SECOND DIVISION

[G.R. No. 101738. April 12, 2000.]

PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner, vs. HON. BIENVENIDO E.

LAGUESMA, Undersecretary of Labor and Employment, HON. HENRY PABEL, Director of the
Department of Labor and Employment Regional Office No. XI and/or the Representation Officer
of the Industrial Relations Division who will act for and in his behalf, PCOP-BISLIG
SUPERVISORY AND TECHNICAL STAFF EMPLOYEES UNION, ASSOCIATED LABOR UNION and
FEDERATION OF FREE WORKERS, respondents.

De La Rosa Tejero & Nograles for petitioner.

The Solicitor General for public respondent.

Mamerto B. Alcisio, Jr. for private respondent.

SYNOPSIS

PBSTSEU instituted a Petition for Certification Election to determine the sole and exclusive bargaining agent of the
supervisory and technical staff employees of PICOP for collective bargaining agreement (CBA) purposes. Following
the submission by the parties of their respective position papers and evidence, Med-Arbiter Phibun D. Pura issued
an Order dated March 27, 1990, holding that supervisors and section heads of the petitioner are managerial
employees and therefore excluded from the list of voters for purposes of certification election. Public respondent
Bienvenido E. Laguesma, acting as the then Undersecretary of Labor, issued the assailed Order dated April 17,
1991 setting aside the Order dated March 27, 1990 of the Med-Arbiter and declaring that the subject supervisors
and section heads are supervisory employees eligible to vote in the certification election. PICOP sought
reconsideration of the said order. However, public respondent in his Order dated August 7, 1991 denied PICOP's
motion for reconsideration. Hence, this petition. PICOP's main thesis is that the positions of Section Heads and
Supervisors, who have been designated as Section Managers and Unit Managers, as the case may be, were
converted to managerial employees under the decentralization and reorganization program it implemented in 1989.
Being managerial employees, with alleged authority to hire and fire employees, they are ineligible for union
membership under Article 245 of the Labor Code.

In this petition, a thorough dissection of the job description of the concerned supervisory employees and section
heads indisputably showed that they were not actually managerial but only supervisory employees since they do
not lay down company policies. The petition was dismissed, and the Resolution and Order of public respondent
Bienvenido E. Laguesma dated April 17, 1991 and August 17, 1991, respectively, finding the subject supervisors
and section heads as supervisory employees eligible to vote in the certification election were affirmed. TAcCDI

SYLLABUS

LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; MANAGERIAL EMPLOYEES; CONSTRUED. —
In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma (288 SCRA 15 [1998]) the Court had occasion to
elucidate on the term "managerial employees." Managerial employees are ranked as Top Managers, Middle
Managers and First Line Managers. Top and Middle Managers have the authority to devise, implement and control
strategic and operational policies while the task of First-Line Managers is simply to ensure that such policies are
carried out by the rank-and-file employees of an organization. Under this distinction, "managerial employees"
therefore fall in two (2) categories, namely, the "managers" per se composed of Top and Middle Managers, and the
"supervisors" composed of First-Line Managers. Thus, the mere fact that an employee is designated "manager"
does not ipso facto make him one. Designation should be reconciled with the actual job description of the
employee, for it is the job description that determines the nature of employment.

DECISION
DE LEON, JR., J p:

Before us is a petition for certiorari seeking to annul the Resolution 1 and the Order 2 dated April 17, 1991 and
August 7, 1991, respectively, of public respondent Bienvenido E. Laguesma, acting then as Undersecretary, now
the Secretary, of the Department of Labor and Employment (DOLE), which reversed the Order dated March 27,
1990 3 of Med-Arbiter Phibun D. Pura declaring that supervisors and section heads of petitioner under its new
organizational structure are managerial employees and should be excluded from the list of voters for the purpose
of a certification election among supervisory and technical staff employees of petitioner. 4

The facts of the case are the following: cdphil

Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of paper and
timber products, with principal place of operations at Tabon, Bislig, Surigao del Sur. It has over
9,000 5 employees, 944 6 of whom are supervisory and technical staff employees. More or less 487 of these
supervisory and technical staff employees are signatory members of the private respondent PICOP-Bislig
Supervisory and Technical Staff Employees Union (PBSTSEU). 7

On August 9, 1989. PBSTSEU instituted a Petition 8 for Certification Election to determine the sole and exclusive
bargaining agent of the supervisory and technical staff employees of PICOP for collective bargaining agreement
(CBA) purposes.

In a Notice 9 dated August 10, 1989, the initial hearing of the petition was set on August 18, 1989 but it was reset
to August 25, 1989, at the instance of PICOP, as it requested a fifteen (15) day period within which to file its
comments and/or position paper. But PICOP failed to file any comment or position paper. Meanwhile, private
respondents Federation of Free Workers (FFW) and Associated Labor Union (ALU) filed their respective petitions for
intervention.

On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order 10 granting the petitions for interventions
of the FFW and ALU. Another Order 11 issued on the same day set the holding of a certification election among
PICOP's supervisory and technical staff employees in Tabon, Bislig, Surigao del Sur, with four (4) choices, namely:
(1) PBSTSEU; (2) FFW; (3) ALU; and (4) no union.

On September 21, 1989, PICOP appealed 12 the Order which set the holding of the certification election contending
that the Med-Arbiter committed grave abuse of discretion in deciding the case without giving PICOP the opportunity
to file its comments/answer, and that PBSTSEU had no personality to file the petition for certification election.

After PBSTSEU filed its Comments 13 to petitioner's appeal, the Secretary of the Labor 14 issued a
Resolution 15 dated November 17, 1989 which upheld the Med-Arbiter's Order dated September 17, 1989, with
modification allowing the supervising and staff employees in Cebu, Davao and Iligan City to participate in the
certification election.

During the pre-election conference on January 18, 1990, PICOP questioned and objected to the inclusion of some
section heads and supervisors in the list of voters whose positions it averred were reclassified as managerial
employees in the light of the reorganization effected by it. 16 Under the Revised Organizational Structure of the
PICOP, the company was divided into four (4) main business groups, namely: Paper Products Business, Timber
Products Business, Forest Resource Business and Support Services Business. A vice-president or assistant vice-
president heads each of these business groups. A division manager heads the divisions comprising each business
group. A department manager heads the departments comprising each division. Section heads and supervisors,
now called section managers and unit managers, head the sections and independent units, respectively, comprising
each department. 17 PICOP advanced the view that considering the alleged present authority of these section
managers and unit managers to hire and fire, they are classified as managerial employees, and hence, ineligible to
form or join any labor organization. 18

Following the submission by the parties of their respective position papers 19 and evidence 20 on this issue, Med-
Arbiter Phibun D. Pura issued an Order 21 dated March 27, 1990, holding that supervisors and section heads of the
petitioner are managerial employees and therefore excluded from the list of voters for purposes of certification
election.

PBSTSEU appealed 22 the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU likewise
appealed. 23 PICOP submitted evidence militating against the appeal. 24 Public respondent Bienvenido E.
Laguesma, acting as the then Undersecretary of Labor, issued the assailed Order 25 dated April 17, 1991 setting
aside the Order dated March 27, 1990 of the Med-Arbiter and declaring that the subject supervisors and section
heads are supervisory employees eligible to vote in the certification election.

PICOP sought 26 reconsideration of the Order dated April 7, 1991. However, public respondent in his
Order 27 dated August 7, 1991 denied PICOP's motion for reconsideration.

Hence, this petition.

PICOP anchors its petition on two (2) grounds, to wit:

I.

THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF

LABOR AND EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF
POWER ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ACTING
WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED YOUR PETITIONER'S PLEA TO
PRESENT ADDITIONAL EVIDENCE TO PROVE THAT SOME OF ITS MANAGERIAL EMPLOYEES ARE
DISQUALIFIED FROM JOINING OR FORMING A UNION REPRESENTED BY CO-RESPONDENT
PBSTSEU, IN VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE CHANGES IN THE
ORGANIZATIONAL STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY IMPLEMENTED IN
JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL AND SUBMITTED FOR DECISION.

II.

THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, ALSO ERRED AND

COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ARBITRARILY ACTING
WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE TOTALLY DISREGARDED THE
DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY YOUR PETITIONER AND RELIED MAINLY ON
THE UNSUBSTANTIATED CLAIM AND MERE ALLEGATIONS OF PRIVATE RESPONDENT,
PBSTSEU, THAT THE REORGANIZATION OF YOUR PETITIONER WAS A SHAM AND CALCULATED
MERELY TO FRUSTRATE THE UNIONIZATION OF YOUR PETITIONER'S SUPERVISORY
PERSONNEL; AND SOLELY ON THIS BASIS, DENIED YOUR PETITIONER'S URGENT MOTION FOR
RECONSIDERATION. 28

PICOP's main thesis is that the positions Section Heads and Supervisors, who have been designated as Section
Managers and Unit Managers, as the case may be, were converted to managerial employees under the
decentralization and reorganization program it implemented in 1989. Being managerial employees, with alleged
authority to hire and fire employees, they are ineligible for union membership under Article 245 29 of the Labor
Code. Furthermore, PICOP contends that no malice should be imputed against it for implementing its
decentralization program only after the petition for certification election was filed inasmuch as the same is a valid
exercise of its management prerogative, and that said program has long been in the drawing boards of the
company, which was realized only in 1989 and fully implemented in 1991. PICOP emphatically stresses that it could
not have conceptualized the decentralization program only for the purpose of "thwarting the right of the concerned
employees to self-organization."

The petition, not being meritorious, must fail and the same should be as it is hereby dismissed. LLjur

First. In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, 30 we had occasion to elucidate on the term
"managerial employees." Managerial employees are ranked as Top Managers, Middle Managers and First Line
Managers. Top and Middle Managers have the authority to devise, implement and control strategic and operational
policies while the task of First-Line Managers is simply to ensure that such policies are carried out by the rank-and-
file employees of an organization. Under this distinction, "managerial employees" therefore fall in two (2)
categories, namely, the "managers" per se composed of Top and Middle Managers, and the "supervisors" composed
of First-Line Managers. 31 Thus, the mere fact that an employee is designated manager" does not ipso facto make
him one. Designation should be reconciled with the actual job description of the employee, 32 for it is the job
description that determines the nature of employment. 33

In the petition before us, a thorough dissection of the job description 34 of the concerned supervisory employees
and section heads indisputably show that they are not actually managerial but only supervisory employees since
they do not lay down company policies. PICOP's contention that the subject section heads and unit managers
exercise the authority to hire and fire 35 is ambiguous and quite misleading for the reason that any authority they
exercise is not supreme but merely advisory in character. Theirs is not a final determination of the company
policies inasmuch as any action taken by them on matters relative to hiring, promotion, transfer, suspension and
termination of employees is still subject to confirmation and approval by their respective superior. 36 Thus, where
such power, which is in effect recommendatory in character, is subject to evaluation, review and final action by the
department heads and other higher executives of the company, the same, although present, is not effective and
not an exercise of independent judgment as required by law. 37

Second. No denial of due process can be ascribed to public respondent Undersecretary Laguesma for the latter's
denial to allow PICOP to present additional evidence on the implementation of its program inasmuch as in the
appeal before the said public respondent, PICOP even then had already submitted voluminous supporting
documents. 38 The record of the case is replete with position papers and exhibits that dealt with the main thesis it
relied upon. What the law prohibits is the lack of opportunity to be heard. 39 PICOP has long harped on its
contentions and these were dealt upon and resolved in detail by public respondent Laguesma. We see no reason or
justification to deviate from his assailed resolutions for the reason that law and jurisprudence aptly support them.

Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the holding of certification
election, despite numerous opportunities to ventilate the same, only after respondent Undersecretary of Labor
affirmed the holding thereof, simply bolstered the public respondents' conclusion that PICOP raised the issue
merely to prevent and thwart the concerned section heads and supervisory employees from exercising a right
granted them by law. Needless to stress, no obstacle must be placed to the holding of certification elections, for it
is a statutory policy that should not be circumvented. 40

WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public respondent Bienvenido E.
Laguesma dated April 17, 1991 and August 17, 1991, respectively, finding the subject supervisors and section
heads as supervisory employees eligible to vote in the certification election are AFFIRMED. Costs against
petitioner. cdasia

SO ORDERED.

||| (Paper Industries Corp. of the Phils. v. Laguesma, G.R. No. 101738, [April 12, 2000], 386 PHIL 498-507)

THIRD DIVISION

[G.R. No. 162025. August 3, 2010.]

9:48 A.M.

TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY, petitioner, vs. ASIA BREWERY,

INC., respondent.

DECISION

VILLARAMA, JR., J p:

For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the Decision 1 dated November 22, 2002 and Resolution 2 dated January 28,
2004 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 55578, granting the petition of respondent
company and reversing the Voluntary Arbitrator's Decision 3 dated October 14, 1999.
The facts are:
Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of beer,
shandy, bottled water and glass products. ABI entered into a Collective Bargaining Agreement
(CBA), 4 effective for five (5) years from August 1, 1997 to July 31, 2002, with Bisig at Lakas ng mga
Manggagawa sa Asia-Independent(BLMA-INDEPENDENT), the exclusive bargaining representative of ABI's
rank-and-file employees. On October 3, 2000, ABI and BLMA-INDEPENDENT signed a renegotiated CBA
effective from August 1, 2000 to 31 July 2003. 5
Article I of the CBA defined the scope of the bargaining unit, as follows:
Section 1. Recognition. — The COMPANY recognizes the UNION as the sole and exclusive
bargaining representative of all the regular rank-and-file daily paid employees within the scope
of the appropriate bargaining unit with respect to rates of pay, hours of work and other terms
and conditions of employment. The UNION shall not represent or accept for membership
employees outside the scope of the bargaining unit herein defined.

Section 2. Bargaining Unit. — The bargaining unit shall be comprised of all regular rank-and-
file daily-paid employees of the COMPANY. However, the following jobs/positions as herein
defined shall be excluded from the bargaining unit, to wit: ADCIca

1. Managers

2. Assistant Managers
 3. Section Heads

4. Supervisors

5. Superintendents

6. Confidential and Executive Secretaries

7. Personnel, Accounting and Marketing Staff

8. Communications Personnel

9. Probationary Employees

10. Security and Fire Brigade Personnel

11. Monthly Employees

12. Purchasing and Quality Control Staff 6 [EMPHASIS SUPPLIED.]

Subsequently, a dispute arose when ABI's management stopped deducting union dues from eighty-
one (81) employees, believing that their membership in BLMA-INDEPENDENT violated the CBA. Eighteen (18)
of these affected employees are QA Sampling Inspectors/Inspectresses and Machine Gauge Technician who
formed part of the Quality Control Staff. Twenty (20) checkers are assigned at the Materials Department of the
Administration Division, Full Goods Department of the Brewery Division and Packaging Division. The rest are
secretaries/clerks directly under their respective division managers. 7
BLMA-INDEPENDENT claimed that ABI's actions restrained the employees' right to self-organization
and brought the matter to the grievance machinery. As the parties failed to amicably settle the controversy,
BLMA-INDEPENDENT lodged a complaint before the National Conciliation and Mediation Board (NCMB). The
parties eventually agreed to submit the case for arbitration to resolve the issue of "[w]hether or not there is
restraint to employees in the exercise of their right to self-organization." 8
In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT after
finding that the records submitted by ABI showed that the positions of the subject employees qualify under the
rank-and-file category because their functions are merely routinary and clerical. He noted that the positions
occupied by the checkers and secretaries/clerks in the different divisions are not managerial or supervisory, as
evident from the duties and responsibilities assigned to them. With respect to QA Sampling
Inspectors/Inspectresses and Machine Gauge Technician, he ruled that ABI failed to establish with sufficient
clarity their basic functions as to consider them Quality Control Staff who were excluded from the coverage of
the CBA. Accordingly, the subject employees were declared eligible for inclusion within the bargaining unit
represented by BLMA-INDEPENDENT. 9
On appeal, the CA reversed the Voluntary Arbitrator, ruling that:
WHEREFORE, foregoing premises considered, the questioned decision of the Honorable
Voluntary Arbitrator Bienvenido De Vera is hereby REVERSED and SET ASIDE, and A NEW ONE
ENTERED DECLARING THAT: DHEACI

a) the 81 employees are excluded from and are not eligible for inclusion in the
bargaining unit as defined in Section 2, Article I of the CBA;

b) the 81 employees cannot validly become members of respondent and/or if already

members, that their membership is violative of the CBA and that they should
disaffiliate from respondent; and

c) petitioner has not committed any act that restrained or tended to restrain its
employees in the exercise of their right to self-organization.

NO COSTS.

SO ORDERED. 10

BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a certification election was
held on August 10, 2002 wherein petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia (TPMA) won. As the
incumbent bargaining representative of ABI's rank-and-file employees claiming interest in the outcome of the
case, petitioner filed with the CA an omnibus motion for reconsideration of the decision and intervention, with
attached petition signed by the union officers. 11 Both motions were denied by the CA. 12
The petition is anchored on the following grounds:

(1)
 THE COURT OF APPEALS ERRED IN RULING THAT THE 81 EMPLOYEES ARE EXCLUDED FROM
AND ARE NOT ELIGIBLE FOR INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION
2, ARTICLE 1 OF THE CBA[;]

(2)

THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81 EMPLOYEES CANNOT VALIDLY
BECOME UNION MEMBERS, THAT THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT
THEY SHOULD DISAFFILIATE FROM RESPONDENT;

(3)

THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER (NOW PRIVATE
RESPONDENT) HAS NOT COMMITTED ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN
ITS EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION. 13

Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to confidential employees
or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner
to managerial employees and hence, are likewise privy to sensitive and highly confidential
records. 14 Confidential employees are thus excluded from the rank-and-file bargaining unit. The rationale for
their separate category and disqualification to join any labor organization is similar to the inhibition for
managerial employees because if allowed to be affiliated with a Union, the latter might not be assured of their
loyalty in view of evident conflict of interests and the Union can also become company-denominated with the
presence of managerial employees in the Union membership. 15 Having access to confidential information,
confidential employees may also become the source of undue advantage. Said employees may act as a spy or
spies of either party to a collective bargaining agreement. 16 AHDcCT
In Philips Industrial Development, Inc. v. NLRC, 17 this Court held that petitioner's "division
secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of
Audit, EDP and Financial Systems" are confidential employees not included within the rank-and-file bargaining
unit. 18Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor, 19 we declared that legal
secretaries who are tasked with, among others, the typing of legal documents, memoranda and
correspondence, the keeping of records and files, the giving of and receiving notices, and such other duties as
required by the legal personnel of the corporation, fall under the category of confidential employees and hence
excluded from the bargaining unit composed of rank-and-file employees.20
Also considered having access to "vital labor information" are the executive secretaries of the General
Manager and the executive secretaries of the Quality Assurance Manager, Product Development Manager,
Finance Director, Management System Manager, Human Resources Manager, Marketing Director, Engineering
Manager, Materials Manager and Production Manager. 21
In the present case, the CBA expressly excluded "Confidential and Executive Secretaries" from the
rank-and-file bargaining unit, for which reason ABI seeks their disaffiliation from petitioner. Petitioner,
however, maintains that except for Daisy Laloon, Evelyn Mabilangan and Lennie Saguan who had been
promoted to monthly paid positions, the following secretaries/clerks are deemed included among the rank-
and-file employees of ABI: 22
NAME DEPARTMENT IMMEDIATE SUPERIOR
C1 ADMIN DIVISION
1. Angeles, Cristina C. Transportation Mr. Melito K. Tan
2. Barraquio, Carina P. Transportation Mr. Melito K. Tan
3. Cabalo, Marivic B. Transportation Mr. Melito K. Tan
4. Fameronag, Leodigario C. Transportation Mr. Melito K. Tan
1. Abalos, Andrea A. Materials Mr. Andres G. Co
2. Algire, Juvy L. Materials Mr. Andres G. Co
3. Anoñuevo, Shirley P. Materials Mr. Andres G. Co
4. Aviso, Rosita S. Materials Mr. Andres G. Co
5. Barachina, Pauline C. Materials Mr. Andres G. Co
6. Briones, Catalina P. Materials Mr. Andres G. Co
7. Caralipio, Juanita P. Materials Mr. Andres G. Co
8. Elmido, Ma. Rebecca S. Materials Mr. Andres G. Co
9. Giron, Laura P. Materials Mr. Andres G. Co
10. Mane, Edna A. Materials Mr. Andres G. Co
xxx xxx xxx

C2 BREWERY DIVISION
1. Laloon, Daisy S. Brewhouse Mr. William Tan
 1. Arabit, Myrna F. Bottling Production Mr. Julius Palmares
2. Burgos, Adelaida D. Bottling Production Mr. Julius Palmares
3. Menil, Emmanuel S. Bottling Production Mr. Julius Palmares
4. Nevalga, Marcelo G. Bottling Production Mr. Julius Palmares ACaDTH

1. Mapola, Ma. Esraliza T. Bottling Maintenance Mr. Ernesto Ang

2. Velez, Carmelito A. Bottling Maintenance Mr. Ernesto Ang

1. Bordamonte, Rhumela D. Bottled Water Mr. Faustino Tetonche

2. Deauna, Edna R. Bottled Water Mr. Faustino Tetonche
3. Punongbayan, Marylou F. Bottled Water Mr. Faustino Tetonche
4. Saguan, Lennie Y. Bottled Water Mr. Faustino Tetonche

1. Alcoran, Simeon A. Full Goods Mr. Tsoi Wah Tung

2. Cervantes, Ma. Sherley Y. Full Goods Mr. Tsoi Wah Tung
3. Diongco, Ma. Teresa M. Full Goods Mr. Tsoi Wah Tung
4. Mabilangan, Evelyn M. Full Goods Mr. Tsoi Wah Tung
5. Rivera, Aurora M. Full Goods Mr. Tsoi Wah Tung
6. Salandanan, Nancy G. Full Goods Mr. Tsoi Wah Tung

1. Magbag, Ma. Corazon C. Tank Farm/ Mr. Manuel Yu Liat

Cella Services
1. Capiroso, Francisca A. Quality Assurance Ms. Regina Mirasol

1. Alconaba, Elvira C. Engineering Mr. Clemente Wong

2. Bustillo, Bernardita E. Electrical Mr. Jorge Villarosa
3. Catindig, Ruel A. Civil Works Mr. Roger Giron
4. Sison, Claudia B. Utilities Mr. Venancio Alconaba
xxx xxx xxx

