward
to deny their membership with respondent. Notably, it had not been
rebutted that the same union members had signed the document
entitled "Sama-Samang Pahayag ng Pagsapi," thus, strengtheningtheir
desire to be members of the respondent union.
Petitioner claims that in the list of members, there was an employee
whose name appeared twice and another employee who was merely a
project employee. Such could not be considered a misrepresentation in
the absence of showing that respondent deliberately did so for the
purpose of increasing their union membership. In fact, even if those two
names were not included in the list of union members, there would still
be 117 members which was still more than 20% of the 396 rank-and-file
employees.
As to petitioner's argument that the total number of its employees as of
May 1, 2009 was 470, and not396 as respondent claimed, still the 117
union members comprised more than the 20% membership requirement
for respondent's registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and
Employment,24 we said:
For the purpose of de-certifying a union such as respondent, it must be
shown that there was misrepresentation, false statement or fraud in
connection with the adoption or ratification of the constitution and by-
laws or amendments thereto, the minutes of ratification; or, in
connection with the election of officers, the minutes of the election of
officers, the list of voters, or failure to submit these documents together
with the list of the newly elected-appointed officers and their postal
addresses to the BLR.
The bare fact that two signatures appeared twice on the list of those who
participated in the organizational meeting would not, to our mind,
provide a valid reason to cancel respondents certificate of registration.
The cancellation of a unions registration doubtless has an impairing
dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration
under the Labor Code, the nature of the fraud and misrepresentation
must be grave and compelling enough to vitiate the consent of a
majority of union members.1wphi1
In this case, we agree with the BLR and the CA that respondent could not
have possibly committed misrepresentation, fraud, or false statements.
The alleged failure of respondent to indicate with mathematical precision
the total number of employees in the bargaining unit is of no moment,
especially as it was able to comply with the 20% minimum membership
requirement. Even if the total number of rank-and-file employees of
petitioner is 528, while respondent declared that it should only be 455, it
still cannot be denied that the latter would have more than complied
with the registration requirement.25
WHEREFORE, premises considered, the petition for review is DENIED. The
Decision dated December 22, 2010 and the Resolution dated March 28,
2011 of the Court of Appeals, in CA-G.R. SP No. 112406, are AFFIRMED.
SO ORDERED.
9.
G.R. No. 211145, October 14, 2015
SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD REP. BY ITS
PRESIDENT, ALFIE ALIPIO, Petitioner, v. BUREAU OF LABOR
RELATIONS, HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO.,
LTD. (HHIC-PHIL.), Respondents.
41
DECISION
MENDOZA, J.:
The right to self-organization is not limited to unionism. Workers may
also form or join an association for mutual aid and protection and for
other legitimate purposes.
This is a petition for review on certiorari seeking to reverse and set aside
the July 4, 2013 Decision1and the January 28, 2014 Resolution2 of the
Court of Appeals (CA) in CA-G.R. SP No. 123397, which reversed the
November 28, 2011 Resolution3 of the Bureau of Labor Relations (BLR)
and reinstated the April 20, 2010 Decision4 of the Department of Labor
and Employment (DOLE) Regional Director, cancelling the registration of
Samahan ng Manggagawa sa Hanjin Shipyard (Samahan) as a worker's
association under Article 243 (now Article 249) of the Labor Code.
The Facts
On February 16, 2010, Samahan, through its authorized representative,
Alfie F. Alipio, filed an application for registration5 of its name "Samahan
ng Mga Manggagawa sa Hanjin Shipyard" with the DOLE. Attached to the
application were the list of names of the association's officers and
members, signatures of the attendees of the February 7, 2010 meeting,
copies of their Constitution and By-laws. The application stated that the
association had a total of 120 members.
On February 26, 2010, the DOLE Regional Office No. 3, City of San
Fernando, Pampanga (DOLE-Pampanga), issued the corresponding
certificate of registration6 in favor of Samahan.
On March 15, 2010, respondent Hanjin Heavy Industries and
Construction Co., Ltd. Philippines (Hanjin), with offices at Greenbeach 1,
Renondo Peninsula, Sitio Agustin, Barangay Cawag, Subic Bay Freeport
Zone, filed a petition7 with DOLE-Pampanga praying for the cancellation
of registration of Samahan's association on the ground that its members
did not fall under any of the types of workers enumerated in the second
sentence of Article 243 (now 249).
Hanjin opined that only ambulant, intermittent, itinerant, rural workers,
self-employed, and those without definite employers may form a workers'
association. It further posited that one third (1/3) of the members of the
association had definite employers and the continued existence and
registration of the association would prejudice the company's goodwill.
On March 18, 2010, Hanjin filed a supplemental petition, 8 adding the
alternative ground that Samahan committed a misrepresentation in
connection with the list of members and/or voters who took part in the
ratification of their constitution and by-laws in its application for
registration. Hanjin claimed that Samahan made it appear that its
members were all qualified to become members of the workers'
association.
On March 26, 2010, DOLE-Pampanga called for a conference, wherein
Samahan requested for a 10-day period to file a responsive pleading. No
pleading, however, was submitted. Instead, Samahan filed a motion to
dismiss on April 14, 2010.9
The Ruling of the DOLE Regional Director
On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of
Hanjin. He found that the preamble, as stated in the Constitution and By-
Laws of Samahan, was an admission on its part that all of its members
were employees of Hanjin, to wit:
KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay
naglalayong na isulong ang pagpapabuti ng kondisyon sa paggawa at
katiyakan sa hanapbuhay sa pamamagitan ng patuloy na pagpapaunlad
ng kasanayan ng para sa mga kasapi nito. Naniniwala na sa
pamamagitan ng aming mga angking lakas, kaalaman at kasanayan ay
anting maitataguyod at makapag-aambag sa kaunlaran ng isang
lipunan. Na mararating at makakamit ang antas ng pagkilala, pagdakila
at pagpapahalaga sa mga tulad naming mga manggagawa.
x x x10
The same claim was made by Samahan in its motion to dismiss, but it
failed to adduce evidence that the remaining 63 members were also
employees of Hanjin. Its admission bolstered Hanjin's claim that
Samahan committed misrepresentation in its application for registration
as it made an express representation that all of its members were
employees of the former. Having a definite employer, these 57 members
should have formed a labor union for collective bargaining. 11 The
dispositive portion of the decision of the Dole Regional Director, reads:
WHEREFORE, premises considered, the petition is hereby GRANTED.
Consequently, the Certificate of Registration as Legitimate Workers
Association (LWA) issued to the SAMAHAN NG MGA MANGGAGAWA SA
HANJIN SHIPYARD (SAMAHAN) with Registration Numbers R0300-1002-
WA-009 dated February 26, 2010 is hereby CANCELLED, and said
association is dropped from the roster of labor organizations of this
Office.
SO DECIDED.12
The Ruling of the Bureau of Labor Relations
Aggrieved, Samahan filed an appeal13 before the BLR, arguing that Hanjin
had no right to petition for the cancellation of its registration. Samahan
pointed out that the words "Hanjin Shipyard," as used in its application
for registration, referred to a workplace and not as employer or company.
42
It explained that when a shipyard was put up in Subic, Zambales, it
became known as Hanjin Shipyard. Further, the remaining 63 members
signed the Sama-Samang Pagpapatunay which stated that they were
either working or had worked at Hanjin. Thus, the alleged
misrepresentation committed by Samahan had no leg to stand on. 14
In its Comment to the Appeal,15 Hanjin averred that it was a party-in-
interest. It reiterated that Samahan committed misrepresentation in its
application for registration before DOLE Pampanga. While Samahan
insisted that the remaining 63 members were either working, or had at
least worked in Hanjin, only 10 attested to such fact, thus, leaving its 53
members without any workplace to claim.
On September 6, 2010, the BLR granted Samahan's appeal and reversed
the ruling of the Regional Director. It stated that the law clearly afforded
the right to self-organization to all workers including those without
definite employers.16 As an expression of the right to self-organization,
industrial, commercial and self-employed workers could form a workers'
association if they so desired but subject to the limitation that it was only
for mutual aid and protection.17 Nowhere could it be found that to form a
workers' association was prohibited or that the exercise of a workers'
right to self-organization was limited to collective bargaining. 18
The BLR was of the opinion that there was no misrepresentation on the
part of Samahan. The phrase, "KAMI, ang mga Manggagawa sa Hanjin
Shipyard" if translated, would be: "We, the workers at Hanjin Shipyard."
The use of the preposition "at" instead of "of " would indicate that
"Hanjin Shipyard" was intended to describe a place. 19 Should Hanjin feel
that the use of its name had affected the goodwill of the company, the
remedy was not to seek the cancellation of the association's registration.
At most, the use by Samahan of the name "Hanjin Shipyard" would only
warrant a change in the name of the association.20 Thus, the dispositive
portion of the BLR decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE Region
III Director Ernesto C. Bihis dated 20 April 2010 is REVERSED and SET
ASIDE.
Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall
remain in the roster of legitimate workers' association. 21
On October 14, 2010, Hanjin filed its motion for reconsideration. 22
In its Resolution,23 dated November 28, 2011, the BLR affirmed its
September 6, 2010 Decision, but directed Samahan to remove the words
"Hanjin Shipyard" from its name. The BLR explained that the Labor Code
had no provision on the use of trade or business name in the naming of a
worker's association, such matters being governed by the Corporation
Code. According to the BLR, the most equitable relief that would strike a
balance between the contending interests of Samahan and Hanjin was to
direct Samahan to drop the name "Hanjin Shipyard" without delisting it
from the roster of legitimate labor organizations. The fallo reads:
WHEREFORE, premises considered, our Decision dated 6 September
2010 is hereby AFFIRMED with a DIRECTIVE for SAMAHAN to remove
"HANJIN SHIPYARD" from its name.
SO RESOLVED.24
Unsatisfied, Samahan filed a petition for certiorari25 under Rule 65 before
the CA, docketed as CA-G.R. SP No. 123397.
In its March 21, 2012 Resolution,26 the CA dismissed the petition because
of Samahan's failure to file a motion for reconsideration of the assailed
November 28, 2011 Resolution.
On April 17, 2012, Samahan filed its motion for reconsideration 27 and on
July 18, 2012, Hanjin filed its comment28 to oppose the same. On October
22, 2012, the CA issued a resolution granting Samahan's motion for
reconsideration and reinstating the petition. Hanjin was directed to file a
comment five (5) days from receipt of notice.29
On December 12, 2012, Hanjin filed its comment on the
petition,30 arguing that to require Samahan to change its name was not
tantamount to interfering with the workers' right to self-
organization.31Thus, it prayed, among others, for the dismissal of the
petition for Samahan's failure to file the required motion for
reconsideration.32
On January 17, 2013, Samahan filed its reply.33
On March 22, 2013, Hanjin filed its memorandum. 34
The Ruling of the Court of Appeals
On July 4, 2013, the CA rendered its decision, holding that the
registration of Samahan as a legitimate workers' association was
contrary to the provisions of Article 243 of the Labor Code.35 It stressed
that only 57 out of the 120 members were actually working in Hanjin
while the phrase in the preamble of Samahan's Constitution and By-laws,
"KAMI, ang mga Manggagawa sa Hanjin Shipyard" created an impression
that all its members were employees of HHIC. Such unqualified
manifestation which was used in its application for registration, was a
clear proof of misrepresentation which warranted the cancellation of
Samahan's registration.
It also stated that the members of Samahan could not register it as a
legitimate worker's association because the place where Hanjin's
industry was located was not a rural area. Neither was there any
evidence to show that the members of the association were ambulant,
43
intermittent or itinerant workers.36
At any rate, the CA was of the view that dropping the words "Hanjin
Shipyard" from the association name would not prejudice or impair its
right to self-organization because it could adopt other appropriate
names. The dispositive portion reads:
WHEREFORE, the petition is DISMISSED and the BLR's directive, ordering
that the words "Hanjin Shipyard" be removed from petitioner
association's name, is AFFIRMED. The Decision dated April 20, 2010 of
the DOLE Regional Director in Case No. R0300-1003-CP-001, which
ordered the cancellation of petitioner association's registration is
REINSTATED.
SO ORDERED.37
Hence, this petition, raising the following
ISSUES
I. THE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT
SAMAHAN CANNOT FORM A WORKERS' ASSOCIATION OF
EMPLOYEES IN HANJIN AND INSTEAD SHOULD HAVE FORMED A
UNION, HENCE THEIR REGISTRATION AS A WORKERS'
ASSOCIATION SHOULD BE CANCELLED.
II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE
REMOVAL/DELETION OF THE WORD "HANJIN" IN THE NAME OF
THE UNION BY REASON OF THE COMPANY'S PROPERTY RIGHT
OVER THE COMPANY NAME "HANJIN."38
Samahan argues that the right to form a workers' association is not
exclusive to intermittent, ambulant and itinerant workers. While the
Labor Code allows the workers "to form, join or assist labor organizations
of their own choosing" for the purpose of collective bargaining, it does
not prohibit them from forming a labor organization simply for purposes
of mutual aid and protection. All members of Samahan have one
common place of work, Hanjin Shipyard. Thus, there is no reason why
they cannot use "Hanjin Shipyard" in their name.39
Hanjin counters that Samahan failed to adduce sufficient basis that all its
members were employees of Hanjin or its legitimate contractors, and
that the use of the name "Hanjin Shipyard" would create an impression
that all its members were employess of HHIC.40
Samahan reiterates its stand that workers with a definite employer can
organize any association for purposes of mutual aid and protection.
Inherent in the workers' right to self-organization is its right to name its
own organization. Samahan referred "Hanjin Shipyard" as their common
place of work. Therefore, they may adopt the same in their association's
name.41
The Court's Ruling
The petition is partly meritorious.
Right to self-organization includes right to form a union, workers'
association and labor management councils
More often than not, the right to self-organization connotes unionism.
Workers, however, can also form and join a workers' association as well
as labor-management councils (LMC). Expressed in the highest law of the
land is the right of all workers to self-organization. Section 3, Article XIII
of the 1987 Constitution states:
Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all. It shall guarantee the
rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law. xxx
[Emphasis Supplied]
And Section 8, Article III of the 1987 Constitution also states:
Section 8. The right of the people, including those employed in the
public and private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not be abridged.
In relation thereto, Article 3 of the Labor Code provides:
Article 3. Declaration of basic policy. The State shall afford protection to
labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the relations between
workers and employers. The State shall assure the rights of
workers to self-organization, collective bargaining, security of
tenure, and just and humane conditions of work.
[Emphasis Supplied]
As Article 246 (now 252) of the Labor Code provides, the right to self-
organization includes the right to form, join or assist labor organizations
for the purpose of collective bargaining through representatives of their
own choosing and to engage in lawful concerted activities for the same
purpose for their mutual aid and protection. This is in line with the policy
of the State to foster the free and voluntary organization of a strong and
44
united labor movement as well as to make sure that workers participate
in policy and decision-making processes affecting their rights, duties and
welfare.42
The right to form a union or association or to self-organization
comprehends two notions, to wit: (a) the liberty or freedom, that is, the
absence of restraint which guarantees that the employee may act for
himself without being prevented by law; and (b) the power, by virtue of
which an employee may, as he pleases, join or refrain from joining an
association.43
In view of the revered right of every worker to self-organization, the law
expressly allows and even encourages the formation of labor
organizations. A labor organization is defined as "any union or
association of employees which exists in whole or in part for the purpose
of collective bargaining or of dealing with employers concerning terms
and conditions of employment."44 A labor organization has two broad
rights: (1) to bargain collectively and (2) to deal with the employer
concerning terms and conditions of employment. To bargain collectively
is a right given to a union once it registers itself with the DOLE. Dealing
with the employer, on the other hand, is a generic description of
interaction between employer and employees concerning grievances,
wages, work hours and other terms and conditions of employment, even
if the employees' group is not registered with the DOLE. 45
A union refers to any labor organization in the private sector organized
for collective bargaining and for other legitimate purpose, 46 while a
workers' association is an organization of workers formed for the mutual
aid and protection of its members or for any legitimate purpose other
than collective bargaining.47
Many associations or groups of employees, or even combinations of only
several persons, may qualify as a labor organization yet fall short of
constituting a labor union. While every labor union is a labor
organization, not every labor organization is a labor union. The difference
is one of organization, composition and operation.48
Collective bargaining is just one of the forms of employee participation.
Despite so much interest in and the promotion of collective bargaining, it
is incorrect to say that it is the device and no other, which secures
industrial democracy. It is equally misleading to say that collective
bargaining is the end-goal of employee representation. Rather, the real
aim is employee participation in whatever form it may appear,
bargaining or no bargaining, union or no union.49 Any labor organization
which may or may not be a union may deal with the employer. This
explains why a workers' association or organization does not always have
to be a labor union and why employer-employee collective interactions
are not always collective bargaining.50
To further strengthen employee participation, Article 255 (now 261) 51 of
the Labor Code mandates that workers shall have the right to participate
in policy and decision-making processes of the establishment where they
are employed insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and employers may form
LMCs.
A cursory reading of the law demonstrates that a common element
between unionism and the formation of LMCs is the existence of an
employer-employee relationship. Where neither party is an employer nor
an employee of the other, no duty to bargain collectively would exist. 52 In
the same manner, expressed in Article 255 (now 261) is the requirement
that such workers be employed in the establishment before they can
participate in policy and decision making processes.
In contrast, the existence of employer-employee relationship is not
mandatory in the formation of workers' association. What the law simply
requires is that the members of the workers' association, at the very
least, share the same interest. The very definition of a workers'
association speaks of "mutual aid and protection."
Right to choose whether to form or join a union or workers' association
belongs to workers themselves
In the case at bench, the Court cannot sanction the opinion of the CA
that Samahan should have formed a union for purposes of collective
bargaining instead of a workers' association because the choice
belonged to it. The right to form or join a labor organization necessarily
includes the right to refuse or refrain from exercising the said right. It is
self-evident that just as no one should be denied the exercise of a right
granted by law, so also, no one should be compelled to exercise such a
conferred right.53 Also inherent in the right to self-organization is the right
to choose whether to form a union for purposes of collective bargaining
or a workers' association for purposes of providing mutual aid and
protection.
The right to self-organization, however, is subject to certain limitations as
provided by law. For instance, the Labor Code specifically disallows
managerial employees from joining, assisting or forming any labor union.
Meanwhile, supervisory employees, while eligible for membership in
labor organizations, are proscribed from joining the collective bargaining
unit of the rank and file employees.54 Even government employees have
the right to self-organization. It is not, however, regarded as existing or
available for purposes of collective bargaining, but simply for the
furtherance and protection of their interests.55
Hanjin posits that the members of Samahan have definite employers,
hence, they should have formed a union instead of a workers'
association. The Court disagrees. There is no provision in the Labor Code
that states that employees with definite employers may form, join or
assist unions only.
The Court cannot subscribe either to Hanjin's position that Samahan's
45
members cannot form the association because they are not covered by
the second sentence of Article 243 (now 249), to wit:
Article 243. Coverage and employees' right to self-organization. All
persons employed in commercial, industrial and agricultural enterprises
and in religious, charitable, medical, or educational institutions, whether
operating for profit or not, shall have the right to self-organization and to
form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining. Ambulant, intermittent and
itinerant workers, self-employed people, rural workers and those
without any definite employers may form labor organizations for
their mutual aid and protection. (As amended by Batas Pambansa
Bilang 70, May 1, 1980)
[Emphasis Supplied]
Further, Article 243 should be read together with Rule 2 of Department
Order (D.O.) No. 40-03, Series of 2003, which provides:
RULE II
COVERAGE OF THE RIGHT TO SELF-ORGANIZATION
Section 1. Policy. - It is the policy of the State to promote the free and
responsible exercise of the right to self-organization through the
establishment of a simplified mechanism for the speedy registration of
labor unions and workers associations, determination of representation
status and resolution of inter/intra-union and other related labor relations
disputes. Only legitimate or registered labor unions shall have the right
to represent their members for collective bargaining and other purposes.
Workers' associations shall have the right to represent their members for
purposes other than collective bargaining.
Section 2. Who may join labor unions and workers' associations. - All
persons employed in commercial, industrial and agricultural enterprises,
including employees of government owned or controlled corporations
without original charters established under the Corporation Code, as well
as employees of religious, charitable, medical or educational institutions
whether operating for profit or not, shall have the right to self-
organization and to form, join or assist labor unions for purposes of
collective bargaining: provided, however, that supervisory employees
shall not be eligible for membership in a labor union of the rank-and-file
employees but may form, join or assist separate labor unions of their
own. Managerial employees shall not be eligible to form, join or assist
any labor unions for purposes of collective bargaining. Alien employees
with valid working permits issued by the Department may exercise the
right to self-organization and join or assist labor unions for purposes of
collective bargaining if they are nationals of a country which grants the
same or similar rights to Filipino workers, as certified by the Department
of Foreign Affairs.
For purposes of this section, any employee, whether employed for a
definite period or not, shall beginning on the first day of his/her service,
be eligible for membership in any labor organization.
All other workers, including ambulant, intermittent and other workers,
the self-employed, rural workers and those without any definite
employers may form labor organizations for their mutual aid and
protection and other legitimate purposes except collective
bargaining.
[Emphases Supplied]
Clearly, there is nothing in the foregoing implementing rules which
provides that workers, with definite employers, cannot form or join a
workers' association for mutual aid and protection. Section 2 thereof
even broadens the coverage of workers who can form or join a workers'
association. Thus, the Court agrees with Samahan's argument that the
right to form a workers' association is not exclusive to ambulant,
intermittent and itinerant workers. The option to form or join a union or a
workers' association lies with the workers themselves, and whether they
have definite employers or not.
No misrepresentation on the part of Samahan to warrant cancellation of
registration
In this case, Samahan's registration was cancelled not because its
members were prohibited from forming a workers' association but
because they allegedly committed misrepresentation for using the
phrase, "KAMI, ang mga Manggagawa sa HAN JIN Shipyard."
