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The sole issue in this petition for review on certiorari is whether or not the public
respondent committed grave abuse of discretion in ruling that the private
respondent is entitled to the financial aid from the compulsory contributions of the
petitioner-union afforded to its members who have been suspended or
terminated from work without reasonable cause.
The provision for the grant of financial aid in favor of a union member is
embodied in the petitioner-union's Constitution and By-laws, Article XIII, Section
5, of which reads:
On July 1985, a complaint was filed by the private respondent against the officers
of the petitioner-union docketed as NRC- LRD-M-7-271-85 alleging, among
others, that the union officers had refused to provide the private respondent the
financial aid as provided in the union constitution despite demands for payment
thereof The petitioner-union and its officers counter-alleged, in their answer, that
the said financial aid was to be given only in cases of termination or suspension
without any reasonable cause; that the union's executive board had the
prerogative to determine whether the suspension or termination was for a
reasonable cause or not; and that the union, in a general membership meeting,
had resolved not to extend financial aid to the private respondent.
Both parties moved for reconsideration. The petitioners reiterated that since the
private respondent's termination was for a reasonable cause, it would be unjust
and unfair if financial aid were to be given in the event that the latter's case for
illegal dismissal is decided against him. The private respondent, on the other
hand, prayed for the amendment of the dispositive portion in order that the grant
of financial aid be made without any qualifications.
Meanwhile, on July 25, 1986, a motion for issuance of a writ of execution was
filed by the private respondent in order to collect from the petitioners the amount
of financial aid to which the former was entitled.
On October 28, 1986, the public respondent through Director Pura Ferrer-Calleja
denied the petitioners' motion for reconsideration stating that Article XIII, Section
5 of the union's constitution and by-laws does not require a special fund so that
all union members similarly situated as the private respondent must be entitled to
the same right and privilege regarding the grant of financial aid as therein
provided.
On December 18, 1986, a writ of execution was issued by the public respondent
in the following tenor:
NOW THEREFORE, you are hereby directed to proceed to the
premises of Johnson and Johnson (FFW) located at Edison Road,
Bo. Ibayo, Paranaque, Metro Manila to collect from the said union
through its Treasurer, Myrna Oloveja or to any responsible officer of
the union the amount of Twenty Thousand Five Hundred Twenty
Pesos (P20,520.00), more or less representing financial assistance
to complainant under the union's constitution and by-laws. In case
you fail to collect said amount in cash, you are to cause the
satisfaction of the same on the union's movable or immovable
properties not exempt from execution. You are to return this writ
within fifteen (15) days from your compliance hereby together with
your report thereon. You may collect your legal fees from the
respondent union. (p. 55, Rollo)
On December 24, 1986, the instant petition was filed with prayer for a preliminary
injunction. The temporary restraining order issued by the Chief Justice on
December 24, 1986 was confirmed in our resolution dated January 7, 1987.
Thus, there is no doubt that the petitioner-union can be ordered to release its
funds intended for the promotion of mutual assistance in favor of the private
respondent.
We likewise find untenable the argument of the petitioners that the public
respondent, in granting financial aid to the private respondent, in effect,
substituted the decision of the petitioner-union to do otherwise and that in so
doing, the public respondent gravely abused its discretion amounting to lack of
jurisdiction. The union constitution is a covenant between the union and its
members and among the members. There is nothing in their constitution which
leaves the legal interpretation of its terms unilaterally to the union or its officers or
even the general membership. It is noteworthy to quote the ruling made by the
public respondent in this respect, to wit:
The union constitution and by-laws clearly show that any member
who is suspended or terminated from employment without
reasonable cause is entitled to financial assistance from the union
and its members. The problem, however, is that the constitution
does not indicate which body has the power to determine whether a
suspension or dismissal is for reasonable cause or not. To our mind,
the constitution's silence on this matter is a clear recognition of the
labor arbiter's exclusive jurisdiction over dismissal cases. After all,
the union's constitution and by-laws is valid only insofar as it is not
inconsistent with existing laws. ... . (BLR decision, p. 2; p. 115,
Records)
On the ancillary issue presented by the petitioners whether or not the petitioning
union members have been deprived of their right to due process of law because
they were never made parties to the case under consideration, we rule that the
fact that the union officers impleaded since the inception of the case acted in a
representative capacity on behalf of the entire union's membership substantially
meets the requirements of due process with respect to the said union members.
Moreover, the complaint filed against the union involves the interpretation of its
constitution favoring an aggrieved member. The members are bound by the
terms of their own constitution. A suit to enforce a union constitution does not
have to be brought against each individual member, especially where several
thousand members form the membership. If there is any violation of the right to
due process in the case at bar it is as regards the private respondent since the
petitioners-union has dispensed with due process in deciding not to extend
financial aid to the private respondent in the absence yet of a ruling by the labor
arbiter on whether his dismissal was for a reasonable cause or not.
The remedy of the petitioners is to strike out or amend the objectionable features
of their constitution. They cannot expect the public respondent to assist them in
its non- enforcement or violation.
SO ORDERED.
VITUG, J.:
This petition stemmed from a complaint for illegal dismissal and unfair labor
practice filed with public respondent Civil Service Commission ("CSC") by private
respondents, through Pamantasan Ng Lungsod Ng Maynila Faculty Organization
("PLMFO"), against petitioner Pamantasan Ng Lungsod Ng Maynila ("PLM") and
its officers.
The sixteen (16) individual private respondents were full-time instructors of PLM
under "temporary contracts" of employment renewable on a yearly basis. They,
among other instructors, joined the PLMFO.
Uniform notices of termination, all dated 24 April 1990, were individually sent to
private respondents informing them of "the expiration of their temporary
appointments at the close of office hours on 31 May 1990" and the non-renewal
of their appointments for the school year (SY) 1990-1991. A series of letter-
complaints addressed to the CSC by private respondents evoked a letter-
response from PLM, dated 16 May 1990, traversing the complainants' right to
compel a renewal of the appointments. They were advised that their retention
was not recommended by their respective Deans.
On 29 May 1990, private respondents, through PLMFO, filed with the CSC a
verified complaint for illegal dismissal and unfair labor practice against petitioner
and its officers.
Public respondent CSC referred the case to the Public Sector Labor-
Management Council1 ("PSLMC"). The latter, through its deputized hearing
officer, Med-Arbiter Hope Ruiz-Valenzuela of the Bureau of Labor Relations of
the Department of Labor and Employment, after due notice, heard the case
(PSLMC Case No. 00-06-91). During the proceedings, petitioner relied in main
on the temporary nature of private respondents' employment contracts.
In a Resolution,2 dated 16 December 1991, the PSLMC found petitioner guilty of
"Unfair Labor Practice" and held that private respondents "should be reinstated."
The dispositive portion of its Resolution read:
SO ORDERED.3
On 15 May 1992, petitioner filed with this Court a petition for certiorari, entitled
"Pamantasan Ng Lungsod Ng Maynila vs. Public Sector Labor-Management
Council, et al.," docketed G.R. No. 105157, that sought the annulment of the
aforementioned PSLMC resolutions. In a Minute Resolution, dated 27 May 1992,
the Court dismissed the petition for PLM's failure to submit the certification
required under Circular 28-91 on forum-shopping. The motion for the
reconsideration of this resolution was dismissed with finality, no compelling
reason having been shown to reconsider the dismissal of the petition. On 30 July
1992, the resolution became final and executory and, in due course, was
recorded in the Book of Entries of Judgment.
The request for the reconsideration of the order was denied by the CSC in its
Resolution No. 92-1573 of 20 October 1992. Respondent CSC, in denying
petitioner's motion, held, among other things, that the findings of fact by the
PSLMC deserved the respect of the Commission and that there was no further
need for it, to conduct a hearing of its own.
The PLM cites the following reasons for its instant petition for certiorari (under
Rule 65, not Rule 45 such as mistakenly referred to by petitioner):
On 11 May 1993, this Court, acting on petitioner's motion for the issuance of a
writ of preliminary injunction, issued, on 18 May 1993, a temporary restraining
order directing respondent CSC "to cease and desist from executing (its)
assailed Resolutions No. 92-814 and No. 92-1573.5
The Solicitor General took an adverse position to that of public respondent and
prayed that the petition be given due course, contending that it was inappropriate
for respondent CSC to rule on the aspect of illegal dismissal, an act that involved
an exercise of its original jurisdiction, without affording anew petitioner an
opportunity to be heard.
Public respondent CSC manifested its intention to file its own comment to the
instant petition; however, it failed to file any such comment within the allotted
period. The Court finally dispensed with the filing of the comment and ordered
CSC to instead file its memorandum in accordance with this Court's resolution of
24 August 1993.6
On 20 January 1994, the Court dismissed the petition for failure to prosecute on
the part of petitioner, which likewise failed to file its memorandum, as well as
because of the "evident lack of interest of the parties"7 to pursue the case. On
petitioner's motion for reconsideration, however, the Court resolved, on 24
February 1994, to reinstate the petition.
Petitioner stresses that the CSC and the PSLMC both exercise quasi-judicial
functions but not on identical issues and subject matter; that the PSLMC
possesses jurisdiction only over the unfair labor practice aspect of private
respondents' complaint but that it is the CSC which alone can take cognizance
over the question of illegal dismissal; and that, therefore, when the CSC has
simply adopted the recommendations of the PSLMC in the unfair labor practice
case in resolving the issue of illegal dismissal and ordering the reinstatement of
private respondents without conducting further proceedings of its own, it has
effectively denied petitioner of its right to due process.
PSLMC's jurisdiction over the unfair labor practice case filed by private
respondents against petitioner is not disputed. The PSLMC, in case No. 00-06-
91, has conducted its proceedings in accordance with its legal mandate.8The
proceedings before Med-Arbiter Valenzuela, who had been deputized to so act
as the hearing officer, conform with the "Rules and Regulations to Govern the
Exercise of the Right of Government Employees to Self Organization" —
Sec. 3. The Council may call on any officer or agency for assistance.
It may deputize officers to hear and recommend action on
complaints or grievances filed with the council.
It appears that the Faculty had many long-standing issues with the
PLM Management, which complainants claim motivated the
organization of the PLMFO. As gathered from the evidence, the
following are some of the more salient issues:
In agreeing with the PSLMC, the CSC, in its own resolution of 25 June 1992,
stated:
Petitioner insists that when CSC has ruled on the matter of illegal dismissal
without conducting any further hearing of its own, relying, instead, on PSLMC's
finding of unfair labor practice on the part of petitioner, the latter has thereby
been denied due process. Unfortunately for petitioner, however, the two
supposed independent issues, i.e., the unfair labor practice charge and the
complaint for illegal dismissal both filed by private respondents, are, in fact, here
unavoidably interlinked. The non-renewal of an employment contract with a term,
it is true, is ordinarily a valid mode of removal at the end of each
period. 11 This rule, however, must yield to the superior constitutional right of
employees, permanent or temporary, to self-organization. While, a temporary
employment may be ended with or without cause, it certainly may not, however,
be terminated for an illegal cause.
Petitioner claims that it was denied "due process." It itself admitted, however, that
"it manifested (before the PSLMC) its intention to submit evidence (that it had
other valid grounds for not renewing private respondents' temporary contracts of
employment) which, inadvertently or otherwise, it failed to present . . . 12 This
supposed evidence, if true and being material to substantiate its defense against
the unfair labor charge, should have been duly presented, but it did not.
Petitioner should not now be heard to complain that it was denied due process.
We ruled, time and again, that "due process" was designed to afford an
opportunity to be heard,13 not that an actual hearing should always and
indispensably be held.
In any case, in its reply to public respondents' comment, PLM enumerates the
alleged causes for the non-renewal of the contracts, to wit:
Name Cause
The PSLMC has noted, however, that the charges are either false or
untenable; hence, its following findings:
The finding of the PSLMC that the non-renewal by petitioner of the questioned
contracts of employment had been motivated by private respondents' union
activities is conclusive on the parties. Indeed, this Court's resolution in G.R. No.
105157 (PLM vs. PSLMC et al.) which has long become final and executory
should now render that matter a fait accompli.
When the case was thus referred to the CSC by the PSLMC to take "appropriate
action" it understandably meant that the CSC should take the necessary steps of
reinstating the illegally dismissed employees.
SO ORDERED.
Adamson and Adamson, Inc., filed this petition to set aside orders of the
respondent Court of Industrial Relations (CIR) holding that the Adamson and
Adamson, Inc. supervisory Union (FFW) can legally represent supervisors of the
petitioner corporation notwithstanding the affiliation of the lank and file union of
the same company with the same labor federation, the Federation of Free
Workers.
The Adamson and Adamson, Inc. Supervisory Union (FFW) informed the
petitioner about its having organized on the same date that the Adamson and
Adamson, Inc. Salesmen Association (FFW) advised the petitioner that the rank
and file salesmen had formed their own union.
The CIR dismissed the petition in CIR Case No. 3267-MC entitled "In the Matter
of Representation of the Supervisory Employees of Adamson and Adamson, Inc.,
Petitioner " thus prompting the filing of this petition for review on certiorari.
Subsequently and during the pendency of the present petition, the rank and file
employees formed their own union, naming it Adamson and Adamson
Independent Workers (FFW).
The petitioner argues that the affiliation of the respondent union of supervisors,
the salesmen's association, and the Adamson and Adamson independent
Workers Union of rank and file personnel with the same national federation
(FFW) violates Section 3 of the Industrial Peace Act, as amended, because —
(1) it results in the indirect affiliation Of supervisors and rank-and-file employees
with one labor organization; (2) since respondent union and the unions of non-
supervisors in the same company are governed by the same constitution and by-
laws of the national federation, in practical effect, there is but one union; and (3)
it would result in the respondent union's losing its independence because it
becomes the alter ego of the federation.
The petitioner also submits that should affiliation be allowed, this would violate
the requirement of separateness of bar units under Section 12 of the Act
because only one union will in fact represent both supervisors and rank-and-file
employees of the petitioner.
The respondents on the other hand argue that the supervisory employees of an
employer may validly join an organization of the rank-and-file employees so long
as the said rank and file employees are not under their supervision. They submit
that Adamson and Adamson Supervisory Union (FFW) is not composed of sales
supervisors and, therefore, the salesmen of the company are not under the
supervision of the supervisory employees forming the union. Respondents also
argue that even if the salesmen of the petitioner company are under the
supervision of the members of the supervisory union, the prohibition would not
apply because the salesmen and the supervisory employees of the company
have their separate and distinct labor organizations, and, as a matter of fact, their
respective unions sent separate proposal for collective bargaining agreements.
They contend that their respective labor organizations, not the FFW, will
represent their members in the negotiations as well as in the signing of their
respective contracts. Respondents further argue that the Federation of Free
Workers has, as its affiliates, supervisory as well as rank-and-file employees, and
should both the supervisory and the rank-and-file employees of a certain
employer who have separate certificates of registration affiliate with the same
federation, the prohibition does not apply as the federation is not the organization
of the supervisory employees contemplated in the law.
Employees shall have the right to self-organization and to form join or assist
labor organizations of their own choosing for the purpose 6f collective bargaining
through representatives of their own 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.
In deciding this case, we start with the recognized rule that the right of
supervisory employees to organize under the Industrial Peace Act carries certain
restrictions but the right itself may not be denied or unduly abridged. The
supervisory employees of an employer cannot join any labor organization of
employees under their supervision but may validly form a separate organization
of their own. As stated in Caltex Filipino Managers and Supervisors Association
v. Court of Industrial Relations (47 SCRA 112), it would be to attach unorthodoxy
to, not to say an emasculation of, the concept of law if managers as such were
precluded from organization. Thus, if Republic Act 875, in its Section 3,
recognizes the right of supervisors to form a separate organization of their own,
albeit they cannot be members of a labor organization of employees under their
supervision, that authority of supervisors to form a separate labor union carries
with it the right to bargain collectively with the employer. (Government Service
Insurance System v. Government Service Insurance System Supervisors' Union,
68 SCRA 418).
The specific issue before us is whether or not a supervisor's union may affiliate
with a federation with which unions of rank and-file employees of the same
employer are also affiliated. We find without merit the contentions of petitioner
that if affilation will be allowed, only one union will in fact represent both
supervisors and rank-and-file employees of the petitioner; that there would be an
indirect affiliation of supervisors and rank-and-file employees with one labor
organization; that there would be emerging of two bargaining units ; and that the
respondent union will loose its independence because it becomes an alter ego of
the federation.
In Elisco-Elirol Labor Union (NAFLU) v. Noriel (80 SCRA 681) and Liberty Cotton
Mills Workers Union v. Liberty Cotton Mills, Inc. (66 SCRA 512), we held :
... the court expressly cited and affirmed the basic principle that
'(T)he locals are separate and distinct units primarily designed to
secure and maintain the equality of bargaining power between the
employer and their employee-member in the economic struggle for
the fruits of the joint productive effort of labor and capital; and the
association of the locals into the national union (as PAFLU) was in
the furtherance of the same end. These association are concensual
entities capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the local
unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association; free to
serve their own and the common-interest of all, subject to the
restraints imposed by the Constitution and By-laws of the
Association; and free also to renounce the affiliation for mutual
welfare upon the terms laid down in the agreement which brought it
into existence.
The confusion seems to have stemmed from the prefix of FFW after
the name of the local unions in the registration of both. Nonetheless,
the inclusion of FWW in the registration is merely to stress that they
are its affiliates at the time of registrations. It does not mean that
said local unions cannot stand on their own Neither can it be
construed that their personalities are so merged with the mother
federation that for one difference or another they cannot pursue their
own ways, independently of the federation. This is borne by the fact
that FFW, like other federation is a legitimate labor organization
separate and distinct from its locals and affiliates and to construe the
registration certificates of the aforecited unions, along the line of the
Company's argument. would tie up any affiliates to the shoe string of
the federation. ...
The Adamson and Adamson Supervisory Union and the Adamson and Adamson,
Inc., Salesmen Association (FFW), have their own respective constitutions and
by-laws. They are separately and independently registered of each other. Both
sent their separate proposals for collective bar agreements with their employer.
There could be no employer influence on rank-and-file organizational activities
nor their could be any rank and file influence on the supervisory function of the
supervisors because of the representation sought to be proscribed.
SO ORDERED.
GUERRERO, J.:
Petition for review of the decision and en banc resolution of the Court of
Industrial Relations dated April 2, 1973 and October 3, 1973, respectively,
promulgated in three (3) consolidated cases. 1
The decision penned by Associate Judge Alberto S. Veloso adopting in full the
report of CIR Hearing Examiner Atty. Francisco de los Reyes made the following
dispositive portion, thus —
SO ORDERED.
This petition limits itself to the controversy in Case No. 4498-ULP filed by
People's Industrial and Commercial Employees and Workers Organization
against People's Industrial and Commercial Corporation and the Federation of
Tenants and Laborers Organization.
On the basis of the Examiner's Report, the following facts appear: On April 30,
1964, the Federation of Tenants and Laborers Organization, Rizal Chapter,
FTLO for short, entered into a collective bargaining agreement with respondent
People's Industrial and Commercial Corporation, hereafter referred to as
PINCOCO, (Exhibits "2" and "G"). At the time the agreement was consummated,
herein individual petitioners, Ernesto Pagayatan, Antonio Eriño, Rodrigo Boado
and Lino Francisco, who were also the individual complainants in Case No.
4498-ULP, together with those mentioned in Annex "A" of the complaint (List of
some forty-five [45] other employees), were employees of PINCOCO and
members of FTLO. The relevant portions of the working agreement stipulate:
From the preceding developments, three separate cases were filed with the
Court of Industrial Relations. In Case No. 4428-ULP, FTLO indicted herein
individual petitioners for unfair labor practice in staging an illegal strike after they
were already dismissed from the company. In Case No. 167-INJ, FTLO sought
for the issuance of a permanent injunction to stop the alleged illegal strike. In
Case No. 4498-ULP, PICEWO sued PINCOCO and FTLO for unfair labor
practice, alleging that by illegally dismissing petitioners, the company
discriminated against them in regard to hire, tenure and/or other conditions of
employment by unlawfully acceding and effecting the request of FTLO without
proper investigation thereof, with no just reason but to encourage membership in
the FTLO; and that respondent federation, in recommending and insisting on the
dismissal of individual petitioners, had interfered in their right to self-organization.
(Annex "C", p. 39, Rollo)
After the reception of evidence, the Hearing Examiner designated by the Court of
Industrial Relations, reported that the petitioners were, beyond doubt, members
of the FTLO when the Working Agreement of April 30, 1964 took effect and that
the working agreement required in Article II thereof maintenance of membership
in the federation as condition for continued employment in the company. Since
the specific causes for expulsion from membership have been enumerated,
particularly that of working for the interest of another organization and disloyalty
to the union, the Hearing Examiner concluded that petitioners' conduct is within
the said causes expressed in the agreement. The Report also established that
FTLO is the sole and exclusive bargaining representative of the employees which
entered into a bona fide agreement, putting a limitation of petitioners' right to
leave the union and join another. The Examiner found no unfair labor practice
committed by either the FTLO or PINCOCO, and that the strike staged by
petitioners was not on account of any unfair labor practice, but, rather, done to
force recognition.
Based on the above findings, respondent court dismissed the three cases. On
April 10, 1973, petitioners filed their motion for reconsideration; same was denied
in the en banc resolution of October 3, 1973. Petitioners now raise the following
assignment of errors:
a) The respondent court erred in holding that the Motion for Reconsideration and
the Memorandum in support of the Motion for Reconsideration were filed out of
time;
b) The respondent court erred in holding that the strike declared by herein
petitioners was intended only to force recognition;
c) The respondent court erred in not declaring both respondent Corporation and
respondent Federation guilty of committing unfair labor practice;
d) The respondent court erred in not declaring as illegal the dismissal from
employment of individual petitioners; and
e) Respondent court erred in not ordering the return to work of the striking
members of petitioner Union with backwages and other fringe benefits from April
30, 1965 until their actual reporting for work.
The last day for filing the motion for reconsideration was April 9, 1973 which was
a holiday (BATAAN DAY), and the last day for filing the arguments in support of
the motion for reconsideration, ten days after, was April 19, 1973, also a holiday
(MAUNDY THURSDAY). Since petitioners have filed their pleadings on the next
respective business days, that is, April 10, 1973, for the motion for
reconsideration and April 23 for the arguments in support thereof (April 20 to 22
not being business days), the pleadings were, therefore, filed on time. On this
procedural aspect, the resolution of October 3, 1973 has erred. It is the policy of
the law to disregard technicalities in procedure so as not to deprive the litigant's
pursuit of his substantial rights under the Rules.
Under Article 13, last paragraph, of the Civil Code, in computing the period, the
first day shall be excluded, and the last day included. And under Rule 28 of the
Rules of Court, Section 1, time is computed thus —
Petitioners contend that no disloyalty is involved since what they did on January
10, 1965 was merely to change, as they did change, the name of Rizal Chapter
of the Federation of Tenants and Laborers Organization FTLO to People's
Industrial and Commercial Employees and Workers Organization (PICEWO).
While We are not convinced with the petitioners' argument that the only act that
they have done was to change the name of their union for they have registered
the new union and affiliated it with the Federation of Free Workers, We rule that
individual petitioners do not merit the dismissals meted by the company.
In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, 2 We held that the
validity of the dismissals pursuant to the security clause of the CBA hinges on the
validity of the disaffiliation of the local union from the federation. It was further
held in this case that PAFLU (the federation) had the status of an agent while the
local union remained the basic unit of association free to serve the common
interest of all its members including the freedom to disaffiliate when the
circumstances warrant such an act. The Supreme Court, speaking thru Justice
Esguerra, said:
All these questions boil down to the single issue of whether or not
the dismissal of the complaining employees, petitioners herein, was
justified or not. The resolution of this question hinges on a precise
and careful analysis of the Collective Bargaining Agreements. (Exhs.
"H" and "l"). In these contracts it appears that PAFLU has been
recognized as the sole bargaining agent for all the employees of the
Company other than its supervisors and security guards. Moreover it
likewise appears that "PAFLU, represented in this Act by its National
Treasurer, and duly authorized representative, ... (was) acting for
and in behalf of its affiliate, the Liberty Cotton Mills Workers Union
and the employees of the Company, etc." In other words, the
PAFLU, acting for and in behalf of its affiliate, had the status of an
agent while the local union remained the basic unit of the
association free to serve the common interest of all its members
including the freedom to disaffiliate when the circumstances warrant.
This is clearly provided in its Constitution and By-Laws, specifically
Article X on Union Affiliation, supra. At this point, relevant is the
ruling in an American case. (Harker et al. vs. Mckissock et al., 81A
2d 480, 482).
The right of the local members to withdraw from the federation and to form a new
local depends upon the provisions of the union's constitution, by- laws and
charter. 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.
There is no merit to the contention of the respondent federation that the act of
disaffiliation is disloyalty to the union. The federation and the union are two
different entities and it was the federation which actively initiated the dismissal of
the individual petitioners. A local union does not owe its existence to the
federation to which it is affiliated. It is a separate and distinct voluntary
association owing its creation and continued existence to the will of its members.
The very essence of self-organization is for the workers to form a group for the
effective enhancement and protection of their common interests.
The third, fourth and fifth assignment of errors maybe resolved on the same
issue which is the legality of the strike and the consequences thereof.
Petitioners allege that the strike which was started on April 30, 1965 was staged
because of the unfair labor practice of the respondent company in refusing to
bargain collectively with PICEWO and in dismissing individual petitioners. The
Hearing Officer in his Report which was adopted in full by the Court of Industrial
Relations settled the legality of the strike in the following manner:
The strike therefore of the PICEWO was not on account of any unfair
labor practice acts committed by the respondent PINCOCO. It seem
to have been more of a strike to force recognition.
xxx xxx xxx
We do not agree with the finding of the Hearing Officer that the strike was staged
to force recognition. The chain of events which preceded the strike belie this
conclusion. On April 5, 1965, Ernesto Pagayatan, the president of PICEWO sent
to the management a set of proposals for a collective bargaining agreement. The
management on April 13, 1965 replied that the formal reply to the proposals
cannot be made within the reglementary period because they will submit the said
proposals to their legal counsel for further study and instead their reply would be
made on April 19, 1965. No reply was made on that date. On April 29, 1965,
individual petitioners were dismissed. A strike was staged the next day. One day
after the petitioners struck, a new collective bargaining agreement was signed by
the respondent company and the FTLO.
The respondent company knew that a new union was formed composed of about
85% of the total number of its employees. It was furnished a copy of the
certification that the majority of the FTLO members are forming a new union
called PICEWO. The set of bargaining proposals were in the name of the new
union. While a company cannot be forced to sit down and bargain collectively
with the new union since it had no notice of the union's official capacity to act as
the bargaining agent, the respondent company cannot deny that it had factual
knowledge of the existence of a majority union. It could have asked for further
proof that the new union was indeed the certified bargaining agent. It did not.
Instead, it dismissed individual petitioners and signed a new CBA the day after
the expiration of the old CBA, on the pretext that FTLO was presumed to be the
certified bargaining agent. Such pretext does not seem justified nor reasonable in
the face of the established fact that a new union enjoyed a majority status within
the company.
On the belief that the respondent company refused to bargain collectively with
PICEWO, individual petitioners together with the other members staged a strike.
We have in several cases ruled that a strike may be considered legal when the
union believed that the respondent company committed unfair labor acts and the
circumstances warranted such belief in good faith although subsequently such
allegation of unfair labor practices are found out as not true.
Thus, in Norton and Harrison Co. and Jackbilt Blocks company Labor Union
(NLU) vs. Norton and Harrison, et al., 3We held that "the act of the company in
dismissing Arcaina done without the required fair hearing, and, therefore, not
tenable even under strict legal ground, induced the union and its members to
believe that said company was guilty of unfair labor practice although viewed
now in retrospect said act would fall short of unfair labor practice. Since the strike
of the union was in response to what it was warranted in believing in good faith to
be unfair labor practice on the part of the management, said strike following the
berrer ruling did not result in the termination of the striking members' status as
employees and therefore, they are still entitled to reinstatement without
backwages."
The Ferrer 4 ruling was also upheld in Shell Oil Workers Union vs. Shell
Company of the Phil. Ltd. 5 where We stated that "(i)t is not even required that
there be in fact an unfair labor practice committed by the employer. It suffices, if
such a belief in good faith is entertained by labor as the inducing factor for
staging a strike. So it was clearly stated by the present Chief Justice while still an
Associate Justice of this Court: 'As a consequence, we hold that the strike in
question had been called to offset what petitioners were warranted in believing in
good faith to be unfair labor practices on the part of Management, that petitioners
were not bound, therefore, to wait for the expiration of thirty (30) days from notice
of strike before staging the same, that said strike was not, accordingly, illegal and
that the strikers had not thereby lost their status as employees of respondents
herein.
The Ferrer ruling was promulgated in 1966, that in the Shell Oil case in 1971. In
1980, there was the case of Pepito vs. Secretary of Labor, L-49418, Feb. 29,
1980, where petitioner therein was separated for having been implicated in a
pilferage case by a co-employee but was later absolved from the charge. The
Supreme Court thru Chief Justice Fernando ruled that the cause for his dismissal
was proved non-existent or false and thus ordered his reinstatement with three
years backwages, without deduction and qualification.
We adopt the Pepito ruling and We hold that the petitioners in the case at bar are
entitled not only to reinstatement but also to three years backwages without
deduction and qualification. This is . justified and proper since the strike was
proved and We held the same to be not illegal but was induced in the honest
belief that management had committed unfair labor practices and, therefore, the
cause of their dismissal from employment was non-existent. It is clear that
management gave cause or reason to induce the staging of the strike by
improperly refusing to recognize the new union formed by petitioners. It has been
twelve (12) years since petitioners were dismissed from their employment and in
their destitute and deplorable condition, to them the benign provisions of the New
Constitution for the protection of labor, assuring the rights of workers to self-
organization, collective bargaining and security of tenure would be useless and
meaningless. Labor, being the weaker in economic power and resources than
capital, deserve protection that — is actually substantial and material.
In view of the length of time that this dispute has been pending, this decision
shall be immediately executory upon promulgation and notice to the parties.
Without pronouncement as to costs.
SO ORDERED.
Pacifico de Ocampo and Benjamin C. Gascon for petitioner in G.R. No. 75055.
GUTIERREZ, JR.:
These consolidated petitions for certiorari seek the review and setting aside of
respondent National Labor Relations Commission's decision in NLRC Case No.
AB-6-11685-81 dated May 26, 1986, affirming the October 12, 1984 decision of
the Labor Arbiter, and of the NLRC resolution dated June 28, 1986, which denied
the motion for reconsideration of the petitioners.
All workers who are or may during the effectivity of this Contract,
become members of the Union in accordance with its Constitution
and By-Laws shall, as a condition of their continued employment,
maintain membership in good standing in the Union for the duration
of the agreement.
On or about the early part of October 1980, while the CBA was in effect
and within the contract bar period the private respondents joined another
union, the Kaisahan Ng Manggagawang Pilipino KAMPIL) and organized its local
chapter in TDI, with private respondents Pedro Esteral and Lamberts Santos
being elected President and Vice-President, respectively.
Acting on the demand of TDLU, TDI, in a Memorandum dated January 13, 1981,
notified "that effective January 16, 1981, we shall file the usual application for
clearance (with preventive suspension to take effect on the same day) to
terminate your services on the basis of the union security clause of our CBA.