C3 PACKAGING DIVISION

1. Alvarez, Ma. Luningning L. GP Administration Ms. Susan Bella

2. Cañiza, Alma A. GP Technical Mr. Chen Tsai Tyan
3. Cantalejo, Aida S. GP Engineering Mr. Noel Fernandez
4. Castillo, Ma. Riza R. GP Production Mr. Tsai Chen Chih
5. Lamadrid, Susana C. GP Production Mr. Robert Bautista
6. Mendoza, Jennifer L. GP Technical Mr. Mel Oña
As can be gleaned from the above listing, it is rather curious that there would be several
secretaries/clerks for just one (1) department/division performing tasks which are mostly routine and clerical.
Respondent insisted they fall under the "Confidential and Executive Secretaries" expressly excluded by the CBA
from the rank-and-file bargaining unit. However, perusal of the job descriptions of these secretaries/clerks
reveals that their assigned duties and responsibilities involve routine activities of recording and monitoring,
and other paper works for their respective departments while secretarial tasks such as receiving telephone
calls and filing of office correspondence appear to have been commonly imposed as additional
duties. 23 Respondent failed to indicate who among these numerous secretaries/clerks have access to
confidential data relating to management policies that could give rise to potential conflict of interest with their
Union membership. Clearly, the rationale under our previous rulings for the exclusion of executive
secretaries or division secretaries would have little or no significance considering the lack of or very limited
access to confidential information of these secretaries/clerks. It is not even farfetched that the job category
may exist only on paper since they are all daily-paid workers. Quite understandably, petitioner had earlier
expressed the view that the positions were just being "reclassified" as these employees actually discharged
routine functions. ASTIED
We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-file employees
and not confidential employees.
With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine Technician, there
seems no dispute that they form part of the Quality Control Staff who, under the express terms of the CBA, fall
under a distinct category. But we disagree with respondent's contention that the twenty (20) checkers are
similarly confidential employees being "quality control staff" entrusted with the handling and custody of
company properties and sensitive information.
Again, the job descriptions of these checkers assigned in the storeroom section of the Materials
Department, finishing section of the Packaging Department, and the decorating and glass sections of the
Production Department plainly showed that they perform routine and mechanical tasks preparatory to the
delivery of the finished products. 24 While it may be argued that quality control extends to post-production
 phase — proper packaging of the finished products — no evidence was presented by the respondent to prove
that these daily-paid checkers actually form part of the company's Quality Control Staff who as such "were
exposed to sensitive, vital and confidential information about [company's] products" or "have knowledge of
mixtures of the products, their defects, and even their formulas" which are considered 'trade secrets'. Such
allegations of respondent must be supported by evidence. 25
Consequently, we hold that the twenty (20) checkers may not be considered confidential employees
under the category of Quality Control Staff who were expressly excluded from the CBA of the rank-and-file
bargaining unit.
Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to
persons who formulate, determine, and effectuate management policies in the field of labor relations. The two
(2) criteria are cumulative, and both must be met if an employee is to be considered a confidential employee
— that is, the confidential relationship must exist between the employee and his supervisor, and the
supervisor must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining
units of employees who, in the normal course of their duties, become aware of management policies relating
to labor relations is a principal objective sought to be accomplished by the "confidential employee
rule." 26 There is no showing in this case that the secretaries/clerks and checkers assisted or acted in a
confidential capacity to managerial employees and obtained confidential information relating to labor relations
policies. And even assuming that they had exposure to internal business operations of the company,
respondent claimed, this is not per se ground for their exclusion in the bargaining unit of the daily-paid rank-
and-file employees. 27
Not being confidential employees, the secretaries/clerks and checkers are not disqualified from
membership in the Union of respondent's rank-and-file employees. Petitioner argues that respondent's act of
unilaterally stopping the deduction of union dues from these employees constitutes unfair labor practice as it
"restrained" the workers' exercise of their right to self-organization, as provided in Article 248 (a) of the Labor
Code. AEcTaS
Unfair labor practice refers to "acts that violate the workers' right to organize." The prohibited acts
are related to the workers' right to self organization and to the observance of a CBA. For a charge of unfair
labor practice to prosper, it must be shown that ABI was motivated by ill will, "bad faith, or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course,
that social humiliation, wounded feelings or grave anxiety resulted . . ." 28 from ABI's act in discontinuing the
union dues deduction from those employees it believed were excluded by the CBA. Considering that the herein
dispute arose from a simple disagreement in the interpretation of the CBA provision on excluded employees
from the bargaining unit, respondent cannot be said to have committed unfair labor practice that restrained its
employees in the exercise of their right to self-organization, nor have thereby demonstrated an anti-union
stance.
WHEREFORE, the petition is GRANTED. The Decision dated November 22, 2002 and Resolution dated
January 28, 2004 of the Court of Appeals in CA-G.R. SP No. 55578 are hereby REVERSED and SET ASIDE. The
checkers and secretaries/clerks of respondent company are hereby declared rank-and-file employees who are
eligible to join the Union of the rank-and-file employees.
No costs.

SO ORDERED.

||| (Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R. No. 162025, [August 3,
2010], 640 PHIL 419-433)

SECOND DIVISION

[G.R. No. 78755. July 19, 1989.]

GOLDEN FARMS, INC., petitioner, vs. THE HONORABLE DIRECTOR PURA FERRER-CALLEJA,
BUREAU OF LABOR RELATIONS and NATIONAL FEDERATION OF LABOR, respondents.

J.V. Yap Law Office for petitioner.

Beethoven L. Orcullo for private respondent.

 SYLLABUS

1. LABOR LAWS; COLLECTIVE BARGAINING AGREEMENT; MUST BE RESPECTED WHEN VOLUNTARILY AND FREELY
ENTERED; PARTY MAY NOT BE COMPELLED TO ACCEPT CHANGES DURING ITS DURATION. — Respondents do not
dispute the existence of said collective bargaining agreement. We must therefore respect this CBA which was freely
and voluntarily entered into as the law between the parties for the duration of the period agreed upon. Until then
no one can be compelled to accept changes in the terms of the collective bargaining agreement.

2. ID.; ID.; MANAGERIAL EMPLOYEES; DISQUALIFIED FROM BARGAINING BY THE NATURE AND FUNCTIONS OF
POSITION. — The signatories to the petition for certification election are the very type of employees by the nature
of their positions and functions which We have decreed as disqualified from bargaining with management in case of
Bulletin Publishing Co. Inc. vs. Hon. Augusto Sanchez, etc. (144 SCRA 628) reiterating herein the rationale for such
ruling as follows: if these managerial employees would belong to or be affiliated with a Union, the latter might not
be assured of their loyalty to the Union in view of evident conflict of interests or that the Union can be company-
dominated with the presence of managerial employees in Union membership.

3. ID.; ID.; ID.; DEFINITION. — A managerial employee is defined under Art. 212 (k) of the new Labor Code as
"one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such
managerial actions. All employees not falling within this definitions are considered rank-and-file employees for
purposes of this book."

4. ID.; ID.; ID.; CONFIDENTIAL EMPLOYEES ARE LIKEWISE DISQUALIFIED. — This rationale holds true also for
confidential employees such as accounting personnel, radio and telegraph operators, who having access to
confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or spies
of either party to a collective bargaining agreement. This is specially true in the present case where the petitioning
Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow the confidential
employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective
Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly
excluded.

5. ID.; ID.; ID.; COMPANY FOREMEN ARE ALSO DISQUALIFIED. — As to the company foremen, while in the
performance of supervisory functions, they may be the extension or alter ego of the management. Adversely, the
foremen, by their actuation, may influence the workers under their supervision to engage in slow down commercial
activities or similar activities detrimental to the policy, interest or business objectives of the company or
corporation, hence they also cannot join.

DECISION

PARAS, J p:

Petitioner Golden Farms, Inc., seeks a reversal of the resolution of public respondent Department of Labor and
Employment Director Pura Ferrer-Calleja in BLR Case No. A-2-56-87 which affirmed on appeal the decision of Labor
Arbiter Conrado 0. Macasa, Sr., in NLRC Case No. R-418-ROXI-MED-UR-88-86, issuing a directive as follows:

"In view of the foregoing, the herein petition for certification election filed by the National
Federation of Labor (NFL) is hereby DISMISSED; whereas, its resultant and relevant
consequence of its recognized representation of the entire rank-and-file employees of the
bargaining unit should be given life and meaning, as it is hereby directed, and Employer Golden
Farms, Incorporated likewise enjoined to negotiate for a supplementary collective bargaining
agreement, or for the inclusion of the herein monthly paid rank-and-file employees at Luna,
Kapalong, Davao del Norte, and Lanang, Davao City in the still existing negotiated contract,
whichever the parties may consider just and appropriate under the circumstances."

SO ORDERED. (p. 29, Rollo)

The case originated as a Petition for Direct Certification Election or Recognition filed by herein private
respondent in behalf of certain office employees and foremen before Regional Office No. XI, Davao City of the
Ministry of Labor and Employment. Petitioner herein opposed said petition on the ground among others that a
perusal of the names allegedly supporting the said petition showed that said persons by the nature of their
jobs are performing managerial functions and/or occupying confidential positions such that they cannot validly
 constitute a separate or distinct group from the existing collective bargaining unit also represented by private
respondent. llcd
Petitioner is a corporation engaged in the production of bananas for export. Private respondent Union represents
the employees/workers of petitioner corporation, who were the same signatories to an earlier Petition for
Certification Election filed in 1984 before the Ministry of Labor known as ROXI Case No. UR-70-84, which was
dismissed by a Resolution issued by Med-Arbiter Conchita Martinez when it was established that a collective
bargaining unit (NFL) between the Corporation and the rank-and-file employees was and is in existence at the time
of the filing of the said petition for certification election until the present filing. However, in the order of dismissal,
it was stated:

"After taking into consideration the functions exercised by the foremen as contained in their
joint affidavits (Annexes "A-1", "A-2" & "A-3", Petitioner's Position Paper) apparently, they fall
within the classification of rank-and-file employees. For, as consistently ruled in a long line of
decisions, mere supervisory designations in the position titles, do not make the holders of such
positions any less rank and filers, without the convincing proof that such supervisory
designations are coupled with actual performance of managerial functions. In the cases at bar,
what was submitted by the respondent companies are only lists of employees holding the
positions of foremen and confidential positions and as such are not covered by the bargaining
unit. Such piece of evidence alone does not constitute convincing proof for us to adapt
respondents' stance (Annexes "A", "B", "C", & "D"). Comment on Petition).

(p. 13, Rollo)

Having had no opportunity to contest the abovementioned statement in the order of dismissal, petitioner herein as
private respondent therein, filed a "Manifestation" stating among others:

"2. That since the petitions were dismissed the herein employees make clear for the record
that said view would run counter to the provision of the pertinent Collective Bargaining
Agreement whereby the foremen were already acknowledged and agreed upon to be
managerial employees and accordingly excluded from the coverage of the said CBA;

"3. That with respect to those employees holding confidential positions, it is a basic principle
that they cannot be included in any bargaining unit, the fact being that having access to
confidential informations, said employees may be the source of undue advantage. Said
employees may act as spies for either parties to collective bargaining agreement. This is
especially true in this case where the petitioning union is already the bargaining agent of the
rank-and-file employees in the establishment. To allow confidential employees to join existing
bargaining unit will defeat the very purpose for which an employee holding confidential position
was in the first place excluded."

(p. 68, Rollo)

Private respondent herein as petitioner therein appealed the order of dismissal which was accordingly opposed
(Annex "L" p. 69, Rollo) by Golden Farms, Inc., reiterating the grounds and arguments set forth in its Manifestation
filed earlier. The appeal was dismissed and subsequently the National Federation of Labor Union refiled the Petition
for Certification in NLRC Case No. R-418-ROX-MED-UR-88-86 which was also dismissed. Said order of dismissal is
now the subject of this review for containing directives not within the power of a Med-Arbiter to issue. Petitioner
Golden Farms, Inc., now poses the following questions:

I — HAS A MED-ARBITER THE POWER OR AUTHORITY TO DIRECT MANAGEMENT TO

ENTER INTO A SUPPLEMENTAL COLLECTIVE BARGAINING AGREEMENT WITH A
CONTRACTING UNION.

II — MAY SUPERVISORS, CASHIERS, FOREMEN, AND EMPLOYEES HOLDING

CONFIDENTIAL/MANAGERIAL FUNCTION COMPEL MANAGEMENT TO ENTER
INTO A COLLECTIVE BARGAINING AGREEMENT WITH THEM.

(p. 14, Rollo)

The petition merits Our consideration.

Respondents relied heavily on the alleged finding of Med-Arbiter Martinez that the employees who were signatories
to the petition for certification election and represented by respondent Union are actually rank-and-file workers not
disqualified from entering into a collective bargaining agreement with management. In said findings of fact, Med-
Arbiter Martinez singled out in her classification as rank-and-file employees the foremen of Petitioner Corporation
considered from their joint affidavits and for lack of convincing proof that their supervisory designations are
coupled with the actual performance of managerial functions. cdphil
Whether or not such finding is supported by the evidence is beside the point. Respondents herein do not dispute
that the signatories (listed in Annex "A", page 30, Rollo) to the Petition for certification election subject of this case,
were holding the positions of cashier, purchasers, personnel officers, foremen and employees having access to
confidential information such as accounting personnel, radio and telegraph operators and head of various sections.
It is also a fact that respondent Union is the exclusive bargaining Unit of the rank-and-file employees of petitioner
corporation and that an existing CBA between petitioner corporation and the Union representing these rank-and-file
employees was still enforced at the time the Union filed a petition for certification election in behalf of the
aforementioned signatories. Under the terms of said CBA (Annex "E", p. 40, Rollo) it is expressly provided that:

"Section 1. The COMPANY and the UNION hereby agree that the recognized bargaining unit for
purposes of this agreement shall consist of regular rank-and-file workers employed by the
COMPANY at the plantation presently situated at Alejal, Carmen, Davao. Consequently, all
managerial personnel like, superintendents, supervisor, foremen, administrative, professional
and confidential employees, and those temporary, casual, contractual, and seasonal workers
are excluded from the bargaining unit and therefore, not covered by this agreement."

(p, 41, Rollo)

Respondents do not dispute the existence of said collective bargaining agreement. We must therefore respect
this CBA which was freely and voluntarily entered into as the law between the parties for the duration of the
period agreed upon. Until then no one can be compelled to accept changes in the terms of the collective
bargaining agreement.
Furthermore, the signatories to the petition for certification election are the very type of employees by the nature
of their positions and functions which We have decreed as disqualified from bargaining with management in case of
Bulletin Publishing Co. Inc. vs. Hon. Augusto Sanchez, etc. (144 SCRA 628) reiterating herein the rationale for such
ruling as follows: if these managerial employees would belong to or be affiliated with a Union, the latter might not
be assured of their loyalty to the Union in view of evident conflict of interests or that the Union can be company-
dominated with the presence of managerial employees in Union membership. A managerial employee is defined
under Art. 212 (k) of the new Labor Code as "one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial actions. All employees not falling within this definitions
are considered rank-and-file employees for purposes of this Book."

This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph
operators, who having access to confidential information, may become the source of undue advantage. Said
employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is specially true in
the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the
establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in
violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded.

As to the company foremen, while in the performance of supervisory functions, they may be the extension or alter
ego of the management. Adversely, the foremen, by their actuation, may influence the workers under their
supervision to engage in slow down commercial activities or similar activities detrimental to the policy, interest or
business objectives of the company or corporation, hence they also cannot join. LLpr

WHEREFORE, finding the assailed directive of Med-Arbiter Conrado O. Macasa, Sr. which was affirmed by Director
Pura Ferrer-Calleja reiterating the directive of Med-Arbiter Conchita Martinez "to negotiate for a supplementary
collective bargaining agreement, or for the inclusion of the herein monthly paid rank-and-file employees" to be
erroneous as it is in complete disregard of the terms of the collective bargaining agreement, the same is hereby
DECLARED to be without force and effect.

SO ORDERED.

||| (Golden Farms, Inc. v. Ferrer-Calleja, G.R. No. 78755, [July 19, 1989], 256 PHIL 903-909)

THIRD DIVISION

[G.R. No. 88957. June 25, 1992.]

PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION and PHILIPS EMPLOYEES ORGANIZATION (FFW), respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioner.

Ronnie M. Nismal legal representative of private respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR ORGANIZATION; COVERAGE; SECURITY PERSONNEL ELIGIBLE FOR
MEMBERSHIP THEREOF. — At the time Case No. NLRC-NCR-00-11-03936-87 was filed in 1987, security personnel
were no longer disqualified from joining or forming a union. Section 6 of E.O No. 111, enacted on 24 December
1986, repealed the original provisions of Article 245 of the Labor Code, reading as follows: "ARTICLE
245. Ineligibility of security personnel to join any labor organization. — Security guards and other personnel
employed for the protection and security of the person, properties and premises of the employer shall not be
eligible for membership in any labor organization." and substituted it with the following provision: "ARTICLE
245. Right of employees in the public service. — ". . . By virtue of such repeal and substitution, security guards
became eligible for membership in any labor organization. Manila Electric Co. vs. Secretary of Labor and
Employment. (197 SCRA 275 [1991]).

2. ID.; ID.; ID.; CONFIDENTIAL EMPLOYEES; NOT INCLUDED THEREIN. — Respondent NLRC committed grave
abuse of discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI's "Service
Engineers, Sales Force, division secretaries, all Staff of General Management, Personnel and Industrial Relations
Department, Secretaries of Audit, EDP and Financial Systems are included within the rank and file bargaining unit."
all these employees, with the exception of the service engineers and the sales force personnel, are confidential
employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous CBAs between
PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions, they
assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union equally applies to them. In Bulletin Publishing Co.,
Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus: ". . . The rationale for this inhibition
has been stated to be, because if these managerial employees would belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also
become company-dominated with the presence of managerial employees in Union membership." In Golden Farms,
Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable to confidential employees.

3. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO SELF-ORGANIZATION; VIOLATED WHEN NLRC HELD THAT
SERVICE ENGINEERS AND SALES REPRESENTATIVES INCLUDED IN BARGAINING UNIT FOR RANK AND FILE
EMPLOYEES. — As regards the service engineers and the sales representatives, in holding that they are included in
the bargaining unit for the rank and file employees of PIDI, the NLRC practically forced them to become members
of PEO-FFW or to be subject to its sphere of influence, it being the certified bargaining agent for the subject
bargaining unit. This violates, obstructs, impairs and impedes the service engineers' and the sales representatives'
constitutional right to form unions or associations and to self-organization. In Victoriano vs. Elizalde Rope
Workers' Union, this Court already ruled: ". . . an employee may, as he pleases, join or refrain from joining an
association. It is, therefore, the employee who should decide for himself whether he should join or not an
association; and should he choose to join, he himself makes up his mind as to which association he would join; and
even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said
organization at any, time. It is clear, therefore, that the right to join a union includes the right to abstain from
joining any union. Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, and
guaranteed to the employee, is the 'right' to join associations of his choice, it would be absurd to say that the law
also imposes, in the same breath, upon the employee the duty to join associations. The law does not enjoin an
employee to sign up with any association." The decision then of the Executive Labor Arbiter in merely directing the
holding of a referendum "to determine the will of the service engineers, sales representatives as to their inclusion
or exclusion in (sic) the bargaining unit" is the most appropriate procedure that conforms with their right to form,
assist or join a labor union or organization.

4. LABOR AND SOCIAL LEGISLATION; LABOR ORGANIZATION; COVERAGE; SUPERVISORY EMPLOYEES; RULE. — It
must be stressed that service engineers and sales representatives holding supervisory positions or functions are
concerned, take into account the present Article 245 of the Labor Code which, as amended by R.A. No. 6715, now
reads: "ARTICLE 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees. — Managerial employees are not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own."

5. ID.; ID.; GLOBE DOCTRINE; NOT APPLICABLE IN CASE AT BAR. — Since the only issue is the subject
employees' inclusion in or exclusion from the bargaining unit in question, and PIDI never questioned the decision of
the Executive Labor Arbiter, the Globe Doctrine finds no application. Besides, this doctrine applies only in instances
of evenly balanced claims by competitive groups for the right to be established as the bargaining unit, which do not
obtain in this case.

DECISION

DAVIDE, JR., J p:

In this petition for certiorari and prohibition under Rule 65 of the Rules of Court with a prayer for a temporary
restraining order and/or a writ of preliminary injunction, petitioner Philips Industrial Development, Inc. (PIDI)
seeks to set aside the Decision and Resolution, dated 16 January 1989 and 17 March 1989, respectively, of the
National Labor Relations Commission (NLRC) in Case No. NLRC-NCR-00-11-03936-87 on the ground that it
committed grave abuse of discretion amounting to lack of jurisdiction in holding that service engineers, sales
representatives and confidential employees of PIDI are qualified to be included in the existing bargaining unit.

PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic products. Since 1971, it
had a total of six (6) collective bargaining agreements (CBAs) with private respondent Philips Employees
Organization-FFW (PEO-FFW), registered labor union and the certified bargaining agent of all the rank and file
employees of PIDI. In the first CBA (1971-1974), the supervisors referred to in R.A. No. 875, confidential
employees, security guards, temporary employees and sales representatives were excluded from the bargaining
unit. In the second to the fifth CBAs (1975-1977; 1978-1980; 1981-1983; and 1984-1986), the sales force,
confidential employees and heads of small units, together with the managerial employees, temporary employees
and security personnel, were specifically excluded from the bargaining unit. 1 The confidential employees are the
division secretaries of light/telecom/data and consumer electronics, marketing managers, secretaries of the
corporate planning and business manager, fiscal and financial system manager and audit and EDP manager, and
the staff of both the General Management and the Personnel Department. 2

In the sixth CBA covering the years 1987 to 1989, it was agreed upon, among others, that the subject of inclusion
or exclusion of service engineers, sales personnel and confidential employees in the coverage of the bargaining unit
would be submitted for arbitration. Pursuant thereto, on June 1987, PEO-FFW filed a petition before the Bureau of
Labor Relations (BLR) praying for an order "directing the parties to select a voluntary arbitrator in accordance with
its rules and regulations." prcd

As the parties failed to agree on a voluntary arbitrator, the BLR endorsed the petition to the Executive Labor
Arbiter of the National Capital Region for compulsory arbitration pursuant to Article 228 of the Labor Code.
Docketed as Case No. NLRC-NCR-00-11-03936-87, the case was assigned to Executive Labor Arbiter Arthur
Amansec.

On 17 March 1988, Labor Arbiter Amansec rendered a decision, the dispositive portion of which states:

"In view of the foregoing, a decision is hereby rendered, ordering the respondent to conduct a
referendum to determine the will of the service engineers, sales representatives as to their
inclusion or exclusion in the bargaining unit.

It is hereby declared that the Division Secretaries and all Staff of general management,
personnel and industrial relations department, secretaries of audit, EDP, financial system are
confidential employees and as such are hereby deemed excluded in the bargaining unit.

SO ORDERED."