Misrepresentation, as a ground for the cancellation of registration of a
labor organization, is committed "in connection with the adoption, or
ratification of the constitution and by-laws or amendments thereto, the
minutes of ratification, the list of members who took part in the
ratification of the constitution and by-laws or amendments thereto, and
those in connection with the election of officers, minutes of the election
of officers, and the list of voters, xxx."56
In Takata Corporation v. Bureau of Relations,57 the DOLE Regional
Director granted the petition for the cancellation of certificate of
registration of Samahang Lakas Manggagawa sa Takata (Salamat) after
finding that the employees who attended the organizational meeting fell
short of the 20% union registration requirement. The BLR, however,
reversed the ruling of the DOLE Regional Director, stating that petitioner
Takata Corporation (Takata) failed to prove deliberate and malicious
misrepresentation on the part of respondent Salamat. Although Takata
claimed that in the list of members, there was an employee whose name
appeared twice and another was merely a project employee, such facts
were not considered misrepresentations in the absence of showing that
the respondent deliberately did so for the purpose of increasing their
46
union membership. The Court ruled in favor of Salamat.
In S.S. Ventures International v. S.S. Ventures Labor Union,58 the petition
for cancellation of certificate of registration was denied. The Court wrote:
If the union's application is infected by falsification and like
serious irregularities, especially those appearing on the face of the
application and its attachments, a union should be denied
recognition as a legitimate labor organization. Prescinding from
these considerations, the issuance to the Union of Certificate of
Registration No. RO300-00-02-UR-0003 necessarily implies that its
application for registration and the supporting documents thereof are
prima facie free from any vitiating irregularities. Another factor which
militates against the veracity of the allegations in the Sinumpaang
Petisyon is the lack of particularities on how, when and where
respondent union perpetrated the alleged fraud on each
member. Such details are crucial for in the proceedings for
cancellation of union registration on the ground of fraud or
misrepresentation, what needs to be established is that the specific
act or omission of the union deprived the complaining employees-
members of their right to choose.
[Emphases Supplied]
Based on the foregoing, the Court concludes that misrepresentation, to
be a ground for the cancellation of the certificate of registration, must be
done maliciously and deliberately. Further, the mistakes appearing in the
application or attachments must be grave or refer to significant matters.
The details as to how the alleged fraud was committed must also be
indubitably shown.
The records of this case reveal no deliberate or malicious intent to
commit misrepresentation on the part of Samahan. The use of such
words "KAMI, ang mga Manggagawa sa HANJIN Shipyard" in the
preamble of the constitution and by-laws did not constitute
misrepresentation so as to warrant the cancellation of Samahan's
certificate of registration. Hanjin failed to indicate how this phrase
constitutes a malicious and deliberate misrepresentation. Neither was
there any showing that the alleged misrepresentation was serious in
character. Misrepresentation is a devious charge that cannot simply be
entertained by mere surmises and conjectures.
Even granting arguendo that Samahan's members misrepresented
themselves as employees or workers of Hanjin, said misrepresentation
does not relate to the adoption or ratification of its constitution and by-
laws or to the election of its officers.
Removal of the word "Hanjin Shipyard" from the association's name,
however, does not infringe on Samahan's right to self-organization
Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must
be removed in the name of the association. A legitimate workers'
association refers to an association of workers organized for mutual aid
and protection of its members or for any legitimate purpose other than
collective bargaining registered with the DOLE.59 Having been granted a
certificate of registration, Samahan's association is now recognized by
law as a legitimate workers' association.
According to Samahan, inherent in the workers' right to self-organization
is its right to name its own organization. It seems to equate the dropping
of words "Hanjin Shipyard" from its name as a restraint in its exercise of
the right to self-organization. Hanjin, on the other hand, invokes that
"Hanjin Shipyard" is a registered trade name and, thus, it is within their
right to prohibit its use.
As there is no provision under our labor laws which speak of the use of
name by a workers' association, the Court refers to the Corporation
Code, which governs the names of juridical persons. Section 18 thereof
provides:
No corporate name may be allowed by the Securities and Exchange
Commission if the proposed name
is identical or deceptively or confusingly similar to that of any
existing corporation or to any other name already protected by law or is
patently deceptive, confusing or contrary to existing laws. When a
change in the corporate name is approved, the Commission shall issue
an amended certificate of incorporation under the amended name.
[Emphases Supplied]
The policy underlying the prohibition in Section 18 against the
registration of a corporate name which is "identical or deceptively or
confusingly similar" to that of any existing corporation or which is
"patently deceptive" or "patently confusing" or "contrary to existing
laws," is the avoidance of fraud upon the public which would have
occasion to deal with the entity concerned, the evasion of legal
obligations and duties, and the reduction of difficulties of administration
and supervision over corporations.60
For the same reason, it would be misleading for the members of
Samahan to use "Hanjin Shipyard" in its name as it could give the wrong
impression that all of its members are employed by Hanjin.
Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly
states:
The change of name of a labor organization shall not affect its legal
personality. All the rights and obligations of a labor organization under its
old name shall continue to be exercised by the labor organization under
its new name.
47
Thus, in the directive of the BLR removing the words "Hanjin Shipyard,"
no abridgement of Samahan's right to self-organization was committed.
WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013
Decision and the January 28, 2014 Resolution of the Court of Appeals are
hereby REVERSED and SET ASIDE. The September 6, 2010 Resolution
of the Bureau of Labor Relations, as modified by its November 28, 2011
Resolution, is REINSTATED.
SO ORDERED.
10.
SAN MIGUEL FOODS, INCORPORATED, Petitioner,
-versus-
SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT
UNION,Respondent.
G.R. No. 146206 August 1, 2011
The issues in the present case, relating to the inclusion of employees in
supervisor levels 3 and 4 and the exempt employees in the proposed
bargaining unit, thereby allowing their participation in the certification
election; the application of the community or mutuality of interests test;
and the determination of the employees who belong to the category of
confidential employees, are not novel.
In G.R. No. 110399, entitled San Miguel Corporation Supervisors and
Exempt Union v. Laguesma,[1] 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 petitioner
San Miguel Foods, Inc. (SMFI) are not to be considered confidential
employees, because the same do not pertain to labor relations,
particularly, negotiation and settlement of grievances. Consequently,
they were allowed to form an appropriate bargaining unit for the purpose
of collective bargaining. The Court also declared that the employees
belonging to the three different plants of San Miguel Corporation
Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis,
having community or mutuality of interests, constitute a single
bargaining unit. They perform work of the same nature, receive the same
wages and compensation, and most importantly, share a common stake
in concerted activities. It was immaterial that the three plants have
different locations as they did not impede the operations of a single
bargaining representative.[2]
Pursuant to the Court's decision in G.R. No. 110399, the Department of
Labor and Employment National Capital Region (DOLE-NCR) conducted
pre-election conferences.[3] However, there was a discrepancy in the list
of eligible voters, i.e., petitioner submitted a list of 23 employees for the
San Fernando plant and 33 for the Cabuyao plant, while respondent
listed 60 and 82, respectively.[4]
On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an
Order[5]directing Election Officer Cynthia Tolentino to proceed with the
conduct of certification election in accordance with Section 2, Rule XII of
Department Order No. 9.
On September 30, 1998, a certification election was conducted and it
yielded the following results,[6] thus:
Cabuyao San Fernando Total
Plant Plant
Yes 23 23 46
No 0 0 0
Spoiled 2 0 2
Segregated 41 35 76
Total Votes
Cast 66 58 124
On the date of the election, September 30, 1998, petitioner filed the
Omnibus Objections and Challenge to Voters,[7] 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
or that there is no existence of employer-employee relationship with
petitioner. Specifically, it argued that certain employees should not be
allowed to vote as they are: (1) confidential employees; (2) employees
assigned to the live chicken operations, which are not covered by the
bargaining unit; (3) employees whose job grade is level 4, but are
performing managerial work and scheduled to be promoted; (4)
employees who belong to the Barrio Ugong plant; (5) non-SMFI
employees; and (6) employees who are members of other unions.
On October 21, 1998, the Med-Arbiter issued an Order directing
respondent to submit proof showing that the employees in the submitted
list are covered by the original petition for certification election and
belong to the bargaining unit it seeks to represent and, likewise,
directing petitioner to substantiate the allegations contained in its
Omnibus Objections and Challenge to Voters.[8]
In compliance thereto, respondent averred that (1) the bargaining unit
contemplated in the original petition is the Poultry Division of San Miguel
Corporation, now known as San Miguel Foods, Inc.; (2) it covered the
operations in Calamba, Laguna, Cavite, and Batangas and its home base
is either in Cabuyao, Laguna or San Fernando, Pampanga; and (3) it
submitted individual and separate declarations of the employees whose
votes were challenged in the election.[9]
Adding the results to the number of votes canvassed during the
September 30, 1998 certification election, the final tally showed
that: number of eligible voters 149; number of valid votes cast 121;
number of spoiled ballots - 3; total number of votes cast 124, with 118
(i.e., 46 + 72 = 118 ) Yes votes and 3 No votes.[10]
48

The Med-Arbiter issued the Resolution[11] dated February 17, 1999
directing the parties to appear before the Election Officer of the Labor
Relations Division on March 9, 1999, 10:00 a.m., for the opening of the
segregated ballots. Thereafter, on April 12, 1999, the segregated ballots
were opened, showing that out of the 76 segregated
votes, 72 were cast for Yes and 3 for No, with one spoiled ballot. [12]
Based on the results, the Med-Arbiter issued the Order [13] dated April 13,
1999, stating that since the Yes vote received 97% of the valid votes
cast, respondent is certified to be the exclusive bargaining agent of the
supervisors and exempt employees of petitioner's Magnolia Poultry
Products Plants in Cabuyao, San Fernando, and Otis.
On appeal, the then Acting DOLE Undersecretary, in the
Resolution[14] dated July 30, 1999, in OS-A-2-70-91 (NCR-OD-M-9010-
017), affirmed the Order dated April 13, 1999, with modification that
George C. Matias, Alma Maria M. Lozano, Joannabel T. Delos Reyes, and
Marilyn G. Pajaron be excluded from the bargaining unit which
respondent seeks to represent. She opined that the challenged voters
should be excluded from the bargaining unit, because Matias and Lozano
are members of Magnolia Poultry Processing Plants Monthly Employees
Union, while Delos Reyes and Pajaron are employees of San Miguel
Corporation, which is a separate and distinct entity from petitioner.
Petitioners Partial Motion for Reconsideration[15] dated August 14, 1999
was denied by the then Acting DOLE Undersecretary in the Order [16] dated
August 27, 1999.
In the Decision[17] dated April 28, 2000, in CA-G.R. SP No.
55510, entitled San Miguel Foods, Inc. v. The Honorable Office of the
Secretary of Labor, Bureau of Labor Relations, and San Miguel
Corporation Supervisors and Exempt Union, the Court of Appeals
(CA) affirmed with modification the Resolution dated July 30, 1999 of the
DOLE Undersecretary, stating that those holding the positions of Human
Resource Assistant and Personnel Assistant are excluded from the
bargaining unit.
Petitioners Motion for Partial Reconsideration[18] dated May 23, 2000 was
denied by the CA in the Resolution[19] dated November 28, 2000.
Hence, petitioner filed this present petition raising the following issues:
I.
WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE
WHEN IT EXPANDED THE SCOPE OF THE BARGAINING UNIT DEFINED BY
THIS COURT'S RULING IN G.R. NO. 110399.
II.
WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE -
SPECIFICALLY, THIS COURT'S DEFINITION OF A CONFIDENTIAL EMPLOYEE
- WHEN IT RULED FOR THE INCLUSION OF THE PAYROLL MASTER
POSITION IN THE BARGAINING UNIT.
III.
WHETHER THIS PETITION IS A REHASH OR A RESURRECTION OF THE
ISSUES RAISED IN G.R. NO. 110399, AS ARGUED BY PRIVATE
RESPONDENT.
Petitioner contends that with the Court's ruling in G.R. No.
110399[20] identifying the specific employees who can participate in the
certification election, i.e., the supervisors (levels 1 to 4) and exempt
employees of San Miguel Poultry Products Plants in Cabuyao, San
Fernando, and Otis, the CA erred in expanding the scope of the
bargaining unit so as to include employees who do not belong to or who
are not based in its Cabuyao or San Fernando plants. It also alleges that
the employees of the Cabuyao, San Fernando, and Otis plants of
petitioners predecessor, San Miguel Corporation, as stated in G.R. No.
110399, were engaged in dressed chicken processing, i.e., handling and
packaging of chicken meat, while the new bargaining unit, as defined by
the CA in the present case, includes employees engaged in live chicken
operations, i.e., those who breed chicks and grow chickens.
Respondent counters that petitioners proposed exclusion of certain
employees from the bargaining unit was a rehashed issue which was
already settled in G.R. No. 110399. It maintains that the issue of union
membership coverage should no longer be raised as a certification
election already took place on September 30, 1998, wherein respondent
won with 97% votes.
Petitioners contentions are erroneous. In G.R. No. 110399, the Court
explained that the employees of San Miguel Corporation Magnolia Poultry
Products Plants of Cabuyao, San Fernando, and Otis constitute a single
bargaining unit, which is not contrary to the one-company, one-union
policy. An appropriate bargaining unit is defined as a group of employees
of a given employer, comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees, consistent
with equity to the employer, indicate to be best suited to serve the
reciprocal rights and duties of the parties under the collective bargaining
provisions of the law.[21]
In National Association of Free Trade Unions v. Mainit Lumber
Development Company Workers Union United Lumber and General
Workers of the Phils,[22] the Court, taking into account the community or
mutuality of interests test, ordered the formation of a single bargaining
unit consisting of the Sawmill Division in Butuan City and the Logging
Division in Zapanta Valley, Kitcharao, Agusan [Del] Norte of the Mainit
Lumber Development Company. It held that while the existence of a
bargaining history is a factor that may be reckoned with in determining
the appropriate bargaining unit, the same is not decisive or
conclusive. Other factors must be considered. The test of grouping is
49
community or mutuality of interest. This is so because the basic test of
an asserted bargaining units acceptability is whether or not it is
fundamentally the combination which will best assure to all employees
the exercise of their collective bargaining rights.[23] Certainly, there is a
mutuality of interest among the employees of the Sawmill Division and
the Logging Division. Their functions mesh with one another.One group
needs the other in the same way that the company needs them
both. There may be differences as to the nature of their individual
assignments, but the distinctions are not enough to warrant the
formation of a separate bargaining unit.[24]
Thus, applying the ruling to the present case, the Court affirms the
finding of the CA that there should be only one bargaining unit for
the employees in Cabuyao, San Fernando, and Otis[25] of Magnolia Poultry
Products Plant involved in dressed chicken processing and Magnolia
Poultry Farms engaged in live chicken operations. Certain factors, such
as specific line of work, working conditions, location of work, mode of
compensation, and other relevant conditions do not affect or impede
their commonality of interest. Although they seem separate and distinct
from each other, the specific tasks of each division are actually
interrelated and there exists mutuality of interests which warrants the
formation of a single bargaining unit.
Petitioner asserts that the CA erred in not excluding the position
of Payroll Masterin the definition of a confidential employee and, thus,
prays that the said position and all other positions with access to salary
and compensation data be excluded from the bargaining unit.
This argument must fail. 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.[26] 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.
[27]
A confidential employee is one entrusted with confidence on delicate, or
with the custody, handling or care and protection of the employers
property.[28] 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.
[29]
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. 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.
Corollarily, although Article 245[30] of the Labor Code limits the
ineligibility to join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to
confidential employees or those who by reason of their positions or
nature of work are required to assist or act in a fiduciary manner to
managerial employees and, hence, are likewise privy to sensitive and
highly confidential records.[31] Confidential employees are thus excluded
from the rank-and-file bargaining unit. 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.[32] 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.[33]
In this regard, 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, considering their respective positions and job descriptions. As
Human Resource Assistant,[34] 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,[35] 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.
The proceedings for certification election are quasi-judicial in nature and,
therefore, decisions rendered in such proceedings can attain finality.
[36]
Applying the doctrine of res judicata, the issue in the
present case pertaining to the coverage of the employees who would
constitute the bargaining unit is now a foregone conclusion.
It bears stressing that 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.[37] 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
50
management. A labor bargaining representative, to be effective, must
owe its loyalty to the employees alone and to no other. [38] The only
exception is where the employer itself has to file the petition pursuant to
Article 258[39] of the Labor Code because of a request to bargain
collectively.[40]
With the foregoing disquisition, the Court writes finis to the issues raised
so as to forestall future suits of similar nature.
WHEREFORE, the petition is DENIED. The Decision dated April 28,
2000 and Resolution dated November 28, 2000 of the Court of Appeals,
in CA-G.R. SP No. 55510, which affirmed with modification the
Resolutions dated July 30, 1999 and August 27, 1999 of the Secretary of
Labor, are AFFIRMED.
SO ORDERED.
11.
SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY
OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND
REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO Union
President, Petitioner,
- versus -
CHARTER CHEMICAL ANDCOATING CORPORATION, Respondent.
G.R. No. 169717 March 16, 2011
x-----------------------------------------------------
---x
DECISION
DEL CASTILLO, J.:
The right to file a petition for certification election is accorded to a labor
organization provided that it complies with the requirements of law for
proper registration. The inclusion of supervisory employees in a labor
organization seeking to represent the bargaining unit of rank-and-file
employees does not divest it of its status as a legitimate labor
organization. We apply these principles to this case.
This Petition for Review on Certiorari seeks to reverse and set aside the
Court of Appeals March 15, 2005 Decision [1] in CA-G.R. SP No. 58203,
which annulled and set aside the January 13, 2000 Decision [2] of the
Department of Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-
M-9902-019) and the September 16, 2005 Resolution[3] denying
petitioner unions motion for reconsideration.
Factual Antecedents
On February 19, 1999, Samahang Manggagawa sa Charter Chemical
Solidarity of Unions in the Philippines for Empowerment and Reforms
(petitioner union) filed a petition for certification election among the
regular rank-and-file employees of Charter Chemical and Coating
Corporation (respondent company) with the Mediation Arbitration Unit of
the DOLE, National Capital Region.
On April 14, 1999, respondent company filed an Answer with Motion to
Dismiss[4] on the ground that petitioner union is not a legitimate labor
organization because of (1) failure to comply with the documentation
requirements set by law, and (2) the inclusion of supervisory employees
within petitioner union.[5]
Med-Arbiters Ruling
On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a
Decision[6] dismissing the petition for certification election. The Med-
Arbiter ruled that petitioner union is not a legitimate labor organization
because the Charter Certificate, Sama-samang Pahayag ng Pagsapi at
Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong
at mga Sumang-ayon at Nagratipika sa Saligang Batas were not
executed under oath and certified by the union secretary and attested to
by the union president as required by Section 235 of the Labor Code[7]in
relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of
1997. The union registration was, thus, fatally defective.
The Med-Arbiter further held that the list of membership of petitioner
union consisted of 12 batchman, mill operator and leadman who
performed supervisory functions. Under Article 245 of the Labor Code,
said supervisory employees are prohibited from joining petitioner union
which seeks to represent the rank-and-file employees of respondent
company.
As a result, not being a legitimate labor organization, petitioner union
has no right to file a petition for certification election for the purpose of
collective bargaining.
Department of Labor and Employments Ruling
On July 16, 1999, the DOLE initially issued a Decision [8] in favor of
respondent company dismissing petitioner unions appeal on the ground
that the latters petition for certification election was filed out of time.
Although the DOLE ruled, contrary to the findings of the Med-Arbiter, that
the charter certificate need not be verified and that there was no
independent evidence presented to establish respondent companys
claim that some members of petitioner union were holding supervisory
positions, the DOLE sustained the dismissal of the petition for
certification after it took judicial notice that another union, i.e., Pinag-
isang LakasManggagawa sa Charter Chemical and Coating Corporation,
previously filed a petition for certification election on January 16, 1998.
The Decision granting the said petition became final and executory on
September 16, 1998 and was remanded for immediate implementation.
51
Under Section 7, Rule XI of D.O. No. 9, series of 1997, a motion for
intervention involving a certification election in an unorganized
establishment should be filed prior to the finality of the decision calling
for a certification election. Considering that petitioner union filed its
petition only on February 14, 1999, the same was filed out of time.
On motion for reconsideration, however, the DOLE reversed its earlier
ruling. In its January 13, 2000 Decision, the DOLE found that a review of
the records indicates that no certification election was previously
conducted in respondent company. On the contrary, the prior
certification election filed by Pinag-isang Lakas Manggagawa sa Charter
Chemical and Coating Corporation was, likewise, denied by the Med-
Arbiter and, on appeal, was dismissed by the DOLE for being filed out of
time. Hence, there was no obstacle to the grant of petitioner unions
petition for certification election, viz:
WHEREFORE, the motion for reconsideration is hereby GRANTED and
the decision of this Office dated 16 July 1999 is MODIFIED to allow the
certification election among the regular rank-and-file employees of
Charter Chemical and Coating Corporation with the following choices:
1. Samahang Manggagawa sa Charter Chemical-Solidarity of
Unions in the Philippines for Empowerment and Reform (SMCC-SUPER);
and
2. No Union.
Let the records of this case be remanded to the Regional Office of origin
for the immediate conduct of a certification election, subject to the usual
pre-election conference.
SO DECIDED.[9]
Court of Appeals Ruling
On March 15, 2005, the CA promulgated the assailed Decision, viz:
WHEREFORE, the petition is hereby GRANTED. The assailed Decision
and Resolution dated January 13, 2000 and February 17, 2000 are hereby
[ANNULLED] and SET ASIDE.
SO ORDERED.[10]
In nullifying the decision of the DOLE, the appellate court gave credence
to the findings of the Med-Arbiter that petitioner union failed to comply
with the documentation requirements under the Labor Code. It, likewise,
upheld the Med-Arbiters finding that petitioner union consisted of both
rank-and-file and supervisory employees. Moreover, the CA held that the
issues as to the legitimacy of petitioner union may be attacked
collaterally in a petition for certification election and the infirmity in the
membership of petitioner union cannot be remedied through the
exclusion-inclusion proceedings in a pre-election conference pursuant to
the ruling in Toyota Motor Philippines v. Toyota Motor Philippines
Corporation Labor Union.[11] Thus, considering that petitioner union is not
a legitimate labor organization, it has no legal right to file a petition for
certification election.
Issues
I
Whether x x x the Honorable Court of Appeals committed grave abuse of
discretion tantamount to lack of jurisdiction in granting the respondent
[companys] petition for certiorari (CA G.R. No. SP No. 58203) in spite of
the fact that the issues subject of the respondent company[s] petition
was already settled with finality and barred from being re-litigated.