Accordingly, TDI filed with the MOLE on January 14, 1981 its application for
clearance to terminate the employment of private respondents. This application
docketed as Case No. NCR-AC-1-435-81 specifically stated that the action
applied for was preventive suspension which will result in termination of
employment, ... due to (T)hreat to (P)roduction traceable to rival (U)nion
activity. The private respondents then filed with the MOLE a complaint for illegal
dismissal against TDI and Benjamin Agaloos, in his capacity as President of
TDLU, which complaint was docketed as Case No. STF-1-333-91. The cases
were jointly heard and tried by Labor Arbiter Teodorico Dogelio.
However, on January 26, 1981, the Med-Arbiter granted the private respondents'
petition calling for a certification election among the rank and file employees of
TDI. The Med-Arbiter's Order stated, inter-alia that the existence of an uncertified
CBA cannot be availed of as a bar to the holding of a certification election
(Emphasis supplied). On appeal of TDI and TDLU to the Bureau of Labor
Relations (BLR), the order for the holding of a certification election was reversed
and set aside by the BLR on July 8,1982, thus:
It should be noted that the alleged CBA has now expired. Its expiry
date being 30 June 1982. Consequently; there appears to be no
more obstacle in allowing a certification election to be conducted
among the rank and file of respondent. The contract bar rule will no
longer apply in view of the supervening event, that is, the expiration
of the contract. (Emphasis supplied) (pp. 244-245, Rollo)
TDLU filed a petition for review of the BLR decision with the Supreme Court,
docketed as Case No. G.R. No. 63995 TDI argued that KAMPIL did not have a
cause of action when the petition for certification was filed on November 7, 1980
because the freedom period was not yet in effect. The fact that the BLR issued
its order when the 60-day freedom period had supervened, did not cure this
defect. Moreover, the BLR decision completely overlooked or ignored the fact
that on September 21, 1982, a new CBA had been executed between the TDLU
and TDI so that when the BLR allowed a certification election in its order dated
December 3, 1982, the contract bar rule was applicable again. This Court denied
TDLU's petition in a minute resolution on November 14,1983.
Using the foregoing as relevant and applicable to the consolidated cases for the
clearance application for termination filed by TDI and the illegal dismissal case
filed by the private respondents on October 12, 1984, Labor Arbiter Teodorico
Dogelio rendered a decision denying TDI's application to terminate the private
respondents and ordering TDI to reinstate the complainants with backwages. It
should be noted that the Labor Arbiter rendered the decision even before the
petitioner company could file its memorandum, formal offer of exhibits and its
manifestation and motion to correct tentative markings of exhibits. This decision
of the arbiter was upheld by the respondent NLRC in NLRC Case No. AB-6-
11685-81 in its decision dated May 20,1986.
TDI and TDLU moved for reconsideration of the questioned decision, In its
motion, TDI alleged, inter alia, that respondent NLRC did not rule on the validity
of the CBA as a contract, neither did it resolve squarely the validity of the
enforcement of the union security clause of the CBA. TDI stated further that
respondent NLRC failed to consider the fact that at the time the private
respondents were expelled by TDLU and consequently terminated by TDI, the
union security clause of the CBA was in full force and effect, binding TDI and
TDLU.
For its part, TDLU said that the decision of the Supreme Court in the certification
case could not be used by respondent NLRC to justify its decision in the
dismissal case because the issues on the cases are entirely different and miles
apart. It is for this reason that there are two (2) cases that are involved. TDLU
explained that the Supreme Court decided to dismiss the petition for certiorari of
TDI and TDLU in the certification case because the original CBA existing at the
time the private respondents formed and joined KAMPIL had already expired.
However, TDLU made it clear that when the private respondents organized
KAMPIL in TDI, the same CBA was still in force and the disaffiliation did not take
place within the freedom period. Hence, at that point in time, the private
respondents committed disloyalty against the union.
On June 26, 1986, respondent NLRC denied the motion for reconsideration filed
by TDI and TDLU for lack of merit. In its petition, TDI alleged that:
II
THE CBA IS VALID AND BINDING NOT ONLY ON TDI AND TDLU BUT
LIKEWISE ON PRIVATE RESPONDENTS WHO HAVE RATIFIED THE SAME
IN THEIR INDIVIDUAL CAPACITIES AS MEMBERS OF TDLU; HENCE, THE
UNION SECURITY CLAUSE IS VALID AND BINDING ON THEM;
The private respondents admit that the root of the whole controversy in the
instant case is the organization of a Local Union Chapter of KAMPIL at TDI and
the subsequent filing of a petition for certification election with the MOLE by said
local chapter. This local chapter of KAMPIL was organized with the help of,
among others, the private respondents some of whom were elected union
officers of said chapter. They contend that their act of organizing a local chapter
of KAMPIL and eventual filing of a petition for certification election was pursuant
to their constitutional right to self-organization.
The issues to be resolved are the following: (a) whether or not TDI was justified
in terminating private respondents' employment in the company on the basis of
TDLU's demand for the enforcement of the Union Security Clause of the CBA
between TDI and TDLU; and (b) whether or not TDI is guilty of unfair labor
practice in complying with TDLU's demand for the dismissal of private
respondents.
Article 249 (e) of the Labor Code as amended specifically recognizes the closed
shop arrangement as a form of union security. The closed shop, the union shop,
the maintenance of membership shop, the preferential shop, the maintenance of
treasury shop, and check-off provisions are valid forms of union security and
strength. They do not constitute unfair labor practice nor are they violations of the
freedom of association clause of the Constitution. (See Pascual, Labor Relations
Law, 1986 Edition, pp. 221-225 and cases cited therein.) There is no showing in
these petitions of any arbitrariness or a violation of the safeguards enunciated in
the decisions of this Court interpreting union security arrangements brought to us
for review.
In this light, the petitioner points out that embedded at the very core and
as raison d'etre for the doctrine which enforces the closed-shop, the union shop,
and other forms of union security clauses in the collective bargaining agreement
is the principle of sanctity and inviolability of contracts guaranteed by the
Constitution.
This Court speaking thru Mr. Justice Labrador, in Victorias Milling Co., Inc., v.
Victorias-Manapia Workers Organization (9 SCRA 154), ruled:
In the instant case, the CBA in question provides for a Union Security Clause
requiring:
(c) All workers who are or may during the effectivity of this contract
become members of the union in accordance with its constitution
and by-laws shall as a condition of their continued employment,
maintain membership in good standing in the union for the duration
of the agreement. (Emphasis supplied)
Having ratified that CBA and being then members of the TDLU, the private
respondents owe fealty and are required under the Union Security Clause to
maintain their membership in good standing with it during the term thereof, a
requirement which ceases to be binding only during the 60-day freedom period
immediately preceding the expiration of the CBA. When the private respondents
organized and joined the KAMPIL Chapter in TDI and filed the corresponding
petition for certification election in November 1980, there was no freedom period
to speak of yet. For under Presidential Decree No. 1391, promulgated May 29,
1978, the law applicable in this instance provides:
and under Section 21, Rule 3 of the Rules Implementing PD 1391 "... pending
certification of a duly filed collective bargaining agreement no petition for
certification election in the same bargaining unit shall be entertained or
processed." (promulgated September 19, 1978). The Labor Code further
mandates that "no certification election shall be entertained if a Collective
Bargaining Agreement which has been submitted in accordance with Article 231
of the Code exists between the employer and a legitimate labor organization
except within sixty (60) days prior to the expiration of the life of such collective
agreement (Art. 257).
The fact, therefore, that the Bureau of Labor Relations (BLR) failed to certify or
act on TDLU's request for certification of the CBA in question is of no moment to
the resolution of the issues presented in this case. The BLR itself found in its
order of July 8, 1982 that "the certified CBA was duly filed and submitted on
October 29, 1980, to last until June 30, 1982 is certifiable for having complied
with all the requirements for certification.
The validity of the CBA is not here assailed by private respondents. They
admitted having organized the local chapter of KAMPIL at TDI, although it is
claimed that this was done when there was no certified CBA between TDI and
TDLU that would constitute a bar to the certification election. Of significance is
the ruling in Manalang v. Artex Development Co., Inc., (21 SCRA 561, 569)
decided on a factual setting where the petitioners had affiliated themselves with
another labor union, Artex Free Workers, without first terminating their
membership with Bagong Buhay Labor Union (BBLU) and without the knowledge
of the officers of the latter union, for which reason the petitioners were expelled
from the BBLU for acts of disloyalty; and the company, upon the behest of BBLU
dismissed them from employment pursuant to the closed-shop stipulation in a
Collective Bargaining Agreement. This Court ruled:
Nor can it be said that the stipulation providing that the employer
may dismiss an employee whenever the union recommends his
expulsion either for disloyalty or for any violation of its by-laws and
constitution is illegal or constitute of unfair labor practice, for such is
one of the matters on which management and labor can agree in
order to bring about harmonious relations between them and the
union, and cohesion and integrity of their organization And as an act
of loyalty a union may certainly require its members not to affiliate
with any other labor union and to consider its infringement as a
reasonable cause for separation. This is what was done by
respondent union. And the respondent employer did nothing but to
put in force their agreement when it separated the herein
complainants upon the recommendation of said union. Such a
stipulation is not only necessary to maintain loyalty and preserve the
integrity of the union but is allowed by the Magna Charta of Labor
when it provided that while it is recognized that an employee shall
have the right to self-organization, it is at the same time postulated
that such right shall not injure the right of the labor organization to
prescribe its own rules with respect to the acquisition or retention of
membership therein (Section 41(b) par. 1, Republic Act 875). This
provision is significant. It is an indirect restriction on the right of an
employee to self-organization. It is a solemn pronouncement of a
policy that while an employee is given the right to join a labor
organization, such right should only be asserted in a manner that will
not spell the destruction of the same organization The law requires
loyalty to the union on the part of its members in order to obtain to
the full extent its cohesion and integrity. We therefore, see nothing
improper in the disputed provisions of the collective bargaining
agreement entered into between the parties. (Ang Malayang
Manggagawa ng Ang Tibay Enterprises, et al. v. Ang Tibay, et al.
102 Phil. 669) (Emphasis supplied)
We agree with petitioner TDLU that the dismissal of the petition for certiorari in
G.R. No. 63995 entitled TDLU v. Kaisahan ng Manggagawang Pilipina could not
be construed as to extinguish the right of TDLU to expel private respondents for
acts of disloyalty when they organized a local chapter of KAMPIL in October
1980 in TDI. The subject matter brought to this Court in G.R. No. 63995 was the
decision of the Bureau of Labor Relations dated December 3, 1982 requiring the
holding of certification election in TDI within twenty (20) days from receipt of said
BLR's decision which reads:
It is clearly apparent that the BLR aforesaid Order which this Court upheld in
G.R. No. 63995 when it dismissed TDLU's petition in a minute resolution, did not
pass upon the question of legality or illegality of the dismissal of private
respondents from TDI by reason of their expulsion from TDLU for disloyalty. That
question was neither raised nor passed upon in the certification case, and was
not a proper issue therein because a petition for certification election is not a
litigation but a mere investigation of a non-adversary character to determine the
bargaining unit to represent the employees (George Peter Lines, Inc. v.
Associated Labor Union, 134 SCRA 82). Hence, no inference could be derived
from the dismissal of said petition that either the BLR or this Court has decided in
favor of private respondents insofar as the question of union disloyalty and their
suspension and termination from employment of TDI is concerned.
Simply put, the BLR ordered the holding of a certification election because the
CBA in question had already expired, its expiry date being June 30, 1982.
Consequently, there appears to be no more obstacle in allowing a certification
election. "... [T]he contract bar rule will not apply in view of the supervening
event, that is, the expiration of the CBA."
But the fact that the CBA had expired on June 30, 1982 and the BLR, because of
such supervening event, ordered the holding of a certification election could not
and did not wipe out or cleanse private respondents from the acts of disloyalty
committed in October 1980 when they organized KAMPIL's local chapter in TDI
while still members of TDLU. The ineluctable fact is that private respondents
committed acts of disloyalty against TDLU while the CBA was in force and
existing for which they have to face the necessary sanctions lawfully imposed by
TDLU.
In Villar v. Inciong (121 SCRA 444), we held that "petitioners, although entitled to
disaffiliation from their union and to form a new organization of their own must
however, suffer the consequences of their separation from the union under the
security clause of the CBA: "
The private respondents cannot, therefore, escape the effects of the security
clause of their own applicable collective bargaining agreement.
WHEREFORE, the decision dated May 26, 1986 and the resolution dated June
26, 1986 of respondent National Labor Relations Commission in NLRC Case No.
AB-11685-81 are hereby SET ASIDE. The expulsion of private respondents from
TANDUAY DISTILLERY LABOR UNION and their consequent suspension and
termination from employment with TANDUAY DISTILLERY, INC., without
reinstatement and backwages, are hereby SUSTAINED. No cost.
SO ORDERED.
DECISION
DE CASTRO, J.:
Petition for review on certiorari of the decision of the National Labor Relations
Commission which modified the award dated February 1, 1974 of the Arbitrator.
The case arose from the complaint for unfair labor practice filed on March 15,
1973 by petitioner against respondent company on the following
grounds:chanrob1es virtual 1aw library
1. Unjust transfers and suspension of unionists.
"Management rights — The COMPANY retains the sole right to manage its
business including the number and location of factories or plants . . . as well as to
suspend, discharge, lay-off or take any disciplinary action against any employee
for just causes . . ."cralaw virtua1aw library
and that management was well within its rights in enforcing a provision of the
CBA.
The respondent company adduced the reason that the questioned transfer was
due to the fact that the Malabon District Office of the Company had been in a
business slump on account of the construction and subsequent opening of the
North Diversion Road at Balintawak, Rizal and other business factors which
forced the company to decide on a retrenchment program involving the reduction
of its personnel. It was also stressed by the company that a careful screening of
all the employees’ records was done to avoid injustice and that the selection of
those involved in the retrenchment was made regardless of whether they were
union members or not; that it could have well decided to dismiss its employees at
its Malabon Branch but instead of pursuing such course of action, it gave its
employees several options to choose from:chanrob1es virtual 1aw library
(1) temporary lay offs with priority of employment at the opening of respondent’s
Marikina Branch;
(3) permanent termination from employment with separation pay; that some
employees accepted and received respondent’s offer of separation pay; and
when herein petitioner-employees opted to remain with the company, they
submitted themselves to its discretion when and where they should be
transferred and/or relocated.
On the other hand, petitioners maintain that the company violated the provision
of Art. I, Section 1 of the Collective Bargaining Agreement, to
wit:jgc:chanrobles.com.ph
Petitioners contend that such transfer involved movement that would take the
employees outside the bargaining unit defined in the agreement. Moreover, in
refusing to be transferred to the Magna Services, Inc. and Cebu District, herein
petitioners-employees claim that it would be very difficult to leave their families
behind even if they wanted to, considering the prevailing economic conditions.
Furthermore, petitioner union alleged that the company refused to honor its
commitment embodied in Art. III, Section 3 of the Agreement, "that respondent
company bound itself . . . to assist the Union to collect and hereby guarantees
collection of, an agency fee equivalent to the Union membership dues but not
exceeding P4.00 per month from each regular employee . . ., and who is not a
member of the Union;" and since all the employees in the Company, whether
they be union or non-union members are entitled to all the benefits that their
bargaining agent was able to secure for them, it is in this light that the Union
seeks the imposition of the Agency fee.
The respondent company considers the issue of agency fee as sub judice since it
was raised for resolution before the Court of First Instance of Rizal in a petition
for declaratory relief praying for the proper construction and interpretation of the
provision on agency fee. In answer to this claim, petitioner union argues that the
NLRC has exclusive jurisdiction to resolve the present dispute regarding agency
fees in accordance with PD No. 21.
"Likewise, the respondent company is ordered to comply with its obligation under
Art. III, Section 3 of the CBA and in this respect, to transmit all agency fees due
the union in the amount of P4.00 per capita monthly from January 1, 1972 up to
the present time and to continue to comply with such obligation henceforth till the
expiration of the CBA.
x x x
"The award appealed from is therefore, set aside insofar as it is inconsistent with
this decision.
Petitioners appealed to the Secretary of Labor on November 14, 1974 and during
the pendency thereof, filed the instant petition for review alleging that they cannot
exclusively rely on their appeal to the Secretary of Labor when they received the
disputed decision on November 8, 1974 (after the New Labor Code had already
taken effect on November 1, 1974, repealing PD No. 21); that up to now there
are no implementing rules promulgated yet by the New NLRC created by PD 442
and in order to prevent a grave irreparable damage to the interest of the
petitioners, they must file this appeal by certiorari pursuant to the provision of the
New Labor Code "that the decision of the NLRC involving question of law could
he appealed by certiorari to the Supreme Court."cralaw virtua1aw library
The following issues are presented to this Court for resolution:chanrob1es virtual
1aw library
1. As to whether or not the NLRC has the power to alter or modify the award
rendered by a voluntary arbitrator whose decision is final and executory pursuant
to the CBA; and
2. As to whether or not the NLRC could still reverse or modify the voluntary
arbitrator’s award despite the appeal of the private respondent company was
filed beyond the reglementary period or in other words the right to appeal has
prescribed.
The petition was given due course on February 24, 1975 and pending receipt of
respondent’ s answer, the Secretary of Labor on March 24, 1975 issued an order
6 denying petitioners’ appeal from the decision of respondent commission and
accordingly enjoined the parties to comply with the disposition set forth in the
said appealed decision.
In support of the first issue raised, petitioners argued that the voluntary arbitrator
expressly stated in his award "that the parties agreed to refer the dispute to the
undersigned for voluntary arbitration in accordance with the CBA;" that said
finding was not questioned by respondent company; that the decision revising
the award of the voluntary arbitrator is violative of the CBA which
provides:jgc:chanrobles.com.ph
"There shall be no appeal from an arbitrator’s decision. It shall be final and
binding on the UNION, on all bargaining unit employees and on the COMPANY.
The decision shall be such as to be dispositive of the matter or matters submitted
to arbitration . . ." 7
and that the provision in the CBA regarding the grievance machinery as well as
the definition of the bargaining unit specifically delineating a definite place of
work would be useless if respondent company could transfer employees at will
even to places not covered by the CBA.
As to the second issue raised, it is the contention of petitioners that the appeal of
respondent company from the arbitrator’s award was filed on March 5, 1974,
which is beyond the reglementary period, alleging that said respondent received
the award on February 22, 1974; 8 and for the NLRC now to revise or disturb the
award of the voluntary arbitrator would in effect be going against the very
implementing rules it has promulgated requiring any aggrieved party to file an
appeal within 5 days upon receipt of the award, which rule was adopted on
October 18, 1972.
"Section 2. Appeal may be brought to the Commission within ten (10) days upon
receipt of the Award by the aggrieved party." 9
It was stressed by said respondent that the provision in the collective bargaining
agreement is subordinate to the will of the state or the law; that is to say, if
appeal is provided for or available under the law, said remedy cannot be
foreclosed by mere stipulation of the parties.
Arbitrator Alexander Guray stated in his award that the parties had earlier sought
to settle their differences internally pursuant to the grievance machinery provided
in their agreement; and when their efforts to resolve the problem failed, the
parties agreed to refer the dispute to a voluntary arbitrator. A perusal of the
records however show that on May 11, 1973, the Mediation-fact finding report
submitted by Mediator Jose Collado, Jr. contained the following data: 10
The records show that the respondent company’s appeal to the Commission was
filed on March 5, 1974 and was received by the Bureau of Labor Relations
Division on March 6, 1974. 12 It was admitted by said respondent that its counsel
received a copy of the arbitrator’s award on February 22, 1974 and applying
Section 2 of the NLRC Rules and Regulations providing for a ten-day period to
appeal from receipt of the award, it is very clear by mathematical computation
that the appeal was filed out of time; hence, the award attained finality.
The lapse of the appeal period deprives courts of jurisdiction to alter a final
judgment. In the instant case, the decision of the Commission 14 modifying the
award of the arbitrator is null and void for having been issued without jurisdiction
and authority, the appeal taken thereto not having been filed on time. The
perfection of an appeal within the reglementary period is not only mandatory but
jurisdictional. 15
Respondent Company’s contention that it filed its appeal within the reglementary
period should not be given weight. Such allegation is not fully substantiated.
There is here an apparent miscomputation by counsel of the appeal period which
will not arrest the course of the same nor prevent the finality of the judgment, in
simply stating that he filed the appeal on time, otherwise, the definite and
executory character of the judgment would be left to the whim of the losing party,
when it is in the interest of everyone that the date when judgments become final
should remain fixed and ascertainable. 16
In view of the above conclusion reached, there is no further need to discuss the
merits of the dismissal of the employees for insubordination. The award having
attained finality, becomes the law of the case, and must be complied with, no
matter how erroneous it may be.
WHEREFORE, the decision dated October 17, 1974 of the National Labor
Relations Commission and the Order dated March 24, 1975 of the Secretary of
Labor are hereby set aside and the award of the arbitrator is reinstated in toto.
This decision is immediately executory. No pronouncement as to costs.
SO ORDERED.
DECISION
BELLOSILLO, J.:
This is a petition for certiorari[1] seeking to set aside the 31 July 1996
Decision[2] of the National Labor Relations Commission affirming the 30 June 1995
Decision of the Labor Arbiter holding petitioners Philippine Skylanders, Inc.,
Mariles C. Romulo[3] and Francisco Dakila as well as the elected officers of the
Philippine Skylanders Employees and Workers Association-PAFLU[4] guilty of
unfair labor practice and ordering them to pay private respondent Philippine
Association of Free Labor Union (PAFLU) September[5] P150,000.00 as
damages. Petitioners likewise seek the reversal of the 31 October 1996 Resolution
of the NLRC denying their Motion for Reconsideration.
In November 1993 the Philippine Skylanders Employees Association (PSEA),
a local labor union affiliated with the Philippine Association of Free Labor Unions
(PAFLU) September (PAFLU), won in the certification election conducted among
the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union,
Philippine Skylanders Employees Association-WATU (PSEA-WATU) immediately
protested the result of the election before the Secretary of Labor.
Several months later, pending settlement of the controversy, PSEA sent
PAFLU a notice of disaffiliation citing as reason PAFLU's supposed deliberate and
habitual dereliction of duty toward its members. Attached to the notice was a copy
of the resolution adopted and signed by the officers and members of PSEA
authorizing their local union to disaffiliate from its mother federation.
PSEA subsequently affiliated itself with the National Congress of Workers
(NCW), changed its name to Philippine Skylanders Employees Association -
National Congress of Workers (PSEA-NCW), and to maintain continuity within the
organization, allowed the former officers of PSEA-PAFLU to continue occupying
their positions as elected officers in the newly-forged PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement
with PSI which was immediately registered with the Department of Labor and
Employment.
Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU
Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a copy of
PSI's audited financial statement.Ayroso explained that with the dismissal of
PSEA-WATUs election protest the time was ripe for the parties to enter into a
collective bargaining agreement.
On 30 July 1994 PSI through its personnel manager Francisco Dakila denied
the request citing as reason PSEA's disaffiliation from PAFLU and its subsequent
affiliation with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso
filed a complaint for unfair labor practice against PSI, its president Mariles Romulo
and personnel manager Francisco Dakila. PAFLU alleged that aside from PSIs
refusal to bargain collectively with its workers, the company through its president
and personnel manager, was also liable for interfering with its employees' union
activities.[6]
Two (2) days later or on 6 October 1994 Ayroso filed another complaint in
behalf of PAFLU for unfair labor practice against Francisco Dakila. Through Ayroso
PAFLU claimed that Dakila was present in PSEA's organizational meeting thereby
confirming his illicit participation in union activities. Ayroso added that the members
of the local union had unwittingly fallen into the manipulative machinations of PSI
and were lured into endorsing a collective bargaining agreement which was
detrimental to their interests.[7] The two (2) complaints were thereafter
consolidated.
On 1 February 1995 PAFLU amended its complaint by including the elected
officers of PSEA-PAFLU as additional party respondents. PAFLU averred that the
local officers of PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon
Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo
Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel
Cadiente, and Herminia Riosa, were equally guilty of unfair labor practice since
they brazenly allowed themselves to be manipulated and influenced by petitioner
Francisco Dakila.[8]
PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved
for the dismissal of the complaint on the ground that the issue of disaffiliation was
an inter-union conflict which lay beyond the jurisdiction of the Labor Arbiter. On the
other hand, PSEA-NCW took the cudgels for its officers who were being sued in
their capacities as former officers of PSEA-PAFLU and asserted that since PSEA
was no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no
personality to file the instant complaint. In support of this assertion, PSEA-NCW
submitted in evidence a Katunayan signed by 111 out of 120 rank and file
employees of PSI disauthorizing Ayroso or PAFLU from instituting any action in
their behalf.[9]
In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's
disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respective
officers guilty of unfair labor practice. The Decision explained that despite PSEA-
PAFLU's status as the sole and exclusive bargaining agent of PSI's rank and file
employees, the company knowingly sanctioned and confederated with Dakila in
actively assisting a rival union. This, according to the Labor Arbiter, was a classic
case of interference for which PSI could be held responsible. As PSEA-NCW's
personality was not accorded recognition, its collective bargaining agreement with
PSI was struck down for being invalid. Ayroso's legal personality to file the
complaint was sustained on the ratiocination that under the Labor Code no petition
questioning the majority status of the incumbent bargaining agent shall be
entertained outside of the sixty (60)-day period immediately before the expiry date
of such five (5)-year term of the collective bargaining agreement that the parties
may enter into. Accordingly, judgment was rendered ordering PSI, PSEA-PAFLU
and their officers to pay PAFLU P150,000.00 in damages.[10]
PSI, PSEA and their respective officers appealed to the National Labor
Relations Commission (NLRC). But the NLRC upheld the Decision of the Labor
Arbiter and conjectured that since an election protest questioning PSEA-PAFLU's
certification as the sole and exclusive bargaining agent was pending resolution
before the Secretary of Labor, PSEA could not validly separate from PAFLU, join
another national federation and subsequently enter into a collective bargaining
agreement with its employer-company.[11]
Petitioners separately moved for reconsideration but both motions were
denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW together
with their respective officers pleading for a reversal of the NLRC's Decision which
they claimed to have been rendered in excess of jurisdiction. In due time, both
petitions were consolidated.
In these petitions, petitioner PSEA together with its officers argued that by
virtue of their disaffiliation PAFLU as a mere agent had no authority to represent
them before any proceedings. They further asserted that being an independent
labor union PSEA may freely serve the interest of all its members and readily
disaffiliate from its mother federation when circumstances so warrant. This right,
they averred, was consistent with the constitutional guarantee of freedom of
association.[12]
For their part, petitioners PSI, Romulo and Dakila alleged that their decision to
bargain collectively with PSEA-NCW was actuated, to a large extent, by PAFLU's
behavior. Having heard no objections or protestations from PAFLU relative to
PSEA's disaffiliation, they reckoned that PSEA's subsequent association with
NSW was done bona fide.[13]
The Solicitor General filed a Manifestation in Lieu of Comment recommending
that both petitions be granted. In his Manifestation, the Solicitor General argued
against the Labor Arbiter's assumption of jurisdiction citing the following as
reasons: first, there was no employer-employee relationship between complainant
Ayroso and PSI over which the Labor Arbiter could rightfully assert his
jurisdiction; second, since the case involved a dispute between PAFLU as mother
federation and PSEA as local union, the controversy fell within the jurisdiction of
the Bureau of Labor Relations; and lastly, the relationship of principal-agent
between PAFLU and PSEA had been severed by the local union through the lawful
exercise of its right of disaffiliation.[14]
Stripped of non-essentials, the fundamental issue tapers down to the
legitimacy of PSEA's disaffiliation. To be more precise, may PSEA, which is an
independent and separate local union, validly disaffiliate from PAFLU pending the
settlement of an election protest questioning its status as the sole and exclusive
bargaining agent of PSI's rank and file employees?
At the outset, let it be noted that the issue of disaffiliation is an inter-union
conflict the jurisdiction of which properly lies with the Bureau of Labor Relations
(BLR) and not with the Labor Arbiter.[15] Nonetheless, with due recognition of this
fact, we deem it proper to settle the controversy at this instance since to remand
the case to the BLR would only mean intolerable delay for the parties.
The right of a local union to disaffiliate from its mother federation is not a novel
thesis unillumined by case law. In the landmark case of Liberty Cotton Mills
Workers Union vs. Liberty Cotton Mills, Inc.[16] 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.[17]
Upon an application of the aforecited principle to the issue at hand, the
impropriety of the questioned Decisions becomes clearly apparent. There is
nothing shown in the records nor is it claimed by PAFLU that the local union was
expressly forbidden to disaffiliate from the federation nor were there any conditions
imposed for a valid breakaway. As such, the pendency of an election protest
involving both the mother federation and the local union did not constitute a bar to
a valid disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of
the 120 members of the local union, or an equivalent of 92.5% of the total union
membership supported the claim of disaffiliation and had in fact disauthorized
PAFLU from instituting any complaint in their behalf. Surely, this is not a case
where one (1) or two (2) members of the local union decided to disaffiliate from the
mother federation, but it is a case where almost all local union members decided
to disaffiliate.
It was entirely reasonable then for PSI to enter into a collective bargaining
agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU,
there would be no restrictions which could validly hinder it from subsequently
affiliating with NCW and entering into a collective bargaining agreement in behalf
of its members.
There is a further consideration that likewise argues for the granting of the
petitions. It stands unchallenged that PAFLU instituted the complaint for unfair
labor practice against the wishes of workers whose interests it was supposedly
protecting. The mere act of disaffiliation did not divest PSEA of its own personality;
neither did it give PAFLU the license to act independently of the local
union. Recreant to its mission, PAFLU cannot simply ignore the demands of the
local chapter and decide for its welfare. PAFLU might have forgotten that as an
agent it could only act in representation of and in accordance with the interests of
the local union. The complaint then for unfair labor practice lodged by PAFLU
against PSI, PSEA and their respective officers, having been filed by a party which
has no legal personality to institute the complaint, should have been dismissed at
the first instance for failure to state a cause of action.
Policy considerations dictate that in weighing the claims of a local union as
against those of a national federation, those of the former must be
preferred. Parenthetically though, the desires of the mother federation to protect
its locals are not altogether to be shunned. It will however be to err greatly against
the Constitution if the desires of the federation would be favored over those of its
members. That, at any rate, is the policy of the law. For if it were otherwise, instead
of protection, there would be disregard and neglect of the lowly workingmen.
WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine
Skylanders and Workers Association-NCW, together with their respective officers,
are GRANTED. TheDecision of the National Labor Relations Commission of 31
July 1996 affirming the Decision of the Labor Arbiter of 30 June 1995 holding
petitioners Philippine Skylanders and Workers Association-NCW, Philippine
Skylanders, Inc. and their respective officers, guilty of unfair labor practice and
ordering them to pay damages to private respondent Philippine Association of Free
Labor Unions (PAFLU) September (now UNIFIED PAFLU) as well as the
Resolution of 31 October 1996 denying reconsideration is REVERSED and SET
ASIDE. No costs.
SO ORDERED.