PEO-FFW appealed from the decision to the NLRC.

On 16 January 1989, the NLRC rendered the questioned decision, the dispositive portion of which reads:

"WHEREFORE, the foregoing premises considered, the appealed decision of the Executive Labor
Arbiter is hereby SET ASIDE and a new one entered declaring respondent company's Service
Engineers, Sales Force, division secretaries, all Staff of General Management, Personnel and
Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems are included
within the rank and file bargaining unit.

SO ORDERED."
The reversal is anchored on the respondent NLRC's conclusion that based on Section 1, 3 Rule II, Book V of the
Omnibus Rules Implementing the Labor Code, as amended by Section 3, Implementing Rules of E.O. No. 111;
paragraph (c), Section 2, Rule V of the same Code, as amended by Section 6 4 of the Implementing Rules ofE.O.
No. 111; and Article 245 5 of the Labor Code, as amended:

". . . all workers, except managerial employees and security personnel, are qualified to join or
be a part of the bargaining unit . . ."

It further ruled that:

"The Executive Labor Arbiter's directive that the service engineers and sales representatives to
(sic) conduct a referendum among themselves is erroneous inasmuch as it arrogates unto said
employees the right to define what the law means. It would not be amiss to state at this point
that there would be no one more interested in excluding the subject employees from the
bargaining unit than management and that it would not be improbable for the latter to lobby
and/or exert pressure on the employees concerned, thus agitating unrest among the rank-and-
file. Likewise, the Executive Labor Arbiter's declaration that the Division Secretaries and all
Staff of general management, personnel and industrial relations department, secretaries of
audit, EDP and financial system 'are confidential employees and as such are hereby deemed
excluded in (sic) the bargaining unit' is contrary to law for the simple reason that the law, as
earlier quoted, does not mention them as among those to be excluded from the bargaining unit
only (sic) managerial employees and security guards. As a matter of fact, supervisory unions
have already been dissolved and their members who do not fall within the definition of
managerial employees have become eligible to join or assist the rank-and-file organization." 6

Its motion for the reconsideration of this decision having been denied by the NLRC in its Resolution of 16 March
1989, a copy of which it received on 8 June 1989, petitioner PIDI filed the instant petition on 20 July 1989, alleging
that: llcd

"I
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN HOLDING THAT SERVICE ENGINEERS, SALES REPRESENTATIVES AND
CONFIDENTIAL EMPLOYEES OF PETITIONER ARE QUALIFIED TO BE PART OF THE EXISTING
BARGAINING UNIT.

II
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN NOT APPLYING THE TIME HONORED 'GLOBE DOCTRINE.' " 7

On 31 July 1989, this Court required the respondents to comment on the petition, which PEO-FFW complied with
on 28 August 1989. Public respondent NLRC, thru its counsel, the Solicitor General, moved for, and was granted a
30-day extension to file its Comment.

On 18 September 1989, this Court required the parties to show cause why the petition should not be dismissed in
view of the finality of the NLRC decision as provided for by the penultimate sentence of Article 223 of the Labor
Code, as amended by R.A. No. 6715. R.A. No. 6715, which amended Article 223 of the Labor Code, was enacted on
2 March 1989 and took effect on 21 March 1989. The parties subsequently complied with the Resolution.

On 16 May 1990, this Court required the parties to submit Memoranda explaining the effect in this case of Article
223 of the Labor Code, as amended by Section 12 ofR.A. No. 6715 with respect to the finality of decisions of the
NLRC. The parties complied separately with the same.

On 10 September 1990, this Court gave due course to the petition and required the parties to submit their
respective Memoranda. The petitioner and the Office of the Solicitor General filed their separate Memoranda. On
the other hand, PEO-FFW moved that its motion and manifestation dated 23 August 1989 be considered as its
Memorandum; this Court granted the same.

As stated earlier, the principal issue in this case is whether the NLRC committed grave abuse of discretion in
holding that service engineers, sales representatives and confidential employees (division secretaries, staff of
general management, personnel and industrial relations department, secretaries of audit, EDP and financial
system) are qualified to be included in the existing bargaining unit. Petitioner maintains that it did, and in support
of its stand that said employees should not be absorbed by the existing bargaining unit, it urges this Court to
consider these points:

1) The inclusion of the group in the existing bargaining unit would run counter to the history of
the parties' CBA. The parties' five (5) previous CBAs consistently excluded this group of
employees from the scope of the bargaining unit. The rationale for such exclusion is that these
employees hold positions which are highly sensitive, confidential and of a highly fiduciary
 nature; to include them in the bargaining unit may subject the company to breaches in security
and the possible revelation of highly sensitive and confidential matters. It would cripple the
company's bargaining position and would give undue advantage to the union.

2) The absence of mutuality of interests between this group of employees and the regular rank
and file militates against such inclusion. A table prepared by the petitioner shows the disparity
of interests between the said groups:

SERVICE ENGINEERS SERVICE SALES REPRESENTATIVES TECHNICIANS

(Non-Bargaining
(Bargaining
AREAS OF INTEREST Unit Employees) Unit Employees)
Qualifications Professional Employees High School/
Vocational
Grads.
Work Schedule With Night Shift None
Schedule
Night Shift 10% of Basic Rate None
Differential Pay
Stand-By Call & On Stand-By Call with: None
Allowance First Line: 15% of
basic rate
Second Line: 10% of
basic rate
Uniforms None 2 sets of polo
& pants every
6 months
Retirement Benefits 15 yrs. ser. 70% 15 yrs serv. 50%
16 75% 16 85%
17 80% 17 90%
18 85% 18 100%
19 90% 19 115%
20 100% 20 135%
Year End Performance Merit Increase System None
Evaluation
Sales Commission Yes None
Car Loan Yes None
Precalculated Yes None
Kilometer allowance
The Office of the Solicitor General supports the decision of the Executive Labor Arbiter and refuses to uphold the
position of the NLRC. It holds the view that the division secretaries; the staff members of General Management,
Personnel and the Industrial Relations Department; and the secretaries of Audit, EDP and Financial Systems, are
disqualified from joining the PEO-FFW as they are confidential employees. They cannot even form a union of their
own for, as held in Golden Farms, Inc. vs. Ferrer-Calleja, 8 the rationale for the disqualification of managerial
employees from joining unions holds true also for confidential employees. As regards the sales representatives and
service engineers, however, there is no doubt that they are entitled to join or form a union, as they are not
disqualified by law from doing so. Considering that they have interests dissimilar to those of the rank and file
employees comprising the existing bargaining unit, and following the Globe Doctrineenunciated in In Re: Globe
Machine and Stamping Company 9 to the effect that in determining the proper bargaining unit the express will or
desire of the employees shall be considered, they should be allowed to determine for themselves what union to join
or form. The best way to determine their preference is through a referendum As shown by the records, such a
referendum was decreed by the Executive Labor Arbiter. LibLex

The petition is impressed with merit.

At the outset, We express Our agreement with the petitioner's view that respondent NLRC did not quite accurately
comprehend the issue raised before it. Indeed, the issue is not whether the subject employees may join or form a
union, but rather, whether or not they may be part of the existing bargaining unit for the rank and file employees
of PIDI.

Even if the issue was, indeed, as perceived by the NLRC, still, a palpable error was committed by it in ruling that
under the law, all workers, except managerial employees and security personnel, are qualified to join a union, or
form part of a bargaining unit. At the time Case No. NLRC-NCR-00-11-03936-87 was filed in 1987, security
personnel were no longer disqualified from joining or forming a union. Section 6 of E.O No. 111, enacted on 24
December 1986, repealed the original provisions of Article 245 of the Labor Code, reading as follows:
 "ARTICLE 245. Ineligibility of security personnel to join any labor organization. — Security
guards and other personnel employed for the protection and security of the person, properties
and premises of the employer shall not be eligible for membership in any labor organization."

and substituted it with the following provision:

"ARTICLE 245. Right of employees in the public service. —" 10

xxx xxx xxx

By virtue of such repeal and substitution, security guards became eligible for membership in any labor
organization. 11
On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse of discretion
in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI's "Service Engineers, Sales
Force, division secretaries, all Staff of General Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems are included within the rank and file bargaining unit."

In the first place, all these employees, with the exception of the service engineers and the sales force personnel,
are confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous
CBAs between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their
functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who
exercise managerial functions in the field of labor relations. 12 As such, the rationale behind the ineligibility of
managerial employees to form, assist or join a labor union equally applies to them.

In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, 13 this Court elaborated on this rationale, thus:

". . . The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured of
their loyalty to the Union in view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in Union membership."

In Golden Farms, Inc. vs. Ferrer-Calleja, 14 this Court explicitly made this rationale applicable to confidential
employees:

"This rationale holds true also for confidential employees such as accounting personnel, radio
and telegraph operators, who having access to confidential information, may become the
source of undue advantage. Said employee(s) may act as a spy or spies of either party to a
collective bargaining agreement. This is specially true in the present case where the petitioning
Union is already the bargaining agent of the rank-and-file employees in the establishment. To
allow the confidential employees to join the existing Union of the rank-and-file would be in
violation of the terms of the Collective Bargaining Agreement wherein this kind of employees
by the nature of their functions/positions are expressly excluded."

As regards the service engineers and the sales representatives, two (2) points which respondent NLRC likewise
arbitrarily and erroneously ruled upon, need to be discussed. Firstly, in holding that they are included in the
bargaining unit for the rank and file employees of PIDI, the NLRC practically forced them to become members of
PEO-FFW or to be subject to its sphere of influence, it being the certified bargaining agent for the subject
bargaining unit. This violates, obstructs, impairs and impedes the service engineers' and the sales representatives'
constitutional right to form unions or associations 15 and to self-organization. 16 In Victoriano vs. Elizalde Rope
Workers' Union, 17 this Court already ruled: llcd

". . . Notwithstanding the different theories propounded by the different schools of

jurisprudence regarding the nature and contents of a 'right', it can be safely said that whatever
theory one subscribes to, a right comprehends at least two broad notions, namely: first, liberty
or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself
without being prevented by law; and second, power, whereby an employee may, as he pleases,
join or refrain from joining an association. It is, therefore, the employee who should decide for
himself whether he should join or not an association; and should he choose to join, he himself
makes up his mind as to which association he would join; and even after he has joined, he still
retains the liberty and the power to leave and cancel his membership with said organization at
any, time. 18 It is clear, therefore, that the right to join a union includes the right to abstain
from joining any union. 19 Inasmuch as what both the Constitution and the Industrial Peace
Act have recognized, and guaranteed to the employee, is the 'right' to join associations of his
choice, it would be absurd to say that the law also imposes, in the same breath, upon the
employee the duty to join associations. The law does not enjoin an employee to sign up with
any association."
The decision then of the Executive Labor Arbiter in merely directing the holding of a referendum "to determine the
will of the service engineers, sales representatives as to their inclusion or exclusion in (sic) the bargaining unit" is
the most appropriate procedure that conforms with their right to form, assist or join a labor union or organization.
However, since this decision was rendered before the effectivity of R.A. No. 6715, it must now be stressed that its
future application to the private parties in this case should, insofar as service engineers and sales representatives
holding supervisory positions or functions are concerned, take into account the present Article 245 20 of the Labor
Code which, as amended by R.A. No. 6715, now reads:

"ARTICLE 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own." (emphasis supplied)

The foregoing disquisitions render unnecessary a discussion on the second ground on the alleged grave abuse of
discretion on the part of the NLRC in not applying the "Globe Doctrine". Suffice it to state here that since the only
issue is the subject employees' inclusion in or exclusion from the bargaining unit in question, and PIDI never
questioned the decision of the Executive Labor Arbiter, the Globe Doctrine finds no application. Besides, this
doctrine applies only in instances of evenly balanced claims by competitive groups for the right to be established as
the bargaining unit, 21 which do not obtain in this case. LexLib

WHEREFORE, the petition is hereby GRANTED. The Decision of public respondent National Labor Relations
Commission in Case No. NLRC-NCR-00-11-03936-87, promulgated on 16 January 1989, is hereby SET ASIDE while
the Decision of the Executive Labor Arbiter in said case dated 17 March 1988 is hereby REINSTATED, subject to the
modifications above indicated.

Costs against private respondent.

SO ORDERED.

||| (Philips Industrial Development, Inc. v. National Labor Relations Commission, G.R. No. 88957, [June 25, 1992],
285 PHIL 830-843)

SECOND DIVISION

[G.R. No. 110854. February 13, 1995.]

PIER 8 ARRASTRE & STEVEDORING SERVICES, INC., petitioner, vs. HON. MA. NIEVES
ROLDAN-CONFESOR, in her capacity as Secretary of Labor and Employment, and GENERAL
MARITIME & STEVEDORES UNION (GMSU), respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; MANAGERIAL EMPLOYEES; DISTINGUISHED FROM

SUPERVISORY AND RANK-AND-FILE EMPLOYEES. — The applicable law governing the proper composition of a
bargaining unit is Article 245 of the Labor Code, as amended. Article 212(m) of the same Code, as well as
Book V, Rule 1, Section 1(o) of the Omnibus Rules Implementing the Labor Code, as amended by the Rules
and Regulations Implementing R.A. 6715, differentiate managerial, supervisory, and rank-and-file employees,
thus: "'Managerial Employee' is one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the
use of independent judgment. All employees not falling within any of the above definitions are considered
rank-and-file employees for purposes of the Book."
2. ID.; ID.; TEST FOR DETERMINING THEREOF. — This Court has ruled on numerous occasions that
the test of supervisory or managerial status is whether an employee possesses authority to act in the interest
of his employer, which authority is not merely routinary or clerical in nature but requires use of independent
judgment. What governs the determination of the nature of employment is not the employee's title, but his job
description. If the nature of the employee's job does not fall under the definition of "managerial" or
"supervisory" in the Labor Code, he is eligible to be a member of the rank-and-file bargaining unit.
 3. ID.; ID.; ID.; APPLICATION IN CASE OF FOREMEN. — Foremen are chief and often especially-
trained workmen who work with and commonly are in charge of a group of employees in an industrial plant or
in construction work. They are the persons designated by the employer-management to direct the work of
employees, and to superintend and oversee them. They are representatives of the employer-management with
authority over particular groups of workers, processes, operations, or sections of a plant or an entire
organization. In the modern industrial plant, they are at once a link in the chain of command and the bridge
between management and labor. In the performance of their work, foremen definitely use their independent
judgment and are empowered to make recommendations for managerial action with respect to those
employees under their control. Foremen fall squarely under the category of supervisory employees, and cannot
be part of rank-and file unions.
4. ID.; ID.; ID.; LEGAL SECRETARIES, CONSIDERED CONFIDENTIAL EMPLOYEES. — Upon the other
hand, legal secretaries are neither managers nor supervisors. Their work is basically routinary and clerical.
However, they should be differentiated from rank-and-file employees because they are tasked with, among
others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the
giving of an receiving notices, and such other duties as required by the legal personnel of the corporation.
Legal secretaries therefore fall under the category of confidential employees. Thus, to them applies our holding
in the case of Philips Industrial Development, Inc. v. NLRC, 210 SCRA 339 (1992), that: ". . . By the very
nature of their functions, they assist and act in a confidential capacity to, or have access to confidential
matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale
behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them.
"In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus: '. . .
The rationale for this inhibition has been stated to be, because if these managerial employees would belong to
or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident
conflict of interests. The Union can also become company-dominated with the presence of managerial
employees in Union membership.' "In Golden Farms, Inc. vs. Ferrer-Calleja, (210 SCRA 471 [1989]), this
Court explicitly made this rationale applicable to confidential employees: 'This rationale holds true also for
confidential employees . . ., who having access to confidential information, may become the source of undue
advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. . .
.'"
5. ID.; ID.; ID.; TIMEKEEPER AND ASSISTANT TIMEKEEPER, NOT INCLUDED. — As for the
timekeeper and assistant timekeeper, it is clear from petitioner's own pleadings that they are neither
managerial nor supervisory employees. They are merely tasked to report those who commit infractions against
company rules and regulations. This reportorial function is routinary and clerical. They do not determine the
fate of those who violate company policy rules and regulations. It follows that they cannot be excluded from
the subject bargaining unit.
6. ID.; LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENT; EFFECTIVITY THEREOF; RULE. —
In the case of Lopez Sugar Corporations v. Federation of Free Workers, (189 SCRA 179 [1991]), this Court
reiterated the rule that although a CBA has expired, it continues to have legal effects as between the parties
until a new CBA has been entered into. It is the duty of both parties to the CBA to keep the status quo, and to
continue in full force and effect the terms and conditions of the existing agreement during the 60-day freedom
period and/or until a new agreement is reached by the parties. Applied to the case at bench, the legal effects
of the immediate past CBA between petitioner and private respondent terminated, and the effectivity of the
new CBA began, only on March 4, 1993, when public respondent resolved their dispute.
7. ID.; ARBITRATORS; CONCLUSION THEREOF, RESPECTED BY COURT. — Order is based on well-
studied evidence. The conclusions reached by public respondent in the discharge of her statutory duty as
compulsory arbitrator, demand the high respect of this Court. The study and settlement of these disputes fall
within public respondent's distinct administrative expertise. She is especially trained for this delicate task, and
she has within her cognizance such data and information as will assist her in striking the equitable balance
between the needs of management, labor, and the public. Unless there is clear showing of grave abuse of
discretion, this Court cannot and will not interfere with the labor expertise of public respondent Secretary of
Labor.

DECISION

PUNO, J p:

Petitioner corporation and private respondent labor union entered into a three-year Collective
Bargaining Agreement (CBA) with expiry date on November 27, 1991. During the freedom period, the National
Federation of Labor Unions (NAFLU) questioned the majority status of pricate respondent through a petition for
certification election. The election conducted on February 27, 1992 was won by private respondent. On March
19, 1992, private respondent was certified as the sole and exclusive bargaining agent of petitioner's rank-and-
file employees. LLphil
On June 22, 1992, private respondent's CBA proposals were received by petitioner. Counter-proposals
were made by petitioner. Negotiations collapsed, and on August 24, 1992, private respondent filed a Notice of
Strike with the National Conciliation and Mediation Board (NCMB). The NCMB tried but failed to settle the
parties' controversy.
On September 30, 1992, public respondent Secretary of Labor assumed jurisdiction over the dispute.
She resolved the bargaining deadlock between the parties through an Order, dated March 4, 1993, which
reads, in part:
"xxx xxx xxx
"A. The non-economic issues
"1. Scope/coverage of the CBA. Article I of the 1988 CBA provides:
'The Company recognizes the Union as the sole and exclusive collective bargaining
representative of the all the stevedores, dockworkers, gang bosses, foremen, rank and file
employees working at Pier 8, North Harbor' and its offices and said positions are [sic] listed in
ANNEX 'A' hereof.
'As such representative the UNION is designated as the collective bargaining agent
with respect to and concerning the terms and conditions of employment and the interpretations
and implementation of the provisions and conditions of this Agreement.'
"Annex 'A' of the CBA is the listing of positions covered thereby. These are:
1. Foremen;
2. Gang bosses;
3. Winchmen;
4. Signalmen;
5. Stevedores;
6. Dockworkers;
7. Tallymen;
8. Checkers;
9. Forklift and crane operators;
10. Sweepers;
11. Mechanics;
12. Utilitymen;
13. Carpenters; and
14. Other rank and file employees.
"The company argues in the first instance that under Article 212(m) in relation to
Article 245 of the Labor Code, supervisors are ineligible for membership in a labor organization
of rank and file employees. Being supervisors, foremen should be excluded from the bargaining
unit.
"The Company likewise seeks the exclusion on the ground of lack of community of
interest and divergence in functions, mode of compensation and working conditions of the
following:
1. Accounting clerk;
2. Audit clerk;
3. Collector;
4. Payroll clerk;
5. Nurse;
6. Chief biller;
7. Biller;
8. Teller/biller;
9. Personnel clerk;
10. Timekeeper;
11. Asst. timekeeper;
12. Legal secretary;
13. Telephone operator;
14. Janitor/Utility; and
15. Clerk
"These positions, the Company argues, cannot be lumped together with the
stevedores or dockworkers who mostly comprise the bargaining unit. Further, notwithstanding
the check-off provisions of the CBA, the incumbents in these positions have never paid union
dues. Finally, some of them occupy confidential positions and therefore ought to be excluded
from the bargaining unit.