II
Whether x x x the Honorable Court of Appeals committed grave abuse of
discretion tantamount to lack of jurisdiction in holding that the alleged
mixture of rank-and-file and supervisory employee[s] of petitioner
[unions] membership is [a] ground for the cancellation of petitioner
[unions] legal personality and dismissal of [the] petition for certification
election.
III
Whether x x x the Honorable Court of Appeals committed grave abuse of
discretion tantamount to lack of jurisdiction in holding that the alleged
failure to certify under oath the local charter certificate issued by its
mother federation and list of the union membership attending the
organizational meeting [is a ground] for the cancellation of petitioner
[unions] legal personality as a labor organization and for the dismissal of
the petition for certification election.[12]
Petitioner Unions Arguments
Petitioner union claims that the litigation of the issue as to its legal
personality to file the subject petition for certification election is barred
by the July 16, 1999 Decision of the DOLE. In this decision, the DOLE
ruled that petitioner union complied with all the documentation
requirements and that there was no independent evidence presented to
prove an illegal mixture of supervisory and rank-and-file employees in
petitioner union. After the promulgation of this Decision, respondent
company did not move for reconsideration, thus, this issue must be
deemed settled.
Petitioner union further argues that the lack of verification of its charter
certificate and the alleged illegal composition of its membership are not
grounds for the dismissal of a petition for certification election under
Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are
they grounds for the cancellation of a unions registration under Section
3, Rule VIII of said issuance. It contends that what is required to be
certified under oath by the local unions secretary or treasurer and
52
attested to by the local unions president are limited to the unions
constitution and by-laws, statement of the set of officers, and the books
of accounts.
Finally, the legal personality of petitioner union cannot be collaterally
attacked but may be questioned only in an independent petition for
cancellation pursuant to Section 5, Rule V, Book IV of the Rules to
Implement the Labor Code and the doctrine enunciated in Tagaytay
Highlands International Golf Club Incoprorated v. Tagaytay Highlands
Empoyees Union-PTGWO.[13]
Respondent Companys Arguments
Respondent company asserts that it cannot be precluded from
challenging the July 16, 1999 Decision of the DOLE. The said decision did
not attain finality because the DOLE subsequently reversed its earlier
ruling and, from this decision, respondent company timely filed its
motion for reconsideration.
On the issue of lack of verification of the charter certificate, respondent
company notes that Article 235 of the Labor Code and Section 1, Rule VI
of the Implementing Rules of Book V, as amended by D.O. No. 9, series of
1997, expressly requires that the charter certificate be certified under
oath.
It also contends that petitioner union is not a legitimate labor
organization because its composition is a mixture of supervisory and
rank-and-file employees in violation of Article 245 of the Labor Code.
Respondent company maintains that the ruling in Toyota Motor
Philippines vs. Toyota Motor Philippines Labor Union[14] continues to be
good case law. Thus, the illegal composition of petitioner union nullifies
its legal personality to file the subject petition for certification election
and its legal personality may be collaterally attacked in the proceedings
for a petition for certification election as was done here.
Our Ruling
The petition is meritorious.
The issue as to the legal personality of petitioner union is not barred by
the July 16, 1999 Decision of the DOLE.
A review of the records indicates that the issue as to petitioner unions
legal personality has been timely and consistently raised by respondent
company before the Med-Arbiter, DOLE, CA and now this Court. In its July
16, 1999 Decision, the DOLE found that petitioner union complied with
the documentation requirements of the Labor Code and that the
evidence was insufficient to establish that there was an illegal mixture of
supervisory and rank-and-file employees in its membership. Nonetheless,
the petition for certification election was dismissed on the ground that
another union had previously filed a petition for certification
election seeking to represent the same bargaining unit in respondent
company.
Upon motion for reconsideration by petitioner union on January 13, 2000,
the DOLE reversed its previous ruling. It upheld the right of petitioner
union to file the subject petition for certification election because its
previous decision was based on a mistaken appreciation of facts. [15] From
this adverse decision, respondent company timely moved for
reconsideration by reiterating its previous arguments before the Med-
Arbiter that petitioner union has no legal personality to file the subject
petition for certification election.
The July 16, 1999 Decision of the DOLE, therefore, never attained finality
because the parties timely moved for reconsideration. The issue then as
to the legal personality of petitioner union to file the certification election
was properly raised before the DOLE, the appellate court and now this
Court.
The charter certificate need not be certified under oath by the local
unions secretary or treasurer and attested to by its president.
Preliminarily, we must note that Congress enacted Republic Act (R.A.) No.
9481[16]which took effect on June 14, 2007.[17] This law introduced
substantial amendments to the Labor Code. However, since the
operative facts in this case occurred in 1999, we shall decide the issues
under the pertinent legal provisions then in force (i.e., R.A. No. 6715,
[18]
amending Book V of the Labor Code, and the rules and
regulations[19] implementing R.A. No. 6715, as amended by D.O. No. 9, [20]
series of 1997) pursuant to our ruling in Republic v. Kawashima Textile
Mfg., Philippines, Inc.[21]
In the main, the CA ruled that petitioner union failed to comply with the
requisite documents for registration under Article 235 of the Labor Code
and its implementing rules. It agreed with the Med-Arbiter that the
Charter Certificate, Sama-samang Pahayag ng Pagsapi
at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang
Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas were not
executed under oath. Thus, petitioner union cannot be accorded the
status of a legitimate labor organization.
We disagree.
The then prevailing Section 1, Rule VI of the Implementing Rules of Book
V, as amended by D.O. No. 9, series of 1997, provides:
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:
53

(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 [are] the same as [those] 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.
As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization
and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga
Sumang-ayon at Nagratipika sa Saligang Batas are not among the
documents that need to be submitted to the Regional Office or Bureau of
Labor Relations in order to register a labor organization. As to the charter
certificate, the above-quoted rule indicates that it should be executed
under oath. Petitioner union concedes and the records confirm that its
charter certificate was not executed under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing
Products Plants-San Miguel Corporation Monthlies Rank-and-File Union-
FFW (MPPP-SMPP-SMAMRFU-FFW),[22] which was decided under the
auspices of D.O. No. 9, Series of 1997, we ruled
In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil.
356 (1996), the Court ruled that it was not necessary for the charter
certificate to be certified and attested by the local/chapter
officers. Id. While this ruling was based on the interpretation of
the previous Implementing Rules provisions which were
supplanted by the 1997 amendments, we believe that the same
doctrine obtains in this case. Considering that the charter certificate
is prepared and issued by the national union and not the local/chapter, it
does not make sense to have the local/chapters officers x x
x certify or attest to a document which they had no hand in the
preparation of.[23] (Emphasis supplied)
In accordance with this ruling, petitioner unions charter certificate need
not be executed under oath. Consequently, it validly acquired the status
of a legitimate labor organization upon submission of (1) its charter
certificate,[24] (2) the names of its officers, their addresses, and its
principal office,[25] and (3) its constitution and by-laws[26] the last two
requirements having been executed under oath by the proper union
officials as borne out by the records.
The mixture of rank-and-file and supervisory employees in petitioner
union does not nullify its legal personality as a legitimate labor
organization.
The CA found that petitioner union has for its membership both rank-
and-file and supervisory employees. However, petitioner union sought to
represent the bargaining unit consisting of rank-and-file employees.
Under Article 245[27] of the Labor Code, supervisory employees are not
eligible for membership in a labor organization of rank-and-file
employees. Thus, the appellate court ruled that petitioner union cannot
be considered a legitimate labor organization pursuant to Toyota Motor
Philippines v. Toyota Motor Philippines Corporation Labor
Union[28] (hereinafter Toyota).
Preliminarily, we note that petitioner union questions the factual findings
of the Med-Arbiter, as upheld by the appellate court, that 12 of its
members, consisting of batchman, mill operator and leadman, are
supervisory employees. However, petitioner union failed to present any
rebuttal evidence in the proceedings below after respondent company
submitted in evidence the job descriptions[29] of the aforesaid employees.
The job descriptions indicate that the aforesaid employees exercise
recommendatory managerial actions which are not merely routinary but
require the use of independent judgment, hence, falling within the
definition of supervisory employees under Article 212(m)[30] of the Labor
Code. For this reason, we are constrained to agree with the Med-Arbiter,
as upheld by the appellate court, that petitioner union consisted of both
rank-and-file and supervisory employees.
Nonetheless, the inclusion of the aforesaid supervisory employees in
petitioner union does not divest it of its status as a legitimate labor
organization. The appellate courts reliance on Toyota is misplaced in view
of this Courts subsequent ruling in Republic v. Kawashima Textile Mfg.,
Philippines, Inc.[31] (hereinafter Kawashima). In Kawashima, we explained
at length how and why the Toyota doctrine no longer holds sway under
the altered state of the law and rules applicable to this case, viz:
R.A. No. 6715 omitted specifying the exact effect any violation of
the prohibition [on the co-mingling of supervisory and rank-and-
file employees] would bring about on the legitimacy of a labor
organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989
Amended Omnibus Rules) which supplied the deficiency by introducing
the following amendment to Rule II (Registration of Unions):
Sec. 1. Who may join unions. - x x x Supervisory employees and
security guards 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; Provided, that
those supervisory employees who are included in an existing rank-and-
54
file bargaining unit, upon the effectivity of Republic Act No. 6715, shall
remain in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the
Omnibus Rules, viz:
Sec. 1. Where to file. - A petition for certification election may be filed
with the Regional Office which has jurisdiction over the principal office of
the employer. The petition shall be in writing and under oath.
Sec. 2. Who may file. - Any legitimate labor organization or the employer,
when requested to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain,
among others:
xxxx
(c) description of the bargaining unit which shall be the
employer unit unless circumstances otherwise require; and
provided further, that the appropriate bargaining unit of the
rank-and-file employees shall not include supervisory employees
and/or security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise
legitimate and duly registered labor organization from exercising its right
to file a petition for certification election.
Thus, when the issue of the effect of mingling was brought to the fore
in Toyota, the Court, citing Article 245 of the Labor Code, as amended by
R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both
rank-and-file and supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-
file and supervisory employees cannot possess any of the rights
of a legitimate labor organization, including the right to file a
petition for certification election for the purpose of collective
bargaining. It becomes necessary, therefore, anterior to the
granting of an order allowing a certification election, to inquire
into the composition of any labor organization whenever the
status of the labor organization is challenged on the basis of
Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the
names of at least twenty-seven (27) supervisory employees in Level Five
positions, the union could not, prior to purging itself of its supervisory
employee members, attain the status of a legitimate labor organization.
Not being one, it cannot possess the requisite personality to file a
petition for certification election. (Emphasis supplied)
In Dunlop, in which the labor organization that filed a petition for
certification election was one for supervisory employees, but in which
the membership included rank-and-file employees, the Court reiterated
that such labor organization had no legal right to file a certification
election to represent a bargaining unit composed of supervisors for as
long as it counted rank-and-file employees among its members.
It should be emphasized that the petitions for certification election
involved in Toyota and Dunlop were filed on November 26, 1992 and
September 15, 1995, respectively; hence, the 1989 Rules was applied in
both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was
further amended by Department Order No. 9, series of 1997 (1997
Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c)
of the 1989 Amended Omnibus Rules that the petition for certification
election indicate that the bargaining unit of rank-and-file employees has
not been mingled with supervisory employees was removed. Instead,
what the 1997 Amended Omnibus Rules requires is a plain description of
the bargaining unit, thus:
Rule XI
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing
and under oath and shall contain, among others, the following: x x x (c)
The description of the bargaining unit.
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold
the validity of the 1997 Amended Omnibus Rules, although the specific
provision involved therein was only Sec. 1, Rule VI, to wit:
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/chapter's officers, their addresses, and the
principal office of the local/chapter; and (c) the local/ chapter's
constitution and by-laws; provided that where the local/chapter's
constitution and by-laws is the same as that of the federation or national
union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath
by the Secretary or the Treasurer of the local/chapter and attested to by
its President.
55

which does not require that, for its creation and registration, a local or
chapter submit a list of its members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands
Employees Union-PGTWO in which the core issue was whether mingling
affects the legitimacy of a labor organization and its right to file a
petition for certification election. This time, given the altered legal milieu,
the Court abandoned the view in Toyota and Dunlop and reverted to its
pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor
organization, the Labor Code does not provide for the effects thereof.
Thus, the Court held that after a labor organization has been registered,
it may exercise all the rights and privileges of a legitimate labor
organization. Any mingling between supervisory and rank-and-file
employees in its membership cannot affect its legitimacy for that is not
among the grounds for cancellation of its registration, unless such
mingling was brought about by misrepresentation, false statement or
fraud under Article 239 of the Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue
Packing Products Plants-San Miguel Packaging Products-San Miguel Corp.
Monthlies Rank-and-File Union-FFW, the Court explained that since the
1997 Amended Omnibus Rules does not require a local or chapter to
provide a list of its members, it would be improper for the DOLE to deny
recognition to said local or chapter on account of any question pertaining
to its individual members.
More to the point is Air Philippines Corporation v. Bureau of Labor
Relations, which involved a petition for cancellation of union registration
filed by the employer in 1999 against a rank-and-file labor organization
on the ground of mixed membership: the Court therein reiterated its
ruling in Tagaytay Highlands that the inclusion in a union of disqualified
employees is not among the grounds for cancellation, unless such
inclusion is due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article 239 of the
Labor Code.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended
Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San
Miguel and Air Philippines, had already set the tone for
it. Toyota and Dunlop no longer hold sway in the present altered state of
the law and the rules.[32] [Underline supplied]
The applicable law and rules in the instant case are the same as those
in Kawashimabecause the present petition for certification election was
filed in 1999 when D.O. No. 9, series of 1997, was still in effect.
Hence, Kawashima applies with equal force here. As a result, petitioner
union was not divested of its status as a legitimate labor organization
even if some of its members were supervisory employees; it had the
right to file the subject petition for certification election.
The legal personality of petitioner union cannot be collaterally attacked
by respondent company in the certification election proceedings.
Petitioner union correctly argues that its legal personality cannot be
collaterally attacked in the certification election proceedings. As we
explained in Kawashima:
Except when it is requested to bargain collectively, an employer is a
mere bystander to any petition for certification election; such proceeding
is non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their
collective bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot interfere with, much
less oppose, the process by filing a motion to dismiss or an appeal from
it; not even a mere allegation that some employees participating in a
petition for certification election are actually managerial employees will
lend an employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed
thereof.
The amendments to the Labor Code and its implementing rules have
buttressed that policy even more.[33]
WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision
and September 16, 2005 Resolution of the Court of Appeals in CA-G.R. SP
No. 58203 are REVERSED and SET ASIDE. The January 13, 2000
Decision of the Department of Labor and Employment in OS-A-6-53-99
(NCR-OD-M-9902-019) is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
12.
G.R. No. 208986
HIJO RESOURCES CORPORATION, Petitioner,
vs.
EPIFANIO P. MEJARES, REMEGIO C. BAL URAN, JR., DANTE
SAYCON, and CECILIO CUCHARO, represented by NAMABDJERA-
HRC, Respondents.
CARPIO, J.:
56
The Case
This petition for review1 assails the 29 August 2012 Decision2 and the 13
August 2013 Resolution3 of the Court of Appeals in CA-G.R. SP No. 04058-
MIN. The Court of Appeals reversed and set aside the Resolutions dated
29 June 2009 and 16 December 2009 of the National Labor Relations
Commission (NLRC) in NLRC No. MIC-03-000229-08 (RAB XI-09-00774-
2007), and remanded the case to the Regional Arbitration Branch, Region
XI, Davao City for further proceedings.
The Facts
Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr., Dante Saycon,
and Cecilio Cucharo (respondents) were among the complainants,
represented by their labor union named "Nagkahiusang Mamumuo ng
Bit, Djevon, at Raquilla Farms sa Hijo Resources Corporation"
(NAMABDJERA-HRC), who filed with the NLRC an illegal dismissal case
against petitioner Hijo Resources Corporation (HRC).
Complainants (which include the respondents herein) alleged that
petitioner HRC, formerly known as Hijo Plantation Incorporated (HPI), is
the owner of agricultural lands in Madum, Tagum, Davao del Norte, which
were planted primarily with Cavendish bananas. In 2000, HPI was
renamed as HRC. In December 2003, HRCs application for the
conversion of its agricultural lands into agri-industrial use was approved.
The machineries and equipment formerly used by HPI continued to be
utilized by HRC.
Complainants claimed that they were employed by HPI as farm workers
in HPIs plantations occupying various positions as area harvesters,
packing house workers, loaders, or labelers. In 2001, complainants were
absorbed by HRC, but they were working under the contractor-growers:
Buenaventura Tano (Bit Farm); Djerame Pausa (Djevon Farm); and Ramon
Q. Laurente (Raquilla Farm). Complainants asserted that these
contractor-growers received compensation from HRC and were under the
control of HRC. They further alleged that the contractor-growers did not
have their own capitalization, farm machineries, and equipment.
On 1 July 2007, complainants formed their union NAMABDJERA-HRC,
which was later registered with the Department of Labor and
Employment (DOLE). On 24 August 2007, NAMABDJERA-HRC filed a
petition for certification election before the DOLE.
When HRC learned that complainants formed a union, the three
contractor-growers filed with the DOLE a notice of cessation of business
operations. In September 2007, complainants were terminated from their
employment on the ground of cessation of business operations by the
contractor-growers of HRC. On 19 September 2007, complainants,
represented by NAMABDJERA-HRC, filed a case for unfair labor practices,
illegal dismissal, and illegal deductions with prayer for moral and
exemplary damages and attorneys fees before the NLRC.
On 19 November 2007, DOLE Med-Arbiter Lito A. Jasa issued an
Order,4 dismissing NAMABDJERA-HRCs petition for certification election
on the ground that there was no employer-employee relationship
between complainants (members of NAMABDJERA-HRC) and HRC.
Complainants did not appeal the Order of Med-Arbiter Jasa but pursued
the illegal dismissal case they filed.
On 4 January 2008, HRC filed a motion to inhibit Labor Arbiter Maria
Christina S. Sagmit and moved to dismiss the complaint for illegal
dismissal. The motion to dismiss was anchored on the following
arguments: (1) Lack of jurisdiction under the principle of res judicata;
and (2) The Order of the Med-Arbiter finding that complainants were not
employees of HRC, which complainants did not appeal, had become final
and executory.
The Labor Arbiters Ruling
On 5 February 2008, Labor Arbiter Sagmit denied the motion to inhibit.
Labor Arbiter Sagmit likewise denied the motion to dismiss in an Order
dated 12 February 2008. Labor Arbiter Sagmit held that res judicata does
not apply. Citing the cases of Manila Golf & Country Club, Inc. v.
IAC5 and Sandoval Shipyards, Inc. v. Pepito,6 the Labor Arbiter ruled that
the decision of the Med-Arbiter in a certification election case, by the
nature of that proceedings, does not foreclose further dispute between
the parties as to the existence or non-existence of employer-employee
relationship between them. Thus, the finding of Med-Arbiter Jasa that no
employment relationship exists between HRC and complainants does not
bar the Labor Arbiter from making his own independent finding on the
same issue. The non-litigious nature of the proceedings before the Med-
Arbiter does not prevent the Labor Arbiter from hearing and deciding the
case. Thus, Labor Arbiter Sagmit denied the motion to dismiss and
ordered the parties to file their position papers.
HRC filed with the NLRC a petition for certiorari with a prayer for
temporary restraining order, seeking to nullify the 5 February 2008 and
12 February 2008 Orders of Labor Arbiter Sagmit.
The Ruling of the NLRC
The NLRC granted the petition, holding that Labor Arbiter Sagmit gravely
abused her discretion in denying HRCs motion to dismiss. The NLRC held
that the Med-Arbiter Order dated 19 November 2007 dismissing the
certification election case on the ground of lack of employer-employee
relationship between HRC and complainants (members of NAMABDJERA-
HRC) constitutes res judicata under the concept of conclusiveness of
judgment, and thus, warrants the dismissal of the case. The NLRC ruled
that the Med-Arbiter exercises quasi-judicial power and the Med-Arbiters
decisions and orders have, upon their finality, the force and effect of a
final judgment within the purview of the doctrine of res judicata.
57
On the issue of inhibition, the NLRC found it moot and academic in view
of Labor Arbiter Sagmits voluntary inhibition from the case as per Order
dated 11 March 2009.
The Ruling of the Court of Appeals
The Court of Appeals found the ruling in the Sandoval case more
applicable in this case. The Court of Appeals noted that
the Sandoval case, which also involved a petition for certification election
and an illegal dismissal case filed by the union members against the
alleged employer, is on all fours with this case. The issue in Sandoval on
the effect of the Med-Arbiters findings as to the existence of employer-
employee relationship is the very same issue raised in this case. On the
other hand, the case of Chris Garments Corp. v. Hon. Sto. Tomas7 cited
by the NLRC, which involved three petitions for certification election filed
by the same union, is of a different factual milieu.
The Court of Appeals held that the certification proceedings before the
Med-Arbiter are non-adversarial and merely investigative. On the other
hand, under Article 217 of the Labor Code, the Labor Arbiter has original
and exclusive jurisdiction over illegal dismissal cases. Although the
proceedings before the Labor Arbiter are also described as non-litigious,
the Court of Appeals noted that the Labor Arbiter is given wide latitude in
ascertaining the existence of employment relationship. Thus, unlike the
Med-Artbiter, the Labor Arbiter may conduct clarificatory hearings and
even avail of ocular inspection to ascertain facts speedily.
Hence, the Court of Appeals concluded that the decision in a certification
election case does not foreclose further dispute as to the existence or
non-existence of an employer-employee relationship between HRC and
the complainants.
On 29 August 2012, the Court of Appeals promulgated its Decision, the
dispositive portion of which reads:
WHEREFORE, the petition is hereby GRANTED and the assailed
Resolutions dated June 29, 2009 and December 16, 2009 of the National
Labor Relations Commission are hereby REVERSED AND SET ASIDE. Let
NLRC CASE No. RAB-XI-09-00774-0707 be remanded to the Regional
Arbitration Branch, Region XI, Davao City for further proceedings.
SO ORDERED.8
The Issue
Whether the Court of Appeals erred in setting aside the NLRC ruling and
remanding the case to the Labor Arbiter for further proceedings.