GUERRERO, J.:
Petition for review by certiorari to set aside the Order dated February 15, 1979 of
respondent Deputy Minister Amado G. Inciong affirming the Decision of the OIC
of Regional Office No. 4 dated October 14, 1978 which jointly resolved RO4-
Case No. T-IV-3549-T and RO4-Case No. RD 4-4088-77-T.
On February 7, 1977, the same employees who had signed the petition filed by
FUR signed a joint resolution reading in toto as follows:
Sama-Samang Kapasiyahan
Finding that the petition involved the same parties and causes of action as the
case previously indorsed to the TUCP, the Med-Arbiter dismiss the petition filed
by herein petitioner Villar, which dismissal is still pending appeal before the
Bureau of Labor Relations.
In the meantime, on February 14, 1977, the Amigo Employees Union- PAFLU
called a special meeting of its general membership. A Resolution was thereby
unanimously approved which called for the investigation by the PAFLU national
president, pursuant to the constitution and by-laws of the Federation, of all of the
petitioners and one Felipe Manlapao, for "continuously maligning, libelling and
slandering not only the incumbent officers but even the union itself and the
federation;" spreading 'false propaganda' that the union officers were 'merely
appointees of the management', and for causing divisiveness in the union.
And on the same date of February 15, 1977, the Amigo Employees Union-
PAFLU and the Company concluded a new CBA which, besides granting
additional benefits to the workers, also reincorporated the same provisions of the
existing CBA, including the union security clause reading, to wit:
ARTICLE III
UNION SECURITY WITH RESPECT TO PRESENT MEMBERS
All members of the UNION as of the signing of this Agreement shall
remain members thereof in good standing. Therefore, any members
who shall resign, be expelled, or shall in any manner cease to be a
member of the UNION, shall be dismissed from his employment
upon written request of the UNION to the Company. 2
Not recognizing PAFLU's jurisdiction over their case, petitioners again refused to
participate in the investigation rescheduled and conducted on March 9, 1979.
Instead, petitioners merely appeared to file their Answer to the charges and
moved for a dismissal.
Petitioners contend in their Answer that neither the disaffiliation of the Amigo
Employees Union from PAFLU nor the act of filing the petition for certification
election constitute disloyalty as these are in the exercise of their constitutional
right to self-organization. They further contended that PAFLU was without
jurisdiction to investigate their case since the charges, being intra-union
problems within the Amigo Employees Union-PAFLU, should be conducted
pursuant to the provisions of Article XI, Sections 2, 3, 4 and 5 of the local union's
constitution and by-laws.
The complainants, all of whom were the then incumbent officers of the Amigo
Employees Union-PAFLU, however, appeared and adduced their evidence
supporting the charges against herein petitioners.
Based on the findings and recommendations of the PAFLU trial committee, the
PAFLU President, on March 15, 1977, rendered a decision finding the petitioners
guilty of the charges and disposing in the last paragraph thereof, to wit,
Petitioners appealed the Decision to the PAFLU, citing the same grounds as
before, and in addition thereto, argued that the PAFLU decision cannot legally
invoke a CBA which was unratified, not certified, and entered into without
authority from the union general membership, in asking the Company to
terminate them from their employment. The appeal was, likewise, denied by
PAFLU in a Resolution dated March 28, 1977.
After denying petitioner's appeal, PAFLU on March 28, 1977 sent a letter to the
Company stating, to wit,
This was followed by another letter from PAFLU to the Company dated April 25,
1977, reiterating the demand to terminate the employment of the petitioners
pursuant to the security clause of the CBA, with a statement absolving the
Company from any liability or damage that may arise from petitioner's
termination.
Acting on PAFLU's demand, the Company informed PAFLU that it will first secure
the necessary clearances to terminate petitioners. By letter dated April 28, 1977,
PAFLU requested the Company to put petitioners under preventive suspension
pending the application for said clearances to terminate the petitioners, upon a
declaration that petitioners' continued stay within the work premises will "result in
the threat to the life and limb of the other employees of the company."6
Hence, on April 29, 1977, the Company filed the request for clearance to
terminate the petitioners before the Department of Labor, Regional Office No. 4.
The application, docketed as RO4-Case No. 7-IV-3549-T, stated as cause
therefor, "Demand by the Union Pursuant to the Union Security Clause," and
further, as effectivity date, "Termination-upon issuance of clearance; Suspension-
upon receipt of notice of workers concerned." 7 Petitioners were then informed by
memorandum dated April 29, 1977 that the Company has applied for clearance
to terminate them upon demand of PAFLU, and that each of them were placed
under preventive suspension pending the resolution of the said applications. The
security guard was, likewise, notified to refuse petitioners entry into the work
premises. 8
In an earlier development, on April 25, 1977, or five days before petitioners were
placed under preventive suspension, they filed a complaint with application for
preliminary injunction before the same Regional Office No. 4, docketed as RO4-
Case No. RD-4-4088-77-T, praying that after due notice and hearing, "(1) A
preliminary injunction be issued forthwith to restrain the respondents from doing
the act herein complained of, namely: the dismissal of the individual
complainants from their employment; (2) After due hearing on the merits of the
case, an Order be entered denying and/or setting aside the Decision dated
March 15, 1977 and the Resolution dated March 28, 1977, issued by respondent
Onofre P. Guevara, National President of respondent PAFLU; (3) The Appeal of
the individual complainants to the General Membership of the complainant
AMIGO EMPLOYEES UNION, dated March 22, 1977, pursuant to Sections 2, 3,
4 & 5, Article XI in relation of Section 1, Article XII of the Union Constitution and
By-Laws, be given due course; and (4) Thereafter, the said preliminary injunction
be made permanent, with costs, and with such further orders/reliefs that are just
and equitable in the premises."9
In these two cases filed before the Regional Office No. 4, the parties adopted
their previous positions when they were still arguing before the PAFLU trial
committee.
Not satisfied with the decision, petitioners appealed to the Office of the Secretary
of Labor. By Order dated February 15, 1979, the respondent Amado G. Inciong,
Deputy Minister of Labor, dismissed their appeal for lack of merit. 11
Hence, the instant petition for review, raising the following issues:
The main thrust of the petition is the alleged illegality of the dismiss of the
petitioners by private respondent Company upon demand of PAFLU which
invoked the security clause of the collective bargaining agreement between the
Company and the local union, Amigo Employees Union-PAFLU. Petitioners
contend that the respondent Deputy Minister acted in grave abuse of discretion
when he affirmed the decision granting the clearance to terminate the petitioners
and dismissed petitioners' complaint, and in support thereof, allege that their
constitutional right to self-organization had been impaired. Petitioner's contention
lacks merit.
It is true that disaffiliation from a labor union is not open to legal objection. It is
implicit in the freedom of association ordained by the Constitution. 13 But this
Court has laid down the ruling that a closed shop is a valid form of union security,
and such provision in a collective bargaining agreement is not a restriction of the
right of freedom of association guaranteed by the Constitution. 14
In the case at bar, it appears as an undisputed fact that on February 15, 1977,
the Company and the Amigo Employees Union-PAFLU entered into a Collective
Bargaining Agreement with a union security clause provided for in Article XII
thereof which is a reiteration of the same clause in the old CBA. The quoted
stipulation for closed-shop is clear and unequivocal and it leaves no room for
doubt that the employer is bound, under the collective bargaining agreement, to
dismiss the employees, herein petitioners, for non- union membership.
Petitioners became non-union members upon their expulsion from the general
membership of the Amigo Employees Union-PAFLU on March 15, 1977 pursuant
to the Decision of the PAFLU national president.
We reject petitioners' theory that their expulsion was not valid upon the grounds
adverted to earlier in this Decision. That PAFLU had the authority to investigate
petitioners on the charges filed by their co-employees in the local union and after
finding them guilty as charged, to expel them from the roll of membership of the
Amigo Employees Union-PAFLU is clear under the constitution of the PAFLU to
which the local union was affiliated. And pursuant to the security clause of the
new CBA, reiterating the same clause in the old CBA, PAFLU was justified in
applying said security clause. We find no abuse of discretion on the part of the
OIC of Regional Office No. 4 in upholding the validity of the expulsion and on the
part of the respondent Deputy Minister of Labor in sustaining the same. We
agree with the OIC's decision, pertinent portion of which reads:
Stripped of non-essentials, the basic and fundamental issue in this
case tapers down to the determination of WHETHER OR NOT
PAFLU HAD THE AUTHORITY TO INVESTIGATE OPPOSITORS
AND, THEREAFTER, EXPEL THEM FROM THE ROLL OF
MEMBERSHIP OF THE AMIGO EMPLOYEES UNION-PAFLU.
Correctly and legally, therefore, the PAFLU acted when, after proper
investigation and finding of guilt, it decided to remove the oppositors
from the list of members of the Amigo Employees Union-PAFLU,
and thereafter, recommended to the Amigo Manufacturing, Inc.; the
termination of the employment of the oppositors. 15
The contention of petitioners that the charges against them being intra-union
problems, should have been investigated in accordance with the constitution and
by-laws of the Amigo Employees Union-PAFLU and not of the PAFLU, is not
impressed with merit. It is true that under the Implementing Rules and
Regulations of the Labor Code, in case of intra-union disputes, redress must first
be sought within the organization itself in accordance with its constitution and by-
laws. However, it has been held that this requirement is not absolute but yields to
exception under varying circumstances. Thus, in Kapisanan ng mga
Manggagawa sa MRR vs. Hernandez, 20 SCRA 109, We held:
In the case at bar, noteworthy is the fact that the complaint was filed
against the union and its incumbent officers, some of whom were
members of the board of directors. The constitution and by-laws of
the union provide that charges for any violations thereof shall be
filed before the said board. But as explained by the lower court, if the
complainants had done so the board of directors would in effect be
acting as respondent investigator and judge at the same time. To
follow the procedure indicated would be a farce under the
circumstances, where exhaustion of remedies within the union itself
would practically amount to a denial of justice or would be illusory or
vain, it will not be insisted upon, particularly where property rights of
the members are involved, as a condition to the right to invoke the
aid of a court.
The facts of the instant petition stand on all fours with the aforecited case that the
principle therein enunciated applies here as well. In the case at bar, the
petitioners were charged by the officers of the Amigo Employees Union- PAFLU
themselves who were also members of the Board of Directors of the Amigo
Employees Union-PAFLU. Thus, were the petitioners to be charged and
investigated according to the local union's constitution, they would have been
tried by a trial committee of three (3) elected from among the members of the
Board who are themselves the accusers. (Section 2, Article 11, Constitution of
the Local Union). Petitioners would be in a far worse position had this procedure
been followed. Nonetheless, petitioners admit in their petition that two (2) of the
six (6) charges, i.e. disaffiliation and filing a petition for certification election, are
not intra-union matters and, therefore, are cognizable by PAFLU.
Petitioners insist that their disaffiliation from PAFLU and filing a petition for
certification election are not acts of disloyalty but an exercise of their right to self-
organization. They contend that these acts were done within the 60-day freedom
period when questions of representation may freely be raised. Under the peculiar
facts of the case, We find petitioners' insistence untenable.
In the first place, had petitioners merely disaffiliated from the. Amigo Employees
Union-PAFLU, there could be no legal objections thereto for it was their right to
do so. But what petitioners did by the very clear terms of their "Sama-Samang
Kapasiyahan" was to disaffiliate the Amigo Employees Union-PAFLU from
PAFLU, an act which they could not have done with any effective consequence
because they constituted the minority in the Amigo Employees Union-PAFLU.
Extant from the records is the fact that petitioners numbering ten (10), were
among the ninety-six (96) who signed the "Sama-Samang Kapasiyahan"
whereas there are two hundred thirty four (234) union members in the Amigo
Employees Union-PAFLU. Hence, petitioners constituted a small minority for
which reason they could not have successfully disaffiliated the local union from
PAFLU. Since only 96 wanted disaffiliation, it can be inferred that the majority
wanted the union to remain an affiliate of PAFLU and this is not denied or
disputed by petitioners. The action of the majority must, therefore, prevail over
that of the minority members. 16
Neither is there merit to petitioners' contention that they had the right to present
representation issues within the 60-day freedom period. It is true, as contended
by petitioners, that under Article 257 of the Labor Code and Section 3, Rule 2,
Book 2 of its Implementing Rules, questions of exclusive bargaining
representation are entertainable within the sixty (60) days prior to the expiry date
of an existing CBA, and that they did file a petition for certification election within
that period. But the petition was filed in the name of the Amigo Employees Union
which had not disaffiliated from PAFLU, the mother union. Petitioners being a
mere minority of the local union may not bind the majority members of the local
union.
In Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40, We
had occasion to interpret Section 23 of R.A. No. 875 (Industrial Peace Act)
requiring of labor unions registration by the Department of Labor in order to
qualify as "legitimate labor organization," and We said:
The theory to the effect that Section 23 of Republic Act No. 875
unduly curtails the freedom of assembly and association guaranteed
in the Bill of Rights is devoid of factual basis. The registration
prescribed in paragraph (b) of said section 17 is not a limitation to the
right of assembly or association, which may be exercised with or
without said registration. The latter is merely a condition sine qua
non for the acquisition of legal personality by labor organizations,
associations or unions and the possession of the 'rights and
privileges granted by law to legitimate labor organizations.' The
Constitution does not guarantee these rights and privileges, much
less said personality, which are mere statutory creations, for the
possession and exercise of which registration is required to protect
both labor and the public against abuses, fraud, or impostors who
pose as organizers, although not truly accredited agents of the union
they purport to represent. Such requirement is a valid exercise of the
police power, because the activities in which labor organizations,
associations and union or workers are engaged affect public
interest, which should be protected.
Simply put, the Amigo Employees Union (Independent) Which petitioners claim
to represent, not being a legitimate labor organization, may not validly present
representation issues. Therefore, the act of petitioners cannot be considered a
legitimate exercise of their right to self-organization. Hence, We affirm and
reiterate the rationale explained in Phil Association of Free Labor Unions vs. Sec.
of Labor case, supra, in order to protect legitimate labor and at the same time
maintain discipline and responsibility within its ranks.
The contention of petitioners that the new CBA concluded between Amigo
Employees Union-PAFLU and the Company on February 15, 1977 containing the
union security clause cannot be invoked as against the petitioners for offenses
committed earlier than its conclusion, deserves scant consideration. We find it to
be the fact that the union security clause provided in the new CBA merely
reproduced the union security clause provided in the old CBA about to expire.
And since petitioners were expelled from Amigo Employees Union-PAFLU on
March 28, 1982 upon denial of their Motion for Reconsideration of the decision
expelling them, the CBA of February 15, 1977 was already applicable to their
case. The "closed-shop provision" in the CBA provides:
The case of Seno vs. Mendoza, 21 SCRA 1124 mentioned previously needs
further citation of the facts and the opinion of the Court, speaking through Justice
Makalintal who later became Chief Justice, and We quote:
We, therefore, hold and rule that petitioners, although entitled to disaffiliate from
their union and form a new organization of their own, must, however, suffer the
consequences of their separation from the union under the security clause of the
CBA.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed from
affirming the joint decision of the OIC of Regional Office No. 4 in RO4-Case No.
T-IV-3549-T and RO4 Case No. RD-4-4088-77-T granting clearance to terminate
petitioners as well as dismissing their complaint with application for preliminary
injunction, is hereby AFFIRMED. No costs.
SO ORDERED.
Villaluz, Villaluz & Villaluz, Padilla Law Offices and Rizalindo V. Diaz,
for Petitioners.
DECISION
TEEHANKEE, J.:
The Court sets aside respondent director’s appealed resolution and rules in
accordance with the prevailing law and settled jurisprudence that the petitioner
union consisting of the members employees of respondent corporation is the
principal party to the collective bargaining agreement (rather than the respondent
mother union which is merely its agent) and is therefore entitled to be recognized
as the sole and exclusive bargaining representative entitled to administer and
enforce the collective bargaining agreement with the employer corporation.
The undisputed antecedent facts which gave rise to the present petition are
stated in the petition as follows:jgc:chanrobles.com.ph
"2. That sometime on February 1974, petitioner-Elisco Elirol Labor Union
(NAFLU), negotiated and executed a collective bargaining agreement with
respondent-Elizalde Steel Consolidated, Inc. 1
"4. That said resolution of the members of petitioner-appellant union was passed
upon by the officers and members of the Board of Directors on May 20, 1975, at
a special meeting called for the purpose, resolution No. 6, s. 1975 was approved
requesting the Acting Directors, Registration Division, Bureau of Labor Relations,
to register the union Elisco-Elirol Labor Union (NAFLU).
"8. That on June 10, 1975, at a special meeting called for the purpose, the
general membership of petitioner union decided that their mother union, the
National Federation of Labor Unions, can no longer safeguard the rights of its
members insofar as working conditions and other terms of employment are
concerned and that the interest and welfare of petitioner can be served best if it
will stay independent and disaffiliated from said mother union, hence, the general
membership adopted a resolution to disaffiliate from the National Federation of
Labor Unions.
"9. That on June 11, 1975, Petitioner, acting through its President Hilario Riza
informed respondents of said disaffiliation by means of a letter, and subsequently
requested respondents to recognize petitioner as the sole and exclusive
bargaining representative of the employees thereof.
"10. That respondent without any justifiable reason refused and continues to
refuse to recognize petitioner as the sole and exclusive bargaining representative
of its employees, and, now actually dismissed the petitioner union’s officers and
board members. 2 In this connection, a complaint for unfair labor practice was
filed by petitioners against respondent for the latter’s refusal to bargain
collectively with petitioner, which complaint is presently docketed as Case No.
LR-R04-6-1662.
"12. That on August 19, 1975. the Bureau of Labor Relations, through Med-
Arbiter Reynaldo B. Carta, before whom the case was heard, issued an Order
dismissing the petition for lack of merit."cralaw virtua1aw library
"On February, 1974 the members of the petitioner union who were then yet
affiliated with the National Association of Free Labor Union negotiated and
executed with the respondent company a collective bargaining agreement with
expiry date in November, 1976.
"On May 28, 1975, after the same members, by valid resolution of the Board of
directors and approved by the general membership, have formed themselves into
an independent organization and applied for registration as a union, a certificate
of registration was issued by the Department of Labor. And on June 10, 1975
again by a valid resolution the same members disaffiliated with the NAFLU.
"Which of the two unions should be recognized as the sole and exclusive
bargaining representative of the employees and ultimately recognized to
administer and supervise the enforcement of the collective bargaining
agreement.
"Petitioner-union contends that it having the necessary interest and being the real
party must be the sole union to be recognized and given authority to bargain with
the company.
"Secondly, to vest, upon the new union the authority to bargain is in violation of
the whole CBA, under the theory that when the mother union (NAFLU) entered
and executed the same in its separate and distinct personality aside from the
people composing the same. In fine, the CBA then was executed by and
between the company and the (NAFLU) with the latter as an entity having its own
capacity and personality different from the members composing the same.
"Lastly, to preserve and avoid unstability and disorder in the labor movement as
correctly ruled by the med-arbiter, the status quo should be preserved, there
being no compelling reason to alter the same." 3
Hence, the petition at bar. We find the petition to be clearly meritorious and
reverse the appealed resolution.cralawnad
I. Respondent director correctly perceived in his Resolution that "to grant to the
former mother union (NAFLU) the authority to administer and enforce their
collective bargaining agreement without presumably any members in the
bargaining unit is quite absurd" but fell unto the grave error of holding that "when
the employees disaffiliated from the mother union and formed themselves into a
new union, their status as employees was also terminated."cralaw virtua1aw
library
His error was in not perceiving that the employees and members of the local
union did not form a new union but merely registered the local union as was their
right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of employees and
members of the local union was the principal party to the agreement. NAFLU as
the mother union" in participating in the execution of the bargaining agreement
with respondent company acted merely as agent of the local union, which
remained the basic unit of the association existing principally and freely to serve
the common interest of all its members, including the freedom to disaffiliate when
the circumstances so warranted as in the present case.
". . . This principle, formulated by the NLRB as its initial compromise solution to
the problem facing it when there occurs a shift in employees’ union allegiance
after the execution of a bargaining contract with their employer, merely states
that even during the effectivity of a collective bargaining agreement executed
between employer and employees thru their agent, the employees can change
said agent but the contract continues to bind them up to its expiration date. They
may bargain however for the shortening of said expiration date.
"In formulating the ‘substitutionary’ doctrine, the only consideration involved as
the employees’ interest in the existing bargaining agreement. The agent’s
interest never entered the picture. In fact, the justification for said doctrine
was:chanrob1es virtual 1aw library
‘. . . that the majority of the employees, as an entity under the statute, is the true
party in interest to the contract, holding rights through the agency of the union
representative. Thus, any exclusive interest claimed by the agent is defeasible at
the will of the principal.’"
3. It need only be mentioned finally that the Secretary of Labor in his decision of
April 23, 1976 and order of January 10, 1977 denying reconsideration in the
sister unfair labor practice case and ordering respondent corporation to
immediately lift the suspension and reinstate the complainant officers and board
members of petitioner union 6 has likewise adhered to the foregoing basic
principles and settled jurisprudence in contrast to respondent director (as well as
therein respondent NLRC which similarly adhered to the archaic and illogical
view that the officers and board members of petitioner local union committed an
"act of disloyalty" in disaffiliating from the mother union when practically all its
members had so voted to disaffiliate and the mother union [as mere agent] no
longer had any local union or members to represent), ruling that (G)ranting
arguendo that the disaffiliation from the NAFLU is a legal cause for expulsion and
dismissal, it could not detract from the fact that only 13 individual complainants
out of almost 700 members who disaffiliated, were singled out for expulsion and
recommended for dismissal. The actuation of NAFLU conclusively constitute
discrimination. Since the suspension of the complainants was effected at the
instance of NAFLU, it should be held liable to the payment of back wages."cralaw
virtua1aw library
The Presidential Assistant for Legal Affairs Ronaldo B. Zamora has likewise
dismissed as untenable in a similar case respondents’ views that "such
maintenance of membership" clause be distorted as intended for the security of
the union rather than the security of tenure for the workers", ruling that" (W)hat is
paramount, as it is expressly and explicitly emphasized in an exacting language
under the New Constitution, is the security of tenure of the workers, not the
security of the union. To impress, therefore, such ‘maintenance of membership’
— which is intended for the security of the union rather than the security of
tenure of the workers — as a bar to employees’ changing their affiliation is not
only to infringe on the constitutional right of freedom of association, but also to
trample upon the constitutional right of workers to security of tenure and to
render meaningless whatever ‘adequate social services’ the State may establish
or maintain in the field of employment ‘to guarantee the enjoyment by the people
of a decent standard of living.’" 7
ACCORDINGLY, the petition is granted and the appealed resolution is set aside
and petitioner local union is declared to be the sole and exclusive bargaining
representative of the employees of respondent corporation entitled to administer
and enforce any subsisting collective bargaining agreement with said employer
corporation. This decision shall be immediately executory upon its promulgation.
D.T. Dagum, Jr. and P.T. De Quiroz for petitioner in G.R. Nos. 87266-69.
FELICIANO, J.:
These cases have been usually difficult for the Court, not because the issues
posed are in themselves intellectually demanding, but because of problems
generated by the procedure adopted by the parties in coming before this Court.
The incidents subject of these cases spawned multiple cases and petitions
before the National Labor Relations Commission ("NLRC"). After the NLRC
rendered a consolidated decision, the parties, in turn, filed multiple
separate certioraripetitions to the Court — on a staggered and piecemeal basis.
This situation resulted in a number of discrete discussions of issues actually
inter-related, since the Court, at any one time, could only see a small part of the
whole picture and decide only on the basis of what it could see. In what follows,
we have tried to put the whole picture together and to render comprehensive and
substantial justice to all the parties.
On 3 April 1985, the abovementioned case was certified in an Order by the then
Minister of Labor and Employment to the NLRC for compulsory arbitration; the
Order also forbade the holding of strikes or lock-outs. 1 The case was docketed
as Certified NLRC Case No. 0403-85. In the latter case, one of the demands
raised by AWU was that Metro terminate the employment of respondents Adriano
Yumul and ten (10) others (individual respondents), for having organized, on 26
October 1984, the Associated Workers Union in Metroport ("AWUM") among the
rank-and-file employees of Metro, ostensibly as a local or chapter of AWU. AWU
had earlier expelled individual respondents from membership in AUW for
disloyalty and, pursuant to the closed-shop provision of the existing AWU-Metro
collective bargaining agreement ("CBA"), sought the termination of their
employment.
The Agreement was attested to by then Deputy Labor Minister Carmelo Noriel.
Metro in April 1985 also filed a complaint for illegal strike with damages against
AWU and its officers, docketed as NLRC Case No. NCR-4-1341-85. On 21 June
1985, Labor Arbiter Ceferina Diosana in an Order directed Metro provisionally to
reinstate individual respondents pending resolution of the issues raised therein,
with which Order Metro complied.
On 15 July 1985, AWU filed a petition for injunction against Metro, docketed as
NLRC Injunction Case No. 993, praying for issuance of a temporary restraining
order stopping the implementation of the Order of provisional reinstatement, and
for Metro's compliance with the Agreement providing for the suspension of
individual respondents. On 1 August 1985, the NLRC in an En Banc Resolution
directed Metro to comply with the Agreement, and Metro complied and re-
suspended individual respondents. Individual respondents' petition before the
NLRC for preliminary mandatory injunction on 30 August 1985, praying "that
pursuant to the Implementing Rules of Batas Pambansa Blg. 130, [Metro] be
ordered to pay their salaries and allowances from and after their initial preventive
suspension of thirty (30) days and until their actual reinstatement," was not acted
upon.
All the above-mentioned cases, to wit: (a) Certified NLRC Case No. 0403-85
(NCR No. NS-10-288-84); (b) NLRC Case No. NCR-4-1341-85; (c) NLRC Case
No. NCR-4-1372-85; and (d) NLRC Injunction Case No. 993, were ordered
consolidated before the NLRC en banc.
On 4 September 1986, the NLRC rendered a consolidated Decision. In Certified
NLRC Case No. 0403-85, the NLRC ruled that: (a) respondent Metro cannot be
compelled to fill up vacancies with AWU's recommendees; (b) respondent Metro
cannot be held liable for union busting, the issue of the medically impaired
workers having become moot and academic; and (c) the compulsory retirement
of AWUs members who have reached the age of 60 years is a valid exercise of
management prerogative.
In NLRC Case No. NCR-4-1372-85, the NLRC, finding that AWU was a national
union, and that individual respondents have the right to organize themselves into
a local chapter thereof, the formation of which was a protected activity and could
not be considered as disloyalty, held the suspension or dismissal of individual
respondents as illegal and, in relation to NLRC Injuction Case No. 993, ordered
their reinstatement with backwages, to be paid solidarily by AWU and respondent
Metro.
In NLRC Case No. NCR-4-1341-85, the NLRC found the strike staged by AWU
not illegal, holding that AWU was of the belief, although erroneously, that it could
validly stage a strike during the pendency of its motion for reconsideration of the
Minister's Order dated 3 April 1985 enjoining a strike or lockout.
Both AWU and Metro filed separate motions for reconsideration of the
consolidated Decision.
On 27 July 1987, the NLRC in a Resolution denied AWU's and Metro's motions
for reconsideration of the consolidated Decision dated 4 September 1986, but
(acting on individual respondents' Motion/Manifestation) with the modification
limiting Metro's liability for backwages to wages accruing up to July 20, 1986 and
ordering Marina to reinstate individual respondents with backwages and
allowances starting from 21 July 1986. Marina complied with the Resolution by
reinstating individual respondents through its payroll retroactive to 21 July 1986.
AWU thereafter in G.R. Nos. 87266-69 filed with the Court a Petition
for certiorari on 14 March 1989 praying for the reversal of the decision of the
NLRC in NLRC Case No. NCR-NS-10-288-84 and NLRC Injunction Case No.
993 (praying principally for reversal of the order holding that respondent Metro
could not be compelled to fill up vacancies with AWUs recommendees) and in
NLRC Case No. NCR-4-1372-85 (praying chiefly for reversal of the order
reinstating the eleven [11] private respondents to their former positions with
backwages payable solidarily by AWU and respondent Metro). These cases
(G.R. Nos. 87266-69) were assigned to the Third Division of the Court.
Marina, meantime, had gone to the Court on certiorari on 14 June 1988 in G.R.
Nos. 81256-59 entitled "Marina Port Services, Inc. v. National Labor Relations
Commission, Metro Port Service, Inc, Associated Workers Union ["AWU"-
PTGWO], and Associated Workers Union in Metro Port [AWUM]" protesting, on
grounds of alleged denial of due process, its inclusion by the NLRC as a party in
NLRC Case No. NCR-4-1372-85 and its being required to reinstate individual
respondents with backwages. In dismissing these cases (G.R. Nos. 81256-59)
on 3 August 1988, the Court held that:
On 13 April 1988, Metro in G.R. No. 82705 (entitled "Metro Port Services, Inc. v.
National Labor Relations Commission, Associated Workers Union-PTGWO,
Marina Port Services, Inc., and Adriano Yumul [and 10 others]") went to this court
again and assailed the NLRC ruling in NLRC Case No. NCR-4-1372-85 and
NLRC Injunction Case No. 993. Metro claimed that it should not have been held
solidary liable with AWU because it had merely suspended individual
respondents pursuant to the Agreement dated 18 April 1985 it had executed with
AWU and, later, had merely obeyed the Resolution of the NLRC dated 1 August
1985 ordering Metro to re-suspend individual respondents. In similarly dismissing
Metro's petition, the Court in G.R. No. 82705, held:
Judgment was entered in G.R. Nos. 81256-59 and G.R. No. 82705 on 23
September 1988 and 4 July 1989, respectively, and the cases were remanded to
the Labor Arbiter of origin for execution.
On 16 April 1990, G.R. Nos. 91223-26 were consolidated with G.R. Nos. 87266-
69.
I
1. Deliberating on the instant Petition for Certiorari, the Court in G.R. Nos. 87266-
69 considers that petitioner AWU has failed to show grave abuse of discretion or
any act without or in excess of jurisdiction on the part of the NLRC in Certified
NLRC Case No. 0403-85 (NCR No. NS-10-288-84). The NLRC was correct there
in holding that respondent Metro cannot be compelled to fill up vacancies with
AWU's recommendees, as the CBA between AWU and respondent Metro
granted the latter the right to "fill or not to fill-up vacancies"; that the issue of the
medically impaired employees had already been raised in another Notice of
Strike filed by AWU against respondent Metro on 16 September 1985, and both
parties had agreed to abide by the recommendation and decision of an
examining physician selected by them; and that the existing CBA grants
respondent Metro the right to compulsorily retire any member of AWU who had
reached 60 years of age, which right has been exercised by Metro.
2. The NLRC, however, misappreciated the relevant facts in NLRC Case No.
NCR-4-1372-85 and NLRC Injunction Case No. 993. While it is true that AWUM
as a local union, being an entity separate and distinct from AWU, is free to serve
the interest of all its members and enjoys the freedom to disaffiliate, such right to
disaffiliate may be exercised, and is thus considered a protected labor
activity, only when warranted by circumstances. Generally, a labor union may
disaffiliate from the mother union to form a local or independent union only during
the 60-day freedom period immediately preceding the expiration of the
CBA.6 Even before the onset of the freedom period (and despite the closed-shop
provision in the CBA between the mother union and management) disaffiliation
may still be carried out, but such disaffiliation must be effected by a majority of
the members in the bargaining unit. 7 This happens when there is a substantial
shift in allegiance on the part of the majority of the members of the union. In such
a case, however, the CBA continues to bind the members of the new or
disaffiliated and independent union up to the CBA's expiration date.8
The record does not show that individual respondents had disaffiliated during the
freedom period. The record does, however, show that only eleven (11) members
of AWU (individual respondents) had decided to disaffiliate from AWU and form
AWUM. Respondent Metro had about 4,000 employees, and around 2,000 of
these were members of AWU 9 It is evident that individual respondents had
failed to muster the necessary majority in order to justify their disaffiliation.