The Union generally argues that the Company's proposed exclusions are retrogressive.
...
"We see no compelling justification to order the modification of Article I of the 1988
CBA as worded. For by lumping together stevedores and other rank and file employees, the
obvious intent of the parties was to treat all employees not disqualified from union membership
as members of one bargaining unit. This is regardless of working conditions, mode of
compensation, place of work, or other considerations. In the absence of mutual agreement of
the parties or evidence that the present composition of the bargaining unit is detrimental to the
individual and organizational rights either of the employees or of the Company, this expressed
intent cannot be set aside.
It may well be that as a consequence of Republic Act No. 6715, foremen are ineligible
to join the union of the rank and file. But this provision can be invoked only upon proof that the
foremen sought to be excluded from the bargaining unit are cloaked with effective
recommendatory powers such as to qualify them under the legal definition of supervisors.
"xxx xxx xxx
"7. Effectivity of the CBA. The Union demands that the CBA should be fully retroactive
to 28 November 1991. The Company is opposed on the ground that under Article 253-A of the
Labor Code, the six-month period within which the parties must come to an agreement so that
the same will be automatically retroactive is long past.
"The Union's demand for full retroactivity, we note, will result in undue financial
burden to the Company. On the other hand, the Company's reliance on Article 253-A is
misplaced as this applies only to the renegotiated terms of an existing CBA. Here, the deadlock
arose from negotiations for a new CBA.
"These considered, the CBA shall be effective from the time we assumed jurisdiction
over the dispute, that is, on 22 September 1992, and shall remain effective for five (5) years
thereafter. It shall be understood that except for the representation aspect, all other provisions
thereof shall be renegotiated not latere than three (3) years after its effectivity, consistently
with Article 253-A of the Labor Code.
"B. The economic issues
"The comparative positions of the parties are:
COMPANY UNION
"xxx xxx xxx
"5. Vacation 17 days vacation and i) For all covered
and sick leave 17 days sick leave employees other than
per year for employees gang boses:
with at least five years
of service
15 working days vacation
and 15 working days
sick leave for those with
at least 1 year of service
20 working days vacation
and 20 working days sick
leave for those with more
than one year of service
up to 5 years of service
25 working days vacation
and 25 working days sick
leave for those with more
than 5 years of service up
to 10 years of service
30 working days vacation
and 30 working days sick
 leave for those with more
than 10 years of service
Provided that in Provided that in the case
the case of a rotation of a rotation worker, he
tion worker he must must have worked for
have worked for at 140 days in a calendar
least 160 days in a year year as a condition for
for availment availment.
Provided, further that in
- the event a rotation
worker fails to complete
140 days work in a
calendar year, he shall
still be entitled to vacation
and sick leave with pay,
as follows:
139 — 120 days worked:
90%
119 — 110 days worked:
50%
ii) For Gang bosses:
Same as the above
schedule except that:
1) the condition that a
gang boss must have
worked for at least 120
days in a calendar year
shall be reduced to 110
days; and
2) where the above
number of days worked is
not met, the gang boss
shall still be entitled to
vacation and sick leave
with pay, as follows:
109 — 90 days worked:
90%
89 — 75 days worked:
50%
"xxx xxx xxx
"7. Death aid P1,500.00 to heirs P10,000.00 to heirs of
of covered employees covered employees
P5,000.00 assistance for
death of immediate
member of covered
employee's family
"xxx xxx xxx
"12. Emergency loan
a) amount of P700.00 but damage to 30 days salary payable
entitlement dwelling by fire shall be through payroll deduction
included in twelve monthly
installments
b) cash bond None The company shall put up
for loss, a cash bond of not less
damage or than P40,000.00 for
accident winchmen, crane and
fork-lift operators.
 "xxx xxx xxx
"Balancing the right of the Company to remain viable and to just returns to its
investments with right of the Union members to just rewards for their labors, we find the
following award to be fair and responsible:
"xxx xxx xxx
"6. Vacation and Sick Leave
a) Non-rotation workers 17 days vacation/17 days sick
leave for those with at least
1 year of service
b) Rotation workers 17 days vacation/17 days sick leave
other than provided that the covered
worker must have worked for at
least 155 days in a calendar
year
c) Gang bosses 17 days vacation/17 days sick
leave, provided that the gang
boss must have worked for at
least 115 days in a calendar year
"xxx xxx xxx
"8. Death aid P3,000.00 to the heirs of each
covered employee
"xxx xxx xxx
"12. Emergency loan 30 days pay, payable through
payroll deductions of 1/12 of
monthly salary
"WHEREFORE, the Pier 8 Arrastre and Stevedoring Services and the General Maritime
Services Union are hereby ordered to execute a new collective bargaining agreement
incorporating the dispositions herein contained. These shall be in addition to all other existing
terms, conditions and benefits of employment, except those specifically deleted herein, which
have previously governed the relations of the parties. All other disputed items not specifically
touched upon herein are deemed denied, without prejudice to such other agreements as the
parties may have reached in the meantime. The collective bargaining agreement so executed
shall be effective from 22 September 1992 and up to five years thereafter, subject to
renegotiation on the third year of its effectivity pursuant to Article 253-A of the Labor Code." 1
Petitioner sought partial reconsideration of the Order. On June 8, 1993, public respondent affirmed
her findings, except for the date of effectivity of the Collective Bargaining Agreement, which was changed to
September 30, 1992. This is the date when she assumed jurisdiction over the deadlock. cdll
Petitioner now assails the Order as follows:
"I
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN NOT
EXCLUDING CERTAIN POSITIONS FROM THE BARGAINING UNIT.
"II
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN
MAKING THE CBA EFFECTIVE ON SEPTEMBER 30, 1992 WHEN SHE ASSUMED JURISDICTION
OVER THE LABOR DISPUTE AND NOT MARCH 4, 1993 WHEN SHE RENDERED JUDGMENT OVER
THE DISPUTE
"III
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN
REDUCING THE NUMBER OF DAYS AN EMPLOYEE SHOULD ACTUALLY WORK TO BE ENTITLED
TO VACATION AND SICK LEAVE BENEFITS
"IV
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN
INCREASING WITHOUT FACTUAL BASIS THE DEATH AID AND EMERGENCY LOAN"2
The petition is partially meritorious.
 Firstly, petitioner questions public respondent for not excluding four (4) foremen, a legal secretary, a
timekeeper and an assistant timekeeper from the bargaining unit composed of rank-and-file employees
represented by private respondent. Petitioner argues that: (1) the failure of private respondent to object when
the foremen and legal secretary were prohibited from voting in the certification election constitutes an
admission that such employees hold supervisory/confidential positions; and (2) the primary duty and
responsibility of the timekeeper and assistant timekeeper is "to enforce company rules and regulations by
reporting to petitioner . . . those workers who committed infractions, such as those caught abandoning their
posts and sleeping on post, "and hence, they should not be considered as rank-and-file employees.
The applicable law governing the proper composition of a bargaining unit is Article 245 of the Labor
Code, as amended, which provides as follows:
"Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
Article 212(m) of the same Code, as well as Book V, Rule 1, Section 1(o) of the Omnibus Rules Implementing
the Labor Code, as amended by the Rules and Regulations Implementing R.A. 6715, differentiate managerial,
supervisory, and rank-and-file employees, thus:
"'Managerial Employee' is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge,
assign or discipline employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of the above definitions are considered rank-and-file
employees for purposes of the Book."
This Court has ruled on numerous occasions that the test of supervisory or managerial status is
whether an employee possesses authority to act in the interest of his employer, which authority is not merely
routinary or clerical in nature but requires use of independent judgment. 3 What governs the determination of
the nature of employment is not the employee's title, but his job description. If the nature of the employee's
job does not fall under the definition of "managerial" or "supervisory" in the Labor Code, he is eligible to be a
member of the rank-and-file bargaining unit. 4

Foremen are chief and often especially-trained workmen who work with and commonly are in charge
of a group of employees in an industrial plant or in construction work.5 They are the persons designated by
the employer-management to direct the work of employees, and to superintend and oversee them.6 They are
representatives of the employer-management with authority over particular groups of workers, processes,
operations, or sections of a plant or an entire organization. In the modern industrial plant, they are at once a
link in the chain of command and the bridge between management and labor. 7In the performance of their
work, foremen definitely use their independent judgment and are empowered to make recommendations for
managerial action with respect to those employees under their control. Foremen fall squarely under the
category of supervisory employees, and cannot be part of rank and file unions.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically
routinary and clerical. However, they should be differentiated from rank-and-file employees because they are
tasked with, among others, the typing of legal documents, memoranda and correspondence, the keeping of
records and files, the giving of and receiving notices, and such other duties as required by the legal personnel
of the corporation.8 Legal secretaries therefore fall under the category of confidential employees. Thus, to
them applies our holding in the case of Philips Industrial Development, Inc. v. NLRC, 210 SCRA 339 (1992),
that:
". . . By the very nature of their functions, they assist and act in a confidential capacity
to, or have access to confidential matters of, persons who exercise managerial functions in the
field of labor relations. As such, the rationale behind the ineligibility of managerial employees
to form, assist or join a labor union equally applies to them.
"In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on
this rationale, thus:
. . . The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured of
their loyalty to the Union in view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in Union membership.'
"In Golden Farms, Inc. vs. Ferrer-Calleja,9 this Court explicitly made this rationale
applicable to confidential employees:
 'This rationale holds true also for confidential employees . . ., who having access to
confidential information, may become the source of undue advantage. Said employee(s) may
act as a spy or spies of either party to a collective bargaining agreement. . . . "
We thus hold that public respondent acted with grave abuse of discretion in not excluding the four
foremen and legal secretary from the bargaining unit composed of rank-and-file employees.
As for the timekeeper and assistant timekeeper, it is clear from petitioner's own pleadings that they
are neither managerial nor supervisory employees. They are merely tasked to report those who commit
infractions against company rules and regulations. This reportorial function is routinary and clerical. They do
not determine the fate of those who violate company policy rules and regulations. It follows that they cannot
be excluded from the subject bargaining unit.
The next issue is the date when the new CBA of the parties should be given effect. Public respondent
fixed the effectivity date on September 30, 1992, when she assumed jurisdiction over the dispute. Petitioner
maintains it should be March 4, 1993, when public respondent rendered judgment over the dispute.
The applicable laws are Articles 253 and 253-A of the Labor Code, thus:
"Art. 253. Duty to bargain collectively when there exists a collective bargaining
agreement. — When there is a collective bargaining agreement, the duty to bargain collectively
shall also mean that neither party shall terminate nor modify such agreement during its
lifetime. However, either party can serve a written notice to terminate or modify the agreement
at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep
the status quo and to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is reached by the parties."
and
"Art. 253-A. Terms of a collective bargaining agreement. — Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated
not later than three (3) years after its execution. Any agreement on such other provisions of
the Collective Bargaining Agreement entered into within six (6) months from the date of expiry
of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall
retroact to the day immediately following such date. If any such agreement is entered into
beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a
deadlock in the renegotiation of the collective bargaining agreement, the parties may exercise
their rights under this Code."
In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this Court interpreted the above law as
follows:
"In light of the foregoing, this Court upholds the pronouncement of the NLRC holding
the CBA to be signed by the parties effective upon the promulgation of the assailed resolution.
It is clear and explicit from Article 253-A that any agreement on such other provisions of the
CBA shall be given retroactive effect only when it is entered into within six (6) months from its
expiry date. If the agreement was entered into outside the six (6) month period, then the
parties shall agree on the duration of the retroactivity thereof.
"The assailed resolution which incorporated the CBA to be signed by the parties was
promulgated June 5, 1989, the expiry date of the past CBA. Based on the provision of Section
253-A, its retroactivity should be agreed upon by the parties. But since no agreement to that
effect was made, public respondent did not abuse its discretion in giving the said CBA a
prospective effect. The action of the public respondent is within the ambit of its authority
vested by existing law."
In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179 (1991), this
Court reiterated the rule that although a CBA has expired, it continues to have legal effects as between the
parties until a new CBA has been entered into. It is the duty of both parties to the CBA to keep the status quo,
and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day
freedom period and/or until a new agreement is reached by the parties. 10 Applied to the case at bench, the
legal effects of the immediate past CBA between petitioner and private respondent terminated, and the
effectivity of the new CBA began, only on March 4, 1993, when public respondent resolved their dispute.
Finally, we find no need to discuss at length the merits of the third and fourth assignments of error.
The questioned Order relevantly states:
 "In the resolution of the economic issues, the Company urges us to consider, among
others, present costs of living, its financial capacity, the present wages being paid by the other
cargo handlers at the North Harbor, and the fact that the present average wage of its workers
is P127.75 a day, which is higher than the statutory minimum wage of P118.00 a day. The
Company's evidence, consisting of its financial statements for the past three years, shows that
its net income was P743, 423.45 for 1989, P2,108,569.03 for 1990, and P1,479,671.84 for
1991, or an average of P1,443,885.10 over the three-year period. It argues that for just the
first year of effectivity of the CBA, the Company's proposals on wages, effect thereof on
overtime, 13th month pay, and vacation and sick leave commutation, will cost about P520,
723.44, or 35.19% of its net income for 1991. The Company likewise urges us to consider the
multiplier effect of its proposals on the second and third years of the CBA. As additional
argument, the Company manifests that a portion of its pier will undergo a six-month to one-
year renovation starting January 1993.
"On the other hand, the Union's main line of argument — that is, aside from being
within the financial capacity of the Company to grant, it's demands are fair and reasonable — is
not supported by evidence controverting the Company's own presentation of its financial
capacity. The Union in fact uses statements of the Company for 1989-1991, although it
interprets these data as sufficient justification for its own proposals. It also draws our attention
to the bargaining history of the parties, particularly the 1988 negotiations during which the
company was able to grant wage increases despite operational losses.
"Balancing the right of the Company to remain viable and to just returns to its
investments with right of the Union members to just rewards for their labors, we find the
following award to be fair and reasonable . . . 11
It is evident that the above portion of the impugned Order is based on well-studied evidence. The conclusions
reached by public respondent in the discharge of her statutory duty as compulsory arbitrator, demand the high
respect of this Court. The study and settlement of these disputes fall within public respondent's distinct
administrative expertise. She is especially trained for this delicate task, and she has within her cognizance
such data and information as will assist her in striking the equitable balance between the needs of
management, labor, and the public. Unless there is clear showing of grave abuse of discretion, this Court
cannot and will not interfere with the labor expertise of public respondent Secretary of Labor.

IN VIEW WHEREOF, public respondent's Order, dated March 4, 1993, and Resolution, dated June 8,
1993, are hereby MODIFIED to exclude foremen and legal secretaries from the rank-and-file bargaining unit
represented by private respondent union, and to fix the date of effectivity of the five-year collective bargaining
agreement between petitioner corporation and private respondent union on March 4, 1993. No costs.
SO ORDERED.
||| (Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor, G.R. No. 110854, [February 13, 1995], 311
PHIL 311-331)

FIRST DIVISION

[G.R. No. 108855. February 28, 1996.]

METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES ROLDAN-CONFESOR, in

her capacity as Secretary of the Department of Labor and Employment and METRO DRUG
CORPORATION EMPLOYEES ASSOCIATION-FEDERATION OF FREE WORKERS, respondents.

Bautista Picazo Buyco Tan & Fider for petitioner.

The Solicitor General for public respondent.

Perfecto V. Fernandez, Jose P. Fernandez & Cristobal P. Fernandez for Metro Drug Corporation.

SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE AGENCIES; RULE; CASE AT BAR. — We
reaffirm the doctrine that considering their expertise in their respective fields, factual findings of administrative
agencies supported by substantial evidence are accorded great respect and binds this Court. The Secretary of
Labor ruled, thus: . . . Any act committed during the pendency of the dispute that tends to give rise to further
contentious issues or increase the tensions between the parties should be considered an act of exacerbation. One
must look at the act itself, not on speculative reactions. A misplaced recourse is not needed to prove that a dispute
has been exacerbated. For instance, the Union could not be expected to file another notice of strike. For this would
depart from its theory of the case that the layoff is subsumed under the instant dispute, for which a notice of strike
had already been filed. On the other hand, to expect violent reactions, unruly behavior, and any other chaotic or
drastic action from the Union is to expect it to commit acts disruptive of public order or acts that may be illegal.
Under a regime of laws, legal remedies take the place of violent ones. . . . Protest against the subject layoffs need
not be in the form of violent action or any other drastic measure. In the instant case the Union registered their
dissent by swiftly filing a motion for a cease and desist order. Contrary to petitioner's allegations, the Union
strongly condemned the layoffs and threatened mass action if the Secretary of Labor fails to timely intervene: . . .
3. This unilateral action of management is a blatant violation of the injunction of this Office against committing acts
which would exacerbate the dispute. Unless such act is enjoined the Union will be compelled to resort to its legal
right to mass actions and concerted activities to protest and stop the said management action. This mass layoff is
clearly one which would result in a very serious dispute unless this Office swiftly intervenes . . . . Metrolab and the
Union were still in the process of resolving their CBA deadlock when petitioner implemented the subject layoffs. As
a result, motions and oppositions were filed diverting the parties' attention, delaying resolution of the bargaining
deadlock and postponing the signing of their new CBA, thereby aggravating the whole conflict.

2. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; EXERCISE OF MANAGEMENT

PREROGATIVES; NOT ABSOLUTE; SUBJECT TO EXCEPTIONS IMPOSED BY LAW. — This Court recognizes the
exercise of management prerogatives and often declines to interfere with the legitimate business decisions of the
employer. However, this privilege is not absolute but subject to limitations imposed by law. In PAL vs. NLRC, (225
SCRA 301 [1993]), we issued this reminder: . . . the exercise of management prerogatives was never considered
boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was held that management's prerogatives must be
without abuse of discretion . . . All this points to the conclusion that the exercise of managerial prerogatives is not
unlimited. It is circumscribed by limitations found in law, a collective bargaining agreement, or the general
principles of fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . . .

3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. — The case at bench constitutes one of the exceptions.
The Secretary of Labor is expressly given the power under the Labor Code to assume jurisdiction and resolve labor
disputes involving industries indispensable to national interest. The disputed injunction is subsumed under this
special grant of authority. Art. 263 (g) of the Labor Code specifically provides that: . . . (g) When, in his opinion,
there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify
the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification
order. If one has already taken place at the time of assumption or certification, all striking or locked out employees
shall immediately return to work and the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and
Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with
this provision as well as with such orders as he may issue to enforce the same . . . That Metrolab's business is of
national interest is not disputed. Metrolab is one of the leading manufacturers and suppliers of medical and
pharmaceutical products to the country. Metrolab's management prerogatives, therefore, are not being unjustly
curtailed but duly balanced with and tempered by the limitations set by law, taking into account its special
character and the particular circumstances in the case at bench.

4. ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN, FORM AND ASSIST ANY LABOR
ORGANIZATION; PROHIBITION EXTENDED TO CONFIDENTIAL EMPLOYEES. — Although Article 245 of the Labor
Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence
has extended this prohibition to confidential employees or those who by reason of their positions or nature of work
are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.

5. ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND FILE BARGAINING UNIT; NOT
TANTAMOUNT TO DISCRIMINATION. — Confidential employees cannot be classified as rank and file. As previously
discussed, the nature of employment of confidential employees is quite distinct from the rank and file, thus,
warranting a separate category. Excluding confidential employees from the rank and file bargaining unit, therefore,
is not tantamount to discrimination.

DECISION
KAPUNAN , J p:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the annulment of the Resolution
and Omnibus Resolution of the Secretary of Labor and Employment dated 14 April 1992 and 25 January 1993,
respectively, in OS-AJ-04491-11 (NCMB-NCR-NS-08-595-91; NCMB-NCR-NS-09-678-91) on grounds that these
were issued with grave abuse of discretion and in excess of jurisdiction.

Private respondent Metro Drug Corporation Employees Association-Federation of Free Workers (hereinafter referred
to as the Union) is a labor organization representing the rank and file employees of petitioner Metrolab Industries,
Inc. (hereinafter referred to as Metrolab/MII) and also of Metro Drug, Inc.

On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and the Union expired. The
negotiations for a new CBA, however, ended in a deadlock.

Consequently, on 23 August 1991, the Union filed a notice of strike against Metrolab and Metro Drug Inc. The
parties failed to settle their dispute despite the conciliation efforts of the National Conciliation and Mediation Board.

To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D. Torres, issued an
assumption order dated 20 September 1991, the dispositive portion of which reads, thus:

WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, as
amended, this Office hereby assumes jurisdiction over the entire labor dispute at Metro Drug,
Inc. — Metro Drug Distribution Division and Metrolab Industries Inc.

Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro
Drug Corp. Employees Association — FFW are likewise directed to cease and desist from
committing any and all acts that might exacerbate the situation.

Finally, the parties are directed to submit their position papers and evidence on the
aforequoted deadlocked issues to this office within twenty (20) days from receipt hereof.

SO ORDERED. 1 (Emphasis ours.)

On 27 December 1991, then Labor Secretary Torres issued an order resolving all the disputed items in the CBA and
ordered the parties involved to execute a new CBA.

Thereafter, the Union filed a motion for reconsideration.

On 27 January 1992, during the pendency of the abovementioned motion for reconsideration, Metrolab laid off 94
of its rank and file employees.

On the same date, the Union filed a motion for a cease and desist order to enjoin Metrolab from implementing the
mass layoff, alleging that such act violated the prohibition against committing acts that would exacerbate the
dispute as specifically directed in the assumption order. 2

On the other hand, Metrolab contended that the layoff was temporary and in the exercise of its management
prerogative. It maintained that the company would suffer a yearly gross revenue loss of approximately sixty-six
(66) million pesos due to the withdrawal of its principals in the Toll and Contract Manufacturing Department.
Metrolab further asserted that with the automation of the manufacture of its product "Eskinol," the number of
workers required its production is significantly reduced. 3

Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary basis due to availability
of work in the production lines.

On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff of Metrolab's 94
rank and file workers illegal and ordered their reinstatement with full backwages. The dispositive portion reads as
follows:

WHEREFORE, the Union's motion for reconsideration is granted in part, and our order of 28
December 1991 is affirmed subject to the modifications in allowances and in the close shop
provision. The layoff of the 94 employees at MII is hereby declared illegal for the failure of the
latter to comply with our injunction against committing any act which may exacerbate the
dispute and with the 30-day notice requirement. Accordingly, MII is hereby ordered to reinstate
the 94 employees, except those who have already been recalled, to their former positions or
substantially equivalent, positions with full backwages from the date they were illegally laid off
on 27 January 1992 until actually reinstated without loss of seniority rights and other benefits.
Issues relative to the CBA agreed upon by the parties and not embodied in our earlier order are
hereby ordered adopted for incorporation in the CBA. Further, the dispositions and directives
 contained in all previous orders and resolutions relative to the instant dispute, insofar as not
inconsistent herein, are reiterated. Finally, the parties are enjoined to cease and desist from
committing any act which may tend to circumvent this resolution.

SO RESOLVED. 4

On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did not aggravate the
dispute since no untoward incident occurred as a result thereof. It, likewise, filed a motion for clarification
regarding the constitution of the bargaining unit covered by the CBA.

On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The execution, however, was
without prejudice to the outcome of the issues raised in the reconsideration and clarification motions submitted for
decision to the Secretary of Labor. 5

Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73 of its employees on
grounds of redundancy due to lack of work which the Union again promptly opposed on 5 October 1992.

On 15 October 1992, Labor Secretary Confesor again issued a cease and desist order. Metrolab moved for a
reconsideration. 6

On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containing the following
orders:

xxx xxx xxx

1. MII's motion for partial reconsideration of our 14 April 1992 resolution specifically that
portion thereof assailing our ruling that the layoff of the 94 employees is illegal, is hereby
denied. MII is hereby ordered to pay such employees their full backwages computed from the
time of actual layoff to the time of actual recall;

2. For the parties to incorporate in their respective collective bargaining agreements the
clarifications herein contained; and

3. MII's motion for reconsideration with respect to the consequences of the second wave of
layoff affecting 73 employees, to the extent of assailing our ruling that such layoff tended to
exacerbate the dispute, is hereby denied. But inasmuch as the legality of the layoff was not
submitted for our resolution and no evidence had been adduced upon which a categorical
finding thereon can be based, the same is hereby referred to the NLRC for its appropriate
action.

Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this
dispute are hereby lifted.

SO RESOLVED. 7

Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shop provision of the
CBA, not from the bargaining unit.

On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the present petition for
certiorari with application for issuance of a Temporary Restraining Order.

On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of Labor from enforcing and
implementing the assailed Resolution and Omnibus Resolution dated 14 April 1992 and 25 January 1993,
respectively.

In its petition, Metrolab assigns the following errors:

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT COMMITTED GRAVE
ABUSE OF DISCRETION AND EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY
LAYOFF ILLEGAL AND ORDERING THE REINSTATEMENT AND PAYMENT OF BACKWAGES TO THE
AFFECTED EMPLOYEES. *

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT GRAVELY ABUSED
HER DISCRETION IN INCLUDING EXECUTIVE SECRETARIES AS PART OF THE BARGAINING
UNIT OF RANK AND FILE EMPLOYEES. 8
Anent the first issue, we are asked to determine whether or not public respondent Labor Secretary committed
grave abuse of discretion and exceeded her jurisdiction in declaring the subject layoffs instituted by Metrolab illegal
on grounds that these unilateral actions aggravated the conflict between Metrolab and the Union who were, then,
locked in a stalemate in CBA negotiations.