The Ruling of the Court
We find the petition without merit.
There is no question that the Med-Arbiter has the authority to determine
the existence of an employer-employee relationship between the parties
in a petition for certification election. As held in M.Y. San Biscuits, Inc. v.
Acting Sec. Laguesma:9
Under Article 226 of the Labor Code, as amended, the Bureau of Labor
Relations (BLR), of which the med-arbiter is an officer, has the following
jurisdiction
"ART. 226. Bureau of Labor Relations. The Bureau of Labor Relations
and the Labor Relations Division[s] in the regional offices of the
Department of Labor shall have original and exclusive authority to act, at
their own initiative or upon request of either or both parties, on all inter-
union and intra-union conflicts, and all disputes, grievances or problems
arising from or affecting labor-management relations in all workplaces
whether agricultural or non-agricultural, except those arising from the
implementation or interpretation of collective bargaining agreements
which shall be the subject of grievance procedure and/or voluntary
arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases
before it, subject to extension by agreement of the parties." (Italics
supplied)
From the foregoing, the BLR has the original and exclusive jurisdiction
to inter alia, decide all disputes, grievances or problems arising from or
affecting labor-management relations in all workplaces whether
agricultural or non-agricultural. Necessarily, in the exercise of this
jurisdiction over labor-management relations, the med-arbiter has the
authority, original and exclusive, to determine the existence of an
employer-employee relationship between the parties.
Apropos to the present case, once there is a determination as to the
existence of such a relationship, the med-arbiter can then decide the
certification election case.1wphi1 As the authority to determine the
employer-employee relationship is necessary and indispensable in the
exercise of jurisdiction by the med-arbiter, his finding thereon may only
be reviewed and reversed by the Secretary of Labor who exercises
appellate jurisdiction under Article 259 of the Labor Code, as amended,
which provides
"ART. 259. Appeal from certification election orders. Any party to an
election may appeal the order or results of the election as determined by
the Med-Arbiter directly to the Secretary of Labor and Employment on
the ground that the rules and regulations or parts thereof established by
the Secretary of Labor and Employment for the conduct of the election
have been violated. Such appeal shall be decided within fifteen (15)
calendar days."10
In this case, the Med-Arbiter issued an Order dated 19 November 2007,
dismissing the certification election case because of lack of employer-
58
employee relationship between HRC and the members of the respondent
union. The order dismissing the petition was issued after the members of
the respondent union were terminated from their employment in
September 2007, which led to the filing of the illegal dismissal case
before the NLRC on 19 September 2007. Considering their termination
from work, it would have been futile for the members of the respondent
union to appeal the Med-Arbiters order in the certification election case
to the DOLE Secretary. Instead, they pursued the illegal dismissal case
filed before the NLRC.
The Court is tasked to resolve the issue of whether the Labor Arbiter, in
the illegal dismissal case, is bound by the ruling of the Med-Arbiter
regarding the existence or non-existence of employer-employee
relationship between the parties in the certification election case.
The Court rules in the negative. As found by the Court of Appeals, the
facts in this case are very similar to those in the Sandoval case, which
also involved the issue of whether the ruling in a certification election
case on the existence or non-existence of an employer-employee
relationship operates as res judicata in the illegal dismissal case filed
before the NLRC. In Sandoval, the DOLE Undersecretary reversed the
finding of the Med-Arbiter in a certification election case and ruled that
there was no employer-employee relationship between the members of
the petitioner union and Sandoval Shipyards, Inc. (SSI), since the former
were employees of the subcontractors. Subsequently, several illegal
dismissal cases were filed by some members of the petitioner union
against SSI. Both the Labor Arbiter and the NLRC ruled that there was no
employer-employee relationship between the parties, citing the
resolution of the DOLE Undersecretary in the certification election case.
The Court of Appeals reversed the NLRC ruling and held that the
members of the petitioner union were employees of SSI. On appeal, this
Court affirmed the appellate courts decision and ruled that the Labor
Arbiter and the NLRC erred in relying on the pronouncement of the DOLE
Undersecretary that there was no employer-employee relationship
between the parties. The Court cited the ruling in the Manila Golf11 case
that the decision in a certification election case, by the very nature of
that proceeding, does not foreclose all further dispute between the
parties as to the existence or non-existence of an employer-employee
relationship between them.
This case is different from the Chris Garments case cited by the NLRC
where the Court held that the matter of employer-employee relationship
has been resolved with finality by the DOLE Secretary, whose factual
findings were not appealed by the losing party. As mentioned earlier, the
Med-Arbiters order in this case dismissing the petition for
certification election on the basis of non-existence of employer-
employee relationship was issued after the members of the
respondent union were dismissed from their employment. The
purpose of a petition for certification election is to determine which
organization will represent the employees in their collective bargaining
with the employer.12 The respondent union, without its member-
employees, was thus stripped of its personality to challenge the
Med-Arbiters decision in the certification election case. Thus,
the members of the respondent union were left with no option
but to pursue their illegal dismissal case filed before the Labor
Arbiter. To dismiss the illegal dismissal case filed before the Labor
Arbiter on the basis of the pronouncement of the Med-Arbiter in the
certification election case that there was no employer-employee
relationship between the parties, which the respondent union could not
even appeal to the DOLE Secretary because of the dismissal of its
members, would be tantamount to denying due process to the
complainants in the illegal dismissal case. This, we cannot allow.
WHEREFORE, we DENY the petition. We AFFIRM the 29 August 2012
Decision and the 13 August 2013 Resolution of the Court of Appeals in
CA-G.R. SP No. 04058-MIN.
SO ORDERED.
13.
NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND
ALLIED INDUSTRIES- MANILA PAVILION HOTEL CHAPTER,
Petitioner,
- versus
SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR
RELATIONS, HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION
AND ACESITE PHILIPPINES HOTEL CORPORATION, Respondents.
G.R. No. 181531
July 31, 2009
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:
National Union of Workers in Hotels, Restaurants and Allied Industries
Manila Pavilion Hotel Chapter (NUWHRAIN-MPHC), herein
petitioner, seeks the reversal of the Court of Appeals November 8, 2007
Decision[1] and of the Secretary of Labor and Employments January 25,
2008 Resolution[2] in OS-A-9-52-05 which affirmed the Med-Arbiters
Resolutions dated January 22, 2007[3] and March 22, 2007.[4]
59
A certification election was conducted on June 16, 2006 among the rank-
and-file employees of respondent Holiday Inn Manila Pavilion Hotel (the
Hotel) with the following results:
EMPLOYEES IN VOTERS LIST = 353
TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22
In view of the significant number of segregated votes, contending
unions, petitioner, NUHWHRAIN-MPHC, and respondent Holiday Inn
Manila Pavillion Hotel Labor Union (HIMPHLU), referred the case back to
Med-Arbiter Ma. Simonette Calabocal to decide which among those votes
would be opened and tallied. Eleven (11) votes were initially segregated
because they were cast by dismissed employees, albeit the legality of
their dismissal was still pending before the Court of Appeals. Six other
votes were segregated because the employees who cast them
were already occupyingsupervisory positions at the time of the
election. Still five other votes were segregated on the ground that they
were cast by probationary employees and, pursuant to the existing
Collective Bargaining Agreement (CBA), such employees cannot vote. It
bears noting early on, however, that the vote of one Jose Gatbonton
(Gatbonton), a probationary employee, was counted.
By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening
of 17 out of the 22 segregated votes, specially those cast by the 11
dismissed employees and those cast by the six supposedly supervisory
employees of the Hotel.
Petitioner, which garnered 151 votes, appealed to the Secretary of Labor
and Employment (SOLE), arguing that the votes of the probationary
employees should have been opened considering that probationary
employee Gatbontons vote was tallied. And petitioner averred that
respondent HIMPHLU, which garnered 169 votes, should not be
immediately certified as the bargaining agent, as the opening of the 17
segregated ballots would push the number of valid votes cast to 338
(151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered
would be one vote short of the majority which would then become 169.
By the assailed Resolution of January 22, 2007, the Secretary of Labor
and Employment (SOLE), through then Acting Secretary Luzviminda
Padilla, affirmed the Med-Arbiters Order. It held that pursuant to Section
5, Rule IX of the Omnibus Rules Implementing the Labor Code on
exclusion and inclusion of voters in a certification election, the
probationary employees cannot vote, as at the time the Med-Arbiter
issued on August 9, 2005 the Order granting the petition for the conduct
of the certification election, the six probationary employees were not yet
hired, hence, they could not vote.
The SOLE further held that, with respect to the votes cast by the 11
dismissed employees, they could be considered since their dismissal was
still pending appeal.
As to the votes cast by the six alleged supervisory employees, the SOLE
held that their votes should be counted since their promotion took effect
months after the issuance of the above-said August 9, 2005 Order of the
Med-Arbiter, hence, they were still considered as rank-and-file.
Respecting Gatbontons vote, the SOLE ruled that the same could be the
basis to include the votes of the other probationary employees, as the
records show that during the pre-election conferences, there was no
disagreement as to his inclusion in the voters list, and neither was it
timely challenged when he voted on election day, hence, the Election
Officer could not then segregate his vote.
The SOLE further ruled that even if the 17 votes of the dismissed and
supervisory employees were to be counted and presumed to be in favor
of petitioner, still, the same would not suffice to overturn the 169 votes
garnered by HIMPHLU.
In fine, the SOLE concluded that the certification of HIMPHLU as the
exclusive bargaining agent was proper.
Petitioners motion for reconsideration having been denied by the SOLE
by Resolution of March 22, 2007, it appealed to the Court of Appeals.
By the assailed Decision promulgated on November 8, 2007, the
appellate court affirmedthe ruling of the SOLE. It held that, contrary to
petitioners assertion, the ruling in Airtime Specialist, Inc. v. Ferrer
Calleja[5] stating that in a certification election, all rank-and-file
employees in the appropriate bargaining unit, whether probationary or
permanent, are entitled to vote, is inapplicable to the case at bar. For,
the appellate court continued, the six probationary employees were not
yet employed by the Hotel at the time the August 9, 2005 Order granting
the certification election was issued. It thus held that Airtime
Specialist applies only to situations wherein the probationary employees
were already employed as of the date of filing of the petition for
certification election.
Respecting Gatbontons vote, the appellate court upheld the SOLEs
finding that since it was not properly challenged, its inclusion could no
longer be questioned, nor could it be made the basis to include the votes
of the six probationary employees.
The appellate court brushed aside petitioners contention that the
opening of the 17 segregated votes would materially affect the results of
the election as there would be the likelihood of a run-off election in the
event none of the contending unions receive a majority of the valid votes
cast. It held that the majority contemplated in deciding which of the
60
unions in a certification election is the winner refers to the majority
of valid votes cast, not the simple majority of votes cast, hence, the
SOLE was correct in ruling that even if the 17 votes were in favor of
petitioner, it would still be insufficient to overturn the results of the
certification election.
Petitioners motion for reconsideration having been denied by Resolution
of January 25, 2008, the present recourse was filed.
Petitioners contentions may be summarized as follows:
1. Inclusion of Jose Gatbontons vote but excluding the vote of the
six other probationary employees violated the principle of equal
protection and is not in accord with the ruling in Airtime Specialists, Inc.
v. Ferrer-Calleja;
2. The time of reckoning for purposes of determining when the
probationary employees can be allowed to vote is not August 9, 2005 the
date of issuance by Med-Arbiter Calabocal of the Order granting the
conduct of certification elections, but March 10, 2006 the date the SOLE
Order affirmed the Med-Arbiters Order.
3. Even if the votes of the six probationary employees were
included, still, HIMPHLU could not be considered as having obtained a
majority of the valid votes cast as the opening of the 17 ballots would
increase the number of valid votes from 321 to 338, hence, for HIMPHLU
to be certified as the exclusive bargaining agent, it should have garnered
at least 170, not 169, votes.
Petitioner justifies its not challenging Gatbontons vote because it was
precisely its position that probationary employees should be allowed to
vote. It thus avers that justice and equity dictate that since Gatbontons
vote was counted, then the votes of the 6 other probationary employees
should likewise be included in the tally.
Petitioner goes on to posit that the word order in Section 5, Rule 9 of
Department Order No. 40-03 reading [A]ll employees who are members
of the appropriate bargaining unit sought to be represented by the
petitioner at the time of the issuance of the ordergranting the conduct of
certification election shall be allowed to vote refers to an order which
has already become final and executory, in this case the March 10, 2002
Order of the SOLE.
Petitioner thus concludes that if March 10, 2006 is the reckoning date for
the determination of the eligibility of workers, then all the segregated
votes cast by the probationary employees should be opened and
counted, they having already been working at the Hotel on such date.
Respecting the certification of HIMPHLU as the exclusive bargaining
agent, petitioner argues that the same was not proper for if the 17 votes
would be counted as valid, then the total number of votes cast would
have been 338, not 321, hence, the majority would be 170; as such, the
votes garnered by HIMPHLU is one vote short of the majority for it to be
certified as the exclusive bargaining agent.
The relevant issues for resolution then are first, whether employees on
probationary status at the time of the certification elections should be
allowed to vote, and second, whether HIMPHLU was able to obtain the
required majority for it to be certified as the exclusive bargaining agent.
On the first issue, the Court rules in the affirmative.
The inclusion of Gatbontons vote was proper not because it was not
questioned but because probationary employees have the right to vote
in a certification election. The votes of the six other probationary
employees should thus also have been counted. As Airtime Specialists,
Inc. v. Ferrer-Calleja holds:
In a certification election, all rank and file employees in the
appropriate bargaining unit, whether probationary or permanent
are entitled to vote. This principle is clearly stated in Art. 255 of the
Labor Code which states that the labor organization designated or
selected by the majority of the employees in an appropriate bargaining
unit shall be the exclusive representative of the employees in such unit
for purposes of collective bargaining. Collective bargaining covers all
aspects of the employment relation and the resultant CBA negotiated by
the certified union binds all employees in the bargaining unit. Hence, all
rank and file employees, probationary or permanent, have a substantial
interest in the selection of the bargaining representative.The Code
makes no distinction as to their employment status as basis for
eligibility in supporting the petition for certification election. The
law refers to all the employees in the bargaining unit. All they
need to be eligible to support the petition is to belong to the
bargaining unit. (Emphasis supplied)
Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which
amended Rule XI of the Omnibus Rules Implementing the Labor Code,
provides:
Rule II
Section 2. Who may join labor unions and workers' associations. -
All persons employed in commercial, industrial and agricultural
enterprises, including employees of government owned or controlled
corporations without original charters established under the Corporation
Code, as well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not, shall have the
right to self-organization and to form, join or assist labor unions for
purposes of collective bargaining: provided, however, that supervisory
employees shall not be eligible for membership in a labor union of the
rank-and-file employees but may form, join or assist separate labor
unions of their own. Managerial employees shall not be eligible to form,
61
join or assist any labor unions for purposes of collective bargaining. Alien
employees with valid working permits issued by the Department may
exercise the right to self-organization and join or assist labor unions for
purposes of collective bargaining if they are nationals of a country which
grants the same or similar rights to Filipino workers, as certified by the
Department of Foreign Affairs.
For purposes of this section, any employee, whether employed
for a definite period or not, shall beginning on the first day of
his/her service, be eligible for membership in any labor
organization.
All other workers, including ambulant, intermittent and other workers,
the self-employed, rural workers and those without any definite
employers may form labor organizations for their mutual aid and
protection and other legitimate purposes except collective bargaining.
(Emphasis supplied)
The provision in the CBA disqualifying probationary employees from
voting cannot override the Constitutionally-protected right of workers to
self-organization, as well as the provisions of the Labor Code and its
Implementing Rules on certification elections and jurisprudence thereon.
A law is read into, and forms part of, a contract. Provisions in a contract
are valid only if they are not contrary to law, morals, good customs,
public order or public policy.[6]
Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court
rely to support their position that probationary employees hired after the
issuance of the Order granting the petition for the conduct of certification
election must be excluded, should not be read in isolation and must be
harmonized with the other provisions of D.O. Rule XI, Sec. 5 of D.O. 40-
03, viz:
Rule XI
xxxx
Section 5. Qualification of voters; inclusion-exclusion. - All employees
who are members of the appropriate bargaining unit sought to
be represented by the petitioner at the time of the issuance of
the order granting the conduct of a certification election shall be
eligible to vote. An employee who has been dismissed from work but
has contested the legality of the dismissal in a forum of appropriate
jurisdiction at the time of the issuance of the order for the conduct of a
certification election shall be considered a qualified voter, unless his/her
dismissal was declared valid in a final judgment at the time of the
conduct of the certification election. (Emphasis supplied)
xxxx
Section 13. Order/Decision on the petition. - Within ten (10) days from
the date of the last hearing, the Med-Arbiter shall issue a formal order
granting the petition or a decision denying the same. In organized
establishments, however, no order or decision shall be issued by the
Med-Arbiter during the freedom period.
The order granting the conduct of a certification election shall
state the following:
(a) the name of the employer or establishment;
(b) the description of the bargaining unit;
(c) a statement that none of the grounds for dismissal enumerated in the
succeeding paragraph exists;
(d) the names of contending labor unions which shall appear as follows:
petitioner union/s in the order in which their petitions were filed, forced
intervenor, and no union; and
(e) a directive upon the employer and the contending union(s) to
submit within ten (10) days from receipt of the order, the
certified list of employees in the bargaining unit, or where
necessary, the payrolls covering the members of the bargaining unit for
the last three (3) months prior to the issuance of the order. (Emphasis
supplied)
xxxx
Section 21. Decision of the Secretary. - The Secretary shall have fifteen
(15) days from receipt of the entire records of the petition within which to
decide the appeal. The filing of the memorandum of appeal from
the order or decision of the Med-Arbiter staysthe holding of any
certification election.
The decision of the Secretary shall become final and executory
after ten (10) days from receipt thereof by the parties. No motion
for reconsideration of the decision shall be entertained. (Emphasis
supplied)
In light of the immediately-quoted provisions, and prescinding from the
principle that all employees are, from the first day of their employment,
eligible for membership in a labor organization, it is evident that
the period of reckoning in determining who shall be included in the list of
eligible voters is, in cases where a timely appeal has been
filedfrom the Order of the Med-Arbiter, the date when the Order of th
e Secretary of Laborand Employment,
whether affirming or denying the appeal, becomes final andexec
utory.
The filing of an appeal to the SOLE from the Med-Arbiters Order stays its
execution, in accordance with Sec. 21, and rationally, the Med-Arbiter
62
cannot direct the employer to furnish him/her with the list of eligible
voters pending the resolution of the appeal.
During the pendency of the appeal, the employer may hire additional
employees.To exclude the employees hired after the issuance of the Med-
Arbiters Order but before the appeal has been resolved would violate the
guarantee that every employee has the right to be part of a labor
organization from the first day of their service.
In the present case, records show that the probationary employees,
including Gatbonton, were included in the list of employees in the
bargaining unit submitted by the Hotel on May 25, 2006 in compliance
with the directive of the Med-Arbiter after the appeal and subsequent
motion for reconsideration have been denied by the SOLE, rendering the
Med-Arbiters August 22, 2005 Order final and executory 10 days after
the March 22, 2007 Resolution (denying the motion for reconsideration of
the January 22 Order denying the appeal), and rightly so. Because, for
purposes of self-organization, those employees are, in light of the
discussion above, deemed eligible to vote.
A certification election is the process of determining the sole and
exclusive bargaining agent of the employees in an appropriate
bargaining unit for purposes of collective bargaining. Collective
bargaining, refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all
other terms and conditions of employment in a bargaining unit. [7]
The significance of an employees right to vote in a certification election
cannot thus be overemphasized. For he has considerable interest in the
determination of who shall represent him in negotiating the terms and
conditions of his employment.
Even if the Implementing Rules gives the SOLE 20 days to decide the
appeal from the Order of the Med-Arbiter, experience shows that it
sometimes takes months to be resolved. To rule then that only those
employees hired as of the date of the issuance of the Med-Arbiters Order
are qualified to vote would effectively disenfranchise employees hired
during the pendency of the appeal. More importantly, reckoning the date
of the issuance of the Med-Arbiters Order as the cut-off date would
render inutile the remedy of appeal to the SOLE.
But while the Court rules that the votes of all the probationary
employees should be included, under the particular circumstances of this
case and the period of time which it took for the appeal to be decided,
the votes of the six supervisory employees must be excluded because at
the time the certification elections was conducted, they had ceased to be
part of the rank and file, their promotion having taken effect two months
before the election.
As to whether HIMPHLU should be certified as the exclusive bargaining
agent, the Court rules in the negative. It is well-settled that under the so-
called double majority rule, for there to be a valid certification
election, majority of the bargaining unit must have voted AND
the winning union must have garnered majority of the valid
votes cast.
Prescinding from the Courts ruling that all the probationary employees
votes should be deemed valid votes while that of the supervisory
employees should be excluded, it follows that the number of valid votes
cast would increase from 321 to 337.Under Art. 256 of the Labor Code,
the union obtaining the majority of the valid votes cast by the eligible
voters shall be certified as the sole and exclusive bargaining agent of all
the workers in the appropriate bargaining unit. This majority is 50% +
1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes. Clearly,
HIMPHLU was not able to obtain a majority vote. The position of both the
SOLE and the appellate court that the opening of the 17 segregated
ballots will not materially affect the outcome of the certification election
as for, so they contend, even if such member were all in favor of
petitioner, still, HIMPHLU would win, is thus untenable.
It bears reiteration that the true importance of ascertaining the number
of valid votes cast is for it to serve as basis for computing the required
majority, and not just to determine which union won the elections. The
opening of the segregated but valid votes has thus become material. To
be sure, the conduct of a certification election has a two-fold
objective: to determine the appropriate bargaining unit and to
ascertain the majority representation of the bargaining
representative, if the employees desire to be represented at all
by anyone. It is not simply the determination of who between two or
more contending unions won, but whether it effectively ascertains the
will of the members of the bargaining unit as to whether they want to be
represented and which union they want to represent them.
Having declared that no choice in the certification election conducted
obtained the required majority, it follows that a run-off election must be
held to determine which between HIMPHLU and petitioner should
represent the rank-and-file employees.