(In fact, it was only on 5 December 1985 that individual respondents were
finally able to register an independent union called Metroport Workers
Union [MWU]. 10 Even then, in the absence of allegation by AWUM [MWU] of
the exact number of its members, the Court presumes that only twenty
percent [20%] of the employees of Metro had joined MWU) 11 Thus, in the
referendum held on 7 January 1985 at the PTGWO compound (where
representatives of the Ministry of Labor and Employment were present) to
determine whether individual respondents should be expelled from AWU,
1,229 members (out of 1,695 members present) voted for expulsion of
individual respondents. 12
The individual respondents here have failed to present proof of their allegation
that the 1,695 members of AWU were not employees of respondent Metro alone;
the Court therefore presumes that those who voted for their expulsion were bona
fide employees of respondent Metro. Moreover, individual respondents failed to
allege that their expulsion for disloyalty violated AWU's constitution and by-
laws. 13 In sum, the attempted disaffiliation of the eleven (11) private respondents
from the petitioner mother union and the effort to organize either a new local of
the mother union or an entirely new and separate union, did not, under the
circumstances of this case, constitute protected activities of the eleven (11)
individual respondents.
II
In view of the conclusion reached above in G.R. Nos. 87266-69, i.e., that AWU
was justified in expelling from its membership the eleven (11) individual
respondents, the question now arises: how and to what extent does such
conclusion affect the liability of Metro, and Marina (as successor-employer)? It
will be recalled that the Resolutions of this Court in G.R. Nos. 81256-59 and
82705 dismissing the Petitions for certiorari of both Metro and Marina assailing
the NLRC consolidated Decision of 4 September 1986 insofar as their (Metro's
and Marina's) liability for reinstatement and backwages of the individual
respondents thereunder is concerned, became final and judgment entered
therein, sometime ago.
2. Thus, so far as concerns the liability of Metro and Marina for reinstatement
with backwages of individual respondents under the consolidated NLRC
Decision, the pre-eminent fact is that the Court's Resolutions in G.R. Nos. 81256-
59 and 82705 dismissing their Petitions are already final. The liabilities of Metro
and Marina for reinstatement and backwages under the consolidated NLRC
Decision have become fixed and definite, with the modification decreed by the
Court in G.R. No. 82705 in so far as backwages were concerned. Thus, the
conclusion we today have reached in G.R. Nos. 87266-69 cannot benefit Metro
and Marina and will not dissolve their already fixed and definite liabilities.
3. Turning to the question of the backwages due to the eleven (11) individual
respondents, three (3) different time periods are relevant here and must be
distinguished from one another:
Under the consolidated NLRC Decision, Metro/Marina are liable for the
backwages accruing during the First and Third Periods above indicated. In
respect of the Second Period, however, the Court in G.R. No. 82705, as already
pointed out earlier, held that Metro/Marina should not be held liable for
backwages accruing during that period. Strictly speaking, in view of our
conclusion above that AWU was justified in expelling individual respondents from
its membership, neither AWU nor Metro/Marina would be liable to individual
respondents for the backwages accruing during this Second Period.
The equitable considerations which impel us to hold AWU liable for one-half (½)
of the backwages during the Second Period include:
(a) the fact that Metro had been reluctant to comply with the demand
of AWU to terminate the services of individual respondents and had
wanted to give the latter procedural due process, but gave in to the
demands of AWU;
(b) that AWU had pressed Metro very hard and indeed went on
strike against Metro when Metro refused simply to terminate the
services of the individual respondents;
(c) that AWU, instead of waiting for final judicial determination of the
legality of its expulsion of individual respondents, chose to importune
the NLRC to issue the order requiring the re-suspension of the
individual respondents on 1 August 1985, with which order Metro
eventually complied.
5. Turning to Metro/Marina we note that, apart from the finality of the Court's
Resolutions in G.R. Nos. 81256-59 and 82705, there is independent basis for
holding Metro/Marina responsible for reinstatement with backwages accruing
throughout the three (3) periods above indicated. The equitable considerations
which lead us to hold Metro/Marina responsible for one-half (½) of the
backwages accruing during the above Second Period relate to the failure of
Metro to accord individual respondents procedural due process by giving them
reasonable opportunity to explain their side before suspending or dismissing
them. Such dismissal was accordingly in violation of the Labor
Code.14Notwithstanding AWU's closed-shop clause in the CBA, Metro was bound
to conduct its own inquiry to determine the existence of substantial basis for
terminating the employment of individual respondents. 15 That AWU, disregarding
the Minister of Labor and Employment's express order, had threatened to go on
strike, and indeed actually went on strike, if Metro had continued with the
services of individual respondents, did not relieve Metro from the duty to accord
procedural due process to individual respondents. 16
6. The portion of the Writ of Execution issued by the Executive Labor Arbiter
requiring Marina to pay salary differentials in the total amount of P154,357.00
accruing during the period from 20 July 1986 up to October 1989, should be
modified to conform with the above legal and equitable allocation of liability for
the backwages which had accrued during the three (3) Periods above mentioned
during which the individual respondents were suspended. The salary
differentials, as we understands it, refer to increases in the prevailing wages
accruing partly during the Second Period and partly during the Third Period as
above indicated. In other words, the salary differentials accruing from 20 July
1986 up to 27 July 1987 should be borne on a 50-50 basis by AWU on the one
hand and Metro/Marina on the other. The salary differentials accruing from 28
July 1987 up to 18 September 1989 shall be borne exclusively by Marina.
7. The portion of the Writ of Execution issued by the Executive Labor Arbiter
which requires Marina to recognize the legality of the organization and
registration of AWUM (now MWU) as a local chapter of AWU, is inconsistent with
the conclusions we have set forth in Part I above, and must be deleted. What
was in fact eventually established by individual respondents was a separate,
independent union called Metro Port Workers Union (MWU) which was not
entitled, during the time periods here relevant, to recognition as the bargaining
unit in CBA negotiations.
No pronouncement as to costs.
SO ORDERED.
3. ID.; ID.; ID.; SECTION 23(b), R.A. 875 DID NOT DELEGATE JUDICIAL
POWER TO AN ADMINISTRATIVE AGENCY. — The determination of the
question whether the requirements of paragraph (b) have been met, or whether
or not the requisite financial report or non-subversive affidavits have been filed
within the period required by the Act, is not judicial power. Indeed, all officers of
the government, including those in the executive department, are supposed to
act on the basis of facts, as they see the same. This is specially true as regards
administrative agencies given by law the power to investigate and render
decisions concerning details related to the execution of laws the enforcement of
which is entrusted thereto.
6. ID.; ID.; ID.; SECTION 23 (c) OF R.A. 875 REFERS TO PROCEEDINGS FOR
REGISTRATION. — The 30-day period invoked by the petitioners is inapplicable
to the decision complained of. Said period is prescribed in paragraph (c) of
Section 23, which refers to the proceedings for the "registration" of labor
organizations, associations or unions, not to the "cancellation" of said
registration, which is governed by paragraph (d) of the same Section.
9. ID.; ID.; ID.; SECTION 23 DOES NOT IMPINGE UPON THE RIGHT OF
ORGANIZATION GUARANTEED IN THE UNIVERSAL DECLARATION OF
HUMAN RIGHTS. — Section 23 does not impinge upon the right of organization
guaranteed in the Declaration of Human Rights, or run counter to Articles 2, 4, 7
and Section 2 of Article 8 of the ILO-Convention No. 87, which provide that
"workers and employers, .. shall have the right to establish and .. join
organizations of their own choosing, without previous authorization" ; that
"workers and employers organizations shall not be liable to be dissolved or
suspended by administrative authority" ; that "the acquisition of legal personality
by workers’ and employers’ organizations, .. shall not be made subject to
conditions of such a character as to restrict the application of the provisions"
above mentioned; and that "the guarantees provided for in" said Convention shall
not be impaired by the law of the land.
10. ID.; ID.; ID.; R.A. NO. 875 IS NOT INCOMPATIBLE WITH THE UNIVERSAL
DECLARATION OF HUMAN RIGHTS. — We have held that there is no
incompatibility between Republic Act No. 875 and the Universal Declaration of
Human Rights. Upon the other hand, the cancellation of the SSSEA’s registration
certificate would not entail a dissolution of said association or its suspension. The
existence of the SSSEA would not be affected by said cancellation, although its
juridical personality and its statutory rights and privileges — as distinguished
from those conferred by the Constitution — would be suspended thereby.
DECISION
CONCEPCION, J.:
Petitioners pray for writs of certiorari and prohibition to restrain respondents, the
Secretary of Labor, the Director of Labor Relations and the Registrar of Labor
Organizations, from enforcing an order of cancellation of the registration
certificate of the Social Security System Employees Association — hereinafter
referred to as the SSSEA — which is affiliated to the Philippine Association of
Free Labor Unions — hereinafter referred to as PAFLU — as well as to annul all
proceedings in connection with said cancellation and to prohibit respondents
from enforcing Section 23 of Republic Act No. 875. Petitioners, likewise, pray for
a writ of preliminary injunction pending the final determination of this case. In
their answer, respondents traversed some allegations of fact and the legal
conclusions made in the petition. No writ of preliminary injunction pendente lite
has been issued.chanroblesvirtuallawlibrary
"1. Failure to furnish the Bureau of Labor Relations with copies of the reports on
the finances of that union duly verified by affidavits which its treasurer or
treasurers rendered to said union and its members covering the periods from
September 24, 1960 to September 23, 1961 and September 24, 1961 to
September 23, 1962, inclusive, within sixty days of the 2 respective latter dates,
which are the end of its fiscal year; and
"2. Failure to submit to this office the names, postal addresses and non-
subversive affidavits of the officers of that union within sixty days of their election
in October (1st Sunday), 1961 and 1963, in conformity with Article IV(1) of its
constitution and by-laws."cralaw virtua1aw library
in violation of Section 23 of Republic Act No. 875. Counsel for the SSSEA moved
to postpone the hearing to October 21, 1963, and to submit then a memorandum,
as well as the documents specified in the notice. The motion was granted, but
nobody appeared for the SSSEA on the date mentioned. The next day, October
22, 1963, Manuel Villagracia, Assistant Secretary of SSSEA, filed, with the Office
of the Registrar, a letter dated October 21, 1963, enclosing the
following:chanrob1es virtual 1aw library
2. List of newly elected officers of the Association in its general elections held on
April 29, 1963; and
Holding
"1. That the joint non-subversive affidavit and the list of officers mentioned in the
letter of Mr. Manuel Villagracia were not the documents referred to in the notice
of hearing and made the subject matter of the present proceeding; and
"2. That there is no iota of evidence on records to show and/or warrant the
dismissal of the present proceeding."cralaw virtua1aw library
on October 23, 1963, the Registrar rendered a decision cancelling the SSSEA’s
Registration Certificate No. 1-IP-169, issued on September 30, 1960. Soon later,
or on October 28, 1963, Alfredo Fajardo, president of the SSSEA moved for a
reconsideration of said decision and prayed for time, up to November 15, within
which to submit the requisite papers and data. An opposition thereto having been
filed by one Paulino Escueta, a member of the SSSEA, upon the ground that the
latter had never submitted any financial statement to its members, said motion
was heard on November 27, 1963. Subsequently, or on December 4, 1963, the
Registrar issued an order declaring that the SSSEA had "failed to submit the
following requirements to wit:jgc:chanrobles.com.ph
"1. Non subversive affidavits of Messrs. Teodoro Sison, Alfonso Atienza, Rodolfo
Zalameda, Raymundo Sabino and Napoleon Pefianco who were elected along
with others on January 30, 1962.
"2. Names, postal addresses and non-subversive affidavits of all the officers who
were supposedly elected on October (1st Sunday), of its constitution and by-
laws."cralaw virtua1aw library
and granting the SSSEA 15 days from notice to comply with said requirements,
as well as meanwhile holding in abeyance the resolution of its motion for
reconsideration.chanroblesvirtual|awlibrary
Pending such resolution, or on December 16, the PAFLU, the SSSEA, Alfredo
Fajardo "and all the officers and members" of the SSSEA commenced the
present action, for the purpose stated at the beginning of this decision, upon the
ground that Section 23 of Republic Act No. 875 violates their freedom of
assembly and association, and is inconsistent with the Universal Declaration of
Human Rights; that it unduly delegates judicial power to an administrative
agency; that said Section 23 should be deemed repealed by ILO-Convention No.
87; that respondents have acted without or in excess of jurisdiction and with
grave abuse of discretion in promulgating, on November 19, 1963, its decision
dated October 22, 1963, beyond the 30-day period provided in Section 23(c) of
Republic Act No. 875; that "there is no appeal on any other plain, speedy and
adequate remedy in the ordinary course of law" ; that the decision complained of
had not been approved by the Secretary of Labor; and that the cancellation of the
SSSEA’s certificate of registration would cause irreparable injury.
The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails
the freedom of assembly and association guaranteed in the Bill of Rights is
devoid of factual basis. The registration prescribed in paragraph (b) of said
Section 1 is not a limitation to the right of assembly or association, which may be
exercised with or without said registration. 2 The latter is merely a condition sine
qua non for the acquisition of legal personality by labor organizations,
associations or unions and the possession of the "rights and privileges granted
by law to legitimate labor organizations." The Constitution does not guarantee
these rights and privileges, much less said personality, which are mere statutory
creations, for the possession and exercise of which registration is required to
protect both labor and the public against abuses, fraud, or impostors who pose
as organizers, although not truly accredited agents of the union they purport to
represent. Such requirement is a valid exercise of the police power, because the
activities in which labor organizations, associations and union of workers are
engaged affect public interest, which should be protected. 3 Furthermore, the
obligation to submit financial statements, as a condition for the non-cancellation
of a certificate of registration, is a reasonable regulation for the benefit of the
members of the organization, considering that the same generally solicits funds
or membership, as well as oftentimes collects, on behalf of its members, huge
amounts of money due to them or to the organization. 4
For the same reasons, said Section 23 does not impinge upon the right of
organization guaranteed in the Declaration of Human Rights, or run counter to
Articles 2, 4, 7 and Section 2 of Article 8 of the ILO-Convention No. 87, which
provide that "workers and employers,. shall have the right to establish and join
organizations of their own choosing, without previous authorization" ; that
"workers and employers . . . organizations shall not be liable to be dissolved or
suspended by administrative authority" ; that "the acquisition of legal personality
by workers’ and employers’ organizations, . . . shall not be made subject to
conditions of such a character as to restrict the application of the provisions"
above mentioned; and that "the guarantees provided for in" said Convention shall
not be impaired by the law of the land.
"(2) A sworn statement of all the officers of the said organization, association or
union to the effect that they are not members of the Communist Party and that
they are not members of any organization which teaches the overthrow of the
Government by force or by any illegal or unconstitutional method; and
"(3) If the applicant organization has been in existence for one or more years, a
copy of its last annual financial report."cralaw virtua1aw library
"The objections of the appellees to the constitutionality of Republic Act No. 2056,
not only as an undue delegation of judicial power to the Secretary of Public
Works but also for being unreasonable and arbitrary, are not tenable. It will be
noted that the Act (R.A. 2056) merely empowers the Secretary to remove
unauthorized obstructions or encroachments upon public streams, constructions
that no private person was anyway entitled to make, because the bed of
navigable streams is public property, and ownership thereof is not acquirable by
adverse possession (Palanca v. Commonwealth, 69 Phil. 449).
"It is true that the exercise of the Secretary’s power under the Act necessarily
involves the determination of some questions of fact, such as the existence of the
stream and its previous navigable character; but these functions, whether judicial
or quasi-judicial, are merely incidental to the exercise of the power granted by
law to clear navigable streams of unauthorized obstructions or encroachments,
and authorities are clear that they are validly conferable upon executive officials
provided the party affected is given opportunity to be heard, as is expressly
required by Republic Act No. 2056, Section 2." 7
It should be noted, also, that, admittedly, the SSSEA had not filed the non-
subversive affidavits of some of its officers — "Messrs. Sison, Tolentino, Atienza,
Zalameda, Sabino and Pefianca" — although said organization avers that these
persons "were either resigned or out on leave as directors or officers of the
union," without specifying who had resigned and who were on leave. This
averment is, moreover, controverted by respondents herein.
Then, again, there is no law requiring the approval, by the Secretary of Labor, of
the decision of the Registrar decreeing the cancellation of a registration
certificate. In fact, the language of paragraph (d) of Section 23 suggests that,
once the conditions therein specified are present, the office concerned "shall"
have no choice but to issue the order of cancellation. Moreover, in the case at
bar, there is nothing, as yet, for the Secretary of Labor to approve or disapprove,
since petitioners’ motion for reconsideration of the Registrar’s decision of
October 23, 1963, is still pending resolution. In fact, this circumstance shows, not
only that the present action is premature 11 , but, also, that petitioners have
failed to exhaust the administrative remedies available to them. 12 Indeed, they
could ask the Secretary of Labor to disapprove the Registrar’s decision or object
to its execution or enforcement, in the absence of approval of the former, if the
same were necessary, on which we need not and do not express any opinion.
pred
DECISION
This special civil action for certiorari and mandamus assails the action of the then
Acting Secretary of Labor and Employment Cresenciano. B. Trajano contained in
its letter dated 19 September 1997,[1]informing petitioner Abbott Laboratories
Philippines, Inc. (hereafter ABBOTT), thru its counsel that the Office of the
Secretary of Labor cannot act on ABBOTT's appeal from the decision of 31
March 1997[2] and the Order of 9 July 1997[3] of the Bureau of Labor Relations,
for lack of appellate jurisdiction.
It gave the following reasons to justify the reversal: ( 1) Article 234 of the Labor
Code does not require an applicant union to show proof of the "desirability of
more than one Ibargaining unit within an employer unit," and the absence of such
proof is not a ground for the cancellation of a union's registration pursuant to
Article 239 of Book V, Rule II of the implementing rules of the Labor Code; (2) the
issue pertaining to the appropriateness of a bargaining unit cannot be raised in a
cancellation proceeding but may be threshed out in the exclusion-inclusion
process during a certification election; and (3) the "one-bargaining unit, one-
employer unit policy" must not be interpreted in a manner that shall derogate the
right of the employees to self-organization and freedom of association as
guaranteed by Article III, Section 8 of the 1987 Constitution and Article II of the
International Labor Organization's Convention No.87. Jj sc
Its motion to reconsider the 31 March 1997 decision of the Bureau of Labor
Relations having been denied for lack of merit in the Order[13] of 9 July 1997,
ABBOTT appealed to the Secretary of Labor and Employment. However, in its
letter dated 19 September 1997,[14] addressed to ABBOTT's counsel, the
Secretary of Labor and Employment refused to act on ABBOTT's appeal on the
ground that it has no jurisdiction to review the decision of the Bureau of Labor
Relations on iappeals in cancellation cases emanating from the Regional Offices.
The decision of the Bureau of Labor Relations therein is final and executory
under Section 4, Rule III, Book V of the Rules and Regulations Implementing thc
Labor Code, as amended by Department Order No. 09, s. of 1997. Finally, the
Secretary stated:
At the outset, it is wortl1y to note that the present petition assails only the letter of
the then Secretary of Labor & Employment refusing to take cognizance of
ABBOTT's appeal for lack of appellate jurisdiction. Hence, in the resolution of the
present petition, it is just appropriate to limit the issue on the power of the
Secretary of Labor and Employment to review the decisions of the Bureau of
Labor Relations rendered in the exercise of its appellate jurisdiction over
decisions of the Regional Director in cases involving cancellations of certificates
of registration of labor unions. The issue anent the validity of ALEU's certificate of
registration is subject of the Bureau of Labor Relations decision dated 31 March
1997. However, said decision is not being assailed in the present petition; hence,
we are not at liberty to review the same. Sc jj
The Bureau or the Secretary shall have fifteen ( 15) days from
receipt of the records of the case within which to decide the appeal.
The decision of the Bureau or the Secretary shall be final and
executory. Sj cj
It is clear then that the Secretary of Labor and Employment did not commit grave
abuse of discretion in not acting on ABBOTT's appeal. The decisions 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
of the Rules of Court.[19]
Even if we relaxed the rule and consider the present petition as a petition
for certiorari not only of the letter of the Secretary of Labor and Employment but
also of the decision of the Bureau of the Labor Relations which overruled the
order of cancellation of ALEU's certificate of registration, the same would still be
dismissable for being time-barred. Under Sec. 4 of Rule 65 of the 1997 Revised
Rules of Court the special civil action for certiorari should be instituted within a
period of sixty (60) days from notice of the judgment, order or resolution sought
to be assailed. ABBOTT received the decision of the Bureau of Labor Relations
on 14 April 1997 and the order denying its motion for reconsideration of the said
decision on 16 July 1997. The present petition was only filed on 28 November
1997, after the laps of more than four months. Thus, for failure to avail of the
correct remd4y within the period provided by law, the decision of the Bureau of
Labor Relations has become final and executory.
SO ORDERED.
SYLLABUS
8. ID.; ID.; ID.; RELATIONSHIP WITH THE MOTHER UNION; LOCAL UNION
MUST FIRST COMPLY WITH STATUTORY REQUIREMENTS BEFORE BEING
CERTIFIED AS BARGAINING AGENT. — It is important to clarify the
relationship between the mother union and the local union. In the case of Liberty
Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975]),
the Court held that the mother union, acting for and in behalf of its affiliate, had
the status of an agent while the local union remained the basic unit of the
association, free to serve the common interest of all its members subject only to
the restraints imposed by the constitution and by-laws of the association. Thus,
where as in this case the petition for certification election was filed by the
federation which is merely an agent; the petition is deemed to be filed by the
chapter, the principal, which must be a legitimate labor organization. The chapter
cannot merely rely on the legitimate status of the mother union. The Court’s
conclusion should not be misconstrued as impairing the local union’s right to be
certified as the employees’ bargaining agent in the petitioner’s establishment. We
are merely saying that the local union must first comply with the statutory
requirements in order to exercise this right. Big federations and national unions of
workers should take the lead in requiring their locals and chapters to faithfully
comply with the law and the rules instead of merely snapping union after union
into their folds in a furious bid with rival federations to get the most number of
members.
DECISION
2) Order dated October 12, 1990, issued by the respondent Secretary of Labor
and Employment, denying PDC’s appeal; and
3) Order dated November 12, 1990, also issued by the respondent Secretary,
denying the petitioner’s Motion for Reconsideration.
Petitioner PDC filed its motion to dismiss dated July 11, 1990 contending that the
local union failed to comply with Rule II, Section 3, Book V of the Rules
Implementing the Labor Code, as amended, which requires the submission of:
(a) the constitution and by-laws; (b) names, addresses and list of officers and/or
members; and (c) books of accounts.
In his September 5, 1990 resolution, Med-Arbiter dela Cruz held that there was
substantial compliance with the requirements for the formation of a chapter. He
further stated that mere issuance of the charter certificate by the federation was
sufficient compliance with the rules. Considering that the establishment is
unorganized, he maintained that a certification election should be conducted to
resolve the question of representation.
Treating the motion for reconsideration filed by PDC as an appeal to the Office of
the Secretary, Undersecretary Laguesma held that the same was merely a
"reiteration of the issues already ventilated in the proceedings before the Med-
Arbiter, specifically, the matter involving the formal organization of the chapter."
(Rollo, p. 20) PDC’s motion for reconsideration from the aforementioned ruling
was likewise denied. Hence, this petition.
In an order dated February 25, 1991, the Court resolved to issue a temporary
restraining order enjoining the public respondents from carrying out the assailed
resolution and orders or from proceeding with the certification election. (Rollo, pp.
37-39)
The Solicitor General, in behalf of the public respondents, avers that there was
substantial compliance with the requirements for the formation of a chapter.
Moreover, he invokes Article 257 of the Labor Code which mandates the
automatic conduct by the Med-Arbiter of a certification election in any
establishment where there is no certified bargaining agent.
The Court has repeatedly stressed that the holding of a certification election is
based on a statutory policy that cannot be circumvented (Airtime Specialists, Inc.
v. Ferrer-Calleja, 180 SCRA 749 [1989], Belyca Corporation v. Ferrer-Calleja,
168 SCRA 184 [1988]; George and Peter Lines, Inc. v. Associated Labor Unions,
134 SCRA 82 [1986]). The workers must be allowed to freely express their
choice in a determination where everything is open to their sound judgment and
the possibility of fraud and misrepresentation is eliminated.
But while Article 257 cited by the Solicitor General directs the automatic conduct
of a certification election in an unorganized establishment, it also requires that
the petition for certification election must be filed by a legitimate labor
organization. Article 242 enumerates the exclusive rights of a legitimate labor
organization among which is the right to be certified as the exclusive
representative of all the employees in an appropriate collective bargaining unit for
purposes of collective bargaining.
The question that now arises is: when does a branch, local or affiliate of a
federation become a legitimate labor organization?
Ordinarily, a labor organization acquires legitimacy only upon registration with the
BLR. Under Article 234 (Requirements of Registration):chanrob1es virtual 1aw
library
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the
workers who participated in such meetings;
(c) The names of all its members comprising at least twenty 20% percent of all
the employees in the bargaining unit where it seeks to operate;
(d) If the applicant 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, the minutes
of its adoption or ratification and the list of the members who participated in
it."cralaw virtua1aw library
"The Bureau shall act on all applications for registration within thirty (30) days
from filing.
All requisite documents and papers shall be certified under oath by the secretary
or the treasurer of the organization, as the case may be, and attested to by its
president."cralaw virtua1aw library
Moreover, section 4 of Rule II, Book V of the Implementing Rules requires that
the application should be signed by at least twenty percent (20%) of the
employees in the appropriate bargaining unit and be accompanied by a sworn
statement of the applicant union that there is no certified bargaining agent or,
where there is an existing collective agreement duly submitted to the DOLE, that
the application is filed during the last sixty (60) days of the agreement.
"The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails
the freedom of assembly and association guaranteed in the Bill of Rights is
devoid of factual basis. The registration prescribed in paragraph (b) of said
section is not a limitation to the right of assembly or association, which may be
exercised with or without said registration. The latter is merely a condition sine
qua non for the acquisition of legal personality by labor organizations,
associations or unions and the possession of the "rights and privileges granted
by law to legitimate labor organizations." The Constitution does not guarantee
these rights and privileges, much less said personality, which are mere statutory
creations, for the possession and exercise of which registration is required to
protect both labor and the public against abuses, fraud, or impostors who pose
as organizers, although not truly accredited agents of the union the purport to
represent. Such requirement is a valid exercise of the police power, because the
activities in which labor organizations, associations and unions of workers are
engaged affect public interest, which should be protected. Furthermore, the
obligation to submit financial statements, as a condition for the non-cancellation
of a certificate of registration, is a reasonable regulation for the benefit of the
members of the organization, considering that the same generally solicits funds
or membership, as well as oftentimes collects, on behalf of its members, huge
amounts of money due to them or to the organization." (Emphasis supplied)
x x x
e) The local or chapter of a labor federation or national union shall have and
maintain a constitution and by laws, set of officers and books of accounts. For
reporting purposes, the procedure governing the reporting of independently
registered unions, federations or national unions shall be observed."cralaw
virtua1aw library
Paragraph (a) refers to a local or chapter of a federation which did not undergo
the rudiments of registration while paragraph (b) refers to an independently
registered union which affiliated with a federation. Implicit in the foregoing
differentiation is the fact that a local or chapter need not be independently
registered. By force of law (in this case, Article 212[h]), such local or chapter
becomes a legitimate labor organization upon compliance with the
aforementioned provisions of Section 3.
Thus, several requirements that are otherwise required for union registration are
omitted, to wit:chanrob1es virtual 1aw library
1) The requirement that the application for registration must be signed by at least
20% of the employees in the appropriate bargaining unit;
Undoubtedly, the intent of the law in imposing lesser requirements in the case of
a branch or local of a registered federation or national union is to encourage the
affiliation of a local union with a federation or national union in order to increase
the local union’s bargaining powers respecting terms and conditions of labor.
In the case at bar, the constitution and by-laws and list of officers submitted to
the BLR, while attested to by the chapter’s president, were not certified under
oath by the secretary. Does such defect warrant the withholding of the status of
legitimacy to the local or chapter?
In the case of union registration, the rationale for requiring that the submitted
documents and papers be certified under oath by the secretary or treasurer, as
the case may be, and attested to by the president is apparent. The submission of
the required documents (and payment of P50.00 registration fee) becomes the
Bureau’s basis for approval of the application for registration. Upon approval, the
labor union acquires legal personality and is entitled to all the rights and
privileges granted by the law to a legitimate labor organization. The employer
naturally needs assurance that the union it is dealing with is a bona-fide
organization, one which has not submitted false statements or
misrepresentations to the Bureau. The inclusion of the certification and
attestation requirements will in a marked degree allay these apprehensions of
management. Not only is the issuance of any false statement and
misrepresentation a ground for cancellation of registration (see Article 239 (a), (c)
and (d)); it is also a ground for a criminal charge of perjury.
"(c) The local or chapter of a labor federation or national union shall have and
maintain a constitution and by-laws, set of officers and books of accounts. For
reporting purposes, the procedure governing the reporting of independently
registered unions, federations or national unions shall be observed." (Emphasis
supplied)
1) A charter certificate, within 30 days from its issuance by the labor federation or
national union, and
2) The constitution and by-laws, a statement on the set of officers, and the books
of accounts all of which are certified under oath by the secretary or treasurer, as
the case may be, of such local or chapter, and attested to by its president.
Absent compliance with these mandatory requirements, the local or chapter does
not become a legitimate labor organization.
In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the
required documents under oath is fatal to its acquisition of a legitimate status.
We observe that, as borne out by the facts in this case, the formation of a local or
chapter becomes a handy tool for the circumvention of union registration
requirements. Absent the institution of safeguards, it becomes a convenient
device for a small group of employees to foist a not-so-desirable federation or
union on unsuspecting co-workers and pare the need for wholehearted
voluntariness which is basic to free unionism. The records show that on June 16,
1990, Kilusan met with several employees of the petitioner. Excerpts of the
"Minutes of the Organizational/General Membership Meeting of Progressive
Development Employees Union (PDEU)-Kilusan", are quoted
below:jgc:chanrobles.com.ph
"The meeting was formally called to order by Bro. Jose V. Parungao, KILUSAN
secretary for organization by explaining to the general membership the
importance of joining a union. He explained to the membership why they should
join a union, and briefly explained the ideology of the Pambansang Kilusan ng
Paggawa-TUCP as a democratically based organization and then read the
proposed Constitution and By-Laws, after which said Constitution and By-Laws
was duly and unanimously ratified after some clarification.
Bro. Jose Parungao was also unanimously voted by the group to act as the
chairman of the COMELEC in holding the organizational election of officers of the
Union.