Metrolab argues that the Labor Secretary's order enjoining the parties from committing any act that might
exacerbate the dispute is overly broad, sweeping and vague and should not be used to curtail the employer's right
to manage his business and ensure its viability.

We cannot give credence to Metrolab's contention.

This Court recognizes the exercise of management prerogatives and often declines to interfere with the legitimate
business decisions of the employer. However, this privilege is not absolute but subject to limitations imposed by
law. 9

In PAL v. NLRC, 10 we issued this reminder:

xxx xxx xxx

. . . the exercise of management prerogatives was never considered boundless. Thus, in Cruz
vs. Medina (177 SCRA 565 [1989]), it was held that management's prerogatives must be
without abuse of discretion. . . .

xxx xxx xxx

All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It
is circumscribed by limitations found in law, a collective bargaining agreement, or the general
principles of fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . .
. (Emphasis ours.)

xxx xxx xxx

The case at bench constitutes one of the exceptions. The Secretary of Labor is expressly given the power under the
Labor Code to assume jurisdiction and resolve labor disputes involving industries indispensable to national interest.
The disputed injunction is subsumed under this special grant of authority. Art. 263 (g) of the Labor Code
specifically provides that:

xxx xxx xxx

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return to work and the
employer shall immediately resume operations and readmit all workers under the same terms
and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment
or the Commission may seek the assistance of law enforcement agencies to ensure compliance
with this provision as well as with such orders as he may issue to enforce the same. . . .
(Emphasis ours.)

xxx xxx xxx

That Metrolab's business is of national interest is not disputed. Metrolab is one of the leading manufacturers and
suppliers of medical and pharmaceutical products to the country.

Metrolab's management prerogatives, therefore, are not being unjustly curtailed but duly balanced with and
tempered by the limitations set by law, taking into account its special character and the particular circumstances in
the case at bench.

As aptly declared by public respondent Secretary of Labor in its assailed resolution:

xxx xxx xxx

MII is right to the extent that as a rule, we may not interfere with the legitimate
exercise of management prerogatives such as layoffs. But it may nevertheless be appropriate
to mention here that one of the substantive evils which Article 263 (g) of the Labor Code
seeks to curb is the exacerbation of a labor dispute to the further detriment of the national
interest. When a labor dispute has in fact occurred and a general injunction has been issued
 restraining the commission of disruptive acts, management prerogatives must always be
exercised consistently with the statutory objective. 11
xxx xxx xxx

Metrolab insists that the subject layoffs did not exacerbate their dispute with the Union since no untoward incident
occurred after the layoffs were implemented. There were no work disruptions or stoppages and no mass actions
were threatened or undertaken. Instead, petitioner asserts, the affected employees calmly accepted their fate "as
this was a matter which they had been previously advised would be inevitable." 12

After a judicious review of the record, we find no compelling reason to overturn the findings of the Secretary of
Labor.

We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of administrative
agencies supported by substantial evidence are accorded great respect and binds this Court. 13

The Secretary of Labor ruled, thus:

xxx xxx xxx

Any act committed during the pendency of the dispute that tends to give rise to further
contentious issues or increase the tensions between the parties should be considered an act of
exacerbation. One must look at the act itself, not on speculative reactions. A misplaced
recourse is not needed to prove that a dispute has been exacerbated. For instance, the Union
could not be expected to file another notice of strike. For this would depart from its theory of
the case that the layoff is subsumed under the instant dispute, for which a notice of strike had
already been filed. On the other hand, to expect violent reactions, unruly behavior, and any
other chaotic or drastic action from the Union is to expect it to commit acts disruptive of public
order or acts that may be illegal. Under a regime of laws, legal remedies take the place of
violent ones. 14

xxx xxx xxx

Protest against the subject layoffs need not be in the form of violent action or any other drastic measure. In the
instant case the Union registered their dissent by swiftly filing a motion for a cease and desist order. Contrary to
petitioner's allegations, the Union strongly condemned the layoffs and threatened mass action if the Secretary of
Labor fails to timely intervene:

xxx xxx xxx

3. This unilateral action of management is a blatant violation of the injunction of this Office
against committing acts which would exacerbate the dispute. Unless such act is enjoined the
Union will be compelled to resort to its legal right to mass actions and concerted activities to
protest and stop the said management action. This mass layoff is clearly one which would
result in a very serious labor dispute unless this Office swiftly intervenes. 15

xxx xxx xxx

Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner implemented the
subject layoffs. As a result, motions and oppositions were filed diverting the parties' attention, delaying resolution
of the bargaining deadlock and postponing the signing of their new CBA, thereby aggravating the whole conflict.

We, likewise, find untenable Metrolab's contention that the layoff of the 94 rank-and-file employees was
temporary, despite the recall of some of the laid off workers.

If Metrolab intended the layoff of the 94 workers to be temporary, it should have plainly stated so in the notices it
sent to the affected employees and the Department of Labor and Employment. Consider the tenor of the pertinent
portions of the layoff notice to the affected employees:

xxx xxx xxx

Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng "lay-off" ng mga
empleyado sa Rank & File dahil nabawasan ang trabaho at puwesto para sa kanila. Marami sa
atin ang kasama sa "lay-off" dahil wala nang trabaho para sa kanila. Mahirap tanggapin ang
mga bagay na ito subalit kailangan nating gawin dahil hindi kaya ng kumpanya ang magbayad
ng suweldo kung ang empleyado ay walang trabaho. Kung tayo ay patuloy na magbabayad ng
suweldo, mas hihina ang ating kumpanya at mas marami ang maaaring maapektuhan.
 Sa pagpapatupad ng "lay-off" susundin natin ang LAST IN-FIRST OUT policy. Ang mga
empleyadong may pinakamaikling serbisyo sa kumpanya ang unang maaapektuhan. Ito ay
batay na rin sa nakasaad sa ating CBA na ang mga huling pumasok sa kumpanya ang unang
masasama sa "lay-off" kapag nagkaroon ng ganitong mga kalagayan.

Ang mga empleyado na kasama sa "lay-off" ay nakalista sa sulat na ito. Ang umpisa ng lay-off
ay sa Lunes, Enero 27. Hindi na muna sila papasok sa kumpanya. Makukuha nila ang suweldo
nila sa Enero 30, 1992.

Hindi po natin matitiyak kung gaano katagal ang "lay-off" ngunit ang aming tingin ay
matatagalan bago magkaroon ng dagdag na trabaho. Dahil dito sinimulan na namin ang isang
"Redundancy Program" sa mga supervisors. Nabawasan ang mga puwesto para sa kanila, kaya
sila ay mawawalan ng trabaho at bibigyan na ng redundancy pay. 16 (Emphasis ours.)

xxx xxx xxx

We agree with the ruling of the Secretary of Labor, thus:

xxx xxx xxx

. . . MII insists that the layoff in question is temporary not permanent. It then
cites International Hardware, Inc. vs. NLRC, 176 SCRA 256, in which the Supreme Court held
that the 30-day notice required under Article 283 of the Labor Code need not be complied with
if the employer has no intention to permanently severe (sic) the employment relationship.

We are not convinced by this argument. International Hardware involves a case where there
had been a reduction of workload. Precisely to avoid laying off the employees, the employer
therein opted to give them work on a rotating basis. Though on a limited scale, work was
available. This was the Supreme Court's basis for holding that there was no intention to
permanently severe (sic) the employment relationship.

Here, there is no circumstance at all from which we can infer an intention from MII not to sever
the employment relationship permanently. If there was such an intention, MII could have made
it very clear in the notices of layoff. But as it were, the notices are couched in a language so
uncertain that the only conclusion possible is the permanent termination, not the continuation,
of the employment relationship.

MII also seeks to excuse itself from compliance with the 30-day notice with a tautology. While
insisting that there is really no best time to announce a bad news, (sic) it also claims that it
broke the bad news only on 27 January 1992 because had it complied with the 30-day notice,
it could have broken the bad news on 02 January 1992, the first working day of the year. If
there is really no best time to announce a bad news (sic), it wouldn't have mattered if the
same was announced at the first working day of the year. That way, MII could have at least
complied with the requirement of the law. 17

The second issue raised by petitioner merits our consideration.

In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA provisions on closed-shop and the
scope of the bargaining unit in this wise:

xxx xxx xxx

Appropriateness of the bargaining unit.

xxx xxx xxx

Exclusions. In our 14 April 1992 resolution, we ruled on the issue of exclusion as follows:

These aside, we reconsider our denial of the modifications which the Union
proposes to introduce on the close shop provision. While we note that the provision as
presently worded has served the relationship of the parties well under previous CBA's,
the shift in constitutional policy toward expanding the right of all workers to self-
organization should now be formally recognized by the parties, subject to the following
exclusions only:

1. Managerial employees; and

2. The executive secretaries of the President, Executive Vice-President, Vice-

President, Vice President for Sales, Personnel Manager, and Director for Corporate
Planning who may have access to vital labor relations information or who may
 otherwise act in a confidential capacity to persons who determine or formulate
management policies.

The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall
thus be modified consistently with the foregoing.

Article I(b) of the 1988-1990 CBA provides:

b) Close Shop. — All Qualified Employees must join the Association

immediately upon regularization as a condition for continued employment. This
provision shall not apply to: (i) managerial employees who are excluded from the
scope of the bargaining unit; (ii) the auditors and executive secretaries of senior
executive officers, such as, the President, Executive Vice-President, Vice-President for
Finance, Head of Legal, Vice-President for Sales, who are excluded from
membership in the Association; and (iii) those employees who are referred to in
Attachment I hereof, subject, however, to the application of the provision of Article II,
par. (b) hereof. Consequently, the above-specified employees are not required to join
the Association as a condition for their continued employment.

On the other hand, Attachment I provides:

Exclusion from the Scope of the Close Shop Provision

The following positions in the Bargaining Unit are not covered by the Close
Shop provision of the CBA (Article I, par. b):

1. Executive Secretaries of Vice-Presidents, or equivalent positions.

2. Executive Secretary of the Personnel Manager, or equivalent positions.

3. Executive Secretary of the Director for Corporate Planning, or equivalent

positions.

4. Some personnel in the Personnel Department, EDP Staff at Head Office,

Payroll Staff at Head Office, Accounting Department at Head Office, and Budget Staff,
who because of the nature of their duties and responsibilities need not join the
Association as a condition for their employment.

5. Newly-hired secretaries of Branch Managers and Regional Managers.

Both MDD and MII read the exclusion of managerial employees and executive secretaries in our
14 April 1992 resolution as exclusion from the bargaining unit. They point out that managerial
employees are lumped under one classification with executive secretaries, so that since the
former are excluded from the bargaining unit, so must the latter be likewise excluded.

This reading is obviously contrary to the intent of our 14 April 1992 resolution. By recognizing
the expanded scope of the right to self-organization, our intent was to delimit the types of
employees excluded from the close shop provision, not from the bargaining unit, to executive
secretaries only. Otherwise, the conversion of the exclusionary provision to one that refers to
the bargaining unit from one that merely refers to the close shop provision would effectively
curtail all the organizational rights of executive secretaries.

The exclusion of managerial employees, in accordance with law, must therefore still carry the
qualifying phrase "from the bargaining unit" in Article I (b)(i) of the 1988-1990 CBA. In the
same manner, the exclusion of executive secretaries should be read together with the
qualifying phrase "are excluded from membership in the Association" of the same Article and
with the heading of Attachment I. The latter refers to "Exclusions from Scope of Close Shop
Provision" and provides that "[t]he following positions in Bargaining Unit are not covered by the
close shop provision of the CBA."

The issue of exclusion has different dimension in the case of MII. In an earlier motion for
clarification, MII points out that it has done away with the positions of Executive Vice-
President, Vice-President for Sales, and Director for Corporate Planning. Thus, the foregoing
group of exclusions is no longer appropriate in its present organizational structure.
Nevertheless, there remain MII officer positions for which there may be executive secretaries.
These include the General Manager and members of the Management Committee, specifically i)
the Quality Assurance Manager; ii) the Product Development Manager; iii) the Finance Director;
iv) the Management System Manager; v) the Human Resources Manager; vi) the Marketing
Director; vii) the Engineering Manager; viii) the Materials Manager; and ix) the Production
Manager.
 xxx xxx xxx

The basis for the questioned exclusions, it should be noted, is no other than the previous CBA
between MII and the Union. If MII had undergone an organizational restructuring since then,
this is a fact to which we have never been made privy. In any event, had this been otherwise
the result would have been the same. To repeat, we limited the exclusions to recognize the
expanded scope of the right to self-organization as embodied in the Constitution. 18

Metrolab, however, maintains that executive secretaries of the General Manager and the executive secretaries of
the Quality Assurance Manager, Product Development Manager, Finance Director, Management System Manager,
Human Resources Manager, Marketing Director, Engineering Manager, Materials Manager and Production Manager,
who are all members of the company's Management Committee should not only be exempted from the closed-shop
provision but should be excluded from membership in the bargaining unit of the rank and file employees as well on
grounds that their executive secretaries are confidential employees, having access to "vital labor information." 19

We concur with Metrolab.

Although Article 245 of the Labor Code 20 limits the ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by
reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial
employees and hence, are likewise privy to sensitive and highly confidential records.

The rationale behind the exclusion of confidential employees from the bargaining unit of the rank and file
employees and their disqualification to join any labor organization was succinctly discussed in Philips
Industrial Development v. NLRC : 21

xxx xxx xxx

On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave
abuse of discretion in reversing the decision of the Executive Labor Arbiter and in decreeing
that PIDI's "Service Engineers, Sales Force, division secretaries, all Staff of General
Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and
Financial Systems are included within the rank and file bargaining unit."

In the first place, all these employees, with the exception of the service engineers and the
sales force personnel, are confidential employees. Their classification as such is not seriously
disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly
considered them as confidential employees. By the very nature of their functions, they assist
and act in a confidential capacity to, or have access to confidential matters of, persons who
exercise managerial functions in the field of labor relations. As such, the rationale behind the
ineligibility of managerial employees to form, assist or join a labor union equally applies to
them.

In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this
rationale, thus:

". . . The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the latter might
not be assured of their loyalty to the Union in view of evident conflict of interests. The
Union can also become company-dominated with the presence of managerial
employees in Union membership."

In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable to
confidential employees:

This rationale holds true also for confidential employees such as accounting
personnel, radio and telegraph operators, who having access to confidential
information, may become the source of undue advantage. Said employee(s) may act
as a spy or spies of either party to a collective bargaining agreement. This is specially
true in the present case where the petitioning Union is already the bargaining agent of
the rank-and-file employees in the establishment. To allow the confidential employees
to join the existing Union of the rank-and-file would be in violation of the terms of the
Collective Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded."

xxx xxx xxx

Similarly, in National Association of Trade Union - Republic Planters Bank Supervisors Chapter v. Torres 22 we
declared:

xxx xxx xxx

. . . As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and
Controllers are confidential employees, having control, custody and/or access to confidential
matters, e.g., the branch's cash position, statements of financial condition, vault combination,
cash codes for telegraphic transfers, demand drafts and other negotiable instruments, pursuant
to Sec. 1166.4 of the Central Bank Manual regarding joint custody, this claim is not even
disputed by petitioner. A confidential employee is one entrusted with confidence on delicate
matters, or with the custody, handling, or care and protection of the employer's property.
While Art. 245 of the Labor Code singles out managerial employees as ineligible to join, assist
or form any labor organization, under the doctrine of necessary, implication, confidential
employees are similarly disqualified. . . .

xxx xxx xxx

. . . (I)n the collective bargaining process, managerial employees are supposed to be on the
side of the employer, to act as its representatives, and to see to it that its interest are well
protected. The employer is not assured of such protection if these employees themselves are
union members. Collective bargaining in such a situation can become one-sided. It is the same
reason that impelled this Court to consider the position of confidential employees as included in
the disqualification found in Art. 245 as if the disqualification of confidential employees were
written in the provision. If confidential employees could unionize in order to bargain for
advantages for themselves, then they could be governed by their own motives rather than the
interest of the employers. Moreover, unionization of confidential employees for the purpose of
collective bargaining would mean the extension of the law to persons or individuals who are
supposed to act "in the interest of the employers. It is not farfetched that in the course of
collective bargaining, they might jeopardize that interest which they are duty-bound to protect.
...

xxx xxx xxx

And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor, 23 we ruled that:

xxx xxx xxx

Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is
basically routinary and clerical. However, they should be differentiated from rank-and-file
employees because they are tasked with, among others, the typing of legal documents,
memoranda and correspondence, the keeping of records and files, the giving of and receiving
notices, and such other duties as required by the legal personnel of the corporation. Legal
secretaries therefore fall under the category of confidential employees. . . .

xxx xxx xxx

We thus hold that public respondent acted with grave abuse of discretion in not excluding the
four foremen and legal secretary from the bargaining unit composed of rank-and-file
employees.

xxx xxx xxx

In the case at bench, the Union does not disagree with petitioner that the executive secretaries are confidential
employees. It however, makes the following contentions:

xxx xxx xxx

There would be no danger of company domination of the Union since the confidential
employees would not be members of and would not participate in the decision making
processes of the Union.

Neither would there be a danger of espionage since the confidential employees would not have
any conflict of interest, not being members of the Union. In any case, there is always the
danger that any employee would leak management secrets to the Union out of sympathy for
his fellow rank and filer even if he were not a member of the union nor the bargaining unit.

Confidential employees are rank and file employees and they, like all the other rank and file
employees, should be granted the benefits of the Collective Bargaining Agreement. There is no
 valid basis for discriminating against them. The mandate of the Constitution and the Labor
Code, primarily of protection to Labor, compels such conclusion. 24

xxx xxx xxx

The Union's assurances fail to convince. The dangers sought to be prevented, particularly the threat of conflict of
interest and espionage, are not eliminated by non-membership of Metrolab's executive secretaries or confidential
employees in the Union. Forming part of the bargaining unit, the executive secretaries stand to benefit from any
agreement executed between the Union and Metrolab. Such a scenario, thus, gives rise to a potential conflict
between personal interests and their duty as confidential employees to act for and in behalf of Metrolab. They do
not have to be union members to affect or influence either side.

Finally, confidential employees cannot be classified as rank and file. As previously discussed, the nature of
employment of confidential employees is quite distinct from the rank and file, thus, warranting a separate
category. Excluding confidential employees from the rank and file bargaining unit, therefore, is not tantamount to
discrimination.

WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions of public respondent
Secretary of Labor dated 14 April 1992 and 25 January 1993 are hereby MODIFIED to the extent that executive
secretaries of petitioner Metrolab's General Manager and the executive secretaries of the members of its
Management Committee are excluded from the bargaining unit of petitioner's rank and file employees.

SO ORDERED.

||| (Metrolab Industries, Inc. v. Roldan-Confesor, G.R. No. 108855, [February 28, 1996], 324 PHIL 416-443)

THIRD DIVISION

[G.R. No. 80882. April 24, 1989.]

SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL), petitioner, vs. HONORABLE PURA

FERRER CALLEJA, DIRECTOR, BUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR AND
EMPLOYMENT, public respondent. MINDANAO MINERS EMPLOYEE UNION SANDIGAN NG
MANGGAGAWANG PILIPINO (SANDIGAN), forced intervenor-private respondent, APEX MINING
COMPANY, INC., employer-private respondent.

Proculo P. Fuentes, Jr. for petitioner.

Valeriano F. Pasquil and Ruben V. Abarquez for respondent Apex Mining Co., Inc.

Raul C. Nengasca and Antonio G. Jolejole for private respondent-Sandigan.

SYLLABUS

1. LABOR LAW; LABOR RELATIONS; CLASSIFICATION OF EMPLOYEES; MANAGERIAL EMPLOYEE; DEFINED. — As

defined in the Labor Code and as we have held in the case of Franklin Baker Company of the Phils. v. Trajano, (157
SCRA 416, 421-423, [1988]): "A managerial employee is defined as one who is vested with powers or prerogatives
to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees, or to effectively recommend such managerial actions. (Reynolds Phil. Corp. v. Eslava, 137
SCRA [1985], citing Section 212 (K), Labor Code." . . . "The test of 'supervisory' or 'managerial status' depends on
whether a person possesses authority to act in the interest of his employer in the matter specified in Article 212 (k)
of the Labor Code and Section 1 (m) of its Implementing Rules and whether such authority is not merely routinary
or clerical in nature, but requires the use of independent judgment. Thus, where such recommendatory powers as
in the case at bar, are subject to evaluation, review and final action by the department heads and other higher
executives of the company, the same, although present, are not effective and not an exercise of independent
judgment as required by law (National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963])." "Furthermore, in line
with the ruling of this Court, subject employees are not managerial employees because as borne by the records,
they do not participate in policy making but are given ready policies to execute and standard practices to observe,
thus having little freedom of action (National Waterworks and Sewerage Authority v. NWSA Consolidated, L-18988,
11 SCRA 766 [1964]).

2. ID.; ID.; RIGHT TO SELF-ORGANIZATION CANNOT BE CURTAILED BY A COLLECTIVE BARGAINING AGREEMENT.

— Although we have upheld the validity of the CBA as the law among the parties, (see Planters Products, Inc. v.
NLRC, et al., G.R. No. 78524, January 20, 1989), its provisions cannot override what is expressly provided by law
that only managerial employees are ineligible to join, assist or form any labor organization. (See Art. 247, Labor
Code). Therefore, regardless of the challenged employees' designations, whether they are employed as Supervisors
or in the confidential payrolls, if the nature of their job does not fall under the definition of "managerial" as defined
in the Labor Code, they are eligible to be members of the bargaining unit and to vote in the certification election.
Their right to self-organization must be upheld in the absence of an express provision of law to the contrary. It
cannot be curtailed by a collective bargaining agreement.

3. ID.; ID.; SUPERVISORS BY THE NATURE OF THEIR JOB, NOT MANAGERIAL EMPLOYEES IN CASE AT BAR. — The
petitioner's motion for reconsideration before the public respondent outlined the job description of Supervisors. In
the category of Supervisory II, the "General Summary" provides: "GENERAL SUMMARY : "Assists the Foreman in
the effective dispatching/distribution of manpower and equipment to carry out approved work." (p. 30, Rollo) while
the first duty enumerated in the position of Supervisor III states: "1. Executes and coordinates work plans
emanating from his supervisors." (p. 32, Rollo) Thus, it is clear from the above provisions that the functions of the
questioned positions are not managerial in nature because they only execute approved and established policies
leaving little or no discretion at all whether to implement the said policies or not. The respondent Director,
therefore, did not commit grave abuse of discretion in dismissing the petitioner's appeal from the Med-Arbiter's
Order to open and count the challenged ballots in denying the petitioner's motion for reconsideration and in
certifying the respondent Union as the sole and exclusive bargaining representative of the rank-and-file employees
of respondent Apex.