A run-off election refers to an election between the labor unions
receiving the two (2) highest number of votes in a certification or
consent election with three (3) or more choices, where such a certified or
consent election results in none of the three (3) or more choices
receiving the majority of the valid votes cast; provided that the total
number of votes for all contending unions is at least fifty percent (50%)
of the number of votes cast.[8] With 346 votes cast, 337 of which are now
deemed valid and HIMPHLU having only garnered 169 and petitioner
having obtained 151 and the choice NO UNION receiving 1 vote, then the
holding of a run-off election between HIMPHLU and petitioner is in order.
63
WHEREFORE, the petition is GRANTED. The Decision dated November
8, 2007 and Resolution dated January 25, 2008 of the Court of Appeals
affirming the Resolutions dated January 22, 2007 and March 22, 2007,
respectively, of the Secretary of Labor and Employment in OS-A-9-52-05
are ANNULLED and SET ASIDE.
The Department of Labor and Employment-Bureau of Labor Relations
is DIRECTED to cause the holding of a run-off election between
petitioner, National Union of Workers in Hotels, Restaurants and Allied
Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-MPC), and
respondent Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU).
SO ORDERED.
14.
G.R. No. 201595
ALLAN M. MENDOZA, Petitioner,
vs.
OFFICERS OF MANILA WATER EMPLOYEES UNION (MWEU),
namely, EDUARDO B. BORELA, BUENAVENTURA QUEBRAL,
ELIZABETH COMETA, ALEJANDRO TORRES, AMORSOLO TIERRA,
SOLEDAD YEBAN, LUIS RENDON, VIRGINIA APILADO, TERESITA
BOLO, ROGELIO BARBERO, JOSE CASAAS, ALFREDO MAGA,
EMILIO FERNANDEZ, ROSITA BUENA VENTURA, ALMENIO
CANCINO, ADELA IMANA, MARIO MANCENIDO, WILFREDO
MANDILAG, ROLANDO MANLAP AZ, EFREN MONTEMAYOR,
NELSON PAGULAYAN, CARLOS VILLA, RIC BRIONES, and CHITO
BERNARDO, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the April 24, 2012
Decision2 of the Court of Appeals (CA) which dismissed the Petition
for Certiorari3 in CA-G.R. SP No. 115639.
Factual Antecedents
Petitioner was a member of the Manila Water Employees Union (MWEU),
a Department of Labor and Employment (DOLE)-registered labor
organization consisting of rank-and-file employees within Manila Water
Company (MWC). The respondents herein named Eduardo B. Borela
(Borela), Buenaventura Quebral (Quebral), Elizabeth Cometa (Cometa),
Alejandro Torres (Torres), Amorsolo Tierra (Tierra), Soledad Yeban (Yeban),
Luis Rendon (Rendon), Virginia Apilado (Apilado), Teresita Bolo (Bolo),
Rogelio Barbero (Barbero), Jose Casaas (Casaas), Alfredo Maga (Maga),
Emilio Fernandez (Fernandez), Rosita Buenaventura (Buenaventura),
Almenio Cancino (Cancino), Adela Imana, Mario Mancenido (Mancenido),
Wilfredo Mandilag (Mandilag), Rolando Manlapaz (Manlapaz), Efren
Montemayor (Montemayor), Nelson Pagulayan, Carlos Villa, Ric Briones,
and Chito Bernardo were MWEU officers during the period material to
this Petition, with Borela as President and Chairman of the MWEU
Executive Board, Quebral as First Vice-President and Treasurer, and
Cometa as Secretary.4
In an April 11, 2007 letter,5 MWEU through Cometa informed petitioner
that the union was unable to fully deduct the increased P200.00 union
dues from his salary due to lack of the required December 2006 check-
off authorization from him. Petitioner was warned that his failure to pay
the union dues would result in sanctions upon him. Quebral informed
Borela, through a May 2, 2007 letter,6 that for such failure to pay the
union dues, petitioner and several others violated Section 1(g), Article IX
of the MWEUs Constitution and By-Laws.7 In turn, Borela referred the
charge to the MWEU grievance committee for investigation.
On May 21, 2007, a notice of hearing was sent to petitioner, who
attended the scheduled hearing. On June 6, 2007, the MWEU grievance
committee recommended that petitioner be suspended for 30 days.
In a June 20, 2007 letter,8 Borela informed petitioner and his
corespondents of the MWEU Executive Boards "unanimous approval"9 of
the grievance committees recommendation and imposition upon them
of a penalty of 30 days suspension, effective June 25, 2007.
In a June 26, 2007 letter10 to Borela, petitioner and his co-respondents
took exception to the imposition and indicated their intention to appeal
the same to the General Membership Assembly in accordance with
Section 2(g), Article V of the unions Constitution and By-Laws, 11 which
grants them the right to appeal any arbitrary resolution, policy and rule
promulgated by the Executive Board to the General Membership
Assembly. In a June 28, 2007 reply,12 Borela denied petitioners appeal,
stating that the prescribed period for appeal had expired.
Petitioner and his co-respondents sent another letter13 on July 4, 2007,
reiterating their arguments and demanding that the General Membership
Assembly be convened in order that their appeal could be taken up. The
letter was not acted upon.
Petitioner was once more charged with non-payment of union dues, and
was required to attend an August 3, 2007 hearing.14 Thereafter,
petitioner was again penalized with a 30-day suspension through an
August 21, 2007 letter15 by Borela informing petitioner of the Executive
Boards "unanimous approval"16 of the grievance committee
recommendation to suspend him effective August 24, 2007, to which he
submitted a written reply,17 invoking his right to appeal through the
convening of the General Membership Assembly. However, the
respondents did not act on petitioners plea.
64
Meanwhile, MWEU scheduled an election of officers on September 14,
2007. Petitioner filed his certificate of candidacy for Vice-President, but
he was disqualified for not being a member in good standing on account
of his suspension.
On October 2, 2007, petitioner was charged with non-payment of union
dues for the third time. He did not attend the scheduled hearing. This
time, he was meted the penalty of expulsion from the union, per
"unanimous approval"18 of the members of the Executive Board. His
pleas for an appeal to the General Membership Assembly were once
more unheeded.19
In 2008, during the freedom period and negotiations for a new collective
bargaining agreement (CBA) with MWC, petitioner joined another union,
the Workers Association for Transparency, Empowerment and Reform, All-
Filipino Workers Confederation (WATER-AFWC). He was elected union
President. Other MWEU members were inclined to join WATER-AFWC, but
MWEU director Torres threatened that they would not get benefits from
the new CBA.20
The MWEU leadership submitted a proposed CBA which contained
provisions to the effect that in the event of retrenchment, non-MWEU
members shall be removed first, and that upon the signing of the CBA,
only MWEU members shall receive a signing bonus. 21
Ruling of the Labor Arbiter
On October 13, 2008, petitioner filed a Complaint22 against respondents
for unfair labor practices, damages, and attorneys fees before the
National Labor Relations Commission (NLRC), Quezon City, docketed as
NLRC Case No. NCR-10-14255-08. In his Position Paper and other written
submissions,23 petitioner accused the respondents of illegal termination
from MWEU in connection with the events relative to his non-payment of
union dues; unlawful interference, coercion, and violation of the rights of
MWC employees to self-organization in connection with the proposed
CBA submitted by MWEU leadership, which petitioner claims contained
provisions that discriminated against non-MWEU members. Petitioner
prayed in his Supplemental Position Paper that respondents be held
guilty of unfair labor practices and ordered to indemnify him moral
damages in the amount of P100,000.00, exemplary damages amounting
to P50,000.00, and 10% attorneys fees.
In their joint Position Paper and other pleadings, 24 respondents claimed
that the Labor Arbiter had no jurisdiction over the dispute, which is intra-
union in nature; that the Bureau of Labor Relations (BLR) was the proper
venue, in accordance with Article 226 of the Labor Code 25 and Section 1,
Rule XI of Department Order 40-03, series of 2003, of the DOLE; 26 and
that they were not guilty of unfair labor practices, discrimination,
coercion or restraint.
On May 29, 2009, Labor Arbiter Virginia T. Luyas-Azarraga issued her
Decision27 which decreed as follows:
Indeed the filing of the instant case is still premature. Section 5, Article
X-Investigation Procedures and Appeal Process of the Union Constitution
and By-Laws provides that:
Section 5. Any dismissed and/or expelled member shall have the rights
to appeal to the Executive Board within seven (7) days from the date of
notice of the said dismissal and/or expulsion, which in [turn] shall be
referred to the General Membership Assembly. In case of an appeal, a
simple majority of the decision of the Executive Board is imperative. The
same shall be approved/disapproved by a majority vote of the general
membership assembly in a meeting duly called for the purpose.
On the basis of the foregoing, the parties shall exhaust first all the
administrative remedies before resorting to compulsory arbitration. Thus,
instant case is referred back to the Union for the General Assembly to act
or deliberate complainants appeal on the decision of the Executive
Board.
WHEREFORE PREMISES CONSIDERED, instant case is referred back to the
Union level for the General Assembly to act on complainants appeal.
SO ORDERED.28
Ruling of the National Labor Relations Commission
Petitioner appealed before the NLRC, where the case was docketed as
NLRC LAC No. 07-001913-09. On March 15, 2010, the NLRC issued its
Decision,29 declaring as follows:
Complainant30 imputes serious error to the Labor Arbiter when she
decided as follows:
a. Referring back the subject case to the Union level for the General
Assembly to act on his appeal.
b. Not ruling that respondents are guilty of ULP as charged.
c. Not granting to complainant moral and exemplary damages and
attorneys fees.
Complainant, in support of his charges, claims that respondents
restrained or coerced him in the exercise of his right as a union member
in violation of paragraph "a", Article 249 of the Labor Code, 31particularly,
in denying him the explanation as to whether there was observance of
the proper procedure in the increase of the membership dues from
P100.00 to P200.00 per month. Further, complainant avers that he was
denied the right to appeal his suspension and expulsion in accordance
with the provisions of the Unions Constitution and By-Laws. In addition,
65
complainant claims that respondents attempted to cause the
management to discriminate against the members of WATER-AFWC thru
the proposed CBA.
Pertinent to the issue then on hand, the Labor Arbiter ordered that the
case be referred back to the Union level for the General Assembly to act
on complainants appeal. Hence, these appeals.
After a careful look at all the documents submitted and a meticulous
review of the facts, We find that this Commission lacks the jurisdictional
competence to act on this case.
Article 217 of the Labor Code,32 as amended, specifically enumerates the
cases over which the Labor Arbiters and the Commission have original
and exclusive jurisdiction. A perusal of the record reveals that the causes
of action invoked by complainant do not fall under any of the
enumerations therein. Clearly, We have no jurisdiction over the same.
Moreover, pursuant to Section 1, Rule XI, as amended, DOLE Department
Order No. 40-03 in particular, Item A, paragraphs (h) and (j) and Item B,
paragraph (a)(3), respectively, provide:
"A. Inter-Intra-Union disputes shall include:
"(h) violation of or disagreements over any provision of the Constitution
and By-Laws of a Union or workers association.
"(j) violation of the rights and conditions of membership in a Union or
workers association.
"B. Other Labor Relations disputes, not otherwise covered by Article 217
of the Labor Code, shall include
"3. a labor union and an individual who is not a member of said union."
Clearly, the above-mentioned disputes and conflict fall under the
jurisdiction of the Bureau of Labor Relations, as these are inter/intra-
union disputes.
WHEREFORE, the decision of the Labor Arbiter a quo dated May 29, 2009
is hereby declared NULL and VOID for being rendered without jurisdiction
and the instant complaint is DISMISSED.
SO ORDERED.33
Petitioner moved for reconsideration,34 but in a June 16, 2010
Resolution,35 the motion was denied and the NLRC sustained its Decision.
Ruling of the Court of Appeals
In a Petition for Certiorari36 filed with the CA and docketed as CA-G.R. SP
No. 115639, petitioner sought to reverse the NLRC Decision and be
awarded his claim for damages and attorneys fees on account of
respondents unfair labor practices, arguing among others that his
charge of unfair labor practices is cognizable by the Labor Arbiter; that
the fact that the dispute is inter- or intra-union in nature cannot erase
the fact that respondents were guilty of unfair labor practices in
interfering and restraining him in the exercise of his right to self-
organization as member of both MWEU and WATER-AFWC, and in
discriminating against him and other members through the provisions of
the proposed 2008 CBA which they drafted; that his failure to pay the
increased union dues was proper since the approval of said increase was
arrived at without observing the prescribed voting procedure laid down in
the Labor Code; that he is entitled to an award of damages and
attorneys fees as a result of respondents illegal acts in discriminating
against him; and that in ruling the way it did, the NLRC committed grave
abuse of discretion.
On April 24, 2012, the CA issued the assailed Decision containing the
following pronouncement:
The petition lacks merit.
Petitioners causes of action against MWEU are inter/intra-union disputes
cognizable by the BLR whose functions and jurisdiction are largely
confined to union matters, collective bargaining registry, and labor
education. Section 1, Rule XI of Department Order (D.O.) No. 40-03,
Series of 2003, of the Department of Labor and Employment enumerates
instances of inter/intra-union disputes, viz:
Section 1. Coverage. Inter/intra-union disputes shall include:
xxxx
(b) conduct of election of union and workers association
officers/nullification of election of union and workers association officers;
(c) audit/accounts examination of union or workers association funds;
xxxx
(g) validity/invalidity of impeachment/ expulsion of union and workers
association officers and members;
xxxx
(j) violations of or disagreements over any provision in a union or
workers association constitution and by-laws;
xxxx
66
(l) violations of the rights and conditions of union or workers association
membership;
xxxx
(n) such other disputes or conflicts involving the rights to self-
organization, union membership and collective bargaining
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers association.
In brief, "Inter-Union Dispute" refers to any conflict between and among
legitimate labor unions involving representation questions for purposes
of collective bargaining or to any other conflict or dispute between
legitimate labor unions. "Intra-Union Dispute" refers to any conflict
between and among union members, including grievances arising from
any violation of the rights and conditions of membership, violation of or
disagreement over any provision of the unions constitution and by-laws,
or disputes arising from chartering or affiliation of union. On the other
hand, the circumstances of unfair labor practices (ULP) of a labor
organization are stated in Article 249 of the Labor Code, to wit:
Article 249. Unfair labor practices of labor organizations. It shall be
unlawful for labor organization, its officers, agents, or representatives to
commit any of the following unfair labor practices:
(a) To restrain or coerce employees in the exercise of their right to self-
organization; Provided, That the labor organization shall have the right to
prescribe its own rules with respect to the acquisition or retention of
membership;
(b) To cause or attempt to cause an employer to discriminate against an
employee, including discrimination against an employee with respect to
whom membership in such organization has been denied or terminated
on any ground other than the usual terms and conditions under which
membership or continuation of membership is made available to other
members;
xxxx
Applying the aforementioned rules, We find that the issues arising from
petitioners right to information on the increased membership dues, right
to appeal his suspension and expulsion according to CBL provisions, and
right to vote and be voted on are essentially intra-union disputes; these
involve violations of rights and conditions of union membership. But his
claim that a director of MWEU warned that non-MWEU members would
not receive CBA benefits is an inter-union dispute. It is more of an
"interference" by a rival union to ensure the loyalty of its members and
to persuade non-members to join their union. This is not an actionable
wrong because interfering in the exercise of the right to organize is itself
a function of self-organizing.37 As long as it does not amount to restraint
or coercion, a labor organization may interfere in the employees right to
self-organization.38Consequently, a determination of validity or illegality
of the alleged acts necessarily touches on union matters, not ULPs, and
are outside the scope of the labor arbiters jurisdiction.
As regards petitioners other accusations, i.e., discrimination in terms of
meting out the penalty of expulsion against him alone, and attempt to
cause the employer, MWC, to discriminate against non-MWEU members
in terms of retrenchment or reduction of personnel, and signing bonus,
while We may consider them as falling within the concept of ULP under
Article 249(a) and (b), still, petitioners complaint cannot prosper for lack
of substantial evidence. Other than his bare allegation, petitioner offered
no proof that MWEU did not penalize some union members who failed to
pay the increased dues. On the proposed discriminatory CBA provisions,
petitioner merely attached the pages containing the questioned
provisions without bothering to reveal the MWEU representatives
responsible for the said proposal. Article 249 mandates that "x x x only
the officers, members of the governing boards, representatives or agents
or members of labor associations or organizations who have actually
participated in, authorized or ratified unfair labor practices shall be held
criminally liable." Plain accusations against all MWEU officers, without
specifying their actual participation, do not suffice. Thus, the ULP charges
must necessarily fail.
In administrative and quasi-judicial proceedings, only substantial
evidence is necessary to establish the case for or against a party.
Substantial evidence is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.
Petitioner failed to discharge the burden of proving, by substantial
evidence, the allegations of ULP in his complaint. The NLRC, therefore,
properly dismissed the case.
FOR THESE REASONS, the petition is DISMISSED.
SO ORDERED.39
Thus, the instant Petition.
Issue
In an August 28, 2013 Resolution,40 this Court resolved to give due
course to the Petition, which claims that the CA erred:
A. IN DECLARING THAT THE PRESENCE OF INTER/INTRA-UNION
CONFLICTS NEGATES THE COMPLAINT FOR UNFAIR LABOR PRACTICES
AGAINST A LABOR ORGANIZATION AND ITS OFFICERS, AND IN AFFIRMING
THAT THE NLRC PROPERLY DISMISSED THE CASE FOR ALLEGED LACK OF
JURISDICTION.
67
B. IN NOT RULING THAT RESPONDENTS ARE GUILTY OF UNFAIR LABOR
PRACTICES UNDER ARTICLE 249(a) AND (b) OF THE LABOR CODE.
C. IN DECLARING THAT THE THREATS MADE BY A UNION OFFICER
AGAINST MEMBERS OF A RIVAL UNION IS (sic) MERELY AN
"INTERFERENCE" AND DO NOT AMOUNT TO "RESTRAINT" OR
"COERCION".
D. IN DECLARING THAT PETITIONER FAILED TO PRESENT SUBSTANTIAL
EVIDENCE IN PROVING RESPONDENTS SPECIFIC ACTS OF UNFAIR LABOR
PRACTICES.
E. IN NOT RULING THAT RESPONDENTS ARE SOLIDARILY LIABLE TO
PETITIONER FOR MORAL AND EXEMPLARY DAMAGES, AND ATTORNEYS
FEES.41
Petitioners Arguments
Praying that the assailed CA dispositions be set aside and that
respondents be declared guilty of unfair labor practices under Article
249(a) and (b) and adjudged liable for damages and attorneys fees as
prayed for in his complaint, petitioner maintains in his Petition and
Reply42 that respondents are guilty of unfair labor practices which he
clearly enumerated and laid out in his pleadings below; that these unfair
labor practices committed by respondents fall within the jurisdiction of
the Labor Arbiter; that the Labor Arbiter, the NLRC, and the CA failed to
rule on his accusation of unfair labor practices and simply dismissed his
complaint on the ground that his causes of action are intra- or inter-union
in nature; that admittedly, some of his causes of action involved intra- or
inter-union disputes, but other acts of respondents constitute unfair labor
practices; that he presented substantial evidence to prove that
respondents are guilty of unfair labor practices by failing to observe the
proper procedure in the imposition of the increased monthly union dues,
and in unduly imposing the penalties of suspension and expulsion
against him; that under the unions constitution and by-laws, he is given
the right to appeal his suspension and expulsion to the general
membership assembly; that in denying him his rights as a union member
and expelling him, respondents are guilty of malice and evident bad
faith; that respondents are equally guilty for violating and curtailing his
rights to vote and be voted to a position within the union, and for
discriminating against non-MWEU members; and that the totality of
respondents conduct shows that they are guilty of unfair labor practices.
Respondents Arguments
In their joint Comment,43 respondents maintain that petitioner raises
issues of fact which are beyond the purview of a petition for review
on certiorari; that the findings of fact of the CA are final and conclusive;
that the Labor Arbiter, NLRC, and CA are one in declaring that there is no
unfair labor practices committed against petitioner; that petitioners
other allegations fall within the jurisdiction of the BLR, as they refer to
intra- or inter-union disputes between the parties; that the issues arising
from petitioners right to information on the increased dues, right to
appeal his suspension and expulsion, and right to vote and be voted
upon are essentially intra-union in nature; that his allegations regarding
supposed coercion and restraint relative to benefits in the proposed CBA
do not constitute an actionable wrong; that all of the acts questioned by
petitioner are covered by Section 1, Rule XI of Department Order 40-03,
series of 2003 as intra-/inter-union disputes which do not fall within the
jurisdiction of the Labor Arbiter; that in not paying his union dues,
petitioner is guilty of insubordination and deserved the penalty of
expulsion; that petitioner failed to petition to convene the general
assembly through the required signature of 30% of the union
membership in good standing pursuant to Article VI, Section 2(a) of
MWEUs Constitution and By-Laws or by a petition of the majority of the
general membership in good standing under Article VI, Section 3; and
that for his failure to resort to said remedies, petitioner can no longer
question his suspension or expulsion and avail of his right to appeal.
Our Ruling
The Court partly grants the Petition.
In labor cases, issues of fact are for the labor tribunals and the CA to
resolve, as this Court is not a trier of facts. However, when the
conclusion arrived at by them is erroneous in certain respects, and would
result in injustice as to the parties, this Court must intervene to correct
the error. While the Labor Arbiter, NLRC, and CA are one in their
conclusion in this case, they erred in failing to resolve petitioners charge
of unfair labor practices against respondents.
It is true that some of petitioners causes of action constitute intra-union
cases cognizable by the BLR under Article 226 of the Labor Code.
An intra-union dispute refers to any conflict between and among union
members, including grievances arising from any violation of the rights
and conditions of membership, violation of or disagreement over any
provision of the unions constitution and by-laws, or disputes arising from
chartering or disaffiliation of the union. Sections 1 and 2, Rule XI of
Department Order No. 40-03, Series of 2003 of the DOLE enumerate the
following circumstances as inter/intra-union disputes x x x. 44
However, petitioners charge of unfair labor practices falls within
the original and exclusive jurisdiction of the Labor Arbiters, pursuant to
Article 217 of the Labor Code. In addition, Article 247 of the same Code
provides that "the civil aspects of all cases involving unfair labor
practices, which may include claims for actual, moral, exemplary and
other forms of damages, attorneys fees and other affirmative relief, shall
be under the jurisdiction of the Labor Arbiters."