Bro. Parungao, officially opened the table for the nomination of candidates after
which the election of officers followed by secret balloting and the following were
the duly elected officers." (Original Record, p. 25)
The foregoing shows that Kilusan took the initiative and encouraged the
formation of 2 union which automatically became its chapter. On June 18, 1990,
Kilusan issued a charter certificate in favor of PDEU-KILUSAN (Records, page
1). It can be seen that Kilusan was moving very fast.
On June 19, 1990, or just three days after the organizational meeting, Kilusan
filed a petition for certification election (Records, pages 2 and 3) accompanied by
a copy each of the charter certificate, constitution and by-laws and minutes of the
organizational meeting. Had the local union filed an application for registration,
the petition for certification election could not have been immediately filed. The
applicant union must first comply with the "20% signature" requirement and all
the other requisites enumerated in Article 234. Moreover, since under Article 235
the BLR shall act on any application for registration within thirty (30) days from its
filing, the likelihood is remote that, assuming the union complied with all the
requirements, the application would be approved on the same day it was filed.
We are not saying that the scheme used by the respondents is per se illegal for
precisely, the law allows such strategy. It is not this Court’s function to augment
the requirements prescribed by law in order to make them wiser or to allow
greater protection to the workers and even their employer. Our only recourse is,
as earlier discussed, to exact strict compliance with what the law provides as
requisites for local or chapter formation.
It may likewise be argued that it was Kilusan (the mother union) and not the local
union which filed the petition for certification election and, being a legitimate labor
organization, Kilusan has the personality to file such petition.
The Court’s conclusion should not be misconstrued as impairing the local union’s
right to be certified as the employees’ bargaining agent in the petitioner’s
establishment. We are merely saying that the local union must first comply with
the statutory requirements in order to exercise this right. Big federations and
national unions of workers should take the lead in requiring their locals and
chapters to faithfully comply with the law and the rules instead of merely
snapping union after union into their folds in a furious bid with rival federations to
get the most number of members.
DECISION
KAPUNAN, J.:
On November 26, 1992, the Toyota Motor Philippines Corporation Labor Union
(TMPCLU) filed a petition for certification election with the Department of Labor,
National Capital Region, for all rank-and-file employees of the Toyota Motor
Corporation.[1]
In response, petitioner filed a Position Paper on February 23, 1993 seeking the
denial of the issuance of an Order directing the holding of a certification election
on two grounds: first, that the respondent union, being "in the process of
registration" had no legal personality to file the same as it was not a legitimate
labor organization as of the date of the filing of the petition; and second, that the
union was composed of both rank-and-file and supervisory employees in violation
of law.[2] Attached to the position paper was a list of union members and their
respective job classifications, indicating that many of the signatories to the petition
for certification election occupied supervisory positions and were not in fact rank-
and-file employees.[3]
The Med-Arbiter, Paterno D. Adap, dismissed respondent union's petition for
certification election for lack of merit. In his March 8, 1993 Order, the Med-Arbiter
found that the labor organization's membership was composed of supervisory and
rank-and-file employees in violation of Article 245 of the Labor Code,[4] and that at
the time of the filing of its petition, respondent union had not even acquired legal
personality yet.[5]
On appeal, the Office of the Secretary of Labor, in a Resolution[6] dated
November 9, 1993 signed by Undersecretary Bienvenido E. Laguesma, set aside
the Med-Arbiter's Order of March 3, 1993, and directed the holding of a certification
election among the regular rank-and-file employees of Toyota Motor Corporation.
In setting aside the questioned Order, the Office of the Secretary contended that:
Contrary to the allegation of herein respondent-appellee, petitioner-appellant was
already a legitimate labor organization at the time of the filing of the petition on
26 November 1992. Records show that on 24 November 1992 or two (2) days
before the filing of the said petition, it was issued a certificate of registration.
We also agree with petitioner-appellant that the Med-Arbiter should have not
dismissed the petition for certification election based on the ground that the
proposed bargaining unit is a mixture of supervisory and rank-and-file
employees, hence, violative of Article 245 of the Labor Code as amended.
Not satisfied with the decision of the Office of the Secretary of Labor, petitioner
filed a Motion for Reconsideration of the Resolution of March 3, 1993, reiterating
its claim that as of the date of filing of petition for certification election, respondent
TMPCLU had not yet acquired the status of a legitimate labor organization as
required by the Labor Code, and that the proposed bargaining unit was
inappropriate.
Acting on petitioner's motion for reconsideration, the public respondent, on July
13, 1994 set aside its earlier resolution and remanded the case to the Med-Arbiter
concluding that the issues raised by petitioner both on appeal and in its motion for
reconsideration were factual issues requiring further hearing and production of
evidence.[8] The Order stated:
The foregoing issues are factual ones, the resolution of which is crucial to the
petition. For if indeed it is true that at the time of filing of the petition, the said
registration certificate has not been approved yet, then, petitioner lacks the legal
personality to file the petition and the dismissal order is proper. Sadly, we can not
resolve the said questions by merely perusing the records. Further hearing and
introduction of evidence are required. Thus, there is a need to remand the case
to the Med-Arbiter solely for the purpose.
WHEREFORE, the motion is hereby granted and our Resolution is hereby set
aside. Let the case be remanded to the Med-Arbiter for the purpose aforestated.
SO ORDERED.[9]
[T]he controvertible fact is that petitioner could not have been issued its
Certificate of Registration on November 24, 1992 when it applied for registration
only on November 23, 1992 as shown by the official receipt of payment of filing
fee. As Enrique Nalus, Chief LEO, this office, would attest in his letter dated
September 8, 1994 addressed to Mr. Porfirio T. Reyes, Industrial Relations
Officer of Respondent company, in response to a query posed by the latter, "It is
unlikely that an application for registration is approved on the date that it is filed
or the day thereafter as the processing course has to pass thought routing,
screening, and assignment, evaluation, review and initialing, and
approval/disapproval procedure, among others, so that a 30-day period is
provided for under the Labor Code for this purpose, let alone opposition thereto
by interested parties which must be also given due course."
LEVEL 4 (JUNIOR GROUP CHIEF II) He is responsible for all operators and
assigned stations, prepares production reports related to daily production output.
He oversees smooth flow of production, quality of production, availability of
manpower, parts and equipments. He also coordinates with other sections in the
Production Department.
DECISION
PANGANIBAN, J.:
There is a right way to do the right thing at the right time for the right reasons, [1] and
in the present case, in the right forum by the right parties. While grievances against
union leaders constitute legitimate complaints deserving appropriate redress, action
thereon should be made in the proper forum at the proper time and after observance of
proper procedures. Similarly, the election of union officers should be conducted in
accordance with the provisions of the unions constitution and bylaws, as well as the
Philippine Constitution and the Labor Code. Specifically, while all legitimate faculty
members of the University of Santo Tomas (UST) belonging to a collective bargaining
unit may take part in a duly convened certification election, only bona fide members of
the UST Faculty Union (USTFU) may participate and vote in a legally called election
for union officers. Mob hysteria, however well-intentioned, is not a substitute for the
rule of law.
The Case
The Petition for Certiorari before us assails the August 15, 1997 Resolution[2] of
Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in
BLR Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of Med-
Arbiter Tomas F. Falconitin. The med-arbiters Decision disposed as follows:
Accordingly, respondents Gil Gamilla, et al are hereby ordered to cease and desist
from acting and performing the duties and functions of the legitimate officers of [the]
University of Santo Tomas Faculty Union (USTFU) pursuant to [the] unions
constitution and by-laws (CBL).
The Temporary Restraining Order (TRO ) issued by this Office on December 11,
1996 in connection with the instant petition, is hereby made and declared permanent.[3]
Likewise challenged is the October 30, 1997 Resolution[4]of Director Bitonio, which
denied petitioners Motion for Reconsideration.
The Facts
The factual antecedents of the case are summarized in the assailed Resolution as
follows:
Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are duly
elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-
year Collective Bargaining Agreement with its employer, the University of Santo
Tomas (UST). The CBA was registered with the Industrial Relations Division,
DOLE-NCR, on 20 February 1995. It is set to expire on 31 May 1998.
On 01 October 1996, some of herein appellants filed a separate petition with the Med-
Arbiter, DOLE-NCR, directed against herein appellees and the members of the
COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the petition alleged that
the COMELEC was not constituted in accordance with USTFUs constitution and by-
laws (CBL) and that no rules had been issued to govern the conduct of the 05 October
1996 election.
On 02 October 1996, the secretary general of UST, upon the request of the various
UST faculty club presidents (See paragraph VI, Respondents Comment and Motion to
Dismiss), issued notices allowing all faculty members to hold a convocation on 04
October 1996 (See Annex C Petition; Annexes 4 to 10, Appeal). Denominated as [a]
general faculty assembly, the convocation was supposed to discuss the state of the
unratified UST-USTFU CBA and status and election of USTFU officers (Annex 11,
Appeal)
Also on 04 October 1996, and as earlier announced by the UST secretary general, the
general faculty assembly was held as scheduled. The general assembly was attended
by members of the USTFU and, as admitted by the appellants, also by 'non-USTFU
members [who] are members in good standing of the UST Academic Community
Collective Bargaining Unit' (See paragraph XI, Respondents Comment and Motion to
Dismiss). On this occasion, appellants were elected as USTFUs new set of officers by
acclamation and clapping of hands (See paragraphs 40 to 50, Annex '12', Appeal).
The election of the appellants came about upon a motion of one Atty. Lopez,
admittedly not a member of USTFU, that the USTFU CBL and 'the rules of the
election be suspended and that the election be held [on] that day' (See --paragraph 39,
Idem.)
On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and
the nullification of the results of the 04 October 1996 election. Appellees alleged that
the holding of the same violated the temporary restraining order issued in Case No.
NCR-OD-M-9610-001. Accusing appellants of usurpation, appellees characterized the
election as spurious for being violative of USTFUs CBL, specifically because the
general assembly resulting in the election of appellants was not called by the Board of
Officers of the USTFU; there was no compliance with the ten-day notice rule required
by Section 1, Article VIII of the CBL; the supposed elections were conducted without
a COMELEC being constituted by the Board of Officers in accordance with Section 1,
Article IX of the CBL; the elections were not by secret balloting as required by
Section 1, Article V and Section 6, Article IX of the CBL, and, the general assembly
was convened by faculty members some of whom were not members of USTFU, so
much so that non-USTFU members were allowed to vote in violation of Section 1,
Article V of the CBL.
On 24 October 1996, appellees filed another urgent ex-parte motion for a temporary
restraining order, this time alleging that appellants had served the former a notice to
vacate the union office. For their part, appellants moved to dismiss the original
petition and the subsequent motion on jurisdictional grounds. Both the petition and the
motion were captioned to be for Prohibition, Injunction with Prayer for Preliminary
Injunction and Temporary Restraining Order. According to the appellants, the med-
arbiter has no jurisdiction over petitions for prohibition, 'including the ancillary
remedies of restraining order and/or preliminary injunction, which are merely
incidental to the main petition for PROHIBITION' (Paragraph XVIII3, Respondents
Comment and Motion to Dismiss). Appellants also averred that they now constituted
the new set of union officers having been elected in accordance with law after the
term of office of appellees had expired. They further maintained that appellees
scheduling of the 5 October 1996 elections was illegal because no rules and
regulations governing the elections were promulgated as required by USTFUs CBL
and that one of the members of the COMELEC was not a registered member of
USTFU. Appellants likewise noted that the elections called by the appellees should
have been postponed to allow the promulgation of rules and regulations and to 'insure
a free, clean, honest and orderly elections and to afford at the same time the greater
majority of the general membership to participate' (See paragraph V, Idem). Finally,
appellants contended that the holding of the general faculty assembly on 04 October
1996 was under the control of the Council of College/Faculty Club Presidents in
cooperation with the USTFU Reformist Alliance and that they received the
Temporary Restraining Order issued in Case No. NCR-OD-M-9610-001 only on 07
October 1996 and were not aware of the same on 04 October 1996.
On 03 December 1996, appellants and UST allegedly entered into another CBA
covering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants
Rejoinder to the Reply and Opposition).
Consequently, appellees again moved for the issuance of a temporary restraining order
to prevent appellants from making further representations that [they] had entered into
a new agreement with UST.Appellees also reiterated their earlier stand that appellants
were usurping the formers duties and functions and should be stopped from
continuing such acts.
On 11 December 1996, over appellants insistence that the issue of jurisdiction should
first be resolved, the med-arbiter issued a temporary restraining order directing the
respondents to cease and desist from performing any and all acts pertaining to the
duties and functions of the officers and directors of USTFU.
In the meantime, appellants claimed that the new CBA was purportedly ratified by an
overwhelming majority of USTs academic community on 12 December 1996
(Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what it
denominated as appellees petition for prohibition on the ground that this had become
moot and academic.[5]
Agreeing with the med-arbiter that the USTFU officers purported election held on
October 4, 1994 was void for having been conducted in violation of the unions
Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners
contention that it was a legitimate exercise of their right to self-organization. He ruled
that the CBL, which constituted the covenant between the union and its members, could
not be suspended during the October 4, 1996 general assembly of all faculty members,
since that assembly had not been convened or authorized by the USTFU.
Director Bitonio likewise held that the October 4, 1996 election could not be
legitimized by the recognition of the newly elected set of officers by UST or by the
alleged ratification of the new CBA by the general membership of the USTFU. Ruled
Respondent Bitonio:
The Issues
The main issue in this case is whether the public respondent committed grave abuse
of discretion in refusing to recognize the officers elected during the October 4, 1996
general assembly. Specifically, petitioners in their Memorandum urge the Court to
resolve the following questions:[10]
(1) Whether the Collective Bargaining Unit of all the faculty members in that General
Faculty Assembly had the right in that General Faculty Assembly to suspend the
provisions of the Constitution and By-Laws of the USTFU regarding the elections of
officers of the union[.]
(2) Whether the suspension of the provisions of the Constitution and By-Laws of the
USTFU in that General Faculty Assembly is valid pursuant to the constitutional right
of the Collective Bargaining Unit to engage in peaceful concerted activities for the
purpose of ousting the corrupt regime of the private respondents[.]
The petition is not meritorious. Petitioners fail to convince this Court that Director
Bitonio gravely abused his discretion in affirming the med-arbiter and in refusing to
recognize the binding effect of the October 4, 1996 general assembly called by the UST
administration.
At the outset, the Court stresses that National Federation of Labor (NFL) v.
Laguesma[11] has held that challenges against rulings of the labor secretary and those
acting on his behalf, like the director of labor relations, shall be acted upon by the Court
of Appeals, which has concurrent jurisdiction with this Court over petitions
for certiorari. However, inasmuch as the memoranda in the instant case have been filed
prior to the promulgation and finality of our Decision in NFL, we deem it proper to
resolve the present controversy directly, instead of remanding it to the Court of
Appeals. Having disposed of the foregoing procedural matter, we now tackle the issues
in the present case seriatim.
Self-organization is a fundamental right guaranteed by the Philippine Constitution
and the Labor Code. Employees have the right to form, join or assist labor organizations
for the purpose of collective bargaining or for their mutual aid and
protection.[12] Whether employed for a definite period or not, any employee shall be
considered as such, beginning on his first day of service, for purposes of membership
in a labor union.[13]
Corollary to this right is the prerogative not to join, affiliate with or assist a labor
union.[14] Therefore, to become a union member, an employee must, as a rule, not only
signify the intent to become one, but also take some positive steps to realize that
intent. The procedure for union membership is usually embodied in the unions
constitution and bylaws.[15] An employee who becomes a union member acquires the
rights and the concomitant obligations that go with this new status and becomes bound
by the unions rules and regulations.
When a man joins a labor union (or almost any other democratically controlled
group), necessarily a portion of his individual freedom is surrendered for the benefit
of all members. He accepts the will of the majority of the members in order that he
may derive the advantages to be gained from the concerted action of all. Just as the
enactments of the legislature bind all of us, to the constitution and by-laws of the
union (unless contrary to good morals or public policy, or otherwise illegal), which
are duly enacted through democratic processes, bind all of the members. If a member
of a union dislikes the provisions of the by-laws, he may seek to have them amended
or may withdraw from the union; otherwise, he must abide by them. It is not the
function of courts to decide the wisdom or propriety of legitimate by-laws of a trade
union.
On joining a labor union, the constitution and by-laws become a part of the members
contract of membership under which he agrees to become bound by the constitution
and governing rules of the union so far as it is not inconsistent with controlling
principles of law. The constitution and by-laws of an unincorporated trade union
express the terms of a contract, which define the privileges and rights secured to, and
duties assumed by, those who have become members. The agreement of a member on
joining a union to abide by its laws and comply with the will of the lawfully
constituted majority does not require a member to submit to the determination of the
union any question involving his personal rights.[16]
Petitioners claim that the numerous anomalies allegedly committed by the private
respondents during the latters incumbency impelled the October 4, 1996 election of the
new set of USTFU officers. They assert that such exercise was pursuant to their right
to self-organization.
Petitioners frustration over the performance of private respondents, as well as their
fears of a fraudulent election to be held under the latters supervision, could not justify
the method they chose to impose their will on the union. Director Bitonio aptly
elucidated:[17]
A union election is held pursuant to the unions constitution and bylaws, and the
right to vote in it is enjoyed only by union members. A union election should be
distinguished from a certification election, which is the process of determining, through
secret ballot, the sole and exclusive bargaining agent of the employees in the
appropriate bargaining unit, for purposes of collective bargaining. [18] Specifically, the
purpose of a certification election is to ascertain whether or not a majority of the
employees wish to be represented by a labor organization and, in the affirmative case,
by which particular labor organization.[19]
In a certification election, all employees belonging to the appropriate bargaining
unit can vote.[20] Therefore, a union member who likewise belongs to the appropriate
bargaining unit is entitled to vote in said election. However, the reverse is not always
true; an employee belonging to the appropriate bargaining unit but who is not a member
of the union cannot vote in the union election, unless otherwise authorized by the
constitution and bylaws of the union. Verily, union affairs and elections cannot be
decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4, 1996
election cannot properly be called a union election, because the procedure laid down in
the USTFUs CBL for the election of officers was not followed. It could not have been
a certification election either, because representation was not the issue, and the proper
procedure for such election was not followed. The participation of non-union members
in the election aggravated its irregularity.
Section 1. The Union shall hold regular general membership meetings at least once
every three (3) months. Notices of the meeting shall be sent out by the Secretary-
General at least ten (10) days prior to such meetings by posting in conspicuous places,
preferably inside Company premises, said notices. The date, time and place for the
meetings shall be determined by the Board of Officers.[23]
Unquestionably, the assembly was not a union meeting. It was in fact a gathering
that was called and participated in by management and non-union members. By no legal
fiat was such assembly transformed into a union activity by the participation of some
union members.
Second, there was no commission on elections to oversee the election, as mandated
by Sections 1 and 2 of Article IX of the USTFUs CBL, which provide:
a) Adopt and promulgate rules and regulations that will ensure a free, clean, honest and orderly
election, whether regular or special;
b) Pass upon qualifications of candidates;
c) Rule on any question or protest regarding the conduct of the election subject to the procedure
that may be promulgated by the Board of Officers; and
d) Proclaim duly elected officers.
Section 2. The COMELEC shall be composed of a chairman and two members all of
whom shall be appointed by the Board of Officers.
Petitioners contend that the October 4, 1996 assembly suspended the unions
CBL. They aver that the suspension and the election that followed were in accordance
with their constituent and residual powers as members of the collective bargaining unit
to choose their representatives for purposes of collective bargaining. Again they cite the
numerous anomalies allegedly committed by the private respondents as USTFU
officers. This argument does not persuade.
First, as has been discussed, the general faculty assembly was not the proper forum
to conduct the election of USTFU officers. Not all who attended the assembly were
members of the union; some, apparently, were even disqualified from becoming union
members, since they represented management. Thus, Director Bitonio correctly
observed:
Further, appellants cannot be heard to say that the CBL was effectively suspended
during the 04 October 1996 general assembly. A union CBL is a covenant between
the union and its members and among members (Johnson and Johnson Labor Union-
FFW, et al. v. Director of Labor Relations, 170 SCRA 469). Where ILO Convention
No. 87 speaks of a unions full freedom to draw up its constitution and rules, it
includes freedom from interference by persons who are not members of the
union. The democratic principle that governance is a matter for the governed to decide
upon applies to the labor movement which, by law and constitutional mandate, must
be assiduously insulated against intrusions coming from both the employer and
complete strangers if the 'protection to labor clause' of the constitution is to be
guaranteed. By appellants own evidence, the general faculty assembly of 04 October
1996 was not a meeting of USTFU. It was attended by members and non-members
alike, and therefore was not a forum appropriate for transacting union matters. The
person who moved for the suspension of USTFUs CBL was not a member of
USTFU. Allowing a non-union member to initiate the suspension of a unions CBL,
and non-union members to participate in a union election on the premise that the
unions CBL had been suspended in the meantime, is incompatible with the freedom of
association and protection of the right to organize.
If there are members of the so-called academic community collective bargaining unit
who are not USTFU members but who would nevertheless want to have a hand in
USTFUs affairs, the appropriate procedure would have been for them to become
members of USTFU first. The procedure for membership is very clearly spelled out in
Article IV of USTFUs CBL. Having become members, they could then draw guidance
from Ang Malayang Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil. 669. Therein
the Supreme Court held that if a member of the union dislikes the provisions of the
by-laws he may seek to have them amended or may withdraw from the union;
otherwise he must abide by them. Under Article XVII of USTFUs CBL, there is also a
specific provision for constitutional amendments. What is clear therefore is that
USTFUs CBL provides for orderly procedures and remedies which appellants could
have easily availed [themselves] of instead of resorting to an exercise of their so-
called residual power'.[26]
Second, the grievances of the petitioners could have been brought up and resolved
in accordance with the procedure laid down by the unions CBL [27]and by the Labor
Code.[28] They contend that their sense of desperation and helplessness led to the October
4, 1996 election. However, we cannot agree with the method they used to rectify years
of inaction on their part and thereby ease bottled-up frustrations, as such method was in
total disregard of the USTFUs CBL and of due process. The end never justifies the
means.
We agree with the solicitor generals observation that the act of suspending the
constitution when the questioned election was held is an implied admission that the
election held on that date [October 4, 1996] could not be considered valid under the
existing USTFU constitution xxx.[29]
The ratification of the new CBA executed between the petitioners and the
University of Santo Tomas management did not validate the void October 4, 1996
election. Ratified were the terms of the new CBA, not the issue of union leadership -- a
matter that should be decided only by union members in the proper forum at the proper
time and after observance of proper procedures.
Epilogue
In dismissing this Petition, we are not passing upon the merits of the
mismanagement allegations imputed by the petitioners to the private respondents; these
are not at issue in the present case. Petitioners can bring their grievances and resolve
their differences with private respondents in timely and appropriate proceedings. Courts
will not tolerate the unfair treatment of union members by their own leaders.When the
latter abuse and violate the rights of the former, they shall be dealt with accordingly in
the proper forum after the observance of due process.
WHEREFORE, the Petition is hereby DISMISSED and the assailed
Resolutions AFFIRMED. Costs against petitioners.
SO ORDERED.
DECISION
CHICO-NAZARIO, J.:
The Facts
November 1997.[9]
On 01 December 1997, a complaint[10] for illegal suspension, willful and
unlawful violation of UEEA constitution and by-laws, refusal to render financial
and other reports, deliberate refusal to call general and special meetings, illegal
holdover of terms and damages was filed by the respondents against herein
petitioners Ernesto C. Verceles, Diosdado F. Trinidad, Salvador G. Blancia,
Rosemarie De Lumban, Felicitas Ramos, Miguel Teao, Jaime Bautista and
Fidel Acero before the Department of Labor and Employment, National Capital
Region (DOLE-NCR).
A few days after the filing of the complaint, i.e., on 10 December 1997, a
resolution[11] was passed by UEEA which reads as follows:
RESOLUTION
WHEREAS, the Association has gone thru a most arduous, difficult, and trying times
in working to obtain the best terms and conditions of employment for its members,
specifically for the period 1992 to 1996;
WHEREAS, said difficulties are in the form of near strikes, cases with the
Department of Labor and Employment and its agencies, as well as with the Supreme
Court;
...
APPROVED.
Accordingly, the claims of complainants for damages [are] hereby ordered dismissed
for lack of jurisdiction.
However, within ten (10) days upon receipt of this Order, the complainants are hereby
directed to submit a written report whether or not the respondents had complied with
this Order.
WHEREFORE, the appeal is hereby DISMISSED for lack of merit and the decision
dated 22 (November) 1999 of Regional Director Maximo B. Lim, DOLE-NCR, is
AFFIRMED.
Not satisfied, the petitioners filed a petition for review on certiorari[24] before
this Court.
The Issues
It is apparent, however, that petitioners were to blame for their predicament. They
repeatedly failed to appear in a series of conferences scheduled by the DOLE-NCR,
asked for resetting of hearings, and requested for extension of time to file its answer.
Hence, when they again did not attend a hearing on a date they themselves asked for,
private respondents (complainants therein) moved for the submission of the case
based on their complaint, position paper and annexes attached thereto.
When DOLE-NCR directed the parties to submit their respective position papers,
petitioners again moved for extension of time to file the same. When another notice
was given to the parties to comply with the directive, petitioners prayed for another
extension of time. (Private respondents, however, reiterated their earlier motion to
have the case resolved based on available pleadings.) After six (6) months or so,
petitioners finally filed not their position paper but their answer.[32]
The Court of Appeals was justified in upholding the DOLE-NCR and BLR-
DOLE decisions based on the complaint and answer. We cannot accept
petitioners line of reasoning that since no position papers were submitted, no
decision may be made by the adjudicating body. As ruled by Regional Director
Maximo B. Lim in his decision, the complaint and the answer thereto were
adopted as the parties position papers. Thereafter, the case shall be deemed
submitted for resolution.[33]
Labor laws mandate the speedy disposition of cases, with the least attention
to technicalities but without sacrificing the fundamental requisites of due
process.[34] The essence of due process is simply an opportunity to be
heard.[35] In this case, it cannot be said that there was a denial of due process
on the part of the petitioners because they were given all the chances to refute
the allegations of the private respondents, and the delay in the proceedings
before the DOLE-NCR was clearly attributable to them.
The argument that there was failure to exhaust administrative remedies
cannot be sustained. One of the instances when the rule of exhaustion of
administrative remedies may be disregarded is when there is a violation of due
process.[36] In this case, the respondents have chronicled from the very
beginning that they were indefinitely suspended without the benefit of a formal
charge sufficient in form and substance. Therefore, the rule on exhaustion of
administrative remedies cannot squarely apply to them.
On the matter concerning the 30% support requirement needed to report
violations of rights and conditions of union membership, as found in the last
paragraph of Article 241 of the Labor Code,[37] we likewise cannot sanction the
petitioners. We have already made our pronouncement in the case
of Rodriguez v. Director, Bureau of Labor Relations[38] that the 30% requirement
is not mandatory. In this case, the Court, speaking through Chief Justice Andres
R. Narvasa,[39] held in part:
The respondent Directors ruling, however, that the assent of 30% of the union
membership, mentioned in Article 242 of the Labor Code, was mandatory and
essential to the filing of a complaint for any violation of rights and conditions of
membership in a labor organization (such as the arbitrary and oppressive increase of
union dues here complained of), cannot be affirmed and will be reversed. The very
article relied upon militates against the proposition. It states that a report of a violation
of rights and conditions of membership in a labor organization may be made by (a)t
least thirty percent (30%) of all the members of a union or any member or members
specially concerned. The use of the permissive may in the provision at once negates
the notion that the assent of 30% of all the members is mandatory. More decisive is
the fact that the provision expressly declares that the report may be made,
alternatively by any member or members specially concerned. And further
confirmation that the assent of 30% of the union members is not a factor in the
acquisition of jurisdiction by the Bureau of Labor Relations is furnished by Article
226 of the same Labor Code, which grants original and exclusive jurisdiction to the
Bureau, and the Labor Relations Division in the Regional Offices of the Department
of Labor, over all inter-union and intra-union conflicts, and all disputes, grievances
or problems arising from or affecting labor management relations, making no
reference whatsoever to any such 30%-support requirement. Indeed, the officials
mentioned are given the power to act on all inter-union and intra-union conflicts
(1)upon request of either or both parties as well as (2) at their own initiative.
Second Issue: was the election held on 07 April 2000 valid or a nullity?
This issue arose from the fact that the original decision of the DOLE-NCR
dated 22 November 1999, ordered petitioners, among other things, to
immediately hold/conduct an election of officers . . . Petitioners, it must be
recalled, appealed from the DOLE-NCR decision to the BLR-DOLE. During the
pendency of the appeal, however, an election of officers was held on 07 April
2000. Subsequently, the BLR-DOLE affirmed the decision of the DOLE-NCR,
but with the pronouncement that . . . the supposed election conducted on (07)
April 2000 is null and void and cannot produce legal effects adverse to
appellants.[40]
The petitioners contend that since the election was held on 07 April 2000,
and the original complaint before the DOLE-NCR was filed on 01 December
1997, the former could not have been the subject of the complaint. There was,
according to petitioners, reversible error in the BLR-DOLEs adding to the
DOLE-NCRs decision, the nullification of the 07 April 2000 election. The
BLRDOLE should have limited itself to affirming, modifying or setting aside and
canceling the provisions of the dispositive portion of the DOLE-NCRs decision
which was subject of the appeal. The election was held because the term of the
petitioners (extended for five years under Republic Act No. 6715[41]) expired on
07 April 2000. As amended by Republic Act 6715, paragraph (c) of Article 241
of the Labor Code now reads:
(c) The members shall directly elect their officers in the local union, as well as their
national officers in the national union or federation to which they or their local union
is affiliated, by secret ballots at intervals of five (5) years.
It just so happened that the holding of the election coincided with the DOLE-
NCR decision.[42]
The private respondents, in answer to this, point out that the 07 April 2000
election, as appearing in the 22 September 2000 Resolution of the BLR-DOLE,
was set aside not on the flimsy reason that there was no complaint to invalidate
it, but due to the appeal of the petitioners questioning the BLR-DOLEs order.
The appeal effectively suspended the effect of the DOLE-NCR Regional
Directors order for the immediate holding of election of officers in accordance
with the unions constitution and by-laws.[43]
On this matter, the Court of Appeals made the following observation:
Nonetheless, despite of this finding, the election of UEEA officers on 7 April 2000
cannot acquire a semblance of legality. First, it was conducted pursuant to the
aforesaid (erroneous) order of the Regional Director as manifested by the petitioners.
Second, it was purposely done to pre-empt the resolution of the case by the BLR and
to deprive private respondents their substantial right to participate in the election.
Third, petitioners cannot be allowed to take an inconsistent position to later on claim
that the election of 7 April 2000 was held because it was already due while previously
declaring that it was made in line with the order of the Regional Director, for this
would go against the principle of fair play.