4. ID.; ID.; CONFIDENTIAL EMPLOYEES; MERE DESIGNATION AS SUCH, DOES NOT MAKE THEM MANAGERIAL
EMPLOYEES. — As regards the employees in the confidential payroll, the petitioner has not shown that the nature
of their jobs is classified as managerial except for its allegation that they are considered by management as
occupying managerial positions and highly confidential. As such they are deemed not to be managerial employees.

5. ID.; LABOR UNIONS; COLLECTIVE BARGAINING UNIT; MEMBERSHIP THEREIN NOT LIMITED TO UNION
MEMBERS. — Payment or non-payment of union dues is not the determining factor of whether the challenged
employees should be excluded from the bargaining unit since the union shop provision in the CBA applies only to
newly hired employees but not to members of the bargaining unit who were not members of the union at the time
of the signing of the CBA. It is, therefore, not impossible for employees to be members of the bargaining unit even
though they are non-union members or not paying union dues.

DECISION

GUTIERREZ, JR., J p:

This petition for certiorari seeks to annul and set aside the Order issued by public respondent Director Pura Ferrer
Calleja of the Bureau of Labor Relations dated June 23, 1987 which certified the respondent union, Mindanao
Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan), as the sole and exclusive
bargaining representative of the rank-and-file employees of respondent Apex Mining Company (Apex) after the said
public respondent denied the motion of herein petitioner to exclude one hundred ninety-seven (197) employees
from voting in the certification election. The denial is based on the ground that they are rank-and-file employees.

As summarized by the Solicitor General in his Comment 1 the facts are as follows:

"On December 29, 1986, petitioner Southern Philippines Federation of Labor filed a petition for
certification election among the rank-and-file employees of private respondent Apex Mining
Company, Incorporated with the Department of Labor in Region XI, Davao City.

"On February 6, 1987, Med-Arbiter Conrado O. Macasa, Sr. issued an Order calling for the
holding of the certification election on February 23, 1987 among the rank-and-file employees
of APEX with the following choices:

"`1. Southern Philippines Federation of Labor (SPFL)

2. Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino

(MMEU-Sandigan) and
 3. No union.

"On February 9, 1987, a pre-election conference was conducted among the petitioner Union;
private respondent Union, MMEU-Sandigan; and APEX to settle details in the conduct of the
election such as the venue of the election and the list of employees qualified to vote in the
election.

"During the pre-election conference, the parties agreed to delete from the list of workers
prepared and submitted by APEX numbering One Thousand Seven Hundred Sixteen (1,716),
the names of nineteen (19) managerial employees and seventy-three probationary employees
who were statutorily disqualified from voting. Petitioner Union objected to the inclusion in said
list of the following: (1) employees occupying the positions of Supervisor I, II, and III; (2)
employees under confidential/special payrolls; and (3) employees who were not paying Union
dues. The petitioner Union contends that the aforementioned employees were disqualified from
participating in the certification election since the Supervisors were managerial employees
while the last two were disqualified by virtue of their non-membership in the Union and their
exclusion from the benefits of the collective bargaining agreement. LibLex

"In view of the lack of agreement among the parties on the list of qualified voters, Med-Arbiter
Macasa issued an Order on February 20, 1987, the dispositive portion of which reads:

"`Wherefore, premises considered it is hereby declared that the following

groups of workers be not included in the list of employees qualified to vote in the
consent election on February 23, 1987, as follows:

1. Nineteen (19) managerial employees;

2. Seventy-three (73) probationary employees; and

3. Nineteen (19) Supervisors I;

All other workers except the foregoing will be allowed to vote.'"

"On February 23, 1987, the day of the certification election petitioner Union filed a Motion for
Reconsideration of Macasa's Order dated February 20, 1987. The certification election was
nonetheless conducted, with the result as follows:

`1. Southern Philippines Federation of Labor 614

2. Mindanao Miners Employees Union
(MMEU-Sandigan) 528
3. No Union 9
4. Challenged Ballots 197
5. Spoiled 25
TOTAL VOTES CAST 1,373
"On the basis of the foregoing results, respondent Union filed an Urgent Motion to Open the
Challenged Ballots, with the prayer, to wit:

"`Wherefore, premises considered, it is most respectfully prayed of this

Honorable office that this instant motion be given due course and that an order be
issued to open and count the challenged ballots in order to determine, once and for
all, the winner in the certification and/or consent election and thereafter certify the
sole and exclusive collective bargaining representative of all rank-and-file employees
and workers of Apex Mining Company, Incorporated.'

xxx xxx xxx

"On March 11, 1987, APEX filed a Manifestation and Motion manifesting its interest in the speedy resolution of the
case and primary concern for `the restoration of normalcy and the preservation of industrial peace in the already
explosive situation in the mining area.'

xxx xxx xxx

"On March 19, 1987, Med-Arbiter Macasa issued an Order, the dispositive portion of which reads:
"`Wherefore, the interest of industrial peace considered, it is hereby directed
that the challenged ballots be opened and inventoried on 26 March 1987 at 3:00 p.m.,
before the entire records of the case be indorsed to the BLR for review'
 xxx xxx xxx

"Petitioner Union appealed Macasa's Order dated March 19, 1987 to the Bureau of Labor
Relations. On April 14, 1987, BLR Director Pura Ferrer-Calleja issued an Order, the dispositive
portion of which reads:

"WHEREFORE, the Appeal of petitioner Southern Philippines Federation of Labor (SPFL) is

hereby dismissed for lack of merit and the Med-Arbiter's Order dated 19 March 1987 is
affirmed with modification that the 197 ballots should be opened and canvassed by Labor
Regional Office XI, Davao City. Let, therefore, the records of this case be immediately
remanded to the said office, for the immediate implementation of this Resolution.'"

"Petitioner Union moved for a reconsideration of the resolution dated April 14, 1987.
Meanwhile, on May 21, 1987, Med-Arbiter Macasa opened and canvassed the 197 challenged
ballots with the results as follows:

SPFL — 12 votes
SANDIGAN — 178 votes
No Union — 2 votes
Spoiled — 4 votes
Envelop with no ballots — 1 vote
TOTAL 197 votes
"As a consequence of the opening and canvass of the challenged ballots, the outcome of the
certification election became:

SPFL — 626 votes

SANDIGAN — 706 votes
No Union — 11 votes
TOTAL 1,343 votes
"Based on the aforementioned results, respondent Union filed a Manifestation with the BLR with
prayer for the issuance of Certification Order certifying it as the sole and exclusive bargaining
representative of the rank-and-file employees of APEX.

"On June 23, 1987, Director Calleja issued can Order, the dispositive portion of which reads:"

"`WHEREFORE, the Motion for reconsideration of Petitioner SPFL is hereby

denied for lack of merit. Meanwhile, intervenor Mindanao Employees Union-Sandigan
Ng Manggagawang Pilipino (MMEU-SANDIGAN) is hereby certified as the sole and
exclusive bargaining representative of the rank-and-file employees of respondent
Apex Mining Company, Inc. Accordingly, the management of Apex Mining Company,
Inc., is directed to negotiate with MMEU-SANDIGAN for the conclusion of a collective
bargaining agreement (CBA)."'

Hence, this petition.

The issue raised in this petition is whether or not the public respondent committed grave abuse of discretion in
allowing the 197 employees to vote in the certification election when, as alleged by the petitioner, they are
disqualified by express provision of law or under the existing collective bargaining agreement. prLL

It is maintained by the petitioner that under the Labor Code, managerial employees are excluded from forming or
joining a collective bargaining unit; and under the collective bargaining agreement executed between Apex and
respondent union, among those who are excluded from the bargaining unit are: a) managerial employees as
defined in paragraph K, Article 212 of the Labor Code; b) those performing supervisory functions; and c) those
holding confidential positions as determined by the company. Therefore, the employees holding the positions of
Supervisors II and III and those in the confidential payrolls should be excluded from joining the bargaining unit and
from voting in the certification election. Likewise, those employees who are not paying union dues should be
excluded from the same since the existing CBA contains a Union shop provision.

The contentions have no merit.

Although we have upheld the validity of the CBA as the law among the parties, (see Planters Products, Inc. v.
NLRC, et al., G.R. No. 78524, January 20, 1989), its provisions cannot override what is expressly provided by law
that only managerial employees are ineligible to join, assist or form any labor organization. (See Art. 247, Labor
Code). Therefore, regardless of the challenged employees' designations, whether they are employed as Supervisors
or in the confidential payrolls, if the nature of their job does not fall under the definition of "managerial" as defined
in the Labor Code, they are eligible to be members of the bargaining unit and to vote in the certification election.
Their right to self-organization must be upheld in the absence of an express provision of law to the contrary. It
cannot be curtailed by a collective bargaining agreement.
Hence, it is important to determine whether the positions of Supervisors II and III are considered "managerial"
under the law.

As defined in the Labor Code and as we have held in the case of Franklin Baker Company of the Phils. v.
Trajano, (157 SCRA 416, 421-423, [1988]):

"A managerial employee is defined as one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees, or to effectively recommend such managerial
actions. (Reynolds Phil. Corp. v. Eslava, 137 SCRA [1985], citing Section 212 (K), Labor Code."

xxx xxx xxx

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

authority to act in the interest of his employer in the matter specified in Article 212 (k) of the
Labor Code and Section 1 (m) of its Implementing Rules and whether such authority is not
merely routinary or clerical in nature, but requires the use of independent judgment. Thus,
where such recommendatory powers as in the case at bar, are subject to evaluation, review
and final action by the department heads and other higher executives of the company, the
same, although present, are not effective and not an exercise of independent judgment as
required by law (National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963])."

"Furthermore, in line with the ruling of this Court, subject employees are not managerial
employees because as borne by the records, they do not participate in policy making but are
given ready policies to execute and standard practices to observe, thus having little freedom of
action (National Waterworks and Sewerage Authority v. NWSA Consolidated, L-18988, 11 SCRA
766 [1964]). Cdpr

The petitioner's motion for reconsideration before the public respondent outlined the job description of Supervisors.
In the category of Supervisory II, the "General Summary" provides:

"GENERAL SUMMARY:
"Assists the Foreman in the effective dispatching/distribution of manpower and equipment to
carry out approved work." (p. 30, Rollo) while the first duty enumerated in the position of
Supervisor III states:

"1. Executes and coordinates work plans emanating from his supervisors." (p.
32, Rollo)

Thus, it is clear from the above provisions that the functions of the questioned positions are not managerial in
nature because they only execute approved and established policies leaving little or no discretion at all whether to
implement the said policies or not. The respondent Director, therefore, did not commit grave abuse of discretion in
dismissing the petitioner's appeal from the Med-Arbiter's Order to open and count the challenged ballots in denying
the petitioner's motion for reconsideration and in certifying the respondent Union as the sole and exclusive
bargaining representative of the rank-and-file employees of respondent Apex.

As regards the employees in the confidential payroll, the petitioner has not shown that the nature of their jobs is
classified as managerial except for its allegation that they are considered by management as occupying managerial
positions and highly confidential. Neither can payment or non-payment of union dues be the determining factor of
whether the challenged employees should be excluded from the bargaining unit since the union shop provision in
the CBA applies only to newly hired employees but not to members of the bargaining unit who were not members
of the union at the time of the signing of the CBA. It is, therefore, not impossible for employees to be members of
the bargaining unit even though they are non-union members or not paying union dues.

WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. Costs against the petitioner.

SO ORDERED.

||| (Southern Philippines Federation of Labor v. Calleja, G.R. No. 80882, [April 24, 1989], 254 PHIL 684-693)

THIRD DIVISION

[G.R. No. 157117. November 20, 2006.]

 COASTAL SUBIC BAY TERMINAL, INC., petitioner, vs. DEPARTMENT OF LABOR and
EMPLOYMENT — OFFICE OF THE SECRETARY, COASTAL SUBIC BAY TERMINAL, INC.
SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE
UNION-ALU-TUCP, respondents.

DECISION

QUISUMBING, J p:

For review on certiorari is the Court of Appeals' Decision 1 dated August 31, 2001, in CA-G.R. SP No. 54128 and
the Resolution 2 dated February 5, 2003, denying petitioner's motion for reconsideration. The Court of Appeals had
affirmed the Decision 3 dated March 15, 1999 of the Secretary of the Department of Labor and Employment
(DOLE) reversing the Mediator Arbiter's dismissal of private respondents' petitions for certification election.

The facts are as follows:

On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTI-RFU) and
Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitions for certification election
before Med-Arbiter Eladio de Jesus of the Regional Office No. III. The rank-and-file union insists that it is a
legitimate labor organization having been issued a charter certificate by the Associated Labor Union (ALU), and the
supervisory union by the Associated Professional, Supervisory, Office and Technical Employees Union (APSOTEU).
Private respondents also alleged that the establishment in which they sought to operate was unorganized.

Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification election alleging that
the rank-and-file union and supervisory union were not legitimate labor organizations, and that the proposed
bargaining units were not particularly described.

Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, without prejudice to refiling,
both petitions which had been consolidated. The Med-Arbiter held that the ALU and APSOTEU are one and the same
federation having a common set of officers. Thus, the supervisory and the rank-and-file unions were in effect
affiliated with only one federation. 4

The Med-Arbiter ruled as follows:

Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant
petitions to be invalid and unwarranted. Consequently, this Office has no recourse but to
dismiss both petitions without prejudice to the refiling of either. cEDaTS

WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are hereby
DISMISSED.

SO ORDERED. 5

Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of the Med-Arbiter.
The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU have separate legal
personalities to file their separate petitions for certification election. The Secretary held that APSOTEU is a
legitimate labor organization because it was properly registered pursuant to the 1989 Revised Rules and
Regulations implementing Republic Act No. 6715, the rule applicable at the time of its registration. It further ruled
that ALU and APSOTEU are separate and distinct labor unions having separate certificates of registration from the
DOLE. They also have different sets of locals. The Secretary declared CSBTI-RFU and CSBTI-SU as legitimate labor
organizations having been chartered respectively by ALU and APSOTEU after submitting all the requirements with
the Bureau of Labor Relations (BLR). Accordingly, the Secretary ordered the holding of separate certification
election, viz:

WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED. Let
separate certification elections be conducted immediately among the appropriate employees of
CSBTI, after the usual pre-election conference, with the following choices:

I. For all rank and file employees of CSBTI:

1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP; and

2. NO UNION.

II. For all supervisory employees of CSBTI:

 1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-APSOTEU;
and

2. NO UNION.

The latest payroll of the employer, including its payrolls for the last three months immediately
preceding the issuance of this decision, shall be the basis for determining the qualified list of
voters.

SO DECIDED. 6

The motion for reconsideration was also denied. 7

On appeal, the Court of Appeals affirmed the decision of the Secretary. 8 It held that there was no grave abuse of
discretion on the part of the Secretary; its findings are supported by evidence on record; and thus should be
accorded with respect and finality. 9

The motion for reconsideration was likewise denied. 10 Hence, the instant petition by the company anchored on
the following grounds:

THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989 REVISED RULES AND
REGULATIONS IMPLEMENTING RA 6715" AS BASIS TO RECOGNIZE PRIVATE RESPONDENT
APSOTEU'S REGISTRATION BY THE DOLE REGIONAL DIRECTOR. CaDSHE

II

THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC RESPONDENT'S

APPLICATION OF THE PRINCIPLE OF STARE DECISIS TO HASTILY DISPOSE OF THE LEGAL
PERSONALITY ISSUE OF APSOTEU.

III

THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW AND
JURISPRUDENCE WHEN IT AFFIRMED PUBLIC RESPONDENT'S APPLICATION OF THE "UNION
AUTONOMY" THEORY.

IV

IN AFFIRMING PUBLIC RESPONDENT'S FINDING THAT PRIVATE RESPONDENTS ARE

"SEPARATE FEDERATIONS," THE HONORABLE COURT OF APPEALS:

(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF A MED-

ARBITER'S FACTUAL FINDINGS; AND

(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL COMMINGLING." 11

Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions for certification
election?; (2) Was the Secretary's decision based onstare decisis correct?; and (3) Were private respondents
engaged in commingling?

The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU, its mother
federation.

Petitioner argues that APSOTEU improperly secured its registration from the DOLE Regional Director and not from
the BLR; that it is the BLR that is authorized to process applications and issue certificates of registration in
accordance with our ruling in Phil. Association of Free Labor Unions v. Secretary of Labor; 12 that the certificates of
registration issued by the DOLE Regional Director pursuant to the rules are questionable, and possibly even void ab
initio for being ultra vires; and that the Court of Appeals erred when it ruled that the law applicable at the time of
APSOTEU's registration was the 1989 Revised Implementing Rules and Regulations of Rep. Act No. 6715.

Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot attain the status
of a legitimate labor organization to file a petition for certification election. It relies on Villar v. Inciong, 13 where
we held therein that Amigo Employees Union was not a duly registered independent union absent any record of its
registration with the Bureau.

Pertinent is Article 235 14 of the Labor Code which provides that applications for registration shall be acted upon
by the Bureau. "Bureau" as defined under the Labor Code means the BLR and/or the Labor Relations Division in the
Regional Offices of the Department of Labor. 15 Further, Section 2, Rule II, Book V of the 1989 Revised
Implementing Rules of the Labor Code (Implementing Rules) provides that:
 Section 2. Where to file application; procedure — Any national labor organization or labor
federation or local union may file an application for registration with the Bureau or the Regional
Office where the applicant's principal offices is located. The Bureau or the Regional Office shall
immediately process and approve or deny the application. In case of approval, the Bureau or
the Regional Office shall issue the registration certificate within thirty (30) calendar days from
receipt of the application, together with all the requirements for registration as hereinafter
provided. 16

The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department Order No. 9, thus:

SECTION 1. Where to file applications. — The application for registration of any federation,
national or industry union or trade union center shall be filed with the Bureau. Where the
application is filed with the Regional Office, the same shall be immediately forwarded to the
Bureau within forty-eight (48) hours from filing thereof, together with all the documents
supporting the registration. SDAcaT

The applications for registration of an independent union shall be filed with and acted upon by
the Regional Office where the applicant's principal office is located . . . .

xxx xxx xxx

The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further amending Book V of
the above implementing rules. The new implementing rules explicitly provide that applications for registration of
labor organizations shall be filed either with the Regional Office or with the BLR. 17

Even after the amendments, the rules did not divest the Regional Office and the BLR of their jurisdiction over
applications for registration by labor organizations. The amendments to the implementing rules merely specified
that when the application was filed with the Regional Office, the application would be acted upon by the BLR.

The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly, the law applicable at
that time was Section 2, Rule II, Book V of the Implementing Rules, and not Department Order No. 9 which took
effect only on June 21, 1997. Thus, considering further that APSOTEU's principal office is located in Diliman,
Quezon City, and its registration was filed with the NCR Regional Office, the certificate of registration is valid.

The petitioner misapplied Villar v. Inciong. 18 In said case, there was no record in the BLR that Amigo Employees
Union was registered. 19

Did the Court of Appeals err in its application of stare decisis when it upheld the Secretary's ruling that APSOTEU is
a legitimate labor organization and its personality cannot be assailed unless in an independent action for
cancellation of registration certificate? 20

We think not.

Section 5, Rule V, Book V of the Implementing Rules states:

Section 5. Effect of registration — The labor organization or workers' association shall be

deemed registered and vested with legal personality on the date of issuance of its certificate of
registration. Such legal personality cannot thereafter be subject to collateral attack, but maybe
questioned only in an independent petition for cancellation in accordance with these Rules. 21

Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to its affiliates. 22 It may issue
a local charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is legitimate.

Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of the commonalities
between them? Are they commingled?

The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate fiction, APSOTEU
and ALU are the same federation. Private respondents disagree. EIcSDC

First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, it continues as
such until its certificate of registration is cancelled or revoked in an independent action for cancellation. 23 In
addition, the legal personality of a labor organization cannot be collaterally attacked. 24 Thus, when the personality
of the labor organization is questioned in the same manner the veil of corporate fiction is pierced, the action
partakes the nature of a collateral attack. Hence, in the absence of any independent action for cancellation of
registration against either APSOTEU or ALU, and unless and until their registrations are cancelled, each continues
to possess a separate legal personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and
separate federations, despite the commonalities of APSOTEU and ALU.
Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the
charter certificate issued by a duly registered federation or national union, and reported to the Regional Office in
accordance with the rules implementing the Labor Code. 25 A local union does not owe its existence to the
federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will
of its members. Mere affiliation does not divest the local union of its own personality, neither does it give the
mother federation the license to act independently of the local union. It only gives rise to a contract of agency,
where the former acts in representation of the latter. 26 Hence, local unions are considered principals while the
federation is deemed to be merely their agent. 27 As such principals, the unions are entitled to exercise the rights
and privileges of a legitimate labor organization, including the right to seek certification as the sole and exclusive
bargaining agent in the appropriate employer unit.

A word of caution though, under Article 245 of the Labor Code, 28 supervisory employees are not eligible for
membership in a labor union of rank-and-file employees. The supervisory employees are allowed to form their own
union but they are not allowed to join the rank-and-file union because of potential conflicts of interest. 29Further,
to avoid a situation where supervisors would merge with the rank-and-file or where the supervisors' labor union
would represent conflicting interests, a local supervisors' union should not be allowed to affiliate with the national
federation of unions of rank-and-file employees where that federation actively participates in the union activity
within the company. 30 Thus, the limitation is not confined to a case of supervisors wanting to join a rank-and-file
union. The prohibition extends to a supervisors' local union applying for membership in a national federation the
members of which include local unions of rank-and-file employees. 31 In De La Salle University Medical Center and
College of Medicine v. Laguesma, we reiterated the rule that for the prohibition to apply, it is not enough that the
supervisory union and the rank-and-file union are affiliated with a single federation. In addition, the supervisors
must have direct authority over the rank-and-file employees. 32

In the instant case, the national federations that exist as separate entities to which the rank-and-file and
supervisory unions are separately affiliated with, do have a common set of officers. In addition, APSOTEU, the
supervisory federation, actively participates in the CSBTI-SU while ALU, the rank-and-file federation, actively
participates in the CSBTI-RFU, giving occasion to possible conflicts of interest among the common officers of the
federation of rank-and-file and the federation of supervisory unions. For as long as they are affiliated with the
APSOTEU and ALU, the supervisory and rank-and-file unions both do not meet the criteria to attain the status of
legitimate labor organizations, and thus could not separately petition for certification elections.