68
Unfair labor practices may be committed both by the employer under
Article 248 and by labor organizations under Article 249 of the Labor
Code,45 which provides as follows:
ART. 249. Unfair labor practices of labor organizations. - It shall be unfair
labor practice for a labor organization, its officers, agents or
representatives:
(a) To restrain or coerce employees in the exercise of their right to self-
organization. However, a labor organization shall have the right to
prescribe its own rules with respect to the acquisition or retention of
membership;
(b) To cause or attempt to cause an employer to discriminate against an
employee, including discrimination against an employee with respect to
whom membership in such organization has been denied or to terminate
an employee on any ground other than the usual terms and conditions
under which membership or continuation of membership is made
available to other members;
(c) To violate the duty, or refuse to bargain collectively with the
employer, provided it is the representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree
to pay or deliver any money or other things of value, in the nature of an
exaction, for services which are not performed or not to be performed,
including the demand for fee for union negotiations;
(e) To ask for or accept negotiation or attorneys fees from employers as
part of the settlement of any issue in collective bargaining or any other
dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the
officers, members of governing boards, representatives or agents or
members of labor associations or organizations who have actually
participated in, authorized or ratified unfair labor practices shall be held
criminally liable. (As amended by Batas Pambansa Bilang 130, August
21, 1981).
Petitioner contends that respondents committed acts constituting unfair
labor practices which charge was particularly laid out in his pleadings,
but that the Labor Arbiter, the NLRC, and the CA ignored it and simply
dismissed his complaint on the ground that his causes of action were
intra- or inter-union in nature. Specifically, petitioner claims that he was
suspended and expelled from MWEU illegally as a result of the denial of
his right to appeal his case to the general membership assembly in
accordance with the unions constitution and by-laws. On the other hand,
respondents counter that such charge is intra-union in nature, and that
petitioner lost his right to appeal when he failed to petition to convene
the general assembly through the required signature of 30% of the union
membership in good standing pursuant to Article VI, Section 2(a) of
MWEUs Constitution and By-Laws or by a petition of the majority of the
general membership in good standing under Article VI, Section 3.
Under Article VI, Section 2(a) of MWEUs Constitution and By-Laws, the
general membership assembly has the power to "review revise modify
affirm or repeal [sic] resolution and decision of the Executive Board
and/or committees upon petition of thirty percent (30%) of the Union in
good standing,"46 and under Section 2(d), to "revise, modify, affirm or
reverse all expulsion cases."47 Under Section 3 of the same Article, "[t]he
decision of the Executive Board may be appealed to the General
Membership which by a simple majority vote reverse the decision of said
body. If the general Assembly is not in session the decision of the
Executive Board may be reversed by a petition of the majority of the
general membership in good standing."48 And, in Article X, Section 5,
"[a]ny dismissed and/or expelled member shall have the right to appeal
to the Executive Board within seven days from notice of said dismissal
and/or expulsion which, in [turn] shall be referred to the General
membership assembly. In case of an appeal, a simple majority of the
decision of the Executive Board is imperative. The same shall be
approved/disapproved by a majority vote of the general membership
assembly in a meeting duly called for the purpose."49
In regard to suspension of a union member, MWEUs Constitution and By-
Laws provides under Article X, Section 4 thereof that "[a]ny suspended
member shall have the right to appeal within three (3) working days from
the date of notice of said suspension. In case of an appeal a simple
majority of vote of the Executive Board shall be necessary to nullify the
suspension."
Thus, when an MWEU member is suspended, he is given the right to
appeal such suspension within three working days from the date of
notice of said suspension, which appeal the MWEU Executive Board is
obligated to act upon by a simple majority vote. When the penalty
imposed is expulsion, the expelled member is given seven days from
notice of said dismissal and/or expulsion to appeal to the Executive
Board, which is required to act by a simple majority vote of its members.
The Boards decision shall then be approved/ disapproved by a majority
vote of the general membership assembly in a meeting duly called for
the purpose.1avvphi1
The documentary evidence is clear that when petitioner received
Borelas August 21, 2007 letter informing him of the Executive Boards
unanimous approval of the grievance committee recommendation to
suspend him for the second time effective August 24, 2007, he
immediately and timely filed a written appeal. However, the Executive
Board then consisting of respondents Borela, Tierra, Bolo, Casaas,
Fernandez, Rendon, Montemayor, Torres, Quebral, Pagulayan, Cancino,
Maga, Cometa, Mancenido, and two others who are not respondents
herein did not act thereon. Then again, when petitioner was charged for
69
the third time and meted the penalty of expulsion from MWEU by the
unanimous vote of the Executive Board, his timely appeal was again not
acted upon by said board this time consisting of respondents Borela,
Quebral, Tierra, Imana, Rendon, Yeban, Cancino, Torres, Montemayor,
Mancenido, Mandilag, Fernandez, Buenaventura, Apilado, Maga, Barbero,
Cometa, Bolo, and Manlapaz.
Thus, contrary to respondents argument that petitioner lost his right to
appeal when he failed to petition to convene the general assembly
through the required signature of 30% of the union membership in good
standing pursuant to Article VI, Section 2(a) of MWEUs Constitution and
By-Laws or by a petition of the majority of the general membership in
good standing under Article VI, Section 3, this Court finds that petitioner
was illegally suspended for the second time and thereafter unlawfully
expelled from MWEU due to respondents failure to act on his written
appeals. The required petition to convene the general assembly through
the required signature of 30% (under Article VI, Section 2[a]) or majority
(under Article VI, Section 3) of the union membership does not apply in
petitioners case; the Executive Board must first act on his two appeals
before the matter could properly be referred to the general membership.
Because respondents did not act on his two appeals, petitioner was
unceremoniously suspended, disqualified and deprived of his right to run
for the position of MWEU Vice-President in the September 14, 2007
election of officers, expelled from MWEU, and forced to join another
union, WATER-AFWC. For these, respondents are guilty of unfair labor
practices under Article 249 (a) and (b) that is, violation of petitioners
right to self-organization, unlawful discrimination, and illegal termination
of his union membership which case falls within the original and
exclusive jurisdiction of the Labor Arbiters, in accordance with Article 217
of the Labor Code.
The primary concept of unfair labor practices is stated in Article 247 of
the Labor Code, which states:
Article 247. Concept of unfair labor practice and procedure for
prosecution thereof. Unfair labor practices violate the constitutional
right of workers and employees to self-organization, are inimical to the
legitimate interests of both labor and management, including their right
to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace and
hinder the promotion of healthy and stable labor-management relations.
"In essence, [unfair labor practice] relates to the commission of acts that
transgress the workers right to organize."50 "[A]ll the prohibited acts
constituting unfair labor practice in essence relate to the workers right
to self-organization."51 "[T]he term unfair labor practice refers to that
gamut of offenses defined in the Labor Code which, at their core, violates
the constitutional right of workers and employees to self-organization."52
Guaranteed to all employees or workers is the right to self-organization
and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining. This is made plain by no less than
three provisions of the Labor Code of the Philippines. Article 243 of the
Code provides as follows:
ART. 243. Coverage and employees right to self-organization. All
persons employed in commercial, industrial and agricultural enterprises
and in religious, charitable, medical, or educational institutions whether
operating for profit or not, shall have the right to self-organization and to
form, join, or assist labor organizations of their own choosing for
purposes or collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those without any
definite employers may form labor organizations for their mutual aid and
protection.
Article 248 (a) declares it to be an unfair labor practice for an employer,
among others, to interfere with, restrain or coerce employees in the
exercise of their right to self-organization. Similarly, Article 249 (a)
makes it an unfair labor practice for a labor organization to restrain or
coerce employees in the exercise of their rights to self-organization . . .
xxxx
The right of self-organization includes the right to organize or affiliate
with a labor union or determine which of two or more unions in an
establishment to join, and to engage in concerted activities with co-
workers for purposes of collective bargaining through representatives of
their own choosing, or for their mutual aid and protection, i.e., the
protection, promotion, or enhancement of their rights and interests. 53
As members of the governing board of MWEU, respondents are presumed
to know, observe, and apply the unions constitution and by-laws. Thus,
their repeated violations thereof and their disregard of petitioners rights
as a union member their inaction on his two appeals which resulted in
his suspension, disqualification from running as MWEU officer, and
subsequent expulsion without being accorded the full benefits of due
process connote willfulness and bad faith, a gross disregard of his
rights thus causing untold suffering, oppression and, ultimately,
ostracism from MWEU. "Bad faith implies breach of faith and willful
failure to respond to plain and well understood obligation." 54 This
warrants an award of moral damages in the amount of P100,000.00.
Moreover, the Civil Code provides:
Art. 32. Any public officer or employee, or any private individual, who
directly or indirectly obstructs, defeats, violates or in any manner
impedes or impairs any of the following rights and liberties of another
person shall be liable to the latter for damages:
xxxx
(12) The right to become a member of associations or societies for
purposes not contrary to law;
70
In Vital-Gozon v. Court of Appeals,55 this Court declared, as follows:
Moral damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. They may be recovered if they are the
proximate result of the defendants wrongful act or omission. The
instances when moral damages may be recovered are, inter alia, acts
and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35 of
the Civil Code, which, in turn, are found in the Chapter on Human
Relations of the Preliminary Title of the Civil Code. x x x
Under the circumstances, an award of exemplary damages in the amount
of P50,000.00, as prayed for, is likewise proper. "Exemplary damages are
designed to permit the courts to mould behavior that has socially
deleterious consequences, and their imposition is required by public
policy to suppress the wanton acts of the offender." 56 This should prevent
respondents from repeating their mistakes, which proved costly for
petitioner.1wphi1
Under Article 2229 of the Civil Code, [e]xemplary or corrective damages
are imposed, by way of example or correction for the public good, in
addition to the moral, temperate, liquidated or compensatory damages.
As this court has stated in the past: Exemplary damages are designed
by our civil law to permit the courts to reshape behaviour that is socially
deleterious in its consequence by creating negative incentives or
deterrents against such behaviour.57
Finally, petitioner is also entitled to attorneys fees equivalent to 10 per
cent (10%) of the total award. The unjustified acts of respondents clearly
compelled him to institute an action primarily to vindicate his rights and
protect his interest. Indeed, when an employee is forced to litigate and
incur expenses to protect his rights and interest, he is entitled to an
award of attorneys fees.58
WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed April
24, 2012 Decision of the Court of Appeals in CA-G.R. SP No. 115639 is
hereby MODIFIED, in that all of the respondents - except for Carlos Villa,
Ric Briones, and Chito Bernardo - are declared guilty of unfair labor
practices and ORDERED TO INDEMNIFY petitioner Allan M. Mendoza
the amounts of Pl00,000.00 as and by way of moral damages,
PS0,000.00 as exemplary damages, and attorney's fees equivalent to
10 per cent (10%) of the total award.
SO ORDERED.
15.
G.R. No.174287 August 12, 2013
NATIONAL UNION OF BANK EMPLOYEES (NUBE), PETITIONER,
vs.
PHILNABANK EMPLOYEES ASSOCIATION (PEMA) AND PHILIPPINE
NATIONAL BANK, RESPONDENTS.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure are the May 22, 2006 Decision 1 and August 17,
2006 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 84606,
which reversed the May 27, 2004 Decision3 of the Secretary of Labor and
Employment acting as voluntary arbitrator, the dispositive portion of
which states:
WHEREFORE, in light of the foregoing findings, the Bank is hereby
ORDERED to release all union dues withheld and to continue remitting to
NUBE-PNB chapter the members' obligations under the CBA, LESS the
amount corresponding to the number of non-union members including
those who participated in the unsuccessful withdrawal of membership
from their mother union.
The parties are enjoined to faithfully comply with the above- mentioned
resolution.
With respect to the URGENT MOTION FOR INTERVENTION filed by PEMA,
the same is hereby denied without prejudice to the rights of its members
to bring an action to protect such rights if deemed necessary at the
opportune time.
SO ORDERED.4
We state the facts.
Respondent Philippine National Bank (PNB) used to be a government-
owned and controlled banking institution established under Public Act
2612, as amended by Executive Order No. 80 dated December 3, 1986
(otherwise known as The 1986 Revised Charter of the Philippine National
Bank). Its rank-and-file employees, being government personnel, were
represented for collective negotiation by the Philnabank Employees
Association (PEMA), a public sector union.
In 1996, the Securities and Exchange Commission approved PNBs new
Articles of Incorporation and By-laws and its changed status as a private
corporation. PEMA affiliated with petitioner National Union of Bank
Employees (NUBE), which is a labor federation composed of unions in the
banking industry, adopting the name NUBE-PNB Employees Chapter
(NUBE-PEC).
71
Later, NUBE-PEC was certified as the sole and exclusive bargaining agent
of the PNB rank-and-file employees. A collective bargaining agreement
(CBA) was subsequently signed between NUBE-PEC and PNB covering the
period of January 1, 1997 to December 31, 2001.
Pursuant to Article V on Check-off and Agency Fees of the CBA, PNB shall
deduct the monthly membership fee and other assessments imposed by
the union from the salary of each union member, and agency fee
(equivalent to the monthly membership dues) from the salary of the
rank- and-file employees within the bargaining unit who are not union
members. Moreover, during the effectivity of the CBA, NUBE, being the
Federation union, agreed that PNB shall remit P15.00 of the P65.00 union
dues per month collected by PNB from every employee, and that PNB
shall directly credit the amount to NUBEs current account with PNB. 5
Following the expiration of the CBA, the Philnabank Employees
Association-FFW (PEMA-FFW) filed on January 2, 2002 a petition for
certification election among the rank-and-file employees of PNB. The
petition sought the conduct of a certification election to be participated
in by PEMA-FFW and NUBE-PEC.
While the petition for certification election was still pending, two
significant events transpired the independent union registration of
NUBE- PEC and its disaffiliation with NUBE.
With a legal personality derived only from a charter issued by NUBE,
NUBE-PEC, under the leadership of Mariano Soria, decided to apply for a
separate registration with the Department of Labor and Employment
(DOLE). On March 25, 2002, it was registered as an independent labor
organization under Registration Certificate No. NCR-UR-3-3790-2002.
Thereafter, on June 20, 2003, the Board of Directors of NUBE-PEC
adopted a Resolution6 disaffiliating itself from NUBE. Cited as reasons
were as follows:
xxxx
WHEREAS, in the long period of time that the Union has been affiliated
with NUBE, the latter has miserably failed to extend and provide
satisfactory services and support to the former in the form of legal
services, training assistance, educational seminars, and the like;
WHEREAS, this failure by NUBE to provide adequate essential services
and support to union members have caused the latter to be resentful to
NUBE and to demand for the Unions disaffiliation from the former[;]
WHEREAS, just recently, NUBE displayed its lack of regard for the
interests and aspirations of the union members by blocking the latters
desire for the early commencement of CBA negotiations with the PNB
management[;]
WHEREAS, this strained relationship between NUBE and the Union is no
longer conducive to a fruitful partnership between them and could even
threaten industrial peace between the Union and the management of
PNB.
WHEREAS, under the circumstances, the current officers of the Union
have no choice but to listen to the clamor of the overwhelming majority
of union members for the Union to disaffiliate from NUBE. 7
The duly notarized Resolution was signed by Edgardo B. Serrana
(President), Rico B. Roma (Vice-President), Rachel C. Latorre (Secretary),
Valeriana S. Garcia (Director/Acting Treasurer), Ruben C. Medrano
(Director), and Verlo C. Magtibay (Director). It is claimed that said
Resolution was overwhelmingly ratified by about eighty-one percent
(81%) of the total union membership.
On June 25, 2003, NUBE-PEC filed a Manifestation and Motion 8 before the
Med-Arbitration Unit of DOLE, praying that, in view of its independent
registration as a labor union and disaffiliation from NUBE, its name as
appearing in the official ballots of the certification election be changed to
"Philnabank Employees Association (PEMA)" or, in the alternative, both
parties be allowed to use the name "PEMA" but with PEMA-FFW and
NUBE-PEC be denominated as "PEMA-Bustria Group" and "PEMA-Serrana
Group," respectively.
On the same date, PEMA sent a letter to the PNB management informing
its disaffiliation from NUBE and requesting to stop, effective immediately,
the check-off of the P15.00 due for NUBE.9
Acting thereon, on July 4, 2003, PNB informed NUBE of PEMAs letter and
its decision to continue the deduction of the P15.00 fees, but stop its
remittance to NUBE effective July 2003. PNB also notified NUBE that the
amounts collected would be held in a trust account pending the
resolution of the issue on PEMAs disaffiliation. 10
On July 11, 2003, NUBE replied that: it remains as the exclusive
bargaining representative of the PNB rank-and-file employees; by signing
the Resolution (on disaffiliation), the chapter officers have abandoned
NUBE-PEC and joined another union; in abandoning NUBE-PEC, the
chapter officers have abdicated their respective positions and resigned
as such; in joining another union, the chapter officers committed an act
of disloyalty to NUBE-PEC and the general membership; the
circumstances clearly show that there is an emergency in NUBE-PEC
necessitating its placement under temporary trusteeship; and that PNB
should cease and desist from dealing with Serrana, Roma, Latorre,
Garcia, Medrano, and Magtibay, who are expelled from NUBE-PEC. 11 With
72
regard to the issue of non-remittance of the union dues, NUBE enjoined
PNB to comply with the union check-off provision of the CBA; otherwise,
it would elevate the matter to the grievance machinery in accordance
with the CBA.
Despite NUBEs response, PNB stood firm on its decision. Alleging unfair
labor practice (ULP) for non-implementation of the grievance machinery
and procedure, NUBE brought the matter to the National Conciliation and
Mediation Board (NCMB) for preventive mediation.12 In time, PNB and
NUBE agreed to refer the case to the Office of the DOLE Secretary for
voluntary arbitration. They executed a Submission Agreement on
October 28, 2003.13
Meantime, the DOLE denied PEMAs motion to change its name in the
official ballots. The certification election was finally held on October 17,
2003. The election yielded the following results:
Number of eligible voters 3,742
Number of valid votes cast 2,993
Number of spoiled ballots 72
Total 3,065
Philnabank Employees Association-FFW 289
National Union of Bank Employees (NUBE)-
Philippine National Bank (PNB) Chapter 2,683
No Union 21
Total 2,993
On April 28, 2004, PEMA filed before the voluntary arbitrator an Urgent
Motion for Intervention,15 alleging that it stands to be substantially
affected by whatever judgment that may be issued, because one of the
issues for resolution is the validity of its disaffiliation from NUBE. It
further claimed that its presence is necessary so that a complete relief
may be accorded to the parties. Only NUBE opposed the motion, arguing
that PEMA has no legal personality to intervene, as it is not a party to the
existing CBA; and that NUBE is the exclusive bargaining representative of
the PNB rank-and-file employees and, in dealing with a union other than
NUBE, PNB is violating the duty to bargain collectively, which is another
form of ULP.16
Barely a month after, DOLE Acting Secretary Manuel G. Imson denied
PEMAs motion for intervention and ordered PNB to release all union dues
withheld and to continue remitting the same to NUBE. The May 27, 2004
Decision opined:
Before we delve into the merits of the present dispute, it behooves [Us]
to discuss in passing the propriety of the MOTION FOR INTERVENTION
filed by the Philnabank Employees Association (PEMA) on April 28, 2004,
the alleged [break-away] group of NUBE- PNB Chapter.
A cursory reading of the motion reveals a denial thereof is not prejudicial
to the individual rights of its members. They are protected by law.
Coming now to the main issues of the case, suffice it to say that after an
evaluative review of the record of the case, taking into consideration the
arguments and evidence adduced by both parties, We find that indeed
no effective disaffiliation took place.
It is well settled that [l]abor unions may disaffiliate from their mother
federations to form a local or independent union only during the 60-day
freedom period immediately preceding the expiration of the CBA.
[Tanduay Distillery Labor Union v. National Labor Relations Commission,
et al.] However, such disaffiliation must be effected by a majority of the
members in the bargaining unit. (Volkschel Labor Union v. Bureau of
Labor Relations).
Applying the foregoing jurisprudence to the case at bar, it is difficult to
believe that a justified disaffiliation took place. While the record
apparently shows that attempts at disaffiliation occurred sometime in
June of 2003 x x x the latest result of a certification election dated 17
October 2003 mooted such disaffiliation.
Further, even if for the sake of argument an attempt at disaffiliation
occurred, the record is bereft of substantial evidence to support a finding
of effective disaffiliation. There might have been a mass withdrawal of
the union members from the NUBE-PNB Chapter. The record shows,
however, that only 289 out of 3,742 members shifted their allegiance
14 from the mother union. Hence, they constituted a small minority for
which reason they could not have successfully severed the local unions
affiliation with NUBE.
Thus, since only a minority of the members wanted disaffiliation as
shown by the certification election, it can be inferred that the majority of
the members wanted the union to remain an affiliate of the NUBE. [Villar,
et al. v. Inciong, et al.]. There being no justified disaffiliation that took
place, the bargaining agents right under the provision of the CBA on
Check-Off is unaffected and still remained with the old NUBE-PNB
Chapter. x x x
While it is true that the obligation of an employee to pay union dues is
co-terminus with his affiliation [Philippine Federation of Petroleum
73
Workers v. CIR], it is equally tenable that when it is shown, as in this
case, that the withdrawal from the mother union is not supported by
majority of the members, the disaffiliation is unjustified and the
disaffiliated minority group has no authority to represent the employees
of the bargaining unit. This is the import of the principle laid down in
[Volkschel Labor Union v. Bureau of Labor Relations supra] and the
inverse application of the Supreme Court decision in [Philippine
Federation of Petroleum Workers v. CIR] regarding entitlement to the
check-off provision of the CBA.
As a necessary consequence to our finding that no valid disaffiliation
took place, the right of NUBE to represent its local chapter at the PNB,
less those employees who are no longer members of the latter, is beyond
reproach.