Thus, while the BLR was wrong in affirming the order of the Regional Director for
the immediate holding of election, it was right in nullifying the 7 April 2000 UEEA
election of officers. It was simply improper for the petitioners to implement the said
order which was then one of the subjects of their appeal in the BLR. To hold
otherwise would be to dispossess the BLR of its inherent power to control the conduct
of the proceedings of cases pending before it for resolution.[44]
Based on the prevailing facts of this case, we affirm the foregoing findings
of the court a quo. We cannot hold the election of 07 April 2000 valid as this
would make us condone an iniquitous act. Said election was perceptibly done
to hinder any resolution or decision that would be made by BLR-DOLE. The
Regional Director indeed ordered the immediate holding of an election in its
Order dated 22 November 1999. The records show that the petitioners
questioned this order of the Regional Director before the BLR-DOLE by way of
appeal,[45] and yet, they conducted the election, allegedly because it was due
under Republic Act No. 6715. Why this was done by the petitioners escapes
us. But as rightfully observed by the BLR-DOLE:
. . . Indeed, it is obvious that the general membership meeting and election of officers
was done purposely to pre-empt our resolution of this case and, more importantly, the
participation of appellees in the election. This cannot be tolerated.[46]
Third Issue: was the indefinite suspension of the private respondents
illegal?
We rule in the affirmative.
The petitioners posit the theory that the records do not support the findings
of the BLR-DOLE that no investigation was conducted making the suspension
illegal because of lack of due process.
It is best to remind the petitioners that this Court, as we have held in a long
line of decisions, is not a trier of facts.[47] The instant case is a petition for review
on certiorari[48] where only questions of law may be raised. The exceptions[49] to
this rule find no application here. This being the case, the findings of fact of the
DOLE-NCR and the BLR-DOLE as affirmed by the Court of Appeals to the
effect that no investigation was conducted, shall not be disturbed. As properly
held by the court a quo:
Petitioners have failed to show that the findings of facts and conclusions of law of
both the DOLE-NCR and BLR-DOLE were arrived at with grave abuse of discretion
or without substantial evidence. A careful review of the pleadings before Us reveals
that the decision and resolutions of the concerned agencies were correctly anchored in
law and on substantial evidence.[50]
AMBROCIO VENGCO, RAMON MOISES, EUGENIA REYES, RAFAEL WAGAS and 80 others per
attached list, Petitioners, v. HON. CRESENCIO B. TRAJANO, in his capacity as Director of the
Bureau of Labor Relations and EMMANUEL TIMBUNGCO, Respondents.
1. LABOR LAWS AND SOCIAL LEGISLATION; LABOR UNIONS; ATTORNEY’S FEES MAY NOT BE
DEDUCTED OR CHECKED OFF WITHOUT WORKER’S WRITTEN CONSENT, EXCEPT FOR MANDATORY
ACTIVITY; MANDATORY ACTIVITY, DEFINED. — It is very clear from Art. 241 of the Labor Code that
attorney’s fees may not be deducted or checked off from any amount due to an employee without his
written consent except for mandatory activities under the Code. A mandatory activity has been
defined as a judicial process of settling dispute laid down by the law. (Carlos P. Galvadores, Et. Al. v.
Cresenciano B. Trajano, Director of the Bureau of Labor Relations, Et Al., G.R. No. L-70067,
September 15, 1986, 144 SCRA 138).
2. ID.; ID.; ID.; CASE AT BAR IS NOT A MANDATORY ACTIVITY. — The amicable settlement entered
into by the management and the union — whereby the company will pay to the union members the
sum of P150,000.00 for their claims arising from the unpaid emergency cost of living allowance
(ECOLA) and other benefits — can not be considered as a mandatory activity under the Code. It is
true that the union filed a claim for emergency cost of living allowance and other benefits before the
Ministry of Labor. But this case never reached its conclusion in view of the parties’ agreement.
4. ID.; ID.; ID.; VIOLATION THEREOF JUSTIFIES LAWYER’S EXPULSION FROM UNION PRESIDENCY.
— Considering the violations of Timbungco, (i.e. deducting attorney’s fees from the workers’ fringe
benefits) there can be no question that he should bear the consequences of his acts. We find that the
penalty of expulsion from the union presidency imposed upon Timbungco is justified.
5. ID.; EMERGENCY COST OF LIVING ALLOWANCE, EXCLUDED FROM SALARIES OR WAGES. — In the
herein case, the fringe benefits received by the union members consist of back payments of their
unpaid emergency cost of living allowances which are totally distinct from their wages. Allowances are
benefits over and above the basic salaries of the employees (University of Pangasinan Faculty Union v.
University of Pangasinan, G.R. No. L-63122, February 20, 1984, 127 SCRA 691). We have held that
such allowances are excluded from the concept of salaries or wages (Cebu Institute of Technology
(CIT) v. Ople, G.R. No. L-58870, December 18, 1987, 156 SCRA 629).
DECISION
MEDIALDEA, J.:
This is a petition for certiorari which seeks to annul: (1) the Order of respondent Director of the
Bureau of Labor Relations dated May 23, 1983 in BLR Case No. A-0179-82 entitled "Ambrocio Vengco,
Et. Al. v. Emmanuel Timbungco" setting aside the decision dated December 29, 1982; and (2) the
Order dated April 2, 1986 denying the motion for reconsideration of the Order dated May 23, 1983.
The antecedent facts are as follows: chanrob 1es vi rtual 1aw lib rary
Sometime in the latter part of 1981, the Management of the Anglo-American Tobacco Corporation and
the Kapisanan ng Manggagawa sa Anglo-American Tobacco Corporation. (FOI-TAF) entered into a
compromise agreement whereby the company will pay to the union members the sum of P150,000.00
for their claims arising from the unpaid emergency cost of living allowance (ECOLA) and other benefits
which were the subject of their compliant before the Ministry of Labor. Respondent Emmanuel
Timbungco (Timbungco, for short) who is the union president received the money which was paid in
installments. Thereafter, he distributed the amount among the union members. Petitioners Ambrocio
Vengco, Ramon Moises, Rafael Wagas and 80 others (Vengco, Et Al., for short) who are union
members noted that Timbungco was not authorized by the union workers to get the money; and that
ten percent (10%) of the P150,000.00 had been deducted to pay for attorney’s fees without their
written authorization in violation of Article 242(o) of the Labor Code. So, they demanded from
Timbungco an accounting of how the P150,000.00 was distributed to the members. Timbungco did not
give in to their demand. Thus Vengco, Et. Al. filed a complaint with the Ministry of Labor praying for:"
(1) the expulsion of Emmanuel Timbungco as president of the union for violation of (the) union
constitution and by-laws and the rights and conditions of union members under the Labor Code; (2)
an order to require Timbungco to render an accounting of how the P150,000.00 was distributed; and
(3) an order to require private respondent to publish in the bulletin board the list of the members and
the corresponding amount they each received from the P150,000.00." (Memorandum for Petitioners,
p. 150, Rollo).
In his answer with counterclaim, Timbungco alleged among others, that he was authorized by a
resolution signed by the majority of the union members to receive and distribute the P150,000.00
among the workers; that the computation of the benefits was based on the payroll of the company;
that the ten percent (10%) attorney’s fees was in relation to the claim of the local union for payment
of emergency cost of living allowance before the Ministry of Labor which is totally distinct and separate
from the negotiation of the CBA; and that the ten percent (10%) deduction was in accordance with
Section II, Rule No. VIII, Book No. III of the Rules and Regulations implementing the Labor Code and
therefore, no authorization from the union members is required.
On July 19, 1982, Med-Arbiter Willie B. Rodriguez issued an Order dismissing the complaint for lack of
merit. (p. 33, Rollo)
Vengco, Et. Al. appealed the aforesaid order to the Bureau of Labor Relations.
On December 29, 1982, respondent Director of the Bureau of Labor Relations Cresenciano B. Trajano
(Trajano, for short) rendered a decision, the dispositive portion of which states:
jgc:chanrob les.c om.ph
"Wherefore, premises considered, the instant appeal is hereby granted and the Med-Arbiter’s Order
dated 19 July 1982 hereby set aside. Accordingly, respondent Emmanuel Timbungco is hereby ordered
to render a full accounting of the One Hundred Fifty Thousand Pesos (P150,000.00) he received from
the management of Anglo-American Tobacco Corporation in behalf of the members of the Kapisanan
ng mga Manggagawa sa Associated Anglo-American Tobacco Corporation (FOITAF) and to publish in
the union’s bulletin board the list of all recipient union members and the respective amounts they
have received, within ten (10) days from receipt hereof. Further, respondent is hereby expelled as
president of the Kapisanan ng Manggagawa sa Anglo American Tobacco Corporation (FOITAF). Lastly,
the counterclaim interposed by the respondent’s counsel, Atty. Benjamin Sebastian is hereby ordered
dismissed.
Timbungco filed a motion for reconsideration of the above-quoted decision while Vengco, Et. Al. filed
their opposition to the said motion.
On May 23, 1983, Officer-in-Charge Victoriano R. Calaycay issued an Order which held, thus: jgc:cha nro bles. com.ph
"Wherefore, premises considered, our resolution dated 29 December 1982 is hereby set aside.
However, an audit examination of the Books of Account of Kapisanan ng Manggagawa sa Associated
Anglo-American Tobacco Corporation (FOITAF) is hereby ordered.
Vengco, et al, sought reconsideration of the aforementioned order. They contended that the
examination of the books of accounts of the union is irrelevant considering that the issue involved in
the case does not consist of union funds but back pay received by the union members from the
company. Likewise, they pointed out that Timbungco did not give the money to the union treasurer
and consequently, the amount was not entered in the records of the union.
On April 2, 1986, Trajano issued an order which affirmed the resolution of May 23, 1983 and denied
the motion for reconsideration for lack of merit. (p. 58, Rollo)
The issues raised in this case are as follows: chanro b1es vi rtua l 1aw lib ra ry
(1) Whether or not Timbungco is guilty of illegally deducting 10% attorneys’ fees from petitioners’
backwages; and
(2) Whether or not Trajano gravely abused his discretion amounting to lack of jurisdiction in ordering
examination of union books instead of affirming his previous Order expelling Timbungco from the
union and ordering him to render an accounting of P150,000.00 received by him. (p. 151, Rollo)
In the resolution of June 4, 1986, We required the respondents to comment on the petition.
In his comment, Timbungco reiterates the defenses he raised in his answer to the complaint filed
against him before the Med-Arbiter. In addition, he claims that he already filed an accounting report
on the P150,000.00 with the Bureau of Labor Relations which enumerated the names of the workers
and the corresponding amounts they received with their respective signatures opposite their names,
the sub-total of the amount of benefits received per department and the grand total of the amount
distributed duly certified by the Union Treasurer and Secretary and duly noted by Timbungco as Union
President. (p. 73, Rollo)
chanrobles vi rtual lawlib rary
The Solicitor General, in his comment, agrees with Vengco, Et. Al. and recommends that the petition
be given due course. (p. 100, Rollo)
Timbungco filed a reply to the aforesaid comment of the Solicitor General which restates the
arguments raised in his comment. (p. 121, Rollo)
"ART. 241. Rights and conditions of membership in a labor organization. — The following are the
rights and conditions of membership in a labor organization.
x x x
"(o) Other than for mandatory activities under the Code, no special assessment, attorney’s fees,
negotiation fees or any other extraordinary fees may be checked off from any amount due an
employee without an individual written authorization duly signed by an employee. The authorization
should specifically state the amount, purpose and beneficiary of the deduction.
x x x
It is very clear from the above-quoted provision that attorney’s fees may not be deducted or checked
off from any amount due to an employee without his written consent except for mandatory activities
under the Code. A mandatory activity has been defined as a judicial process of settling dispute laid
down by the law. (Carlos P. Galvadores, Et. Al. v. Cresenciano B. Trajano, Director of the Bureau of
Labor Relations, Et Al., G.R. No. L-70067, September 15, 1986, 144 SCRA 138). In the instant case,
the amicable settlement entered into by the management and the union can not be considered as a
mandatory activity under the Code. It is true that the union filed a claim for emergency cost of living
allowance and other benefits before the Ministry of Labor. But this case never reached its conclusion in
view of the parties’ agreement. It is not also shown from the records that Atty. Benjamin Sebastian
was instrumental in forging the said agreement on behalf of the union members.
Timbungco maintains that the "Kapasiyahan" gave him the authority to make the deduction. This
contention is unfounded. Contrary to his claim, the undated "Kapasiyahan" or resolution did not confer
upon him the power to deduct 10% of the P150,000.00 despite the alleged approval of the majority of
the union workers. A reading of the said resolution (p. 75, Rollo) yields the same conclusion arrived at
by Trajano who declared it defective. We quote with approval Trajano’s findings on this point: jgc:chanro bles. com.ph
"Further, a cursory examination of the alleged resolution shows that it is quite defective. Not only that
it is not dated but also that, with the exception of the first page, the remaining pages were not
captioned and did not state the very purpose for which it was prepared. Thus, the alleged signatories
were not properly apprised thereof. There is, therefore, truth in complainant’s contention that they
never authorized, more so, they had no knowledge of the deduction of 10% attorney’s fees until it was
actually effected. Consequently, the deduction was not valid." (p. 45, Rollo)
Moreover, the law is explicit. It requires the individual written authorization of each employee
concerned, to make the deduction of attorney’s fees valid.
Likewise, We find that the other "Kapasiyahan" dated September 18, 1981 submitted by Timbungco
belied his claim that he was authorized by the union workers to receive the sum of P150,000.00 on
their behalf. The pertinent portion of the said "Kapasiyahan" provides: jgc:chan robles .com.p h
"3. Na sa dahilang hindi bigla ang pagbabayad sa nasabing "CLAIM" bukod pa sa marami kaming
naghati-hati sa nasabing halaga ipinapasiya naming na kusang-loob na kunin ang aming bahagi sa
aming kapisanan sa unang linggo ng Disyembre, 1981 at ito’y ipinaalam namin sa Pangulo ng
Kapisanan na si Ginoong Emmanuel Timbungco." (p. 47, Rollo)
The above-quoted statement merely indicated the intention of the workers to get their claim on the
first week of December, 1981 and to inform Timbungco of their intention. Clearly, this statement can
not be construed to confer upon Timbungco the authority to receive the fringe benefits for the
workers. Absent such authority, Timbungco should not have kept the money to himself but should
have turned it over to the Union Treasurer. He, therefore, exceeded his authority as President of the
Union.chan roble s virtualawli bra ry cha nrob les.com: chan roble s.com.p h
Moreover, Book III, Rule VIII, Section II of the Implementing Rules cited by Timbungco which
dispenses with the required written authorization from the employees concerned does not apply in this
case. This provision envisions a situation where there is a judicial or administrative proceedings for
recovery of wages. Upon termination of the proceedings, the law allows a deduction for attorney’s fees
of 10% from the total amount due to a winning party. In the herein case, the fringe benefits received
by the union members consist of back payments of their unpaid emergency cost of living allowances
which are totally distinct from their wages. Allowances are benefits over and above the basic salaries
of the employees (University of Pangasinan Faculty Union v. University of Pangasinan, G.R. No. L-
63122, February 20, 1984, 127 SCRA 691). We have held that such allowances are excluded from the
concept of salaries or wages (Cebu Institute of Technology (CIT) v. Ople, G.R. No. L-58870, December
18, 1987, 156 SCRA 629). In addition, the payment of the fringe benefits were effected through an
amicable settlement and not in an administrative proceeding.
Considering the aforestated violations of Timbungco, there can be no question that he should bear the
consequences of his acts. We find that the penalty of expulsion from the union presidency imposed
upon Timbungco is justified. cralawna d
In view of the foregoing, We hold that the Orders dated May 23, 1983 and April 2, 1986 were issued
with grave abuse of discretion. The herein controversy involves the propriety of the 10% deduction
from the fringe benefits of the union workers which they received from the management in settlement
of their claims. Such issue does not touch on union dues or funds. Besides, the sum of P150,000.00
was not entered into the records of the Union since, as earlier stated, the money was not turned over
by Timbungco to the Union Treasurer. Consequently, the said Orders have no basis.
ACCORDINGLY, the petition is granted. The assailed Orders dated May 23, 1983 of Officer-in-Charge
Victoriano R. Calaycay of the Bureau of Labor Relations, and April 2, 1986 of respondent Director
Cresenciano B. Trajano of the same Bureau are REVERSED and SET ASIDE and the latter’s decision
dated December 29, 1982 is hereby reinstated. No costs.
SO ORDERED.
SYNOPSIS
Petitioner assailed the order of respondent court awarding overtime pay to its employees who rendered
overtime services during Sundays and legal holidays. It contended that the Court of Industrial Relations had
no jurisdiction to pass upon the issues involving money claims arising out of, or in connection with,
employment since the matter falls within the jurisdiction of the ordinary judicial tribunals. Petitioner who
alleged that procedural due process was not observed because the employees whose statutory right for
overtime pay as found in the challenged order were not respected had not been included as parties. The
Supreme Court did not find such grounds meritorious.
SYLLABUS
2. LABOR LAW; INDUSTRIAL PEACE ACT; RIGHT TO SELF-ORGANIZATION; LABOR UNION HAS THE
PERSONALITY TO REPRESENT ITS MEMBERS. — A labor union possesses the requisite personality to sue on
behalf of its members for their individual money claims. It would be an unwarranted impairment of the right
to self-organization if such collective entities are barred from instituting such actions in their representative
capacity.
3. ID.; ID.; ID.; BENEFITS RESULTING FROM COLLECTIVE CONTRACTS EXTEND EVEN TO THOSE WHO DO
NOT BELONG TO THE CHOSEN LABOR UNION. — Once a collective contract is entered into, its benefits
extend not only to all the laborers and employees in the collective bargaining unit, but also to those who do
not belong to the labor organization chosen to represent the employees.
4. CONSTITUTIONAL LAW; PROCEDURAL DUE PROCESS; THERE IS NO DENIAL OF DUE PROCESS WHERE A
PARTY HAD BEEN DULY HEARD. — There is no denial of due process where a party had been fully heard and
accorded the right to resist what it considered unwarranted money claims at all stages of the proceedings.
RESOLUTION
FERNANDO, J.:
The main thrust in this appeal by certiorari against the then existing Court of Industrial Relations is its
alleged lack of jurisdiction over money claims for overtime services on Sundays and legal holidays by
employees still forming part of the labor force of petitioner firm, La Carlota Sugar Central. At the time the
proceedings were had before respondent Court, leading to the challenged awards for overtime pay, there
was some lurking doubt as to whether ordinary judicial tribunals or respondent Court had the competence to
pass upon the matter. Since then, however, as will subsequently be made clear, the definitive ruling is that
respondent Court was vested with the requisite power. As a matter of fact, this very petition yielded the
impression that its stand was not too strongly entrenched in law. For there were indications even then that
respondent Court was the proper agency to decide such issue. Petitioner would raise another point, the
alleged lack of procedural process. Its effort in that direction is equally unavailing. We affirm.
In the main resolution challenged, respondent Court after stating that a previous order was already final and
executory ruled that the employees named in the Examiner’s Report were entitled to the additional
compensation. 1 Further: "The contention of the respondent that the overtime pay due the petitioners are
already included in their salary as agreed upon by them is without foundation for any agreement to waive
one’s overtime pay is null and void as the same is contrary to law." 2 It was therein likewise stated:
"Concerning the last issue, the Court believes that the workers are entitled to the amount paid to them
during the entire period stated in the report. Concerning the period prior to 1956 it appears that there are
no records existing in the company for such periods. It, therefore, behooves on the petitioning Union to
prove by secondary evidence the matter of services rendered on Sundays and legal holidays so as to enable
the Court on the basis of such evidence to determine and compute the additional compensation in favor of
the petitioners." 3 There was a motion for reconsideration by petitioner firm, and respondent Court in its
resolution of May 21, 1962 excluded certain employees, but otherwise found no sufficient justification for
altering [its] Order . . ." 4
1. The authoritative precedent on the pivotal question of jurisdiction is supplied by Price Stabilization
Corporation v. Court of Industrial Relations. 5 In that case, this Court, through Justice Barrera, categorically
affirmed the underlying principle to be "that where the employer-employee relationship is still existing or is
sought to be reestablished because of its wrongful severance (as where the employees seeks
reinstatement), the Court of Industrial Relations has jurisdiction over all claims arising out of, or in
connection with employment, such as those related to the Minimum Wage Law and the Eight-Hour Labor
Law. After the termination of the relationship and no reinstatement is sought, such claims become mere
money claims, and come within the jurisdiction of the regular courts." 6 Since then, up to the time the Court
of Industrial Relations was abolished, that ruling had been adhered to. 7 There is thus futility in the attempt
of petitioner to impress on this Tribunal that respondent Court was devoid of jurisdiction.
2. Petitioner firm would make much of the due process claim. This plea it would support by the allegation
that only respondent National Sugar Workers Union and respondent Jose Villanueva were named as parties.
It is its contention then that those employees whose statutory rights for overtime pay as found in the
challenged orders were not respected had to file the action as individuals. Again there is misapprehension of
the law on the part of petitioner firm. Only lately, in Liberty Manufacturing Workers Union v. Court of First
Instance, 8 this Court reiterated the view that a labor union has the requisite personality to sue on behalf of
its members for their individual money claims. It would be an unwarranted impairment of the right to self-
organization through formation of labor associations if thereafter such collective entities would be barred
from instituting action in their representative capacity. So marked is the respect under the Constitution and
the statutes to such a right to self-organization as a result of which it may enter into collective bargaining
agreements that in another decision, Mactan Workers Union v. Aboitiz, 9 it was held by his Court that once
such a collective contract is entered into, its benefits extend to all the laborers and employees in the
collective bargaining unit. That would include those who do not belong to the labor organization that was
chosen to represent the employees. This doctrine goes back to Leyte Land Transportation v. Leyte Farmers’
and Laborers’ Union, 10 a 1948 decision. Under the peculiar circumstances on this case where the
controversy as to the right to overtime pay for work performed on Sundays and holidays dated back to
September 24, 1956, with respondent Court having held a number of hearings with petitioner firm having at
all stages resisting, as it ought to, what it considered to be unwarranted demands, there is an air of
implausibility to any allegation that it was denied procedural due process. It was not only duly informed as
to the claims it had to meet, but also was thereon fully heard.
WHEREFORE, this appeal by certiorari is dismissed for lack of merit and the challenged orders of respondent
Court affirmed. The preliminary injunction issued by this Court is hereby lifted and set aside. Costs against
petitioner La Carlota Sugar Central.
DECISION
CHICO-NAZARIO, J.:
The Facts
November 1997.[9]
On 01 December 1997, a complaint[10] for illegal suspension, willful and
unlawful violation of UEEA constitution and by-laws, refusal to render financial
and other reports, deliberate refusal to call general and special meetings, illegal
holdover of terms and damages was filed by the respondents against herein
petitioners Ernesto C. Verceles, Diosdado F. Trinidad, Salvador G. Blancia,
Rosemarie De Lumban, Felicitas Ramos, Miguel Teao, Jaime Bautista and
Fidel Acero before the Department of Labor and Employment, National Capital
Region (DOLE-NCR).
A few days after the filing of the complaint, i.e., on 10 December 1997, a
resolution[11] was passed by UEEA which reads as follows:
RESOLUTION
WHEREAS, the Association has gone thru a most arduous, difficult, and trying times
in working to obtain the best terms and conditions of employment for its members,
specifically for the period 1992 to 1996;
WHEREAS, said difficulties are in the form of near strikes, cases with the
Department of Labor and Employment and its agencies, as well as with the Supreme
Court;
...
APPROVED.
Accordingly, the claims of complainants for damages [are] hereby ordered dismissed
for lack of jurisdiction.
However, within ten (10) days upon receipt of this Order, the complainants are hereby
directed to submit a written report whether or not the respondents had complied with
this Order.
WHEREFORE, the appeal is hereby DISMISSED for lack of merit and the decision
dated 22 (November) 1999 of Regional Director Maximo B. Lim, DOLE-NCR, is
AFFIRMED.
Not satisfied, the petitioners filed a petition for review on certiorari[24] before
this Court.
The Issues
It is apparent, however, that petitioners were to blame for their predicament. They
repeatedly failed to appear in a series of conferences scheduled by the DOLE-NCR,
asked for resetting of hearings, and requested for extension of time to file its answer.
Hence, when they again did not attend a hearing on a date they themselves asked for,
private respondents (complainants therein) moved for the submission of the case
based on their complaint, position paper and annexes attached thereto.
When DOLE-NCR directed the parties to submit their respective position papers,
petitioners again moved for extension of time to file the same. When another notice
was given to the parties to comply with the directive, petitioners prayed for another
extension of time. (Private respondents, however, reiterated their earlier motion to
have the case resolved based on available pleadings.) After six (6) months or so,
petitioners finally filed not their position paper but their answer.[32]
The Court of Appeals was justified in upholding the DOLE-NCR and BLR-
DOLE decisions based on the complaint and answer. We cannot accept
petitioners line of reasoning that since no position papers were submitted, no
decision may be made by the adjudicating body. As ruled by Regional Director
Maximo B. Lim in his decision, the complaint and the answer thereto were
adopted as the parties position papers. Thereafter, the case shall be deemed
submitted for resolution.[33]
Labor laws mandate the speedy disposition of cases, with the least attention
to technicalities but without sacrificing the fundamental requisites of due
process.[34] The essence of due process is simply an opportunity to be
heard.[35] In this case, it cannot be said that there was a denial of due process
on the part of the petitioners because they were given all the chances to refute
the allegations of the private respondents, and the delay in the proceedings
before the DOLE-NCR was clearly attributable to them.
The argument that there was failure to exhaust administrative remedies
cannot be sustained. One of the instances when the rule of exhaustion of
administrative remedies may be disregarded is when there is a violation of due
process.[36] In this case, the respondents have chronicled from the very
beginning that they were indefinitely suspended without the benefit of a formal
charge sufficient in form and substance. Therefore, the rule on exhaustion of
administrative remedies cannot squarely apply to them.
On the matter concerning the 30% support requirement needed to report
violations of rights and conditions of union membership, as found in the last
paragraph of Article 241 of the Labor Code,[37] we likewise cannot sanction the
petitioners. We have already made our pronouncement in the case
of Rodriguez v. Director, Bureau of Labor Relations[38] that the 30% requirement
is not mandatory. In this case, the Court, speaking through Chief Justice Andres
R. Narvasa,[39] held in part:
The respondent Directors ruling, however, that the assent of 30% of the union
membership, mentioned in Article 242 of the Labor Code, was mandatory and
essential to the filing of a complaint for any violation of rights and conditions of
membership in a labor organization (such as the arbitrary and oppressive increase of
union dues here complained of), cannot be affirmed and will be reversed. The very
article relied upon militates against the proposition. It states that a report of a violation
of rights and conditions of membership in a labor organization may be made by (a)t
least thirty percent (30%) of all the members of a union or any member or members
specially concerned. The use of the permissive may in the provision at once negates
the notion that the assent of 30% of all the members is mandatory. More decisive is
the fact that the provision expressly declares that the report may be made,
alternatively by any member or members specially concerned. And further
confirmation that the assent of 30% of the union members is not a factor in the
acquisition of jurisdiction by the Bureau of Labor Relations is furnished by Article
226 of the same Labor Code, which grants original and exclusive jurisdiction to the
Bureau, and the Labor Relations Division in the Regional Offices of the Department
of Labor, over all inter-union and intra-union conflicts, and all disputes, grievances
or problems arising from or affecting labor management relations, making no
reference whatsoever to any such 30%-support requirement. Indeed, the officials
mentioned are given the power to act on all inter-union and intra-union conflicts
(1)upon request of either or both parties as well as (2) at their own initiative.
Second Issue: was the election held on 07 April 2000 valid or a nullity?
This issue arose from the fact that the original decision of the DOLE-NCR
dated 22 November 1999, ordered petitioners, among other things, to
immediately hold/conduct an election of officers . . . Petitioners, it must be
recalled, appealed from the DOLE-NCR decision to the BLR-DOLE. During the
pendency of the appeal, however, an election of officers was held on 07 April
2000. Subsequently, the BLR-DOLE affirmed the decision of the DOLE-NCR,
but with the pronouncement that . . . the supposed election conducted on (07)
April 2000 is null and void and cannot produce legal effects adverse to
appellants.[40]
The petitioners contend that since the election was held on 07 April 2000,
and the original complaint before the DOLE-NCR was filed on 01 December
1997, the former could not have been the subject of the complaint. There was,
according to petitioners, reversible error in the BLR-DOLEs adding to the
DOLE-NCRs decision, the nullification of the 07 April 2000 election. The
BLRDOLE should have limited itself to affirming, modifying or setting aside and
canceling the provisions of the dispositive portion of the DOLE-NCRs decision
which was subject of the appeal. The election was held because the term of the
petitioners (extended for five years under Republic Act No. 6715[41]) expired on
07 April 2000. As amended by Republic Act 6715, paragraph (c) of Article 241
of the Labor Code now reads:
(c) The members shall directly elect their officers in the local union, as well as their
national officers in the national union or federation to which they or their local union
is affiliated, by secret ballots at intervals of five (5) years.
It just so happened that the holding of the election coincided with the DOLE-
NCR decision.[42]
The private respondents, in answer to this, point out that the 07 April 2000
election, as appearing in the 22 September 2000 Resolution of the BLR-DOLE,
was set aside not on the flimsy reason that there was no complaint to invalidate
it, but due to the appeal of the petitioners questioning the BLR-DOLEs order.
The appeal effectively suspended the effect of the DOLE-NCR Regional
Directors order for the immediate holding of election of officers in accordance
with the unions constitution and by-laws.[43]
On this matter, the Court of Appeals made the following observation:
Nonetheless, despite of this finding, the election of UEEA officers on 7 April 2000
cannot acquire a semblance of legality. First, it was conducted pursuant to the
aforesaid (erroneous) order of the Regional Director as manifested by the petitioners.
Second, it was purposely done to pre-empt the resolution of the case by the BLR and
to deprive private respondents their substantial right to participate in the election.
Third, petitioners cannot be allowed to take an inconsistent position to later on claim
that the election of 7 April 2000 was held because it was already due while previously
declaring that it was made in line with the order of the Regional Director, for this
would go against the principle of fair play.
Thus, while the BLR was wrong in affirming the order of the Regional Director for
the immediate holding of election, it was right in nullifying the 7 April 2000 UEEA
election of officers. It was simply improper for the petitioners to implement the said
order which was then one of the subjects of their appeal in the BLR. To hold
otherwise would be to dispossess the BLR of its inherent power to control the conduct
of the proceedings of cases pending before it for resolution.[44]
Based on the prevailing facts of this case, we affirm the foregoing findings
of the court a quo. We cannot hold the election of 07 April 2000 valid as this
would make us condone an iniquitous act. Said election was perceptibly done
to hinder any resolution or decision that would be made by BLR-DOLE. The
Regional Director indeed ordered the immediate holding of an election in its
Order dated 22 November 1999. The records show that the petitioners
questioned this order of the Regional Director before the BLR-DOLE by way of
appeal,[45] and yet, they conducted the election, allegedly because it was due
under Republic Act No. 6715. Why this was done by the petitioners escapes
us. But as rightfully observed by the BLR-DOLE:
. . . Indeed, it is obvious that the general membership meeting and election of officers
was done purposely to pre-empt our resolution of this case and, more importantly, the
participation of appellees in the election. This cannot be tolerated.[46]
Third Issue: was the indefinite suspension of the private respondents
illegal?
We rule in the affirmative.
The petitioners posit the theory that the records do not support the findings
of the BLR-DOLE that no investigation was conducted making the suspension
illegal because of lack of due process.