The purpose of affiliation of the local unions into a common enterprise is to increase the collective bargaining power
in respect of the terms and conditions of labor. 33When there is commingling of officers of a rank-and-file union
with a supervisory union, the constitutional policy on labor is circumvented. Labor organizations should ensure the
freedom of employees to organize themselves for the purpose of leveling the bargaining process but also to ensure
the freedom of workingmen and to keep open the corridor of opportunity to enable them to do it for
themselves. EIAScH

WHEREFORE, the petition is GRANTED. The Court of Appeals' Decision dated August 31, 2001, in CA-G.R. SP No.
54128 and the Resolution dated February 5, 2003 are SET ASIDE. The decision of the Med-Arbiter is hereby
AFFIRMED.

SO ORDERED.

||| (Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment, G.R. No. 157117, [November 20,
2006], 537 PHIL 459-473)

EN BANC

[G.R. No. 142297. June 15, 2004.]

HOME DEVELOPMENT MUTUAL FUND, petitioner, vs. COMMISSION ON AUDIT, respondent.

DECISION

AZCUNA, J p:
Before us is a petition for certiorari under Rule 65 of the Rules of Court alleging that the Commission on Audit
acted in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing
Resolution No. 2000-086 dated March 7, 2000, which affirmed COA Decision No. 98-245 dated June 16, 1998. COA
Decision No. 98-245 affirmed the audit disallowance of payment of productivity incentive bonus by petitioner Home
Development Mutual Fund (HDMF) to its personnel pursuant to Republic Act No. 6971, otherwise known as the
"Productivity Incentives Act of 1990."

The facts are as follows:

Republic Act No. 6971, "An Act to Encourage Productivity and Maintain Industrial Peace by Providing Incentives to
Both Labor and Capital," was approved on November 22, 1990, and took effect on December 9, 1990.

Section 3 of said Act states:

Sec. 3. Coverage. — This Act shall apply to all business enterprises with or without existing and
duly recognized or certified labor organizations, including government-owned and controlled
corporations performing proprietary functions. It shall cover all employees and workers
including casual, regular, supervisory and managerial employees.

The Secretary of Labor and Employment and the Secretary of Finance promulgated the Rules
Implementing Republic Act No. 6971 1 on June 4, 1991. Rule II of said implementing rules provides:

Section 1. Coverage. — These Rules shall apply to:

(a) All business enterprises with or without existing duly recognized or certified labor
organizations, including government-owned and controlled corporations
performing proprietary functions;

(b) All employees and workers including casual, regular, rank-and-file, supervisory
and managerial employees.

On November 21, 1991, petitioner HDMF granted Productivity Incentive Bonus equivalent to one month salary plus
allowance to all its personnel pursuant to Republic Act No. 6971, and its Implementing Rules. 2

The HDMF granted said bonus despite the advice on August 26, 1991 of Undersecretary Salvador Enriquez of the
Department of Budget and Management (DBM) to all government-owned and controlled corporations (GOCCs) and
government financial institutions (GFIs) with original charters performing proprietary functions to defer payment of
the productivity incentive bonus to their employees, pending the issuance of a definite ruling by the Office of the
President on the matter. 3

On December 27, 1991, the Department of Labor and Employment and the Department of Finance issued
the Supplemental Rules Implementing Republic Act No. 6971, which provides, thus:

Section 1. Paragraph (a) Section 1, Rule II of the Rules Implementing RA 6971, shall be
amended to read as follows:

Coverage. These Rules shall apply to:

(a) All business enterprises with or without existing duly certified labor organizations including
government-owned and controlled corporations performing proprietary functions which are
established solely for business or profit or gain and accordingly excluding those created,
maintained or acquired in pursuance of a policy of the state, enunciated in the constitution or
by law, and those whose officers and employees are covered by the Civil Service. (Emphasis
supplied.)

On November 29, 1996, the grant of productivity incentive bonus to the HDMF personnel in the total amount of
P5,136,710.91 was disallowed in audit under Notice of Disallowance No. 96-006-101 (91). 4 The disallowance was
based on COA Decision No. 96-288, dated June 4, 1996, stating that Republic Act No. 6971 does not apply to
government-owned or controlled corporations or to government financial institutions with original charters
performing proprietary functions, such as the HDMF. 5

In a letter-request dated May 28, 1997, HDMF, through its President and Chief Executive Officer, Zorayda Amelia
C. Alonzo, requested for the lifting of the disallowance.6 Alonzo argued that Republic Act No. 6971 applies to the
employees of HDMF since the coverage of the said law includes government-owned and controlled corporations
performing proprietary functions, and the supplemental rules excluding it from coverage was issued after the HDMF
had already granted the productivity incentive bonus to its employees.

In its Decision No. 98-245 7 dated June 16, 1998, the Commission on Audit affirmed the audit disallowance. It
ruled, thus:
 xxx xxx xxx

Appellant (petitioner herein) further averred that while the Supplemental Rules
Implementing R.A. No. 6971 issued by the Department of Labor and Employment and the
Department of Finance dated December 27, 1991, exclude from the coverage of R.A. No.
6971 GOCCs whose officers and employees are covered by the Civil Service Law (like the
HDMF), payment of the incentive bonus have been effected prior to the issuance of the said
supplemental rules. Simply stated, it is the position of the appellant that the supplemental
rules should not be given retroactive effect.

The Commission finds the appellant's arguments untenable. It must be noted that the grant of
the Productivity Incentive Bonus was made on November 21, 1991 or after receipt of the
advice of the Department of Budget and Management Undersecretary dated August 26, 1991
to defer payment of Productivity Incentive Bonus to all GOCCs/GFIs with original charters
performing proprietary functions, pending definite ruling of the Office of the President. Despite
the said notice, management proceeded with the payment. HCITDc

Likewise, the issue as to whether or not GOCCs/GFIs with original charters which are
performing proprietary functions are covered by R.A. No. 6971 had been resolved by the
Secretary of Justice in his letter dated November 8, 1995, stating that GOCCs with original
charter, being covered by the Civil Service Law, and not by the labor laws, are clearly outside
the ambit of R.A. No. 6971.

Verily, the grant of the incentive bonus is contrary to the Supplemental Rules
Implementing R.A. No. 6971 issued by the Department of Labor and Employment and the
Department of Finance dated December 27, 1991, portion of which pertinently reads as
follows:

'All business enterprises . . . established solely for business of profit or gain and
accordingly, excluding those created, maintained or acquired in pursuance of a policy
of the state, enunciated in the constitution or by law, and those whose officers and
employees are covered by the Civil Service (emphasis supplied).'

Moreover, the issue raised by the appellant that the supplemental rules excluding GOCCs/GFIs
from the coverage of R.A. No. 6971 should not be given retroactive effect is not tenable since
the HDMF from the very beginning is not covered by the aforesaid law.

Premises considered, the audit disallowance is hereby affirmed, and the refund of the amount
of P5,136,710.91 granted as Productivity Incentive Bonus to HDMF personnel based on the
provisions of R.A. No. 6971 shall be enforced accordingly.

HDMF filed a motion for reconsideration that was denied by the Commission on Audit in Resolution No. 2000-086
dated March 7, 2000. 8

Hence, this petition.

Petitioner raises three issues: 9

1. What is the applicable rule at the time of the grant of the Productivity Incentive Bonus?

2. Whether the Memorandum from the Department of Finance signed by Secretary Jesus P.
Estanislao dated January 16, 1992 constitutes appropriate authorization for the grant
of Productivity Incentive Allowance for 1991.

3. Whether the Supplemental Implementing Rules are valid? If so, whether it may be given
retroactive effect?

Petitioner contends that when it granted the productivity incentive bonus to its personnel on November 21, 1991,
no other rule but the Implementing Rules of Republic Act No. 6971 dated June 4, 1991 was in existence. Said Rule
includes in its coverage government-owned and controlled corporations performing proprietary functions, without
any qualification. The Supplementary Rules, which excluded petitioner from coverage, was issued only after it had
already granted the productivity incentive bonus to its personnel. Hence, the employees already acquired a vested
right over the productivity incentive bonus.

The contention is without merit.

Association of Dedicated Employees of the Philippine Tourism Authority (ADEPT) v. Commission on Audit, 10 held
that the legislature intended Republic Act No. 6971 to cover only government-owned and controlled corporations
incorporated under the general corporation law, thus:
 Petitioner cites an entry in the journal of the House of Representatives to buttress its
submission that PTA is within the coverage of RA 6971, to wit:

"Chairman Veloso: The intent of including government-owned and controlled corporations

within the coverage of the Act is the recognition of the principle that when government goes
into business, it (divests) itself of its immunity from suit and goes down to the level of ordinary
private enterprises and subjects itself to the ordinary laws of the land just like ordinary private
enterprises. Now, when people work therefore in government-owned or controlled
corporations, it is as if they are also, just like in the private sector, entitled to all the benefits of
all laws that apply to workers in the private sector. In my view, even including the right to
organize, bargain . . ." VELOSO (Bicameral Conference committee on Labor and Employment,
pp. 15–16).

After a careful study, the Court is of the view, and so holds, that contrary to petitioner's
interpretation, the government-owned and controlled corporations Mr.Chairman Veloso had in
mind were government-owned and controlled corporations incorporated under the general
corporation law. This is so because only workers in private corporations and government-
owned and controlled corporations, incorporated under the general corporation law, have the
right to bargain (collectively). Those in government corporations with special charter, which are
subject to Civil Service Laws, have no right to bargain (collectively), except where the terms
and conditions of employment are not fixed by law. Their rights and duties are not comparable
with those in the private sector. (Emphasis supplied.)

xxx xxx xxx

The legislative intent to place only government-owned and controlled corporations performing
proprietary functions under the coverage of RA 6971 is gleanable from the other provisions of
the law. For instance, section 2 of said law envisions "industrial peace and harmony" and "to
provide corresponding incentives to both labor and capital"; section 4 refers to "representatives
of labor and management", section 5 mentions of "collective bargaining agent(s) of the
bargaining unit(s); section 6 relates to "existing collective bargaining agreements," and "labor
and management"; section 7 speaks of "strike or lockout"; and section 9 purports to "seek the
assistance of the National Conciliation and Mediation Board of the Department of Labor and
Employment" and "include the name(s) of the voluntary arbitrator or panel of voluntary
arbitrators." All the aforecited provisions of law apply only to private corporations and
government-owned and controlled corporations organized under the general corporation law.
Only they have collective bargaining agents, collective bargaining units, collective bargaining
agreements, and the right to strike or lockout. (Emphasis supplied.)

To repeat, employees of government corporations created by special charters have neither the
right to strike nor the right to bargain collectively, as defined in the Labor Code. The case
of Social Security System Employees Association indicates the following remedy of government
workers not allowed to strike or bargain collectively, to wit:

"Government employees may, therefore, through their unions or associations, either petition
the Congress for the betterment of the terms and conditions of employment which are within
the ambit of legislation or negotiate with the appropriate government agencies for the
improvement of those which are not fixed by law. If there be any unresolved grievances, the
dispute may be referred to the Public Sector Labor-Management Council for appropriate
action. But employees in the civil service may not resort to strikes, walkouts and other
temporary work stoppages, like workers in the private sector, to pressure the Government to
accede to their demands." (supra, footnote 14, p. 698; italics ours)

It is a rule in statutory construction that every part of the statute must be interpreted with
reference to the context, i.e., that every part of the statute must be considered together with
the other parts, and kept subservient to the general intent of the whole enactment. The
provisions of RA 6971, taken together, reveal the legislative intent to include only government-
owned and controlled corporations performing proprietary functions within its coverage.

Petitioner is a government-owned and controlled corporation performing proprietary functions with original charter
or created by special law, specifically Presidential Decree (PD) No. 1752, 11 amending PD No. 1530. As such,
petitioner HDMF is covered by the Civil Service pursuant to Article IX, Section 2(1) 12 of the 1987 Constitution,
and, therefore, excluded from the coverage of Republic Act No. 6971.

Since Republic Act No. 6971 intended to cover only government-owned and controlled corporations incorporated
under the general corporation law, the power of administrative officials to promulgate rules in the implementation
of the statute is necessarily limited to what is intended and provided for in the legislative enactment.13 Hence, the
Supplemental Rules clarified that government-owned and controlled corporations performing proprietary functions
which are "created, maintained or acquired in pursuance of a policy of the state, enunciated in the constitution or
by law, and those whose officers and employees are covered by the Civil Service" are excluded from the coverage
of Republic Act No. 6971.

Therefore, even if petitioner HDMF granted the Productivity Incentive Bonus before the Supplemental Rules were
issued clarifying that petitioner was excluded from the coverage of Republic Act No. 6971, the employees of HDMF
did not acquire a vested right over said bonus because they were not entitled to it under Republic Act No. 6971.

Moreover, the DBM advised petitioner herein, HDMF, on August 26, 1991, to defer payment of the productivity
incentive bonus to their employees, pending the issuance of a definite ruling by the Office of the President on the
matter. Despite said advice, the Board of Trustees of HDMF opted to grant the said bonus on a voluntary basis as
stated in its Resolution No. 91-549, Series of 1991. 14 It expressed its "concern over the welfare of the officers
and employees of the Fund rather than adhering to the stringent technicality of the law." The Board, therefore, was
aware that possibly HDMF may not be covered by Republic Act No. 6971. It should have exercised prudence by
awaiting the definite ruling on the coverage to prevent legal problems.

Regarding the validity of the Supplemental Rules Implementing Republic Act No. 6971, ADEPT v. Commission on
Audit held that said rules issued by the Secretary of Labor and Employment and the Secretary of Finance were in
accord with the intendment and provisions of Republic Act No. 6971. 15

Petitioner further claims that it is covered by a memorandum, 16 dated January 16, 1992, which was allegedly
issued by Secretary Jesus P. Estanislao, Department of Finance, stating that "[a]s authorized by the President, the
GFIs are to pay the traditional PIA at the year-end 1991, following the standard formulas that have been observed
by the GFIs over the years." Petitioner raises as an issue whether or not said memorandum constitutes appropriate
authorization for its grant of productivity incentive allowance for 1991.

Parenthetically, the decision of the Commission on Audit subject of the petition herein, never discussed the
aforesaid memorandum. The same, in any case, cannot prevail over the law.

Petitioner finally asserts that its payment of the productivity incentive bonus to its personnel and the latter's
acceptance of the same was in good faith and cites ADEPT v. Commission on Audit as precedent against a refund of
said bonus.

In ADEPT v. Commission on Audit, docketed as G.R. No. 119597, the Court sustained the decision of the
Commission on Audit affirming the disallowance by the Corporate Auditor of the productivity incentive bonus
granted to ADEPT (an association of employees of the Philippine Tourism Authority) for calendar year 1992
pursuant to Republic Act No. 6971. ADEPT v. Commission on Audit was consolidated with four other cases, which
did not involve the application of Republic Act No. 6971. It was in the other cases, docketed as G.R. Nos. 109406,
110642, 111494 and 112056, that the Court enjoined further deductions from the salaries and allowances of
petitioners therein.

In view of the foregoing, the respondent Commission on Audit did not commit grave abuse of discretion amounting
to lack of jurisdiction in affirming the audit disallowance.

WHEREFORE, the petition is DISMISSED. Respondent Commission on Audit's Resolution No. 2000-086, dated
March 7, 2000, which affirmed COA Decision No. 98-245, dated June 16, 1998, is hereby AFFIRMED.

Costs de oficio.

SO ORDERED.

||| (HDMF v. Commission on Audit, G.R. No. 142297, [June 15, 2004], 476 PHIL 92-105)

SECOND DIVISION

[G.R. No. 131248. December 11, 1998.]

DUNLOP SLAZENGER (PHILS.), INC., petitioner, vs. HON. SECRETARY OF LABOR AND
EMPLOYMENT and DUNLOP SLAZENGER STAFF ASSOCIATION-APSOTEU, respondents.

Bautista Picazo Buyco Tan & Fider for petitioner.

Seno Mendoza & Associates Law Offices for private respondent.

 SYNOPSIS

Respondent union filed a Petition for Certification Election among the supervisory, office and technical employees of
the petitioner company before the Department of Labor and Employment. Petitioner company filed its answer with
motion to dismiss on the following grounds that respondent union is comprised of supervisory and rank-and-file
employees and cannot act as bargaining agent for the proposed unit; that a single certification election cannot be
conducted jointly among supervisory and rank-and-file employees; and that the union lacks legal standing since it
failed to submit its books of accounts. Respondent union, on the other hand, alleged that its members are
supervisors and not rank-and-file employees. The Mediator Arbiter granted the certification election, which was
affirmed by the Secretary of Labor. Hence, this petition. cITAaD

Supervisors can be an appropriate bargaining unit. The resolution of the issue of whether or not the respondent
union can file a petition for certification election to represent the supervisory employees of the petitioner company
depends on whether the respondent union is composed solely of supervisory employees or of both supervisory and
rank-and-file employees. Art. 245 of the Labor Code clearly provides that supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file employees. Here, respondent union has no legal
right to file a certification election to represent a bargaining unit composed of supervisors for so long as it counts
office and technical employees who are rank-and-file employees among its members. CcAIDa

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR UNION; SUPERVISORS CAN BE APPROPRIATE BARGAINING UNIT;
ELUCIDATED. — Supervisors can be an appropriate bargaining unit. "[A]n appropriate bargaining unit is a group of
employees of a given employer, composed of all or less than the entire body of employees, which the collective
interests of all the employees, consistent with equity to the employer, indicate to be best suited to serve reciprocal
rights and duties of the parties under the collective bargaining provisions of law. Otherwise stated, it is a legal
collectivity for collective bargaining purposes whose members have substantially mutual bargaining interests in
terms and conditions of employment as will assure to all employees their collective bargaining rights. A unit to be
appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working
conditions and other subjects of collective bargaining."

2. ID.; ID.; ID.; CAPACITY TO FILE PETITION FOR CERTIFICATION ELECTION. — Whether or not the respondent
union can file a petition for certification election to represent the supervisory employees of the petitioner company,
this issue depends on whether the respondent union is composed solely of supervisory employees or of both
supervisory and rank-and-file employees. Article 245 of the Labor Code clearly provides that "supervisory
employees shall not be eligible for membership in a labor organization of the rank-and-file employees . . .."

3. ID.; SUPERVISORY EMPLOYEES; HOW DETERMINED. — To determine who are supervisory and rank-and-file
employees reference has to be made to Article 212 (m) of the Labor Code, as amended, as well as Section 1 (t),
Rule I, Book V of the Omnibus Rules Implementing the Labor Code. The test of supervisory status is whether an
employee possesses authority to act in the interest of his employer, which authority should not be merely routinary
or clerical in nature but requires the use of independent judgment. Corollarily, what determines the nature of
employment is not the employee's title, but his job description.

DECISION

PUNO, J p:

In this petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner seeks the annulment of
the Resolution and Order, dated July 19, 1997 and October 16, 1997, 1 of the public respondent Secretary of Labor
and Employment calling for a certification election in its company. LLjur

It appears that on September 15, 1995, the respondent union filed a Petition for Certification Election among the
supervisory, office and technical employees of the petitioner company before the Department of Labor and
Employment, Regional Office No. III, San Fernando, Pampanga. It alleged that it is a legitimate labor organization,
a duly chartered local of the Associated Professional, Supervisory, Office & Technical Employees Union (APSOTEU);
that petitioner is a domestic corporation engaged in the manufacture of tennis balls and other allied products; that
petitioner is an unorganized establishment and there is no certified bargaining agreement that will bar the filing of
its petition for certification election; and that no certification election has been conducted within one (1) year prior
to the filing of its petition for certification election. LLpr

On October 9, 1995, the petitioner company filed its Answer with Motion to Dismiss based on three (3) grounds,
namely: (1) that the respondent union is comprised of supervisory and rank-and-file employees and cannot act as
bargaining agent for the proposed unit; (2) that a single certification election cannot be conducted jointly among
supervisory and rank-and-file employees; and (3) that the respondent union lacks legal standing since it failed to
submit its books of accounts. 2

In its Reply filed on December 5, 1995, the respondent union alleged that its members are supervisors and not
rank-and-file employees. It averred that all its members are paid monthly by the petitioner company. It alleged
that the bargaining unit it seeks to represent is made up of the monthly paid supervisory employees and other
personnel who cannot be classified as belonging to the rank-and-file. It further contended that it has no obligation
to attach its books of accounts since it is a legitimate labor organization. It urged that the certification election
proceeding cannot be used to question the legal personality of a labor organization. 3 On March 4, 1996, however,
respondent union submitted its new books of accounts consisting of the Cash Receipts Journal, Cash Disbursements
Journal and two (2) ledgers. 4

On July 15, 1996, Mediator Arbiter Ma. Carmen A. Espinosa granted the petition for certification election.
Respondent Secretary of Labor and Employment affirmed the Arbiter's decision ruling as follows:

"xxx xxx xxx

'The order of the Med-Arbiter directing the conduct of a certification elections is well and
proper.

"A perusal of the records shows that the bargaining unit that the petitioner seeks to represent
has been properly defined and this is composed of all the supervisory employees of the
respondent company. We wish to emphasize that the right of supervisory employees to form
their own labor organization separate from that of the rank-and-file union has been recognized
by law. This is quite clear from the provisions of Article 245 of the Labor Code, as amended,
which states: prcd

ART. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees-managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in
a labor organization of the rank and file employees but may join, assist or form
separate labor organizations of their own.'

"As to the contention of the respondent that the petitioning union is composed of both
supervisory and rank and file employees, suffice it to stress that the same is not a sufficient
reason that would warrant the dismissal of the present petition. The same can be taken care
(sic) of during the pre-election conference thru the exclusion-inclusion proceedings wherein
those employees who are occupying rank and file positions will be excluded from the list of
eligible voters. LexLib

"Anent the issue on the legitimacy of the petitioner, we agree with the findings of the Med-
Arbiter that the petitioner has acquired the requisite legal personality to file the present
petition for certification elections. This is shown by the fact that the petitioner has sufficiently
complied with the mandatory reportorial requirements provided for under Section 3, Rule II,
Book V of the Rules and Regulations Implementing the Labor Code, as amended and as
enunciated by the Supreme Court in the cases of Progressive Development Corporation vs.
Secretary of Labor, et al., 205 SCRA 802 and Protection Technology Inc. vs. Secretary of
Labor, G.R. 11711, March 1, 1995." 5

Respondent Secretary of Labor denied petitioner's motion for reconsideration; hence, this petition.

It is petitioner's submission that:

"I

"Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack
or excess of jurisdiction in holding that the respondent union is composed of all the supervisory
employees of the [petitioner] company. dctai

"II

"Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack
or excess of jurisdiction in finding that even if the respondent union is composed of both
 supervisory and rank-and-file employees such can be taken cared of during the pre-election
conference thru the exclusion-inclusion proceedings.