However, the Bank cannot be faulted for not releasing union dues to
NUBE at the time when representation status issue was still being
threshed out by proper governmental authority. Prudence dictates the
discontinuance of remittance of union dues to NUBE under such
circumstances was a legitimate exercise of management discretion
apparently in order to protect the Banks business interest. The
suspension of the check-off provision of the CBA, at the instance of the
latter made in good faith, under the present circumstances cannot give
rise to a right of action. For having been exercised without malice much
less evil motive and for not causing actual loss to the National Union of
Bank Employees (NUBE), the same act of management [cannot] be
penalized.17
Aggrieved, PEMA filed before the CA a petition under Rule 43 of the Rules
on Civil Procedure with prayer for the issuance of a temporary restraining
order (TRO) or writ of preliminary injunction (WPI). On November 2, 2004,
the CA denied the application for WPI.18 PEMAs motion for
reconsideration was also denied on February 24, 2005, noting PNBs
manifestation that it would submit to the judgment of the CA as to which
party it should remit the funds collected from the employees. 19
On June 21, 2005, however, petitioner again filed an Urgent Motion for
the Issuance of a TRO against the June 10, 2005 Resolution of DOLE
Acting Secretary Imson, which ordered PNB to properly issue a check
directly payable to the order of NUBE covering the withheld funds from
the trust account.20 Considering the different factual milieu, the CA
resolved to grant the motion.21
Subsequent to the parties submission of memoranda, the CA
promulgated its May 22, 2006 Decision, declaring the validity of PEMAs
disaffiliation from NUBE and directing PNB to return to the employees
concerned the amounts deducted and held in trust for NUBE starting July
2003 and to stop further deductions in favor of NUBE. 22
As to the impropriety of denying PEMAs motion for intervention, the CA
noted:
x x x Among the rights of the [PEMA] as an affiliate of a federation is to
disaffiliate from it. Any case in which this is an issue is then one in which
the union has a significant legal interest and as to which it must be
heard, irrespective of any residual rights of the members after a decision
that might deny a disaffiliation. It is a non-sequitur to make the
intervention of the union in this case dependent on the question of
whether its members can pursue their own agenda under the same
constraints.23
On the validity of PEMAs disaffiliation, the CA ratiocinated:
The power and freedom of a local union to disaffiliate from its mother
union or federation is axiomatic. As Volkschel vs. Bureau of Labor
Relations [137 SCRA 42] recognizes, a local union is, after all, a separate
and voluntary association that under the constitutional guarantee of
freedom of expression is free to serve the interests of its members. Such
right and freedom invariably include the right to disaffiliate or declare its
autonomy from the federation or mother union to which it belongs,
subject to reasonable restrictions in the law or the federations
constitution. [Malayang Samahan ng mga Manggagawa sa M. Greenfield
vs. Ramos, 326 SCRA 428]
Without any restrictive covenant between the parties, [Volkschel Labor
Union vs. Bureau of Labor Relations, supra, at 48,] it is instructive to look
into the state of the law on a unions right to disaffiliate. The voluntary
arbitrator alludes to a provision in PD 1391 allowing disaffiliation only
within a 60-day period preceding the expiration of the CBA. In Alliance of
Nationalist and Genuine Labor Organization vs. Samahan ng mga
Manggagawang Nagkakaisa sa Manila Bay Spinning Mills, etc. [258 SCRA
371], however, the rule was not held to be iron-clad. Volkschel was cited
to support a more flexible view that the right may be allowed as the
circumstances warrant. In Associated Workers Union-PTGWO vs. National
Labor Relations Commission [188 SCRA 123], the right to disaffiliate was
upheld before the onset of the freedom period when it became apparent
that there was a shift of allegiance on the part of the majority of the
union members.
xxxx
As the records show, a majority, indeed a vast majority, of the members
of the local union ratified the action of the board to disaffiliate. Our count
of the members who approved the board action is, 2,638. If we divide
this by the number of eligible voters as per the certification election
which is 3,742, the quotient is 70.5%, representing the proportion of the
members in favor of disaffiliation. The [PEMA] says that the action was
ratified by 81%. Either way, the groundswell of support for the measure
was overwhelming.
The respondent NUBE has developed the ingenious theory that if the
disaffiliation was approved by a majority of the members, it was
neutered by the subsequent certification election in which NUBE-PNB
74
Chapter was voted the sole and exclusive bargaining agent. It is argued
that the effects of this change must be upheld as the latest expression of
the will of the employees in the bargaining unit. The truth of the matter
is that the names of PEMA and NUBE-PNB Chapter are names of only one
entity, the two sides of the same coin. We have seen how NUBE-PNB
Employees Chapter evolved into PEMA and competed with Philnabank
Employees Association-FFW for supremacy in the certification election. To
realize that it was PEMA which entered into the contest, we need only to
remind ourselves that PEMA was the one which filed a motion in the
certification election case to have its name PEMA put in the official ballot.
DOLE insisted, however, in putting the name NUBE-PNB Chapter in the
ballots unaware of the implications of this seemingly innocuous act. 24
NUBE filed a motion for reconsideration, but it was denied;25 hence, this
petition raising the following issues for resolution:
I.
The Secretary of Labor acted without error and without grave abuse of
discretion in not giving due course to the urgent motion for intervention
filed by PEMA.
II.
The Secretary of Labor acted without grave abuse of discretion and
without serious error in ruling that PEMAs alleged disaffiliation was
invalid.
III.
The Secretary of Labor did not commit serious error in ordering the
release of the disputed union fees/dues to NUBE-PNB Chapter.
IV.
There is no substantial basis for the issuance of a preli minary injunction
or temporary restraining order.
V.
Under the Rules of Court, the appeal/petition of PEMA should have been
dismissed.
VI.
PEMA and NUBE are not one and the same, and the denial by the
Secretary of Labor of the motion for intervention was proper.
VII.
NUBE-PNB Chapter, not PEMA, has been fighting for PNB rank-and-file
interests and rights since PNBs privatization, which is further pro of that
NUBE-PNB Chapter and PEMA are not one and the same.
VIII.
The alleged disaffiliation was not valid as proper procedure was not
followed.
IX.
NUBE is entitled to check-off.26
Stripped of the non-essential, the issue ultimately boils down on whether
PEMA validly disaffiliated itself from NUBE, the resolution of which, in
turn, inevitably affects the latters right to collect the union dues held in
trust by PNB.
We deny the petition.
Whether there was a valid disaffiliation is a factual issue. 27 It is
elementary that a question of fact is not appropriate for a petition for
review on certiorari under Rule 45 of the Rules of Court. The parties may
raise only questions of law because the Supreme Court is not a trier of
facts. As a general rule, We are not duty-bound to analyze again and
weigh the evidence introduced in and considered by the tribunals below.
When supported by substantial evidence, the findings of fact of the CA
are conclusive and binding on the parties and are not reviewable by this
Court, except: (1) When the conclusion is a finding grounded entirely on
speculation, surmises and conjectures; (2) When the inference made is
manifestly mistaken, absurd or impossible; (3) Where there is a grave
abuse of discretion; (4) When the judgment is based on a
misapprehension of facts; (5) When the findings of fact are conflicting;
(6) When the CA, in making its findings, went beyond the issues of the
case and the same is contrary to the admissions of both parties; (7)
When the findings are contrary to those of the trial court; (8) When the
findings of fact are conclusions without citation of specific evidence on
which they are based; (9) When the facts set forth in the petition as well
as in the petitioners main and reply briefs are not disputed by the
respondents; and (10) When the findings of fact of the CA are premised
on the supposed absence of evidence and contradicted by the evidence
on record.28 The Court finds no cogent reason to apply these recognized
exceptions.
Even a second look at the records reveals that the arguments raised in
the petition are bereft of merit.
The right of the local union to exercise the right to disaffiliate from its
mother union is well settled in this jurisdiction. In MSMG-UWP v. Hon.
Ramos,29 We held:
75
A local union has the right to disaffiliate from its mother union or declare
its autonomy. A local union, being a separate and voluntary association,
is free to serve the interests of all its members including the freedom to
disaffiliate or declare its autonomy from the federation which it belongs
when circumstances warrant, in accordance with the constitutional
guarantee of freedom of association.
The purpose of affiliation by a local union with a mother union [or] a
federation
"x x x is to increase by collective action the 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."
Thus, a local union which has affiliated itself with a federation is free to
sever such affiliation anytime and such disaffiliation cannot be
considered disloyalty. In the absence of specific provisions in the
federation's constitution prohibiting disaffiliation or the declaration of
autonomy of a local union, a local may dissociate with its parent union. 30
Likewise, Philippine Skylanders, Inc. v. National Labor Relations
Commission31 restated:
The right of a local union to disaffiliate from its mother federation is not a
novel thesis unillumined by case law.1wphi1 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.
Such dictum has been punctiliously followed since then. 32
And again, in Coastal Subic Bay Terminal, Inc. v. Department of Labor
and Employment Office of the Secretary,33 this Court opined:
Under the rules implementing the Labor Code, a chartered local union
acquires legal personality through the charter certificate issued by a duly
registered federation or national union, and reported to the Regional
Office in accordance with the rules implementing the Labor Code. A local
union does not owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. Mere affiliation does not divest the
local union of its own personality, neither does it give the mother
federation the license to act independently of the local union. It only
gives rise to a contract of agency, where the former acts in
representation of the latter. Hence, local unions are considered principals
while the federation is deemed to be merely their agent. As such
principals, the unions are entitled to exercise the rights and privileges of
a legitimate labor organization, including the right to seek certification as
the sole and exclusive bargaining agent in the appropriate employer
unit.34
Finally, the recent case of Cirtek Employees Labor Union-Federation of
Free Workers v. Cirtek Electronics, Inc35ruled:
x x x [A] local union may disaffiliate at any time from its mother
federation, absent any showing that the same is prohibited under its
constitution or rule. Such, however, does not result in it losing its legal
personality altogether. Verily, Anglo-KMU v. Samahan Ng Mga
Manggagawang Nagkakaisa Sa Manila Bar Spinning Mills At J.P. Coats
enlightens:
A local labor union is a separate and distinct unit primarily designed to
secure and maintain an equality of bargaining power between the
employer and their employee-members. A local union does not owe its
existence to the federation with which it is affiliated. It is a separate and
distinct voluntary association owing its creation to the will of its
members. The mere act of affiliation does not divest the local union of its
own personality, neither does it give the mother federation the license to
act independently of the local union. It only gives rise to a contract of
agency where the former acts in representation of the latter. 36
These and many more have consistently reiterated the earlier view that
the right of the local members to withdraw from the federation and to
form a new local union depends upon the provisions of the union's
constitution, by-laws and charter and, 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. 37 In the
case at bar, there is nothing shown in the records nor is it claimed by
NUBE that PEMA was expressly forbidden to disaffiliate from the
federation nor were there any conditions imposed for a valid breakaway.
This being so, PEMA is not precluded to disaffiliate from NUBE after
acquiring the status of an independent labor organization duly registered
before the DOLE.
76
Also, there is no merit on NUBEs contention that PEMAs disaffiliation is
invalid for non-observance of the procedure that union members should
make such determination through secret ballot and after due
deliberation, conformably with Article 241 (d) of the Labor Code, as
amended.38 Conspicuously, other than citing the opinion of a "recognized
labor law authority," NUBE failed to quote a specific provision of the law
or rule mandating that a local unions disaffiliation from a federation
must comply with Article 241 (d) in order to be valid and effective.
Granting, for arguments sake, that Article 241 (d) is applicable, still, We
uphold PEMAs disaffiliation from NUBE. First, non-compliance with the
procedure on disaffiliation, being premised on purely technical grounds
cannot rise above the employees fundamental right to self-organization
and to form and join labor organizations of their own choosing for the
purpose of collective bargaining.39 Second, the Article nonetheless
provides that when the nature of the organization renders such secret
ballot impractical, the union officers may make the decision in behalf of
the general membership. In this case, NUBE did not even dare to contest
PEMAs representation that "PNB employees, from where [PEMA]
[derives] its membership, are scattered from Aparri to Jolo, manning
more than 300 branches in various towns and cities of the country,"
hence, "[to] gather the general membership of the union in a general
membership to vote through secret balloting is virtually impossible." 40 It
is understandable, therefore, why PEMAs board of directors merely
opted to submit for ratification of the majority their resolution to
disaffiliate from NUBE. Third, and most importantly, NUBE did not dispute
the existence of the persons or their due execution of the document
showing their unequivocal support for the disaffiliation of PEMA from
NUBE. Note must be taken of the fact that the list of PEMA members
(identifying themselves as "PEMA-Serrana Group"41) who agreed with the
board resolution was attached as Annex "H" of PEMAs petition before the
CA and covered pages 115 to 440 of the CA rollo. While fully displaying
the employees printed name, identification number, branch, position,
and signature, the list was left unchallenged by NUBE. No evidence was
presented that the union members ratification was obtained by mistake
or through fraud, force or intimidation. Surely, this is not a case where
one or two members of the local union decided to disaffiliate from the
mother federation, but one where more than a majority of the local union
members decided to disaffiliate.
Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum
that previously bound the two entities was completely severed. As NUBE
was divested of any and all power to act in representation of PEMA, any
act performed by the former that affects the interests and affairs of the
latter, including the supposed expulsion of Serrana et al., is rendered
without force and effect.
Also, in effect, NUBE loses it right to collect all union dues held in its trust
by PNB. The moment that PEMA separated from and left NUBE and exists
as an independent labor organization with a certificate of registration,
the former is no longer obliged to pay dues and assessments to the
latter; naturally, there would be no longer any reason or occasion for PNB
to continue making deductions.42 As we said in Volkschel Labor Union v.
Bureau of Labor Relations:43
x x x In other words, ALUMETAL [NUBE in this case] 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." A contract between an employer and the parent
organization as bargaining agent for the employees is terminated bv the
disaffiliation ofthe local of which the employees are members. x x x 44
On the other hand, it was entirely reasonable for PNB to enter into a CBA
with PEMA as represented by Serrana et al. Since PEMA had validly
separated itself from NUBE, there would be no restrictions which could
validly hinder it from collectively bargaining with PNB.
WHEREFORE, the foregoing considered, the instant Petition is DENIED.
The May 22, 2006 Decision and August 17, 2006 Resolution of the Court
of Appeals in CA-G.R. SP No. 84606, which reversed the May 27, 2004
Decision ofthe Secretary of Labor and Employment, are AFFIRMED.
SO ORDERED.
16.
G.R. Nos. 184903 October 10, 2012
DIGITAL TELECOMMUNICATIONS PHILIPPINES, INC., Petitioner,
vs.
DIGITEL EMPLOYEES UNION (DEU), ARCELO RAFAEL A. ESPLANA,
ALAN D. LICANDO, FELICITO C. ROMERO, JR., ARNOLD D.
GONZALES, REYNEL FRANCISCO B. GARCIA, ZOSIMO B. PERALTA,
REGINO T. UNIDAD and JIM L. JAVIER, Respondents.
DECISION
PEREZ, J.:
This treats of the petition for review filed by Digital Telecommunications
Philippines, Inc. (Digitel) assailing the 18 June 2008 Decision 1 and 9
October 2008 Resolution of the Court of Appeals 10th Division in CA-G.R.
SP No. 91719, which affirms the Order of the Secretary of Labor and
77
Employment directing Digitel to commence Collective Bargaining
Agreement (CBA) negotiations and in CA-G.R. SP No. 94825, which
declares the dismissal of affected Digitel employees as illegal.
The facts, as borne by the records, follow.
By virtue of a certification election, Digitel Employees Union (Union)
became the exclusive bargaining agent of all rank and file employees of
Digitel in 1994. The Union and Digitel then commenced collective
bargaining negotiations which resulted in a bargaining deadlock. The
Union threatened to go on strike, but then Acting Labor Secretary
Bienvenido E. Laguesma assumed jurisdiction over the dispute and
eventually directed the parties to execute a CBA.2
However, no CBA was forged between Digitel and the Union. Some Union
members abandoned their employment with Digitel. The Union later
became dormant.
Ten (10) years thereafter or on 28 September 2004, Digitel received from
Arceo Rafael A. Esplana (Esplana), who identified himself as President of
the Union, a letter containing the list of officers, CBA proposals and
ground rules.3 The officers were respondents Esplana, Alan D. Licando
(Vice-President), Felicito C. Romero, Jr. (Secretary), Arnold D. Gonzales
(Treasurer), Reynel Francisco B. Garcia (Auditor), Zosimo B. Peralta (PRO),
Regino T. Unidad (Sgt. at Arms), and Jim L. Javier (Sgt. at Arms).
Digitel was reluctant to negotiate with the Union and demanded that the
latter show compliance with the provisions of the Unions Constitution
and By-laws on union membership and election of officers.
On 4 November 2004, Esplana and his group filed a case for Preventive
Mediation before the National Conciliation and Mediation Board based on
Digitels violation of the duty to bargain. On 25 November 2004, Esplana
filed a notice of strike.
On 10 March 2005, then Labor Secretary Patricia A. Sto. Tomas issued an
Order4 assuming jurisdiction over the labor dispute.
During the pendency of the controversy, Digitel Service, Inc. (Digiserv), a
non-profit enterprise engaged in call center servicing, filed with the
Department of Labor and Employment (DOLE) an Establishment
Termination Report stating that it will cease its business operation. The
closure affected at least 100 employees, 42 of whom are members of the
herein respondent Union.
Alleging that the affected employees are its members and in reaction to
Digiservs action, Esplana and his group filed another Notice of Strike for
union busting, illegal lock-out, and violation of the assumption order.
On 23 May 2005, the Secretary of Labor ordered the second notice of
strike subsumed by the previous Assumption Order. 5
Meanwhile, on 14 March 2005, Digitel filed a petition with the Bureau of
Labor Relations (BLR) seeking cancellation of the Unions registration on
the following grounds: 1) failure to file the required reports from 1994-
2004; 2) misrepresentation of its alleged officers; 3) membership of the
Union is composed of rank and file, supervisory and managerial
employees; and 4) substantial number of union members are not Digitel
employees.6
In a Decision dated 11 May 2005, the Regional Director of the DOLE
dismissed the petition for cancellation of union registration for lack of
merit. The Regional Director ruled that it does not have jurisdiction over
the issue of non-compliance with the reportorial requirements. He also
held that Digitel failed to adduce substantial evidence to prove
misrepresentation and the mixing of non-Digitel employees with the
Union. Finally, he declared that the inclusion of supervisory and
managerial employees with the rank and file employees is no longer a
ground for cancellation of the Unions certificate of registration. 7
The appeal filed by Digitel with the BLR was eventually dismissed for lack
of merit in a Resolution dated 9 March 2007, thereby affirming the 11
May 2005 Decision of the Regional Director.
CA-G.R. SP No. 91719
In an Order dated 13 July 2005, the Secretary of Labor directed Digitel to
commence the CBA negotiation with the Union. Thus:
WHEREFORE, all the foregoing premises considered, this Office hereby
orders:
1. DIGITEL to commence collective bargaining negotiation with DEU
without further delay; and,
2. The issue of unfair labor practice, consisting of union-busting, illegal
termination/lockout and violation of the assumption of jurisdiction,
specifically the return-to-work aspect of the 10 March 2005 and 03 June
2005 orders, be CERTIFIED for compulsory arbitration to the NLRC. 8
Digitel moved for reconsideration on the contention that the pendency of
the petition for cancellation of the Unions certificate of registration is a
prejudicial question that should first be settled before the DOLE could
order the parties to bargain collectively. On 19 August 2005, then Acting
Secretary Manuel G. Imson of DOLE denied the motion for
reconsideration, affirmed the 13 July 2005 Order and reiterated the order
directing parties to commence collective bargaining negotiations. 9
On 14 October 2005, Digitel filed a petition, docketed as CA-G.R. SP No.
91719, before the Court of Appeals assailing the 13 July and 19 August
2005 Orders of the DOLE Secretary and attributing grave abuse of
discretion on the part of the DOLE Secretary for ordering Digitel to
78
commence bargaining negotiations with the Union despite the pendency
of the issue of union legitimacy.
CA-G.R. SP No. 94825
In accordance with the 13 July 2005 Order of the Secretary of Labor, the
unfair labor practice issue was certified for compulsory arbitration before
the NLRC, which, on 31 January 2006, rendered a Decision dismissing the
unfair labor practice charge against Digitel but declaring the dismissal of
the 13 employees of Digiserv as illegal and ordering their reinstatement.
The Union manifested that out of 42 employees, only 13 remained, as
most had already accepted separation pay. The dispositive portion of the
Decision reads:
WHEREFORE, premises considered, the charge of unfair labor practice is
hereby DISMISSED for lack of merit. However, the dismissal of the
remaining thirteen (13) affected employees is hereby declared illegal and
DIGITEL is hereby ORDERED to reinstate them to their former position
with full backwages up to the time they are reinstated, computed as
follows:
x x x x.10
Upon motion for reconsideration filed by Digitel, four (4) affected
employees, namely Ma. Loreta Eser, Marites Jereza, Leonore Tuliao and
Aline G. Quillopras, were removed from entitlement to the awards
pursuant to the deed of quitclaim and release which they all signed. 11
In view of this unfavorable decision, Digitel filed another petition on 9
June 2006 in CA-G.R. SP No. 94825 before the Court of Appeals,
challenging the above NLRC Decision and Resolution and arguing mainly
that Digiserv employees are not employees of Digitel.
Ruling of the Court of Appeals
On 18 June 2008, the Tenth Division of the Court of Appeals consolidated
the two petitions in CA-G.R. SP No. 91719 and CA-G.R. SP No. 94825, and
disposed as follows:
WHEREFORE, the petition in CA-G.R. SP No. 91719 is DISMISSED. The
July 13, 2005 Order and the August 19, 2005 Resolution of the DOLE
Secretary are AFFIRMED in toto. With costs.
The petition in CA-G.R. SP No. 94825 is partially GRANTED, with the
effect that the assailed dispositions must be MODIFIED, as follows:
1) In addition to the order directing reinstatement and payment of full
backwages to the nine (9) affected employees, Digital
Telecommunications Philippines, Inc. is furthered ORDERED, should
reinstatement is no longer feasible, to pay separation pay equivalent to
one (1) month pay, or one-half (1/2) month pay for every year of service,
whichever is higher.
2) The one hundred thousand (PhP 100,000.00) peso-fine imposed on
Digital Telecommunications Philippines, Inc. is DELETED. No costs.12
The Court of Appeals upheld the Secretary of Labors Order for Digitel to
commence CBA negotiations with the Union and emphasized that the
pendency of a petition for the cancellation of a unions registration does
not bar the holding of negotiations for a CBA. The Court of Appeals
sustained the finding that Digiserv is engaged in labor-only contracting
and that its employees are actually employees of Digitel.