It is best to remind the petitioners that this Court, as we have held in a long
line of decisions, is not a trier of facts.[47] The instant case is a petition for review
on certiorari[48] where only questions of law may be raised. The exceptions[49] to
this rule find no application here. This being the case, the findings of fact of the
DOLE-NCR and the BLR-DOLE as affirmed by the Court of Appeals to the
effect that no investigation was conducted, shall not be disturbed. As properly
held by the court a quo:
Petitioners have failed to show that the findings of facts and conclusions of law of
both the DOLE-NCR and BLR-DOLE were arrived at with grave abuse of discretion
or without substantial evidence. A careful review of the pleadings before Us reveals
that the decision and resolutions of the concerned agencies were correctly anchored in
law and on substantial evidence.[50]
TEEHANKEE, J.:
These cases are separate appeals filed by respective petitioners from respondent Court's Orders of
November 8, 1963 and March 9, 1964 approving by a split 3 to 1 vote the settlement for
P100,000.00 of the estimated P423,756.74 — judgment liability of respondent firm in favor of the
claimants-members of the Santiago labor Union, executed on November 8, 1963 between
respondent firm and the labor union as represented by a majority of its board of directors. The
appeals are jointly resolved in this decision.
Petitioners in Cases L-23331-32 are the retained lawyers of the Santiago Labor Union who question
respondent Court's approval of respondent firm's settlement of the union members' judgment claims
with the union board of directors, without their knowledge and consent, notwithstanding their duly
recorded attorneys' lien, and over the objection of a board member that the union board had no
authority to compromise or quit-claim the judgment rights of the union members.1
Petitioners in Cases L-23361-62 are forty-nine (49) claimants-members of the Santiago Labor Union
who assail respondent Court's approval of the questioned settlement, without their authority as the
real parties in interest, and who denounce the settlement as unconscionable and having been
entered into by the majority of the union board "under circumstances of fraud, deceit,
mispresentation and/or concealment, especially where a member of the Court has actively used his
official and personal influence to effect the settlement which is manifestly unjust to laborers who by
reason of their financial disadvantages in a conflict with their employers need all the aid of the Court
for their protection, consonant with law, justice and equity."2
The factual background goes as far back as June 21, 1952, when the Santiago Labor Union,
composed of workers of the Santiago Rice Mill, a business enterprise engaged in the buying and
milling of palay at Santiago, Isabela, and owned operated by King Hong Co., filed before the
respondent Court of Industrial Relations Cases Nos. 709-V and V-1 hereof, a petition for overtime
pay, premium pay for night, Sunday and holiday work, and for reinstatement of workers illegally laid
off. As of then, the total sum claimed by the workers, as itemized in their amended petition of
September 2, 1952 — P100,816.36 for overtime pay, P19,350.00 for premium pay and P3,360.00
for differential pay under the Minimum Wage Law — amounted to P123,526.36.3
As recorded in this Court's decision of August 31, 1962 in Santiago Rice Mill, et al. vs. Santiago
Labor Union,4which affirmed the Court of Industrial Relations judgment in favor of the workers, "on
September 19, 1958, after a protracted hearing during which scores of witnesses and voluminous
exhibits were presented, the court, thru Judge Emiliano G. Tabigne, rendered decision dismissing
the petition of the union for lack of merit and want of jurisdiction; but, upon a motion for
reconsideration, the Court of Industrial en banc, by a split decision of 3-2 vote, issued a resolution
reversing the decision of the trial judge. The dispositive part of said resolution reads:
"WHEREFORE, the respondents are hereby ordered to pay the overtime claim of both male
and female claimants herein computed at their basic pay for each period in question; the
legal premium for night, Sunday and holiday work or services rendered by the male
claimants herein computed also on the proven basic wage or salary at the time in question;
to pay the overtime claim of their drivers computed on their respective monthly salaries; to
pay the differentials due each of the women claimants on their wages from August 4, 1951 at
the rate of P2.00 daily and P3.000 daily from August 4, 1952; and to reinstate the claimants
both male and female, who have testified and proved their having been illegally laid-off, with
the right of respondents to deduct from the back wages due each claimant any amount
earned during the period of the illegal dismissal."
The worker's decade of travail was not yet to be at an end, however, despite this Court's affirmance
of the judgment for the workers. After the remand of the records for enforcement by respondent
Court, and the corresponding examination of books, said Court's Chief Examiner filed his Partial
Report of December 14, 1962, wherein the judgment award in favor of the workers was determined
and computed, as follows:
(a) For back wages from January 1, 1953 to April 30, 1962 of
all the 35 employees and laborers (26 workers, 6 laborers and
3 drivers) who testified in court, per dispositive part of the
judgment, "before deducting the amounts earned during the
period of the back wages by each claimant and before
deduction of amounts corresponding to the back wages of
claimants who died before April 30, 1962" at P6,380.00 for
each of the 32 workers and P28,000.00 for each of the 3
drivers P288,160.00
Petitioners claim, furthermore, that "in this computation, however, the filed examiners did not include
the claims of seventy (70) other laborers whose total claims (for back wages), at the rate of
P6,300.00 each, would be P441,000.00. Therefore, the correct grand total amount due the laborers
would be P864,756.74."6
The Chief Examiner's Report showed respondent firm's total assets as at October 31, 1962 to be
P191.151.08 (cash account of P148,411.20, fixed assets of buildings, machinery & equipment, corn
mill, etc. with a book value of P40,073.75 and deferred charges of P2,666.14), and its net worth to
be in the same amount of P191,151.08, (capital stock paid up of P232,000.00 less deficit of
P40,848.92). the Report further stated that in January, 1962 and on August 9, 1962, respondent firm
sold its trucks, jeep and one car, with a net book value of P2,628.71 for P27,000.00 or a net gain of
P24,371.29. Petitioners claim that the book value of respondent firm's fixed assets is only one-sixth
of their actual market value of P240.442.50, and that its total leviable assets therefore amounted to
close to P390,000.00, without taking into account the huge income potential of its rice mill
operations. Respondent firm disputes such a figure as "completely gratuitous and without basis in
fact."7
A general opposition to the Chief Examiner's Report was filed by respondent firm. Judge Emiliano G.
Tabigne, as the trial judge, supra, ordered a hearing thereon on December 22, 1962, as a condition
precedent to execution of the judgment. Such Report was submitted for resolution and approval at
the hearing of December 22, 1962, but the records before us fail to show that the trial judge ever
acted on or approved the Report.
Before and after the submittal of the Chief Examiner's Report of December 14, 1962, the union
pressed for execution of the final judgment in favor of its claimants-members. It filed, furthermore, on
December 20, 1962, an Urgent Motion for Preliminary Attachment, in view of the disposition by
respondent firm of its trucks and automotive equipment and by virtue of the fact admitted by
respondent firm that it had stopped operations preparatory to liquidation, by reason of the alien
nationality of most of its stockholders, under the provisions of Republic Act No. 3018 nationalizing
the rice and corn industry. In another motion of December 4, 1962, the union had asked that the
Court at least order respondent firm to put up a bond of P500,000.00 to answer for the payment of
the judgment or to deposit said amount in Court.
Petitioners assert that these motions were left hanging until the union filed a mandamus petition with
this Court,8after which the trial judge issued and released on April 15, 1963 his Order dated March
30, 1963. In this Order, the trial Judge, recognizing that "petitioner (union) and its members
concerned should be extended the necessary protection of their rights" ordered respondent firm,
within 10 days from its finality, to deposit in Court the sum of one hundred thousand (P100,000.00)
pesos and to file a surety bond of equal amount, "to guarantee the payment of whatever amount (a)
due petitioner (union) and its members concerned after this Court shall have finally decided the
obligation of herein respondents under the judgment." This Order was affirmed by respondent
court en banc, in its Resolution denying respondent firm's motion for reconsideration thereof.
Respondent sought a review by this Court of the said Order and Resolution requiring it to deposit
P100,000.00 and to file a surety bond of equal amount to guarantee payment of its judgment
obligation in Santiago Rice Mill et al. vs. Santiago Labor Union, etc., docketed as Cases G.R. Nos.
L-21758-59 of this Court. this Court, in its Resolution of September 20, 1963, dismissed for lack of
merit respondent's petition for review, and the dismissal became final on October 24, 1963.
Earlier, June 25, 1963, pursuant to the request of the parties, who had advised the trial judge that
they would meet at the premises of respondent firm at Santiago, Isabela, to take up direct
negotiations for the possible settlement of the judgment, a team of employees of the Court had been
sent to help in the negotiations. the transcript of the negotiations records that respondent had then
offered the Union the maximum amount of P110,000.00 in full settlement of its obligations to the
members-claimants of the Union under the judgment, but that the union rejected the offer and
counter-offered the minimum amount of P200,000.00.
The Union meanwhile filed to no avail a series of urgent motions on May 8, July 1, August 29 and
September 6, 1963 for approval of the Chief Examiner's Partial Report of December 14, 1962 and
for enforcement, through a writ of execution or contempt proceedings, of the Order of March 30,
1963 requiring firm to deposit a total of P200,000 in cash and bond to guarantee payment of the
judgment. Upon the finality of this Court's Resolution dismissing respondent's petition for a review of
said Order of March 30, 1963, the union again filed on October 29, 1963 still another Urgent Motion,
advising the trial judge of this Court's action rejecting respondent's appeal and invoking the Court's
ministerial duty of enforcing its said Order — in vain again, as shall presently be seen.
The trial judge took no action on this latest Urgent Motion of the Union, wherein it emphasized that
respondent, with this Court's action rejecting its appeal, no longer had any excuse for refusing its
appeal, no longer had any excuse for refusing to comply with the deposit Order. Instead, an
unscheduled conference was called and held on October 31, 1963 in the chambers of the trial judge,
and attended by representatives of respondent firm, including their counsels of record, on one hand
and Segundino S. Maylem, president of the union and eight directors of the union, on the other. Four
of these nine union representatives, including the union president himself, had no claims of rewards
whatever under the judgment. Said union officials were not assisted by counsel, as petitioner Mary
Concepcion, counsel of record of the union, was not present, not having been notified of the
conference.
At this conference of October 31, 1963, respondent firm made again the same offer to settle and
quitclaim the judgment in favor of the union members for the same amount of P110,000.00, which
offer had already been rejected by the union at the earlier conference held on June 25, 1963 at
Santiago, Isabela, supra. But this time, as appears from the transcript of the conference, respondent
and the directors of the union decided to settle the case amicably with the payment by the firm of the
same amount of P110,000.00 which was deposited with the Court's disbursing officer "immediately
upon the signing of the settlement which will be prepared by the respondent firm through its
counsel." The complete transcript of the conference, as reproduced by respondent in its brief,
follows:
COURT:
The parties have solicited the intervention of the court for the settlement of this case.
They have decided to settle it amicably with the condition that the management will
pay ONE HUNDRED TEN THOUSAND PESOS (P110,000.00) cash, and that the
said amount will be deposited with the Disbursing Officer of the Court immediately
upon the signing of the settlement which will be prepared by the respondent firm
through its counsel. Now, Mr. Maylem, make your manifestation on record.
MR. MAYLEM:
As per unanimous decision of the present members of the board composing of nine,
the three are not members of the board, present before this Honorable Court to date,
(sic) they have agreed to accept the proffer of ONE HUNDRED TEN THOUSAND
PESOS (P110,000.00) as full settlement of their claims in Cases Nos. 709-V and
709-V (1).
ATTY. GARCIA:
In behalf of the respondent and the management of the said respondent and also in
behalf of Mr. Pino, who is the attorney-in-fact of the respondent corporation, with full
power to enter into this settlement, we wish to manifest and uniform this Honorable
Court that the acceptance of the proffer of P110,000.00 in full settlement of the
claims of petitioners is with the full agreement of the said respondent. We are
disposed to deposit the amount of P110,000.00 on or about Friday, November 8,
1963, and said deposit to be made with the Disbursing Officer of this Court and said
deposit to be in certified checks of a local bank and which is actually equivalent to
cash. In line further with the suggestion of the Honorable Judge, we ware willing to
assume the payment of the deposit fee upon our depositing the said amount of
P110,000.00. There is a previous understanding which was not made of record as to
the fact that to enable the members of the board of directors of the petitioner union to
come back to Manila next week to enable them to sign the settlement papers, we
have agreed to advance the sum of TWO HUNDRED PESOS (P200.00) to the
petitioner for the account of said settlement and which will be used by the said
petitioners in their travelling expenses between Manila and Santiago, going and
coming.
COURT:
Noted.
MR. MAYLEM:
We request the Court that Mrs. Mary Concepcion should be presented during the
signing of the agreement on or about November 8, 1963, at 2:30 P.M.
COURT:
NOTED.9
As against the official transcript of the proceedings of the conference above reproduced, petitioner
Natividad Magalpo, a director of the union, together with petitioners Lydia Bulos and Paciencia
Batoon, both union members-claimants, filed on November 5, 1963, through their present counsel,
who duly entered their appearance, their verified "Manifestation and Objection with Ex-Parte Urgent
Motion", relating what transpired at the conference, charging the union president, Maylem, with bad
faith in that he never previously advised the union representatives that the conference of October 31,
1963 was to discuss a compromise settlement nor that this court's resolution dismissing
respondent's appeal from the trial judge's Order dated March 30, 1963 requiring respondent to
deposit P200,000.00 in cash and surety bond had already become final, and asking the trial judge to
shelve the proposed settlement until respondent firm shall have complied with the said deposit order.
The pertinent portions of said Objection and Urgent Motion read:
3. That during the conference, the matter of amicably settling the case was discussed;
petitioners representatives pressed for at least P150,000.00 as a fair amount and the
representatives of the respondents were insisting on their offer of a definite sum of
P110,000.00;
4. That in the course of the conference, no mention at all was made of the entry of judgment
in G.R. Nos. L-21758-59, Supreme Court of the Philippines, entitled "Santiago Rice Mill, et
al. vs. Santiago Labor Union, etc." on October 24, 1963, thereby becoming final and
executory; that the aforesaid entry of judgment reads as follows:
5. That by the terms of the afore-cited entry of judgment, the Respondent's, in effect, are
ordered to deposit the sum of P100,000 in cash, Philippine Currency and similar amount
P100,000 in surety bond, pursuant to the order of this Honorable court of March 30, 1963,
which was affirmed in the abovecited Supreme Court resolutions;
7. That movants consented to come to Manila on the understanding that the conference was
to be held with the Attorney-in-fact of the petitioner, the "CREAM, INC.," formerly, Credit
Research and Intelligence, its exclusive authorized representative for the evaluation,
adjustment and liquidation of its claim against Respondent, that they were very much taken
back in having been taken to the Court of Industrial Relations on October 31, 1963 by the
President of the Petitioner, Mr. Segundino S. Maylem; that even while they were already
inside the building, they were informed that the purpose was to talk about a compromise
settlements with respondent's representatives; as a result of these circumstances, your
movants although present, were not able to register their objections to the proceedings; that
immediately after the aforesaid conference, the herein movants came to know of the entry of
judgment in the Supreme Court, infra; (sic)
8. That the herein Movant's register and manifest their objections to the proceeding held and
to the tentative agreement manifested by the Board of Directors of the Santiago Labor Union
then present, on the following grounds:
a) That the Board of Directors did not have any express authority of the members of
the Santiago Labor Union to enter into any compromise for the sum of P110,000.00;
on the contrary, the latest authority granted its Attorney-in-fact, the "CREAM, INC."
was for the sum of P150,000.00 which authority was given only, very recently:
b) That the proceedings on October 31, 1963 was tainted by apparent bad faith on
the part of the President of the Petitioner, Mr. Segundino s. Maylem, in that there
never was a time before the conference when he intimated or otherwise made known
to the movants, that a conference would be held before Judge Emiliano Tabigne. The
only reason for the trip to Manila was the conference with "CREAM, Inc." officials;
9. That Movant's vehemently disagree to any settlement as tentatively agreed upon, for, in
effect, they will only get fourteen percent, (14%) approximately, or one-seventh of
the amounts as computed by the Chief Examiner of this Honorable Court;
b) That these movants be afforded opportunity by this Honorable Court to be heard regarding
the surety bond to be submitted by the Respondent, before approval thereof;
e) Hearings on the Report of the Chief Examiner be resumed immediately and without
interruption in view of the provisions of Republic Act 3108, until final termination as soon as
possible long before December 31, 1963,10
There petitioners further filed on the same date, November 4, 1963 an urgent Ex parte Motion for the
issuance of a writ of execution for the enforcement of the deposit order against respondent firm, and
asked the trial judge to act on their two urgent motions upon receipt thereof.
Both urgent motions were totally ignored by both the trial judge as well as by the respondent firm,
despite due notice on the latter. The request of the union president, Maylem, at the October 31,
1963 conference that the trial judge have the union counsel present during the proposed signing of
the settlement agreement set for November 8, 1963, as expressly noted by the trial judge, was
likewise ignored. Notwithstanding that notice of the conference set for November 8, 1963 at 2:30
p.m. was served on November 5, 1963 on the union counsel, petitioner Mary Concepcion, the
scheduled conference was never held.
Unexplained, Maylem, the union president and nine other members of the union's board of directors
(out of 13 board members) even before the scheduled hour of the conference of November 8, 1963
at 2:30 p.m. had earlier executed a "Settlement" on said date, without the knowledge, advice, and
conformity of the union counsel, with respondent firm's attorney-in- fact, who was duly assisted by
respondent's two counsels, who likewise executed the "Settlement." In this "Settlement", the said
union officials claiming to act "with the authorization of the Board of Directors and its members, "in
consideration of the sum of P110,000.00, or one-fourth of the estimated P423,756.74-judgment
liability of respondent firm, as computed in the respondent Court's Chief Examiner's Partial Report of
December 14, 1962, "waived and quitclaimed . . . any and all claims it (the union) may have against
the respondent as well as the claim of each and every one of the members of the said petitioner
union against the respondent firm." The union further "warranted" in said "Settlement" "that aside
from the petitioner (union) itself and the members thereof, there are no other persons who have any
interest over the judgment debt and that if it should happen that other persons shall make a claim
against the respondent and/or said judgment debt, that the respondent, nevertheless, shall no longer
be liable therefor."11
The "Settlement" was immediately submitted to the trial judge who forthwith on the same day,
November 8, 1963, issued his Order, approving the same, and entered into respondent Court's
records at 1:45 p.m. of the same day, as follows:
Considering that the bases of the above quoted settlement is well founded and justified and
not contrary to law, morals and/or public policy, approval of the same is, therefore, in order.
WHEREFORE, the Court hereby approves the settlement of the parties in these cases; and
shall as between the parties to the same be deemed to be a decision and/or award in these
matters therein treated in the aforesaid settlement; and upon acknowledgment of the sum of
money in the said settlement, these cases shall be deemed closed and terminated.
Petitioners-lawyers Mary Concepcion, et al. upon learning of the "Settlement" and respondent's
deposit with the Court of the sum of P110,000.00 in pursuance thereof filed in the afternoon of
November 8, 1963 a motion for withdrawal of the sum of P33,000.00 equivalent to their 30%
contingent fee, without prejudice to such action as they may take for enforcing their lien to its full
extent. The trial judge granted such motion in its Order of November 9, 1963. In due course, said
petitioners moved for reconsideration and setting aside of the trial judge's Order of November 8,
1963 approving the "Settlement" and prayed respondent Court en banc to reinstate the judgment
against respondent and to enforce the deposit order dated March 30, 1963.
Petitioners Magalpo, Bulos and Batoon, likewise moved respondent Court en banc to reconsider and
set aside the trial judge's approval of the "Settlement", in disregard of their objection and pending
motions of November 5, 1963 to shelve the proposed settlement and to enforce the deposit Order.
On December 26, 1963, they were joined in their plea for reconsideration by forty-seven other union
members-claimants, Co-petitioners at bar.
Respondent, on the other hand, filed its opposition to the motions for reconsideration, questioning
the personality and interest of petitioners-movants Magalpo and her 2 other co-movants and
asserting that they were bound by the "Settlement" entered into by their union's board of directors. It
alleged that it had deposited with respondent Court the sum of P110,000.00 stipulated in the
"Settlement" on the same day of its approval by the trial judge. It filed with respondent Court on
November 21, 1963 a letter of ratification dated November 10, 1963 addressed to the trial judge and
purportedly signed by some 79 union members-claimants confirming and accepting the settlement
executed by the union board. Petitioners in their brief list 21 of these signatures as questionable,
asserting that they are at variance with other corresponding signatures in the Payroll dated
November 8, 1963 submitted to respondent Court on November 21, 1963, such that "either one or
the other signature is a forgery." Respondent counters that there is "absolutely no truth to the claim"
and that the signers of the ratification letter "have all received their individual shares of the
P110,000.00 settlement paid by respondent company and this in itself is a ratification on their part of
said settlement." Nothing appears in the record, however, as to whether and in what manner the
respondent Court determined the authenticity of the signatures. Respondent further filed on
December 18, 1963 a motion for reconsideration of the trial judge's Order approving payment of
P33,000.00 to the petitioners-attorneys by way of attorneys' fees.
On August 1, 1964, and August 4, 1964, after petitioners had filed on November 29, December 2
and 17, 1963 and January 16, 1964 various urgent motions to set for hearing and for resolution, they
were served with copies of respondent Court's en banc Resolution dated March 9, 1964, penned by
the trial judge, "finding no sufficient justifications to set aside, disturb or modify the Order issued in
these cases on November 8 and 9, 1963" and denying all three motions for reconsideration. Judges
Amando C. Bugayong and Ansberto F. Paredes concurred under date of July 29, 1964 with the
Resolution, while Judge Arsenio Martinez took no part. No statement of the material allegations of,
and issues raised in, the pertinent pleadings set out in detail hereinabove nor reasons for the
conclusion of insufficient justification reached by the majority resolution are given therein.
Then Presiding Judge Jose S. Bautista dissented. "Taking into account the precipitate approval of
settlement over the objection of some union members concerned and without hearing them, on the
strength simply of the manifestation of the petitioner's Board of Directors that it had authority to
compromise when previously said union members concerned had already manifested in Annex "E"
(Exhibit "G", at bar) that there was no such authority," he voted "that the case be restored to
the status quo as of October 30, 1963, but the payment already made to the union members be
considered as partial payments on account, subject to final liquidation and adjustment; that an order
of execution of the judgment in cases Nos. G.R. L-21758 and L-21759 of the Supreme Court be
issued (upholding the Order of March 30, 1963 for deposit of P200,000.00 in cash and surety bond)
be issued and that the Hearing Officer shall resume the hearing of the Examiner's Report.
The Santiago Labor Union, impleaded as party respondent in Cases L-23361-62, filed its Answer on
September 24, 1964, "putting its weight behind the prayers of the petitioners." The Answer reveals
that the union members, feeling betrayed, had disauthorized and removed from office Maylem, the
union president and his board of directors who had executed the "Settlement" with respondent firm
and disclaimed the documents of ratification that they had signed at the behest of Maylem. The
union averred in its Answer that:
a) The real parties in interest in Cases 709-V and 709 V(1), CIR, are the members of
respondent Labor Union;
b) The records of the respondent labor union do not show any grant by the members to the
former incumbency of any previous authority to negotiate the claim or subsequent ratification
of the settlement for P110,000.00 for it is unthinkable and ridiculous for the real parties in
interest to give away gratuitously what had been awarded to them in a final judgment, for a
much lesser amount than that of the award;
c) The members are unanimous in the assertion that the documents they signed at the
behest of former President Segundino S. Maylem were represented and understood to be
but an authority to collect a part of the court award to the members;
d) That the records of the respondent labor union disclose that the members of the union
have unanimously acted, in their individual capacities to proceed with the prosecution and
collection of whatever sums they might yet be entitled to collect, in order to show
unequivocally that the negotiation made by former President Segundino S. Maylem and his
board of directors was unauthorized, and to spotlight the betrayal of the members of the
Union by said Segundino S. Maylem and his board of directors of the former union
incumbency;
6. That fundamentally, there is no contentious issue between the petitioners and respondent labor
union; if at all, the only distinction is between the personality of the real parties in interest, the union
members who have initiated and instituted this petition as against the limited and formal personality
of the respondent labor union to represent them when so authorized by their collective will."12
The core question is whether this Court can give its sanction to respondent Court's majority
resolution upholding the trial judge's approval of the union board's settlement for P110,000.00 of the
estimated P423,766.74-judgment liability of respondent firm in favor of the individual union
members, over the timely opposition formally filed by three members (later joined by forty-seven
other members) expressly calling attention to the union board's bad faith in the premises and lack of
any express authority to enter into the settlement, and without giving the union the opportunity of
being heard and assisted by counsel and notwithstanding the fact that respondent firm, which had
sufficient cash and fixed assets, was under legal compulsion by virtue of respondent court's own
final order to deposit P100,000.00 in cash and another P100,000.00 in surety bond to guarantee
payment of the union members' judgment claims?
The question answers itself. The precipitate approval of the purported settlement under the
circumstances goes against the grain of fundamental considerations of justice, equity and due
process.
1. To begin with, petitioners were not accorded due process of law, when, for reasons unexplained
in the record, the conference set for November 8, 1963 at 2:30 p.m. to take up formally the proposed
settlement was cancelled and never held. (supra, pp. 8-9) Notice thereof had been served on the
union counsel, in accordance with the express request of the union president, as expressly noted by
the trial judge. Yet, such notice was deliberately disregarded and the union was deprived of the
assistance of its counsel.13 Instead, the settlement as unilaterally drafted by respondent's counsel
(supra, p. 7) was executed ahead of the scheduled hour of the conference that turned out to be a
non-conference, by the union president with nine other members of the union's board of directors,
without the knowledge, advice and conformity of the union counsel, while respondent was duly
assisted by its two counsels. By 1:45 p.m. of the same day, the settlement had been approved by
the trial judge as "not contrary to law, morals and public policy." Similarly, petitioners Magalpo, a
board member herself and her co-petitioners Bulos and Batoon were not accorded an opportunity for
a fair hearing on their grave charges against the union leadership and their urgent motions to shelve
the proposed settlement and to enforce the final order of respondent court requiring respondent firm
to deposit P200,000.00 in cash and surety bond for satisfaction of the union members' judgment, as
said motions were totally ignored by the trial judge and not touched upon at all in his Order rashly
approving the settlement.
2. The lack of due deliberation and caution in the trial judge's instant approval of the settlement is
seen from the stipulations therein that the union thereby waived and quitclaimed any and all claims
which it may have against the respondent, as well as the claim of each and every one of the
members of the union against respondent, when precisely the authority of the union board members
to enter into any such compromise or settlement was under express challenge by petitioner
Magalpo, a board member herself in her Objection and Urgent Motion to shelve the settlement filed
on November 5, 1963, which the trial judge completely disregarded. Petitioner Magalpo further made
serious charges that Maylem, the union president, had misled the board members into attending the
unscheduled conference held on October 31, 1963 before the trial judge, and had deliberately
concealed from them the fact of entry on October 24, 1963 of the Order of this Court in G.R. Nos. L-
21758-59 upholding the P200,000.00 deposit Order of respondent court and the effect thereof of
making mandatory upon the trial judge, in accordance with the terms of his own order, the issuance
of a writ for execution or enforcement to compel respondent to so deposit P100,000.00 in cash and
an equal amount in surety bond to guarantee satisfaction of the union members' judgment against
respondent. In point of facts, the union's own Urgent Motion of October 29, 1963, emphasizing that
respondent no longer had any excuse for not complying with the deposit order, as well as petitioner
Magalpo, et al.'s Urgent ex parte motion of November 4, 1963 to the same effect were pending
before the trial judge, unresolved and unacted upon. Petitioners Magalpo, et al. had reason
therefore, to assail the proposed settlement for P110,000.00 as unconscionable, when at the very
least the union members could be assured of P200,000.00 under the deposit order to satisfy their
judgment credit, while the report of respondent court's examiner showed that respondent firm had
sufficient assets, (supra, p. 5), and considering that their partial judgment credit, as estimated by
respondent court's examiner, amounted to more than P400,000.00.
3. The trial judge's rush approval of the settlement disregarded the grave adverse consequences
thereof to the union members. The settlement, as prepared by respondent's counsel, provided for a
union warranty that aside from the union itself and the members thereof, "there are no other persons
who have any interests over the judgment debt and that if it should happen that other persons shall
make a claim against the respondent and/or said judgment debt, that the respondent, nevertheless,
shall no longer be liable therefor." Such warranty was against the very facts of record, which showed
that as early as June 21, 1963, petitioners-counsels in Cases L-23331-32 had duly recorded their
attorneys' lien of "30 % of whatever amount may finally be awarded in favor of the petitioner." Thus,
technically, since the award in favor of the union members amounted to more than P400,000.00, the
settlement for P110,000.00 would conceivably just about cover the 30% attorneys' fees payable to
the petitioners-counsels under the contract, if they were so minded to enforce it and bad faith on the
union's part were shown, with the union members left holding an empty bag.14 Such onerous terms
of the settlement could not then properly be approved by the trial judge as "not contrary to law,
morals and public policy."
4. All these underscore the failure of due process when petitioners were deprived of the formal
conference on the proposed settlement scheduled for November 8, 1963 and of their right to be
assisted by the union counsel as expressly requested, so that a fair hearing could be accorded
petitioners and an opportunity afforded them to air their serious charges of bad faith and lack of
authority against the union leadership. Certainly, all these serious questions and charges made by
petitioners could have been threshed out and verified, if the formal conference scheduled for
November 8, 1963 had been held with the presence of union counsel, considering that the latter
likewise had a right to be heard, since they had duly made of record their attorneys' lien upon the
judgment.15Respondent, in its brief, asserts that it vividly remembers that the trial judge repeatedly
made mention of the P200,000.00 deposit order during the unscheduled conference of October 31,
1963 and "even explained the matter to the members of the board in their native dialect." But the
transcript of the conference reproduced above (supra, pp. 7-9) does not bear out this assertion. The
transcript is obviously deficient and does not reflect the actual discussions and proceedings. This is
to be deplored, for in a matter of such great importance, especially where the union officials were
unassisted by counsel in an unscheduled conference, care should be taken by the trial judge that the
proceedings are faithfully recorded. Thus, although the transcript again fails to make any mention of
it, respondent, in its brief, in effect provides support for petitioners' plaint against the unscheduled
conference and precipitate approval of the settlement behind the back of union counsel, when it
states that "the presiding judge tried to help the parties reach a settlement by stressing to the union
that there was no sense in demanding more than P110,000.00 from the respondent if that was all it
could afford, and that any more delay in the execution of its award to the union members might lead
to their getting much less than the P110,000.00 already being offered by respondents," and "while it
is true that the presiding judge took an active part in helping the parties reach such settlement, it was
only in line with the policy of the law encouraging settlement of cases even after final
judgment."16The obvious fallacy of this untenable posture assumed by the trial judge, of course, is
that with this Court having upheld his P200,000.00 deposit order, it made every sense to enforce
execution of said order, which it was practically his ministerial duty to do so, to assure the union
members of recovery of their judgment credit at the very least to the extent of P200,000.00, as the
trial judge had expressly recognized therein that "petitioner (union) and its members
concerned should be extended the necessary protection of their rights." Any further delay in the
execution of the judgment award in favor of the union members could readily be obviated, if the trial
judge would but expedite the hearings for approval of the Court examiner's Report which had been
filed and left pending since December 14, 1962. As correctly contended by petitioners, he could
have placed the union members, unassisted as they were by counsel, on an equal footing in
negotiating with respondent by a mere stroke of his pen by ordering the enforcement of his final
P200,000.00 deposit order, as to which there no longer existed any obstacle. We find the forcing
through of the settlement, under such circumstances, arbitrary, unfair and unconscionable.