Digitel filed a motion for reconsideration but was denied in a Resolution
dated 9 October 2008.
Hence, this petition for review on certiorari.
Digitel argues that the Court of Appeals seriously erred when it condoned
the act of the Secretary of Labor in issuing an assumption order despite
the pendency of an appeal on the issue of union registration. Digitel
maintains that it cannot be compelled to negotiate with a union for
purposes of collective bargaining when the very status of the same as
the exclusive bargaining agent is in question.
Digitel insists that had the Court of Appeals considered the nature of the
activities performed by Digiserv, it would reach the conclusion that
Digiserv is a legitimate contractor. To bolster its claim, Digitel asserts
that the affected employees are registered with the Social Security
System, Pag-ibig, Bureau of Internal Revenue and Philhealth with
Digiserv as their employer. Digitel further contends that assuming that
the affected Digiserv employees are employees of Digitel, they were
nevertheless validly dismissed on the ground of closure of a department
or a part of Digitels business operation.
The three issues raised in this petition are: 1) whether the Secretary of
Labor erred in issuing the assumption order despite the pendency of the
petition for cancellation of union registration; 2) whether Digiserv is a
legitimate contractor; and 3) whether there was a valid dismissal.
The pendency of a petition
for cancellation of union
registration does not preclude
collective bargaining.
79
The first issue raised by Digitel is not novel. It is well-settled that the
pendency of a petition for cancellation of union registration does not
preclude collective bargaining.
The 2005 case of Capitol Medical Center, Inc. v. Hon. Trajano 13 is apropos.
The respondent union therein sent a letter to petitioner requesting a
negotiation of their CBA. Petitioner refused to bargain and instead filed a
petition for cancellation of the unions certificate of registration.
Petitioners refusal to bargain forced the union to file a notice of strike.
They eventually staged a strike. The Secretary of Labor assumed
jurisdiction over the labor dispute and ordered all striking workers to
return to work. Petitioner challenged said order by contending that its
petition for cancellation of unions certificate of registration involves a
prejudicial question that should first be settled before the Secretary of
Labor could order the parties to bargain collectively. When the case
eventually reached this Court, we agreed with the Secretary of Labor
that the pendency of a petition for cancellation of union registration does
not preclude collective bargaining, thus:
That there is a pending cancellation proceeding against the respondent
Union is not a bar to set in motion the mechanics of collective
bargaining. If a certification election may still be ordered despite the
pendency of a petition to cancel the unions registration certificate
(National Union of Bank Employees vs. Minister of Labor, 110 SCRA 274),
more so should the collective bargaining process continue despite its
pendency. We must emphasize that the majority status of the respondent
Union is not affected by the pendency of the Petition for Cancellation
pending against it. Unless its certificate of registration and its status as
the certified bargaining agent are revoked, the Hospital is, by express
provision of the law, duty bound to collectively bargain with the Union. 14
Trajano was reiterated in Legend International Resorts Limited v. Kilusang
Manggagawa ng Legenda (KML-Independent).15 Legend International
Resorts reiterated the rationale for allowing the continuation of either a
CBA process or a certification election even during the pendency of
proceedings for the cancellation of the unions certificate of registration.
Citing the cases of Association of Court of Appeals Employees v. Ferrer-
Calleja16 and Samahan ng Manggagawa sa Pacific Plastic v. Hon.
Laguesma,17 it was pointed out at the time of the filing of the petition for
certification election or a CBA process as in the instant case the union
still had the personality to file a petition for certification or to ask for a
CBA negotiation as in the present case.
Digiserv is a labor-only contractor.
Labor-only contracting is expressly prohibited by our labor laws. Article
106 of the Labor Code defines labor-only contracting as "supplying
workers to an employer [who] does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises,
among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business
of such employer."
Section 5, Rule VIII-A, Book III of the Omnibus Rules Implementing the
Labor Code (Implementing Rules), as amended by Department Order No.
18-02, expounds on the prohibition against labor-only contracting, thus:
Section 5. Prohibition against labor-only contracting. Labor-only
contracting is hereby declared prohibited. For this purpose, labor-only
contracting shall refer to an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to perform a
job, work or service for a principal, and any of the following elements are
present:
i) The contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed and
the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the
main business of the principal; or
ii) The contractor does not exercise the right to control over the
performance of the work of the contractual employee.
The foregoing provisions shall be without prejudice to the application of
Article 248 (c) of the Labor Code, as amended.
xxxx
The "right to control" shall refer to the right reserved to the person for
whom, the services of the contractual workers are performed, to
determine not only the end to be achieved, but also the manner and
means to be used in reaching that end.
The law and its implementing rules allow contracting arrangements for
the performance of specific jobs, works or services. Indeed, it is
management prerogative to farm out any of its activities, regardless of
whether such activity is peripheral or core in nature. However, in order
for such outsourcing to be valid, it must be made to an independent
contractor because the current labor rules expressly prohibit labor-only
contracting.18
After an exhaustive review of the records, there is no showing that first,
Digiserv has substantial investment in the form of capital, equipment or
tools. Under the Implementing Rules, substantial capital or investment
refers to "capital stocks and subscribed capitalization in the case of
corporations, tools, equipment, implements, machineries and work
80
premises, actually and directly used by the contractor or subcontractor in
the performance or completion of the job, work or service contracted
out." The NLRC, as echoed by the Court of Appeals, did not find
substantial Digiservs authorized capital stock of One Million Pesos
(P 1,000,000.00). It pointed out that only Two Hundred Fifty Thousand
Pesos (P 250,000.00) of the authorized capital stock had been subscribed
and only Sixty-Two Thousand Five Hundred Pesos (P 62,500.00) had been
paid up. There was no increase in capitalization for the last ten (10)
years.19
Moreover, in the Amended Articles of Incorporation, as well as in the
General Information Sheets for the years 1994, 2001 and 2005, the
primary purpose of Digiserv is to provide manpower services. In PCI
Automation Center, Inc. v. National Labor Relations Commission, 20 the
Court made the following distinction: "the legitimate job contractor
provides services while the labor-only contractor provides only
manpower. The legitimate job contractor undertakes to perform a
specific job for the principal employer while the labor-only contractor
merely provides the personnel to work for the principal employer." The
services provided by employees of Digiserv are directly related to the
business of Digitel, as rationalized by the NLRC in this wise:
It is undisputed that as early as March 1994, the affected employees,
except for two, were already performing their job as Traffic Operator
which was later renamed as Customer Service Representative (CSR). It is
equally undisputed that all throughout their employment, their function
as CSR remains the same until they were terminated effective May 30,
2005. Their long period of employment as such is an indication that their
job is directly related to the main business of DIGITEL which is
telecommunications. Because, if it was not, DIGITEL would not have
allowed them to render services as Customer Service Representative for
such a long period of time.21
Furthermore, Digiserv does not exercise control over the affected
employees. The NLRC highlighted the fact that Digiserv shared the same
Human Resources, Accounting, Audit and Legal Departments with Digitel
which manifested that it was Digitel who exercised control over the
performance of the affected employees. The NLRC also relied on the
letters of commendation, plaques of appreciation and certification issued
by Digitel to the Customer Service Representatives as evidence of
control.
Considering that Digiserv has been found to be engaged in labor-only
contracting, the dismissed employees are deemed employees of Digitel.
Section 7 of the Implementing Rules holds that labor-only contracting
would give rise to: (1) the creation of an employer-employee relationship
between the principal and the employees of the contractor or sub-
contractor; and (2) the solidary liability of the principal and the
contractor to the employees in the event of any violation of the Labor
Code.
Accordingly, Digitel is considered the principal employer of respondent
employees.
The affected employees were
illegally dismissed.
In addition to finding that Digiserv is a labor-only contractor, records
teem with proof that its dismissed employees are in fact employees of
Digitel. The NLRC enumerated these evidences, thus:
That the remaining thirteen (13) affected employees are indeed
employees of DIGITEL is sufficiently established by the facts and
evidence on record.
It is undisputed that the remaining affected employees, except for two
(2), were already hired by DIGITEL even before the existence of
DIGISERV. (The other two (2) were hired after the existence of DIGISERV).
The UNION submitted a sample copy of their appointment paper (Annex
"A" of UNIONs Position Paper, Records, Vol. 1, p. 100) showing that they
were appointed on March 1, 1994, almost three (3) months before
DIGISERV came into existence on May 30, 1994 (Annex "B", Ibid,
Records, Vol. 1, p. 101). On the other hand, not a single appointment
paper was submitted by DIGITEL showing that these remaining affected
employees were hired by DIGISERV.
It is equally undisputed that the remaining, affected employees
continuously held the position of Customer Service Representative, which
was earlier known as Traffic Operator, from the time they were appointed
on March 1, 1994 until they were terminated on May 30, 2005. The
UNION alleges that these Customer Service Representatives were under
the Customer Service Division of DIGITEL. The UNIONs allegation is
correct. Sample of letter of commendations issued to Customer Service
Representatives (Annexes "C" and "C-1" of UNIONs Position Paper,
Records, p. 100 and 111) indeed show that DIGITEL has a Customer
Service Division which handles its Call Center operations.
Further, the Certificates issued to Customer Service Representative
likewise show that they are employees of DIGITEL (Annexes "C-5", "C-6" -
"C-7" of UNIONs Position Paper, Records, Vol. 1, pp. 115 to 117), Take for
example the "Service Award" issued to Ma. Loretta C. Esen, one of the
remaining affected employees (Annex "C-5", Supra). The "Service Award"
was signed by the officers of DIGITEL the VP-Customer Services
Division, the VP-Human Resources Division and the Group Head-Human
Resources Division. It was issued by DIGITEL to Esen thru the above
named officers "In recognition of her seven (7) years continuous and
valuable contributions to the achievement of Digitels organization
objectives". It cannot be gainsaid that it is only the employer that issues
service award to its employees.22 (Emphasis not supplied)
81
As a matter of fact, even before the incorporation of Digiserv, the
affected employees were already employed by Digitel as Traffic
Operators, later renamed as Customer Service Representatives.
As an alternative argument, Digitel maintains that the affected
employees were validly dismissed on the grounds of closure of Digiserv,
a department within Digitel.
In the recent case of Waterfront Cebu City Hotel v. Jimenez,23 we referred
to the closure of a department or division of a company as retrenchment.
The dismissed employees were undoubtedly retrenched with the closure
of Digiserv.
For a valid retrenchment, the following elements must be present:
(1) That retrenchment is reasonably necessary and likely to prevent
business losses which, if already incurred, are not merely de minimis, but
substantial, serious, actual and real, or if only expected, are reasonably
imminent as perceived objectively and in good faith by the employer;
(2) That the employer served written notice both to the employees and
to the Department of Labor and Employment at least one month prior to
the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay
equivalent to one (1) month pay or at least month pay for every year
of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in
good faith for the advancement of its interest and not to defeat or
circumvent the employees right to security of tenure; and
(5) That the employer used fair and reasonable criteria in ascertaining
who would be dismissed and who would be retained among the
employees, such as status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.24
Only the first 3 elements of a valid retrenchment had been here satisfied.
Indeed, it is management prerogative to close a department of the
company. Digitels decision to outsource the call center operation of the
company is a valid reason to close down the operations of a department
under which the affected employees were employed. Digitel cited the
decline in the volume of transaction of operator-assisted call services as
supported by Financial Statements for the years 2003 and 2004, during
which Digiserv incurred a deficit of P 163,624.00 and P 164,055.00,
respectively.25 All affected employees working under Digiserv were
served with individual notices of termination. DOLE was likewise served
with the corresponding notice. All affected employees were offered
separation pay. Only 9 out of the 45 employees refused to accept the
separation pay and chose to contest their dismissal before this Court.
The fifth element regarding the criteria to be observed by Digitel clearly
does not apply because all employees under Digiserv were dismissed.
The instant case is all about the fourth element, that is, whether or not
the affected employees were dismissed in good faith. We find that there
was no good faith in the retrenchment.
Prior to the cessation of Digiservs operations, the Secretary of Labor had
issued the first assumption order to enjoin an impending strike. When
Digiserv effected the dismissal of the affected employees, the Union filed
another notice of strike. Significantly, the Secretary of Labor ordered that
the second notice of strike be subsumed by the previous assumption
order. Article 263(g) of the Labor Code provides:
When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such assumption or certification
shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or certification
order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately
return to work and the employer shall immediately resume operations
and readmit all workers under the same terms and conditions prevailing
before the strike or lockout. The Secretary of Labor and Employment or
the Commission may seek the assistance of law enforcement agencies to
ensure the compliance with this provision as well as with such orders as
he may issue to enforce the same.
The effects of the assumption order issued by the Secretary of Labor are
two-fold. It enjoins an impending strike on the part of the employees and
orders the employer to maintain the status quo.
There is no doubt that Digitel defied the assumption order by abruptly
closing down Digiserv. The closure of a department is not illegal per se.
What makes it unlawful is when the closure is undertaken in bad faith. In
St. John Colleges, Inc. v. St. John Academy Faculty and Employees
Union,26 bad faith was evidenced by the timing of and reasons for the
closure and the timing of and reasons for the subsequent opening. There,
the collective bargaining negotiations between St. John and the Union
resulted in a bargaining deadlock that led to the filing of a notice of
strike. The labor dispute was referred to the Secretary of Labor who
assumed jurisdiction.
Pending resolution of the dispute, St. John closed the school prompting
the Union to file a complaint for illegal dismissal and unfair labor
practice. The Union members alleged that the closure of the high school
was done in bad faith in order to get rid of the Union and render useless
any decision of the SOLE on the CBA deadlocked issues. We held that
closure was done to defeat the affected employees security of tenure,
thus:
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The determination of whether SJCI acted in bad faith depends on the
particular facts as established by the evidence on record. Bad faith is,
after all, an inference which must be drawn from the peculiar
circumstances of a case. The two decisive factors in determining whether
SJCI acted in bad faith are (1) the timing of, and reasons for the closure
of the high school, and (2) the timing of, and the reasons for the
subsequent opening of a college and elementary department, and,
ultimately, the reopening of the high school department by SJCI after
only one year from its closure.
Prior to the closure of the high school by SJCI, the parties agreed to refer
the 1997 CBA deadlock to the SOLE for assumption of jurisdiction under
Article 263 of the Labor Code. As a result, the strike ended and classes
resumed. After the SOLE assumed jurisdiction, it required the parties to
submit their respective position papers. However, instead of filing its
position paper, SJCI closed its high school, allegedly because of the
"irreconcilable differences between the school management and the
Academys Union particularly the safety of our students and the financial
aspect of the ongoing CBA negotiations." Thereafter, SJCI moved to
dismiss the pending labor dispute with the SOLE contending that it had
become moot because of the closure. Nevertheless, a year after said
closure, SJCI reopened its high school and did not rehire the previously
terminated employees.
Under these circumstances, it is not difficult to discern that the closure
was done to defeat the parties agreement to refer the labor dispute to
the SOLE; to unilaterally end the bargaining deadlock; to render nugatory
any decision of the SOLE; and to circumvent the Unions right to
collective bargaining and its members right to security of tenure. By
admitting that the closure was due to irreconcilable differences between
the Union and school management, specifically, the financial aspect of
the ongoing CBA negotiations, SJCI in effect admitted that it wanted to
end the bargaining deadlock and eliminate the problem of dealing with
the demands of the Union. This is precisely what the Labor Code abhors
and punishes as unfair labor practice since the net effect is to defeat the
Unions right to collective bargaining.27 (Emphasis not supplied)
As in St. John, bad faith was manifested by the timing of the closure of
Digiserv and the rehiring of some employees to Interactive Technology
Solutions, Inc. (I-tech), a corporate arm of Digitel. The assumption order
directs employees to return to work, and the employer to reinstate the
employees. The existence of the assumption order should have
prompted Digitel to observe the status quo. Instead, Digitel proceeded to
close down Digiserv. The Secretary of Labor had to subsume the second
notice of strike in the assumption order. This order notwithstanding,
Digitel proceeded to dismiss the employees.
The timing of the creation of I-tech is dubious. It was incorporated on 18
January 2005 while the labor dispute within Digitel was pending. I-techs
primary purpose was to provide call center/customer contact service, the
same service provided by Digiserv. It conducts its business inside the
Digitel office at 110 E. Rodriguez Jr. Avenue, Bagumbayan, Quezon City.
The former head of Digiserv, Ms. Teresa Taniega, is also an officer of I-
tech. Thus, when Digiserv was closed down, some of the employees
presumably non-union members were rehired by I-tech.
Thus, the closure of Digiserv pending the existence of an assumption
order coupled with the creation of a new corporation performing similar
functions as Digiserv leaves no iota of doubt that the target of the
closure are the union member-employees. These factual circumstances
prove that Digitel terminated the services of the affected employees to
defeat their security of tenure. The termination of service was not a valid
retrenchment; it was an illegal dismissal of employees.
It needs to be mentioned too that the dismissal constitutes an unfair
labor practice under Article 248(c) of the Labor Code which refers to
contracting out services or functions being performed by union members
when such will interfere with, restrain or coerce employees in the
exercise of their rights to self-organization. At the height of the labor
dispute, occasioned by Digitels reluctance to negotiate with the Union, I-
tech was formed to provide, as it did provide, the same services
performed by Digiserv, the Union members nominal employer.
Under Article 279 of the Labor Code, an illegally dismissed employee is
entitled to backwages and reinstatement. Where reinstatement is no
longer viable as an option, as in this case where Digiserv no longer
exists, separation pay equivalent to one (1) month salary, or one-half
(1/2) month pay for every year of service, whichever is higher, should be
awarded as an alternative.28 The payment of separation pay is in addition
to payment of backwages.29
Indeed, while we have found that the closure of Digiserv was undertaken
in bad faith, badges thereof evident in the timing of Digiservs closure,
hand in hand, with I-techs creation, the closure remains a foregone
conclusion. There is no finding, and the Union makes no such assertion,
that Digiserv and I-tech are one and the same corporation. The timing of
Digiservs closure and I-techs ensuing creation is doubted, not the
legitimacy of I-tech as a business process outsourcing corporation
providing both inbound and outbound services to an expanded local and
international clientele.30
The finding of unfair labor practice hinges on Digitels contracting-out
certain services performed by union member-employees to interfere
with, restrain or coerce them in the exercise of their right to self-
organization.
We have no basis to direct reinstatement of the affected employees to an
ostensibly different corporation. The surrounding circumstance of the
creation of I-tech point to bad faith on the part of Digitel, as well as
constitutive of unfair labor practice in targeting the dismissal of the
union member-employees. However, this bad faith does not contradict,
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much less negate, the impossibility of the employees reinstatement
because Digiserv has been closed and no longer exists.
Even if it is a possibility that I-tech, as though Digitel, can absorb the
dismissed union member-employees as I-tech was incorporated during
the time of the controversy with the same primary purpose as Digiserv,
we would be hard pressed to mandate the dismissed employees
reinstatement given the lapse of more than seven (7) years.
This length of time from the date the incident occurred to its
Resolution31 coupled with the demonstrated litigiousness of the
disputants: (1) with all sorts of allegations thrown by either party against
the other; (2) the two separate filings of a notice of strike by the Union;
(3) the Assumption Orders of the DOLE; (4) our own finding of unfair
labor practice by Digitel in targeting the union member-employees,
abundantly show that the relationship between Digitel and the union
member-employees is strained. Indeed, such discordance between the
parties can very well be a necessary consequence of the protracted and
branched out litigation. We adhere to the oft-quoted doctrine that
separation pay may avail in lieu of reinstatement if reinstatement is no
longer practical or in the best interest of the parties. 32
Under the doctrine of strained relations, the payment of separation pay
is considered an acceptable alternative to reinstatement when the latter
option is no longer desirable or viable. On one hand, such payment
liberates the employee from what could be a highly oppressive work
environment. On the other hand, it releases the employer from the
grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust.33
Finally, an illegally dismissed employee should be awarded moral and
exemplary damages as their dismissal was tainted with unfair labor
practice.34 Depending on the factual milieu, jurisprudence has awarded
varying amounts as moral and exemplary damages to illegally dismissed
employees when the dismissal is attended by bad faith or fraud; or
constitutes an act oppressive to labor; or is done in a manner contrary to
good morals, good customs or public policy; or if the dismissal is effected
in a wanton, oppressive or malevolent manner.351wphi1
In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees
Association v. National Labor Relations Commission, we intoned:
Unfair labor practices violate the constitutional rights of workers and
employees to self-organization, are inimical to the legitimate interests of
both labor and management, including their right to bargain collectively
and otherwise deal with each other in an atmosphere of freedom and
mutual respect; and disrupt industrial peace and hinder the promotion of
healthy and stable labor-management relations. As the conscience of the
government, it is the Courts sworn duty to ensure that none trifles with
labor rights.36
We awarded moral damages in the amount of P 10,000.00 and likewise
awarded P 5,000.00 as exemplary damages for each dismissed
employee.
In the recent case of Purefoods Corporation v. Nagkakaisang Samahang
Manggagawa ng Purefoods Rank-and-File,37 we awarded the aggregate
amount of P 500,000.00 as moral and exemplary damages to the illegally
dismissed union member-employees which exact number was
undetermined.
In the case at hand, with the Unions manifestation that only 13
employees remain as respondents, as most had already accepted
separation pay, and consistent with our finding that Digitel committed an
unfair labor practice in violation of the employees constitutional right to
self-organization, we deem it proper to award each of the illegally
dismissed union member-employees the amount of P 10,000.00
and P 5,000.00 as moral and exemplary damages, respectively.
WHEREFORE, the Petition is DENIED. The Decision of the Court of
Appeals in CA-G.R. SP No. 91719 is AFFIRMED, while the Decision in CA-
G.R. SP No. 94825 declaring the dismissal of affected union member-
employees as illegal is MODIFIED to include the payment of moral and
exemplary damages in amount of P 10,000.00 and P 5,000.00,
respectively, to each of the thirteen (13) illegally dismissed union-
member employees.
Petitioner Digital Telecommunications Philippines, Inc. is ORDERED to
pay the affected employees backwages and separation pay equivalent to
one (1) month salary, or one-half (1/2) month pay for every year of
service, whichever is higher.
Let this case be REMANDED to the Labor Arbiter for the computation of
monetary claims due to the affected employees.
SO ORDERED.
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