5. Another vital reason for striking down the settlement is the lack of any express or specific authority
of the president and majority of the union board of directors to execute the same and scale down the
estimated P423,756.74-judgment liability of respondent firm in favor of the individual union members
to P110,000.00. On the contrary, petitioner board member Magalpo timely challenged the authority
of the union board to execute any such settlement, expressly informing the trial judge that the union
had specifically appointed an entity in Manila, the "CREAM, Inc.", formerly Credit Research and
Intelligence, as its attorney-in-fact and "exclusive authorized representative for the evaluation,
adjustment and liquidation of its claim against respondent." Forty-seven other union members-
claimants joined petitioner Magalpo in their denunciation of the union board's unauthorized action,
and in their plea for reconsideration with respondent court. Forty-nine union members-claimants
entitled to the bulk of the judgment award have filed this appeal from the adverse rulings of the Court
below. These union members have repudiated the former union president, Maylem and his board of
directors, for having betrayed the union members, and the new union leadership, in its Answer filed
with the Court, has joined petitioners in their prayer for redress, categorically asserting that the union
records do not show any grant by the members to the former union board under Maylem to
"negotiate the claim or subsequent ratification of the settlement for P110,000.00" which is
"unthinkable and ridiculous." (supra, p. 15) Under such circumstances, the letter of ratification of the
settlement purportedly signed by some 79 members, many of whose signatures thereon are
denounced as forgeries and which ratification was not authenticated in the proceedings below and
has been expressly disowned by petitioners herein, cannot be given any legal significance or effect.
6. When it is further taken into consideration that the judgment award, as affirmed by this Court's
decision of August 31, 1962,17 was for the payment of overtime, premium and differential pay to
the individual union members as claimants and for the reinstatement of the individual union
members who testified and proved their having been illegally laid-off, which represent a personal
material interest directly in favor of the individual union members, as against the lack of material
interest on the part of the union as such, the union's lack of authority to execute the settlement, in
the absence of express or specific authorization by the union members, becomes patent. The
authority of the union as such, to execute a settlement of the judgment award in favor of the
individual union members, cannot be presumed but must be expressly granted.
7. Recently, in the analogous case of La Campana Food Products, Inc. etc. Employees Ass'n vs.
Court of Industrial Relations, et al.,18 this Court ruled upon the merits of the union's appeal, and set
aside the Industrial Court's questioned orders which would reopen its previous judgment finding the
employer guilty of unfair labor practice and ordering the reinstatement of, and payment of back
wages from December 4, 1963 to, twenty-one (21) union members. In handing down its decision,
this Court disregarded the petitioner union's motion to dismiss the appeal, filed through new counsel
while the case was pending decision, alleging that the union's legislative council had adopted a
resolution relieving the former union counsel of his services and authorizing the dismissal of the
case, on the premise that such dismissal "would serve the best interests of both parties who are now
in the process of formulating a collective bargaining agreement in their earnest desire to establish
industrial peace and promote the economic well-being of all the parties concerned." For this Court
ruled that the union's loss of interest in the case was no ground for dismissing the case, since "the
labor union as a body in reality has not so great a material interest in the controversy as would
prejudice it in the event of dismissal. It is the twenty-one (21) members for whose benefit the ULP
case was prosecuted who stand to take tremendous losses" and suffer injustice. Upholding the
individual union members in their stand of vindicating their rights acquired under the final judgment
as against the union's legislative council's resolution to dismiss the case, this Court, speaking
through Mr. Justice Sanchez, thus held: —
We now come to the motion to dismiss filed in this Court on March 10, 1969 by new counsel
for petitioner. In that motion, we read the averment that the petitioning union, "after careful
and serious consideration of their Petition, taken in the light of recent developments affecting
their relationship with the respondent-company, have decided that they have lost interest in
the further prosecution of their claims"; that the union's legislative council, on February 5,
1969, adopted a resolution authorizing the new counsel to file a motion dismissing this case;
that the former counsel who directed this case before this Court, Atty. Eulogio R. Lerum, had
been relieved of his services in a letter of the union dated January 13, 1969; and that "the
dismissal of this instant case would serve the best interests of both parties who are now in
the process of formulating a collective bargaining agreement in their earnest desire to
establish industrial peace and promote the economic well-being of all parties concerned."
This drew a reply from Atty. Eulogio R. Lerum that "while he admits that he had received
termination notice from the alleged officers of the abovenamed union, he had not been
disauthorized by the complainants who had retained him to appear in their behalf" and that
"said complainants are against the dismissal of their case for the reason that they want to
vindicate their rights and it is against public policy to settle an unfair labor practice by
amicable settlement (Sec. 5 [a], Rep. Act 875)."
While it may be true that the labor union itself has lost interest in the case, we do not believe
that such should give ground for the dismissal of this case. The labor union as a body in
reality has not so great a material interest in the controversy as would prejudice it in the
event of dismissal. It is the twenty-one (21) members for whose benefit the ULP case was
prosecuted who stand to take tremendous losses. Nor is the argument that union and
employer are now in the process of formulating a collective bargaining agreement of any
consequence. That would not be affected by the decision we now render as an aftermath of
the ULP case. Unless of course such a dismissal is a quid pro quo before the parties could
sit around the bargaining table. Which surely enough is not to the 'best interests' of the
laborers.
And, as we examine the record, we observe none of the members of the legislative council
who adopted the resolution relied upon in the motion to dismiss is personally affected by the
decision rendered by the CIR in Case 3985-ULP. That decision, it will be recalled, directs
private respondents herein not only to reinstate the twenty-one (21) union members without
loss of seniority and other benefits and privileges but also to pay their respective backwages
from December 4, 1963, date of filing of the charge, basis of the complaint, until actual
reinstatement. It is easy enough to perceive the injustice which may be visited upon these
twenty-one (21) union members if the petition herein were to be dismissed. For then, a new
trial will be had, with the consequent trouble, expense, anxiety and another long delay before
they could enjoy the fruits of their victory which they have legally and definitely won only after
a long and protracted legal battle. At any rate, it is better on balance that we foreclose a
flanking movement which could destroy rather than uphold the rights — to reinstatement and
monetary award — of individual laborers acquired under the final judgment.
8. Just as this Court has stricken down unjust exploitation of laborers by oppressive employers, so
will it strike down their unfair treatment by their own unworthy leaders. The Constitution enjoins the
State to afford protection to labor.19 Fair dealing is equally demanded of unions as well as of
employers in their dealings with employees. The union has been evolved as an organization of
collective strength for the protection of labor against the unjust exactions of capital, but equally
important is the requirement of fair dealing between the union and its members, which is fiduciary in
nature, and arises out of two factors: "one is the degree of dependence of the individual employee
on the union organization; the other, a corollary of the first, is the comprehensive power vested in the
union with respect to the individual."20 The union may be considered but the agent of its members for
the purpose of securing for them fair and just wages and good working conditions and is subject to
the obligation of giving the members as its principals all information relevant to union and labor
matters entrusted to it. As already discussed above, the union leadership in the case at bar was
recreant in its duty towards the union members in apparently having failed to disclose to the union
members the full situation of their judgment credit against respondent, to wit, that they were in the
advantageous position of being able to require enforcement of the respondent court's P200,000.00-
deposit order, and in presuming that it had authority to waive and quitclaim the estimated
P423,756.74-judgment credit of the union members for the unconscionable amount of P110,000.00,
which had already been previously rejected by the workers. Respondent firm could not claim that it
dealt in good faith with the union officials, for it hastily executed the purported settlement
notwithstanding the serious charges of bad faith against the union leadership, and the non-holding of
the scheduled conference where the union leaders, at their express request, could be duly assisted
by union counsel. It is noteworthy that respondent never filed with the court below any denial or
responsive pleading traversing the factual allegations in petitioner Magalpo's Manifestation and
Objection charging that at the unscheduled conference of October 31, 1963, the proposed
settlement was in effect railroaded with the fact of the finality of the P200,000.00-deposit order not
having been disclosed to the union representatives. Such failure on the part of respondent
constitutes an implied admission of the material averments. Respondent's justification now that it did
not file any responsive pleading or denial because Magalpo and her co-petitioners had no
personality to file their pleadings as they were not parties to the cases in the lower court is of no
avail, for they were actually the awardees and beneficiaries under the judgment against respondent
and the union was but their agent. Deplorable also is the failure of the trial judge to defer precipitate
action on approval of the settlement until the union could be afforded the opportunity of a hearing
thereon duly assisted by counsel, and failure later of the majority of respondent court in the
reconsideration proceedings, as well, to look seriously into the grave charges of bad faith and
deception against the union officials and their lack of authority to execute the settlement. All of these
charges were just swept under the rug, and summarily dismissed, without even being mentioned, in
the unreasoned en banc Resolution, finding arbitrarily as against the facts herein collated by this
Court from the pertinent pleadings and annexes furnished it, "no sufficient justification to set aside,
disturb or modify" the questioned approval of the settlement. .
9. The cases of Jesalva, et al. vs. Bautista,21 and Diomela, et al. vs. Court of Industrial
Relations,22 cited by respondent, clearly have no application in the present case. In Jesalva,
seventeen cases in different stages of hearing or execution before the Industrial Court were settled
by a compromise agreement, and this Court held that the three petitioners who questioned the
settlement were "bound by the actions of the Union, that is to say, a majority of the members of the
union." There was no question there that the union had acted with the authority of the union
membership. No deceit or concealment or misrepresentation tainted the settlement. Neither was the
amount of the settlement denounced as unconscionable. The employer there, Premiere Productions,
Inc., agreed to pay the amount of P200,000.00 which appeared to be a reasonable settlement as
against the judgment credit of the union workers, and further agreed to lease to the union its
equipment and facilities for the Union to produce two moving pictures, apparently to cover the other
wage claims of the union workers which were still pending trial and resolution. In Diomela, the labor-
management disputes were settled amicably with the unfair labor practice charge against the
employer, Squibb and Sons, (Phil.) being withdrawn, upon motion signed by the union president and
the three employees against whom the acts of unfair labor practice charged in the complaint had
been allegedly committed, to which motion the Court's prosecutor gave his conformity, and with the
employer, which had secured a permanent writ of injunction restraining the strikers who had
apparently declared an illegal strike, against the commission of acts of violence, threats and
intimidation, agreeing to pay three months separation pay to each striking employee. There was no
question, therefore, of the authority of the union president to withdraw the unfair labor practice
charge, as the three employees directly affected had co-signed the withdrawal motion with him. The
subsequent move of Diomela and 23 co-petitioners to disauthorize the union and its counsel of
record, was by their own pleading overruled by the majority of the union membership. The other acts
of unfair labor practice sought to be filed by Diomela and his companions were there ruled out as
splitting a cause of action and harassing the employer with subsequent charges, based upon acts
committed during the same period of time and which should have been included in the charges first
preferred. What should be borne in mind is that the interests of the individual worker can be better
protected on the whole by a strong union aware of its moral and legal obligations to represent the
rank and file faithfully and secure for them the best wages and working terms and conditions in the
process of collective bargaining. As has been aptly pointed out, the will of the majority must prevail
over that of the minority in the process, for "under the philosophy of collective responsibility, an
employer who bargains in good faith should be entitled to rely upon the promises and agreements of
the union representatives with whom he must deal under the compulsion of law and contract. The
collective bargaining process should be carried on between parties who can mutually respect and
rely upon the authority of each other."23 Where, however, collective bargaining process is not
involved, and what is at stake are back wages already earned by the individual workers by way of
overtime, premium and differential pay, and final judgment has been rendered in their favor, the
present case, the real parties in interest with direct material interest, as against the union which has
only served as a vehicle for collective action to enforce their just claims, are the individual workers
themselves.24 Authority of the union to waive or quitclaim all or part of the judgment award in favor of
the individual workers cannot be lightly presumed but must be expressly granted, and the employer,
as judgment debtor, must deal in all good faith with the union as the agent of the individual workers.
The Court in turn should certainly verify and assure itself of the fact and extent of the authority of the
union leadership to execute any compromise or settlement of the judgment on behalf of the
individual workers who are the real judgment creditors.
We therefore sustain the minority opinion of then Presiding Judge Bautista of respondent Court that
the settlement was precipitately approved without verification of the union board's authority to
execute the compromise settlement, and find that there was no such authority. The said settlement
is therefore set aside and the cases below are restored to the status quo, as of October 30, 1963,
with the payments already made to the union members to be considered as partial payments on
account, subject to final liquidation and adjustment. It is directed that an order for the enforcement of
the P200,000.00-deposit order dated March 30, 1963 issued in the cases below, and upheld in
Cases G.R. Nos. L-21758-59 of this Court dismissing the respondent's petition for review, be
forthwith issued, and that hearings on the Chief Examiner's Report of December 14, 1962 be
resumed immediately and without interruption so that the amounts due under the judgment to the
individual union members may be finally determined without further delay. It is unfortunate that
pending these proceedings, no application for preliminary injunction restraining respondent firm from
disposing of its assets was made, since as stated above, (supra, p. 5) respondent had stopped
operations in 1962 preparatory to liquidation, by virtue of the provisions of Republic Act No. 3018
nationalizing the rice and corn industry. The respondent firm's stockholders are, however, charged
with notice of the firm's liability by virtue of the pendency of these appeals, and should any
liquidating dividends have been distributed and paid to them in the meantime, they shall stand liable
for the satisfaction of the union workers' judgment against respondent to the extent of such dividends
respectively paid to and received by them. Similarly, any outstanding unpaid subscriptions or
balances of subscriptions to the firm's capital stock, estimated at P20,000.00,25 shall be subject to
garnishment and execution in satisfaction of the judgment. As to the contingent 30% attorneys' fees
of petitioners-lawyers, the Court deems it proper at this stage, to direct in the exercise of its authority
to control the amount of such fees, that petitioners-lawyers may collect their stipulated contingent
30% attorneys' fees to the extent that additional amounts may be realized on the union workers'
judgment up to the sum of P150,000.00, including the initial payment of P110,000.00, (on which they
have already collected their corresponding fee), such that any further amounts collected beyond said
sum of P150,000.00 shall no longer be subject to said contingent fee.
WHEREFORE, the respondent Court's Orders of November 8, 1963 and March 9, 1964 are hereby
declared null and void and set aside. The respondent court is directed to proceed immediately with
the execution of the judgment rendered by it against respondent firm in Cases Nos. 709-V and V-1
as affirmed by this Court's decision of August 31,
1962,26 in accordance with the directives set forth in the next preceding paragraph, which is
incorporated by reference as an integral portion of the dispositive part of this decision. With costs
against private respondent in both cases herein decided.
DECISION
PARDO, J.:
The petition at bar is actually one for certiorari impugning the resolution of the
[1] [2]
National Labor Relations Commission (NLRC), which modified the Labor Arbiters
decision and ordered petitioner to reinstate complainants (respondents) to their former
positions without loss of seniority rights and back wages limited to three (3) years
from dismissal up to time of reinstatement and to pay respondents Rosita Tamargo,
Lucita Tegio, Alma Magtarayo, and Leonisa Hontiveros each separation pay of
P4,000.00; to pay complainant Agapito Macandog separation pay of P4,000.00,
unpaid salary of P1,000.00; thirteenth month pay of P1,329.25 and attorneys fee of ten
(10%) per cent of the total amount due; and the order denying reconsideration of the
[3]
aforementioned resolution.
The facts are aptly summarized in the Labor Arbiters decision dated January 29, 1993,
as follows:
November 9,
1989
Oldmiso
We are in receipt of your letter expressing your sincere apology for the
incident that happened last Nov. 7, 1989 at AIT.
However further, we would like to inform you that our final decision is
to declare the negotiation DEADLOCK (sic).
Thus, we regret to inform you that we could not attent (sic) to your
scheduled meeting this afternoon.
Sincerely yours,
Florante M. Vicedo
'KMDD President
"Came November 15 and 17, but the union panel did not show up
despite the management letters advising the former about the CBA
meetings. Again, on November 20, 1989 management sent a letter
informing the union regarding the resumption of the negotiation, but the
same turned out fruitless. Finally, despite managements open letter of
admonition under date of November 23, 1989, the union struck on
December 18, 1989. Ncm
"On the ground that the strike was illegal because (a) it was started
without the union having first exercised the ritht (sic) to collective
bargaining in violation of Article 264 (a) of the Labor Code; (b) the
strikers barricaded the company premises, barring ingress to and egress
from the premises, which resulted to the trapping of officers and
employees; (c) the strikers, on December 19, 1989, overturned the
companys Isuzu Kc-20 Van with Plate No. 506 and, thereafter, smashed
its windshield, headlights and sidemirrors; (d) the strikers brandished
broken bottles of Coca-Cola and effectively prevented Ernesto de
Castillo, the traffic dispatcher, and his driver, Narciso Urjal, from
making any move to pacify the mob; and (e) the strike was affected
without any strike vote for the purpose and without the approval of the
majority of the membership, and for not having reported the same to the
Ministry (now Department) of Labor and Employment; a Complaint
with Prayer for Preliminary Injunction was filed by Golden Donuts, Inc.
on January 9, 1990, seeking the following relief (sic): a) to declare the
strike illegal and to dismiss all officers of the union and members who
participated in the commission of illegal acts; b) to pay petitioner actual
damages as may be proven, the sum of Five Hundred Thousand
(P500,000.00) Pesos and Three Hundred Thousand (P300,000.00) Pesos,
respectively, as moral and exemplary damages, plus attorneys fees. After
KMUs Atty. Pontenciano Flores was retained as counsel by the union
and strikers, and sensing the gravity of the penalties attendant to the
strike resorted to, including the financial award that may be due the
Golden Donuts, Inc. and civil liabilities that may be awarded thereafter,
said counsel pleaded for a comprome (sic). Hence, on July 16, 1990, a
compromise agreement was entered into by the KMDD-CFW and
Golden Donuts, Inc. whereby:
apart from the separation pay said strikers, 262 in all, should receive
from the corporation, the variable amounts of which are stated in the list
of workers attached to the agreement. Out of the said 262 striking force,
only the five (5) aforenamed complainants disagree (sic) and did not
receive the amount due, arguing that the compromise agreement was
entered into by their counsel and the President of the Union without their
individual consent and/or authority and that the same was not approved
nor ratified by the majority of the union membership. Hence, these
complaints which were filed on the dates mentioned earlier." [4]
On January 29, 1993, the Labor Arbiter rendered a decision upholding the dismissal
of private respondents and ruling that they were bound by the compromise agreement
entered into by the union with petitioners. The dispositive portion of the decision
states: Ncmmis
"3. To pay complainants counsel ten percent (10%) of the total amount
due them as attorneys fees.
SO ORDERED." [5]
In due time, private respondents interposed an appeal to the NLRC, claiming that the
union had no authority to waive or compromise their individual rights and that they
were not bound by the compromise agreement entered into by the union with
petitioners.
On October 29, 1993, the NLRC issued a resolution which disposed of the case as
follows:
On January 31, 1994, the NLRC denied petitioners motion for reconsideration of the
resolution, for lack of an assignment of "palpable" or "patent" errors.
[7]
The questions presented in the petition are: (1) whether or not a union may
compromise or waive the rights to security of tenure and money claims of its minority
members, without the latters consent, and (2) whether or not the compromise
agreement entered into by the union with petitioner company, which has not been
consented to nor ratified by respondents minority members has the effect of res
judicata upon them.
As a consequence of a negative ruling on the foregoing issues, there arises the issue of
whether private respondents are entitled to monetary benefits subject of their
individual complaints.
The petition is anchored on the argument that a preponderant majority of the union
members, that is, 257 out of 262 members, having agreed to a compromise settlement
whereby they shall be paid separation pay in exchange for the dismissal of the
criminal and unfair labor practice cases filed by petitioners against them, the union is
authorized to waive and compromise even the claims of those who did not consent to
the terms of such compromise agreement. In other words, petitioners claim that the
compromise agreement is binding on union members including those who did not
consent thereto, such as private respondents.
First, even if a clear majority of the union members agreed to a settlement with the
employer, the union has no authority to compromise the individual claims of members
who did not consent to such settlement. Rule 138 Section 23 of the 1964 Revised
Rules of Court requires a special authority before an attorney may compromise his
clients litigation. "The authority to compromise cannot lightly be presumed and
should be duly established by evidence." [9]
In the case at bar, minority union members did not authorize the union to compromise
their individual claims. Absent a showing of the unions special authority to
compromise the individual claims of private respondents for reinstatement and back
wages, there is no valid waiver of the aforesaid rights. As private respondents did not
authorize the union to represent them in the compromise settlement, they are not
bound by the terms thereof. Sdaamiso
[10]
Second, whether minority union members who did not consent to a compromise
agreement are bound by the majority decision approving a compromise settlement has
been resolved in the negative. [11]
The case of La Campana was re-affirmed in the General Rubber case as follows:
"In the instant case, there is no dispute that private respondent has not
ratified the Return-to-Work Agreement. It follows, and we so hold, that
private respondents cannot be held bound by the Return-to-Work
Agreement. The waiver of money claims, which in this case were
accrued money claims, by workers and employees must be regarded as a
personal right, that is, a right that must be personally exercised. For a
waiver thereof to be legally effective, the individual consent or
ratification of the workers or employees involved must be shown.
Neither the officers nor the majority or the union had any authority to
waive the accrued rights pertaining to the dissenting minority members,
even under a collective bargaining agreement which provided for a union
shop. The same considerations of public policy which impelled the Court
to reach the conclusion it did in La Campana, are equally compelling in
the present case. The members of the union need the protective shield of
this doctrine not only vis--vis their employer but also, at times, vis--vis
the management of their own union, and at other times even against their
own imprudence or impecuniousness." [13]
We have consistently ruled that "a compromise is governed by the basic principle that
the obligations arising therefrom have the force of law between the parties."[14]
"A compromise, once approved by final orders of the court has the force of res
judicata between the parties and should not be disturbed except for vices of consent or
forgery." A compromise is basically a contract perfected by mere consent. "Consent
[15]
is manifested by the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract." A compromise agreement is not valid
[16]
when a party in the case has not signed the same or when someone signs for and in
behalf of such party without authority to do so. [17]
In SMI Fish Industries, Inc. vs. NLRC, this Court declared that where the
[18]
compromise agreement was signed by only three of the five respondents, the non-
signatories cannot be bound by that amicable settlement. This is so as a compromise
agreement is a contract and cannot affect third persons who are not parties to it. [19]
Private respondents were not parties to the compromise agreement. Hence, the
judgment approving such agreement cannot have the effect of res judicata upon them
since the requirement of identity of parties is not satisfied. A judgment upon a
[20]
compromise agreement has all the force and effect of any other judgment, hence
conclusive only upon parties thereto and their privies. [21]
Viewed in light of the foregoing legal principles, the conclusion is inescapable that
private respondents are not bound by the compromise agreement entered into by the
union without their consent. They have not waived their right to security of tenure nor
can they be barred from entitlement of their individual claims.
Since the Labor Arbiter found no evidence showing that private respondents
committed any illegal act during the strike, petitioners failure to reinstate them after
the settlement of the strike amounts to illegal dismissal, entitling them to the twin
reliefs of reinstatement and back wages. Scsdaad
[22]
"The burden is on the employer to prove that the termination was after due process,
and for a valid or authorized cause. For the two requisites in our jurisdiction to
[23]
constitute a valid dismissal are: (a) the existence of a cause expressly stated in Article
282 of the Labor Code; and (b) the observance of due process, including the
opportunity given the employee to be heard and defend himself." [24]
However, the separation pay must be deleted, as private respondents are entitled to
reinstatement and back wages and there is no showing of strained relations as would
prevent their reinstatement.[25]
WHEREFORE, the Court DISMISSES the petition and AFFIRMS the NLRC
resolution dated October 29, 1993 and the order dated January 31, 1994, in NLRC
NCR Case Nos. 00-08-04180-90, 00-09-04807-90, and 00-09-04840-90, with
modification deleting the award of separation pay to private respondents.
No costs.
SO ORDERED.
DECISION
PANGANIBAN, J.:
The Case
seeking to annul the November 29, 2002 Decision of the Court of Appeals (CA)
[2]
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the judgment must be, as
it hereby is, AFFIRMED, and the present petition DISMISSED for lack of merit.
Costs shall be taxed against petitioners.
[3]
The affirmed November 29, 2001 Decision of the National Labor Relations
[4]
WHEREFORE, the decision appealed from is hereby SET ASIDE, and respondent
Me-Shurn Corp. is hereby ordered to pay the complainants who appeared in the
proceedings conducted by the Labor Arbiter their full backwages from the date their
wages were withheld from them to the date of the finality of this decision.
[5]
The Facts
for registration with the Bureau of Labor Relations (BLR) through a letter dated
June 11, 1998. [7]
Ten days later, or on June 17, 1998, petitioner corporation started placing
on forced leave all the rank and file employees who were members of the unions
bargaining unit. [8]
On June 23, 1998, respondent union filed a Petition for Certification Election
with the Med-Arbitration Unit of the Department of Labor and Employment
(DOLE), Regional Office No. 3. [9]
Instead of filing an answer to the Petition, the corporation filed on July 27,
1998, a comment stating that it would temporarily lay off employees and cease
operations, on account of its alleged inability to meet the export quota required
by the Board of Investment. [10]
While the Petition was pending, 184 union members allegedly submitted a
retraction/withdrawal thereof on July 14, 1998. As a consequence, the med-
arbiter dismissed the Petition. On May 7, 1999, Department of Labor and
Employment (DOLE) Undersecretary Rosalinda Dimapilis-Baldoz granted the
unions appeal and ordered the holding of a certification election among the rank
and file employees of the corporation. [11]
On August 31, 1998, Chou Fang Kuen (alias Sammy Chou, the other
petitioner herein) and Raquel Lamayra (the Filipino administrative manager of
the corporation) imposed a precondition for the resumption of operation and the
rehiring of laid off workers. He allegedly required the remaining union officers
to sign an Agreement containing a guarantee that upon their return to work, no
union or labor organization would be organized. Instead, the union officers were
to serve as mediators between labor and management. After the signing of
[13]
the Agreement, the operations of the corporation resumed in September 1998. [14]
the cases to the CA via a Petition for Certiorari under Rule 65. They [20]
maintained that the NLRC had committed grave abuse of discretion and serious
errors of fact and law in reversing the Decision of the labor arbiter and in finding
that the corporations cessation of operations in August 1998 had been tainted
with unfair labor practice.
Petitioners added that respondent unions personality to represent the
affected employees had already been repudiated by the workers themselves in
the certification election conducted by the DOLE. Pursuant to the Decision of
Undersecretary Dimapilis-Baldoz in Case No. RO3 00 9806 RU 001, a
certification election was held on September 7, 2000, at the premises of
petitioner corporation under the supervision of the DOLE. The election had the
following results:
No Union 135
Spoiled 2
Challenged 52
Issues
regarding the financial condition of a company -- those that justify the closing of
its business and show the losses in its operations -- are questions of fact that
must be proven below. Petitioners must bear the consequence of their
[26]
Obviously, on the basis of the evidence -- or the lack thereof -- the appellate
court cannot be faulted for ruling that the NLRC did not gravely abuse its
discretion in finding that the closure of petitioner corporation was not due to
alleged financial losses.
At any rate, even if we admit these additional pieces of evidence, the
circumstances surrounding the cessation of operations of the corporation reveal
the doubtful character of its supposed financial reason.
First, the claim of petitioners that they were compelled to close down the
company to prevent further losses is belied by their resumption of operations
barely a month after the corporation supposedly folded up.
Moreover, petitioners attribute their loss mainly to their failure to obtain an
export quota from the Garments and Textile Export Board (GTEB). Yet, as
pointed out by respondents, the corporation resumed its business without first
obtaining an export quota from the GTEB. Besides, these export quotas pertain
only to business with companies in the United States and do not preclude the
corporation from exporting its products to other countries. In other words, the
business that petitioner corporation engaged in did not depend entirely on
exports to the United States.
If it were true that these export quotas constituted the determining and
immediate cause of the closure of the corporation, then why did it reopen for
business barely a month after the alleged cessation of its operations?
Second, the Statements of Income and Deficit for the years 1996 and 1997
show that at the beginning of 1996, the corporation had a deficit of P2,474,505.
Yet, the closure was effected only after more than a year from such year-end
deficit; that is, in the middle of 1998, shortly after the formation of the union.
On the other hand, the Statement of Income and Deficit for the year 1998
does not reflect the extent of the losses that petitioner corporation allegedly
suffered in the months prior to its closure in July/August 1998. This document
is not an adequate and competent proof of the alleged losses, considering that
it resumed operations in the succeeding month of September.
Upon careful study of the evidence, it is clear that the corporation was more
profitable in 1997 than in 1996. By the end of 1997, it had a net income
of P1,816,397.
If petitioners were seriously desirous of averting losses, why did the
corporation not close in 1996 or earlier, when it began incurring deficits? They
have not satisfactorily explained why the workers dismissal was effected only
after the formation of respondent union in September 1998.
We also take note of the allegation that after several years of attempting to
organize a union, the employees finally succeeded on June 7, 1998. Ten days
later, without any valid notice, all of them were placed on forced leave, allegedly
because of lack of quota.
All these considerations give credence to their claim that the closure of the
corporation was a mere subterfuge, a systematic approach intended to dampen
the enthusiasm of the union members. [28]
Third, as a condition for the rehiring of the employees, the union officers
were made to sign an agreement that they would not form any union upon their
return to work. This move was contrary to law.
Fourth, notwithstanding the Petition for Certification Election filed by
respondents and despite knowledge of the pendency thereof, petitioners
recognized a newly formed union and hastily signed with it an alleged Collective
Bargaining Agreement. Their preference for the new union was at the expense
of respondent union. Moncada Bijon Factory v. CIR held that an employer
[29]
could be held guilty of discrimination, even if the preferred union was not
company-dominated.
Fifth, petitioners were not able to prove their allegation that some of the
employees contracts had expired even before the cessation of operations. We
find this claim inconsistent with their position that all 342 employees of the
corporation were paid their separation pay plus accrued benefits in August
1998.
Sixth, proper written notices of the closure were not sent to the DOLE and
the employees at least one month before the effectivity date of the termination,
as required under the Labor Code. Notice to the DOLE is mandatory to enable
the proper authorities to ascertain whether the closure and/or dismissals were
being done in good faith and not just as a pretext for evading compliance with
the employers just obligations to the affected employees. This requirement is
[30]
intended to protect the workers right to security of tenure. The absence of such
requirement taints the dismissal.
All these factors strongly give credence to the contention of respondents
that the real reason behind the shutdown of the corporation was the formation
of their union. Note that, to constitute an unfair labor practice, the dismissal
need not entirely and exclusively be motivated by the unions activities or
affiliations. It is enough that the discrimination was a contributing factor. If the
[31]
basic inspiration for the act of the employer is derived from the affiliation or
activities of the union, the formers assignment of another reason, no matter how
seemingly valid, is unavailing. [32]
Second Issue:
Legal Personality of Respondent Union
Verily, the union has the requisite personality to sue in its own name in order
to challenge the unfair labor practice committed by petitioners against it and its
members. It would be an unwarranted impairment of the right to self-
[36]