"III

"Respondent Secretary acted contrary to law and with grave abuse of discretion amounting to
lack or excess of jurisdiction in upholding the findings of the Med-Arbiter that the respondent
union has complied with all the requirements for it to attain the legal personality to file the
petition for certification election." 6

The petition is meritorious.

We agree with the public respondent that supervisors can be an appropriate bargaining unit. This is in accord with
our repeated ruling that "[a]n appropriate bargaining unit is a group of employees of a given employer, composed
of all or less than the entire body of employees, which the collective interests of all the employees, consistent with
equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties under the
collective bargaining provisions of law. Otherwise stated, it is a legal collectivity for collective bargaining purposes
whose members have substantially mutual bargaining interests in terms and conditions of employment as will
assure to all employees their collective bargaining rights. A unit to be appropriate must effect a grouping of
employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of
collective bargaining." 7

The critical issue, however, is whether or not the respondent union can file a petition for certification election to
represent the supervisory employees of the petitioner company. The resolution of this issue depends on whether
the respondent union is composed solely of supervisory employees or of both supervisory and rank-and-file
employees. Article 245 of the Labor Code clearly provides that "supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees . . ."

To determine who are supervisory and rank-and-file employees reference has to be made to Article 212 (m) of the
Labor Code, as amended, as well as Section 1 (t), Rule I, Book V of the Omnibus Rules Implementing the Labor
Code, as amended, viz:

"'Managerial employee is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign
or discipline employees. Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment. All employees not
falling within any of the above definitions are considered rank-and-file employees for purposes
of this Book [these Rules].'" LLpr

Determining the status of supervisory and rank-and-file employees is not a hard row to hoe in labor law. The test
of supervisory status as we have repeatedly ruled is whether an employee possesses authority to act in the interest
of his employer, which authority should not be merely routinary or clerical in nature but requires the use of
independent judgment. Corollarily, what determines the nature of employment is not the employee's title, but his
job description. 8

In the instant case, the list of monthly paid employees submitted by the petitioner company contains the names of
about twenty seven (27) supervisory employees, six (6) managerial employees, one (1) confidential employee and
twenty six (26) office and technical employees holding various positions. The list reveals that the positions
occupied by the twenty six (26) office and technical employees are in fact rank-and-file positions, i.e., A/C
mechanic, draftsmen, storemen, motorpool mechanic, secretaries, accounts clerk, company nurses, industrial
mechanic, boiler men, laboratory technicians, payroll clerk, welder, purchasing clerk, company drivers and
electricians. It is fairly obvious that these positions cannot be considered as supervisory positions for they do not
carry the authority to act in the interest of the employer or to recommend managerial actions. It is not decisive
that these employees are monthly paid employees. Their mode of compensation is usually a matter of convenience
and does not necessarily determine the nature and character of their job.

We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of
the respondent union can be remedied in "the pre-election conference thru the exclusion-inclusion proceedings
wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible
voters." Public respondent gravely misappreciates the basic antipathy between the interest of supervisors and the
interest of rank-and-file employees. Due to the irreconcilability of their interests we held in Toyota Motor
Philippines v. Toyota Motors Philippines Corporation Labor Union, 9 viz:

"xxx xxx xxx

 "Clearly, based on this provision [Article 245, Labor Code], a labor organization composed of
both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any
guise or purpose, be a legitimate labor organization. Not being one, an organization which
carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights
of a legitimate labor organization, including the right to file a petition for certification
election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to
the granting of an order allowing a certification election, to inquire into the composition of any
labor organization whenever the status of the labor organization is challenged on the basis of
Article 245 of the Labor Code." cdll

Needless to stress, the respondent union has no legal right to file a certification election to represent a
bargaining unit composed of supervisors for so long as it counts rank-and-file employees among its members.
IN VIEW WHEREOF, the Resolution and Order dated July 19, 1997 and October 16, 1997, in OS-A-10-171-96 of the
public respondent are annulled and set aside. No costs.

SO ORDERED.

||| (Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and Employment, G.R. No. 131248, [December 11,
1998], 360 PHIL 304-312)

FIRST DIVISION

[G.R. No. 128845. June 1, 2000.]

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner, vs. HON. LEONARDO

A. QUISUMBING in his capacity as the Secretary of Labor and Employment; HON.
CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor and Employment;
DR. BRIAN MACCAULEY in his capacity as the Superintendent of International School-Manila;
and INTERNATIONAL SCHOOL, INC., respondents.

Azcuna Yorac Sarmiento Arroyo & Chua Law Offices for petitioner.

The Solicitor General for public respondent.

Bernas Law Office for private respondent.

SYNOPSIS

Private respondent International School, Inc. is a domestic educational institution established primarily for
dependents of foreign diplomatic personnel and other temporary residents. It hires both foreign and local teachers
as members of its faculty classifying them as foreign-hires and local-hires. It grants foreign-hires certain benefits
as housing, transportation, shipping costs, taxes and home leave travel allowance which are not accorded to local-
hires. Foreign-hires are also paid a salary rate of twenty-five percent (25%) more than the local-hires. The school
justified the difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the
"dislocation factor" and (b) limited tenure. When negotiations for a new collective bargaining agreement were held
in June 1995, petitioner International School Alliance of Educators (ISAE) as a legitimate labor union and the
collective bargaining representative of all the faculty members of the school contested the difference in salary rates
between foreign and local hires. This issue, as well as the question of whether foreign-hires should be included in
the appropriate bargaining unit, eventually caused a deadlock between the parties. The Department of Labor and
Employment (DOLE) assumed jurisdiction over the dispute. It subsequently issued an Order resolving the issues in
favor of the school. The motion for reconsideration of ISAE was also denied. Hence, this petition.

The Court ruled that the point-of-hire classification employed by respondent School to justify the distinction in the
salary rates of foreign-hires and local-hires was an invalid classification. There is no reasonable distinction between
the services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to
foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of the Court.
The Court agreed, however, that foreign-hires do not belong to the same bargaining unit as the local-hires. The
basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which
will best assure to all employees the exercise of their collective bargaining rights. It does not appear that foreign-
hires have indicated their intention to be grouped together with local-hires for purposes of collective bargaining.
The collective bargaining history in the School also showed that these groups were always treated separately.
Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar
functions under the same working conditions as the local-hires, foreign-hires are accorded certain benefits not
granted to local-hires. These benefits, such as housing, transportation, shipping costs, taxes, and home leave
travel allowance, are reasonably related to their status as foreign-hires, and justified the exclusion of the former
from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either group the
exercise of their respective collective bargaining rights. The orders of the Secretary of Labor were reversed and set
aside insofar as they upheld the practice of respondent School of according foreign-hires higher salaries than local-
hires.

SYLLABUS

1. POLITICAL LAW; CONSTITUTIONAL LAW; PUBLIC POLICY ABHORS INEQUALITY AND DISCRIMINATION. — That
public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy
against these evils. The Constitution in the Article on Social Justice and Human Rights exhorts Congress to "give
highest priority to the enactment of measures that protect and enhance the right of all people to human dignity,
reduce social, economic, and political inequalities." The very broad Article 19 of the Civil Code requires every
person, "in the exercise of his rights and in the performance of this duties, [to] act with justice, give everyone his
due, and observe honesty and good faith."

2. INTERNATIONAL LAW; SPRINGS FROM GENERAL PRINCIPLES OF LAW WHICH PROSCRIBE DISCRIMINATION. —
International law, which springs from general principles of law, likewise proscribes discrimination. General
principles of law include principles of equity, i.e., the general principles of fairness and justice, based on the test of
what is reasonable. The Universal Declaration of Human Rights, the International Covenant on Economic, Social,
and Cultural Rights, the International Convention on the Elimination of All Forms of Racial Discrimination, the
Convention against Discrimination in Education, the Convention (No. 111) Concerning Discrimination in Respect of
Employment and Occupation — all embody the general principle against discrimination, the very antithesis of
fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national
laws.

3. POLITICAL LAW; CONSTITUTIONAL LAW; SOCIAL JUSTICE AND HUMAN RIGHTS; LABOR; HUMANE CONDITIONS
OF WORK INCLUDES THE MANNER BY WHICH EMPLOYERS TREAT THEIR EMPLOYEES. — The Constitution
specifically provides that labor is entitled to "humane conditions of work." These conditions are not restricted to the
physical workplace — the factory, the office or the field — but include as well the manner by which employers treat
their employees.

4. LABOR AND SOCIAL LEGISLATION; LABOR CODE; THE STATE SHALL ENSURE EQUAL WORK OPPORTUNITIES
REGARDLESS OF SEX, RACE OR CREED. — The Constitution also directs the State to promote "equality of
employment opportunities for all." Similarly, the Labor Code provides that the State shall "ensure equal work
opportunities regardless of sex, race or creed." It would be an affront to both the spirit and letter of these
provisions if the State, in spite of its primordial obligation to promote and ensure equal employment opportunities,
closes its eyes to unequal and discriminatory terms and conditions of employment.

5. ID.; ID.; PROHIBITS DISCRIMINATION IN TERMS OF WAGES. — Discrimination, particularly in terms of wages,
is frowned upon by the Labor Code. Article 135, for example, prohibits and penalizes the payment of lesser
compensation to a female employee as against a male employee for work of equal value. Article 248 declares it an
unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage
membership in any labor organization.

6. INTERNATIONAL LAW; INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS;

INSTITUTIONALIZED THE LONG HONORED LEGAL TRUISM OF "EQUAL PAY FOR EQUAL WORK." — [T]he
International Covenant on Economic, Social, and Cultural Rights, in Article 7 thereof, provides: The States Parties
to the present Covenant recognize the right of everyone to the enjoyment of just and favourable conditions of
work, which ensure, in particular: a. Remuneration which provides all workers, as a minimum, with: i. Fair wages
and equal remuneration for work of equal value without distinction of any kind, in particular women being
guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work; . . . . The
foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for
equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries.
7. LABOR AND SOCIAL LEGISLATION; LABOR CODE; CONDITIONS OF EMPLOYMENT; EQUAL WORK FOR EQUAL
PAY; APPLIED IN CASE AT BAR. — This rule applies to the School, its "international character" notwithstanding. The
School contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-
hires. The Court finds this argument a little cavalier. If an employer accords employees the same position and
rank, the presumption is that these employees perform equal work. This presumption is borne by logic and human
experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he
receives less or why the others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the employee is treated unfairly. The
employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires perform 25%
more efficiently or effectively than the local-hires. Both groups have similar functions and responsibilities, which
they perform under similar working conditions. The School cannot invoke the need to entice foreign-hires to leave
their domicile to rationalize the distinction in salary rates without violating the principle of equal work for equal
pay.

8. ID.; ID.; ID.; SALARY; DEFINED. — "Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or
recompense for services performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is the
"[c]onsideration paid at regular intervals for the rendering of services." In Songco v. National Labor Relations
Commission, we said that: "salary" means a recompense or consideration made to a person for his pains or
industry in another man's business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of
the Roman soldier, it carries with it the fundamental idea of compensation for services rendered.

9. ID.; ID.; ID.; ID.; "DISLOCATION FACTOR" AND FOREIGN HIRES' LIMITED TENURE CANNOT SERVE AS VALID
BASES FOR DISTINCTION IN SALARY RATES. — While we recognize the need of the School to attract foreign-hires,
salaries should not be used as an enticement to the prejudice of local-hires. The local-hires perform the same
services as foreign-hires and they ought to be paid the same salaries as the latter. For the same reason, the
"dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in
salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by
certain benefits accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping
costs, taxes and home leave travel allowances.

10. ID.; ID.; THE STATE HAS THE RIGHT AND DUTY TO REGULATE THE RELATIONS BETWEEN LABOR AND
CAPITAL. — The Constitution enjoins the State to "protect the rights of workers and promote their welfare," "to
afford labor full protection." The State, therefore, has the right and duty to regulate the relations between labor
and capital. These relations are not merely contractual but are so impressed with public interest that labor
contracts, collective bargaining agreements included, must yield to the common good. Should such contracts
contain stipulations that are contrary to public policy, courts will not hesitate to strike down these stipulations.

11. ID.; ID.; CONDITIONS OF EMPLOYMENT; POINT-OF-HIRE CLASSIFICATION TO JUSTIFY THE DISTINCTION IN
THE SALARY RATES OF FOREIGN-HIRES AND LOCAL-HIRES IS AN INVALID CLASSIFICATION. — [W]e find the
point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-
hires and local-hires to be an invalid classification. There is no reasonable distinction between the services
rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires
contravenes public policy and, certainly, does not deserve the sympathy of this Court.

12. ID.; ID.; LABOR RELATIONS; COLLECTIVE BARGAINING UNIT; ELUCIDATED. — A bargaining unit is "a group of
employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with
equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under
the collective bargaining provisions of the law." The factors in determining the appropriate collective bargaining
unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as
substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual
Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. The basic test of an
asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure
to all employees the exercise of their collective bargaining rights. cADEHI

13. ID.; ID.; ID.; ID.; FOREIGN-HIRES SHOULD NOT BELONG TO THE SAME BARGAINING UNIT AS LOCAL-HIRES.
— We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires. . . . It does
not appear that foreign-hires have indicated their intention to be grouped together with local-hires for purposes of
collective bargaining. The collective bargaining history in the School also shows that these groups were always
treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires
perform similar functions under the same working conditions as the local-hires, foreign-hires are accorded certain
benefits not granted to local-hires. These benefits, such as housing, transportation, shipping costs, taxes, and
home leave travel allowance, are reasonably related to their status as foreign-hires, and justify the exclusion of the
former from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either group
the exercise of their respective collective bargaining rights.
 DECISION

KAPUNAN, J p:

Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly
Filipinos, cry discrimination. We agree. That the local-hires are paid more than their colleagues in other schools is,
of course, beside the point. The point is that employees should be given equal pay for work of equal value. That is
a principle long honored in this jurisdiction. That is a principle that rests on fundamental notions of justice. That is
the principle we uphold today.

Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree 732, is a
domestic educational institution established primarily for dependents of foreign diplomatic personnel and other
temporary residents. 1 To enable the School to continue carrying out its educational program and improve its
standard of instruction, Section 2(c) of the same decree authorizes the School to

employ its own teaching and management personnel selected by it either locally or abroad,
from Philippine or other nationalities, such personnel being exempt from otherwise applicable
laws and regulations attending their employment, except laws that have been or will be
enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into
two: (1) foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member
should be classified as a foreign-hire or a local hire:

a. What is one's domicile?

b. Where is one's home economy?

c. To which country does one owe economic allegiance?

d. Was the individual hired abroad specifically to work in the School and was the School
responsible for bringing that individual to the Philippines? 2

Should the answer to any of these queries point to the Philippines, the faculty member is classified as a local hire;
otherwise, he or she is deemed a foreign-hire. llcd
The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation,
shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five
percent (25%) more than local-hires. The School justifies the difference on two "significant economic
disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. The
School explains:

A foreign-hire would necessarily have to uproot himself from his home country, leave his family
and friends, and take the risk of deviating from a promising career path — all for the purpose
of pursuing his profession as an educator, but this time in a foreign land. The new foreign hire
is faced with economic realities: decent abode for oneself and/or for one's family, effective
means of transportation, allowance for the education of one's children, adequate insurance
against illness and death, and of course the primary benefit of a basic salary/retirement
compensation.

Because of a limited tenure, the foreign hire is confronted again with the same economic reality
after his term: that he will eventually and inevitably return to his home country where he will
have to confront the uncertainty of obtaining suitable employment after a long period in a
foreign land.

The compensation scheme is simply the School's adaptive measure to remain competitive on
an international level in terms of attracting competent professionals in the field of international
education. 3

When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International
School Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty
members" 4 of the School, contested the difference in salary rates between foreign and local-hires. This issue, as
well as the question of whether foreign-hires should be included in the appropriate bargaining unit, eventually
caused a deadlock between the parties.

On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and Mediation
Board to bring the parties to a compromise prompted the Department of Labor and Employment (DOLE) to assume
jurisdiction over the dispute. On June 10, 1996, the DOLE Acting Secretary, Cresenciano B. Trajano, issued an
Order resolving the parity and representation issues in favor of the School. Then DOLE Secretary Leonardo A.
Quisumbing subsequently denied petitioner's motion for reconsideration in an Order dated March 19, 1997.
Petitioner now seeks relief in this Court.

Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that
the grant of higher salaries to foreign-hires constitutes racial discrimination.

The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all, with
nationalities other than Filipino, who have been hired locally and classified as local hires. 5 The Acting Secretary of
Labor found that these non-Filipino local-hires received the same benefits as the Filipino local-hires:

The compensation package given to local-hires has been shown to apply to all, regardless of
race. Truth to tell, there are foreigners who have been hired locally and who are paid equally
as Filipino local hires. 6

The Acting Secretary upheld the point-of-hire classification for the distinction in salary rates:

The principle "equal pay for equal work" does not find application in the present case. The
international character of the School requires the hiring of foreign personnel to deal with
different nationalities and different cultures, among the student population.

We also take cognizance of the existence of a system of salaries and benefits accorded to
foreign hired personnel which system is universally recognized. We agree that certain
amenities have to be provided to these people in order to entice them to render their services
in the Philippines and in the process remain competitive in the international market.

Furthermore, we took note of the fact that foreign hires have limited contract of employment
unlike the local hires who enjoy security of tenure. To apply parity therefore, in wages and
other benefits would also require parity in other terms and conditions of employment which
include the employment contract. cda

A perusal of the parties' 1992-1995 CBA points us to the conditions and provisions for salary
and professional compensation wherein the parties agree as follows:

All members of the bargaining unit shall be compensated only in accordance with
Appendix C hereof provided that the Superintendent of the School has the discretion
to recruit and hire expatriate teachers from abroad, under terms and conditions that
are consistent with accepted international practice.

Appendix C of said CBA further provides:

The new salary schedule is deemed at equity with the Overseas Recruited Staff
(OSRS) salary schedule. The 25% differential is reflective of the agreed value of
system displacement and contracted status of the OSRS as differentiated from the
tenured status of Locally Recruited Staff (LRS).

To our mind, these provisions demonstrate the parties' recognition of the difference in the
status of two types of employees, hence, the difference in their salaries.

The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an
established principle of constitutional law that the guarantee of equal protection of the laws is
not violated by legislation or private covenants based on reasonable classification. A
classification is reasonable if it is based on substantial distinctions and apply to all members of
the same class. Verily, there is a substantial distinction between foreign hires and local hires,
the former enjoying only a limited tenure, having no amenities of their own in the Philippines
and have to be given a good compensation package in order to attract them to join the
teaching faculty of the School. 7

We cannot agree.

That public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the
policy against these evils. The Constitution 8 in the Article on Social Justice and Human Rights exhorts Congress to
"give highest priority to the enactment of measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities." The very broad Article 19 of the Civil Code requires
every person, "in the exercise of his rights and in the performance of his duties, [to] act with justice, give everyone
his due, and observe honesty and good faith."
International law, which springs from general principles of law, 9 likewise proscribes discrimination. General
principles of law include principles of equity, 10 i.e., the general principles of fairness and justice, based on the test
of what is reasonable. 11 The Universal Declaration of Human Rights, 12 the International Covenant on Economic,
Social and Cultural Rights, 13 the International Convention on the Elimination of All Forms of Racial
Discrimination, 14 the Convention against Discrimination in Education, 15 the Convention (No. 111) Concerning
Discrimination in Respect of Employment and Occupation 16 — all embody the general principle against
discrimination, the very antithesis of fairness and justice. The Philippines, through its Constitution, has
incorporated this principle as part of its national laws.

In the workplace, where the relations between capital and labor are often skewed in favor of capital, inequality and
discrimination by the employer are all the more reprehensible.

The Constitution 17 specifically provides that labor is entitled to "humane conditions of work." These conditions are
not restricted to the physical workplace — the factory, the office or the field — but include as well the manner by
which employers treat their employees.

The Constitution 18 also directs the State to promote "equality of employment opportunities for all." Similarly, the
Labor Code 19 provides that the State shall "ensure equal work opportunities regardless of sex, race or creed." It
would be an affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation
to promote and ensure equal employment opportunities, closes its eyes to unequal and discriminatory terms and
conditions of employment. 20

Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for example,
prohibits and penalizes 21 the payment of lesser compensation to a female employee as against a male employee
for work of equal value. Article 248 declares it an unfair labor practice for an employer to discriminate in regard to
wages in order to encourage or discourage membership in any labor organization.

Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7 thereof, provides:

The States Parties to the present Covenant recognize the right of everyone to the enjoyment of
just and favorable conditions of work, which ensure, in particular:

a. Remuneration which provides all workers, as a minimum, with:

i. Fair wages and equal remuneration for work of equal value without distinction of any
kind, in particular women being guaranteed conditions of work not inferior to
those enjoyed by men, with equal pay for equal work;

xxx xxx xxx

The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay
for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under
similar conditions, should be paid similar salaries. 22 This rule applies to the School, its "international character"
notwithstanding.

The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of
foreign-hires. 23 The Court finds this argument a little cavalier. If an employer accords employees the same
position and rank, the presumption is that these employees perform equal work. This presumption is borne by logic
and human experience. If the employer pays one employee less than the rest, it is not for that employee to explain
why he receives less or why the others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the employee is treated unfairly.

The employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires perform
25% more efficiently or effectively than the local-hires. Both groups have similar functions and responsibilities,
which they perform under similar working conditions.

The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the distinction in
salary rates without violating the principle of equal work for equal pay.

"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for services performed."
Similarly, the Philippine Legal Encyclopedia states that "salary" is the "[c]onsideration paid at regular intervals for
the rendering of services." In Songco v. National Labor Relations Commission, 24 we said that:

"salary" means a recompense or consideration made to a person for his pains or industry in
another man's business. Whether it be derived from "salarium," or more fancifully from "sal,"
the pay of the Roman soldier, it carries with it the fundamental idea of compensation for
services rendered. (Emphasis supplied.)

While we recognize the need of the School to attract foreign-hires, salaries should not be used as an enticement to
the prejudice of local-hires. The local-hires perform the same services as foreign-hires and they ought to be paid
the same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure
also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure
affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by
local-hires, such as housing, transportation, shipping costs, taxes and home leave travel allowances.

The Constitution enjoins the State to "protect the rights of workers and promote their welfare," 25 "to afford labor
full protection." 26 The State, therefore, has the right and duty to regulate the relations between labor and
capital. 27 These relations are not merely contractual but are so impressed with public interest that labor contracts,
collective bargaining agreements included, must yield to the common good. 28 Should such contracts contain
stipulations that are contrary to public policy, courts will not hesitate to strike down these stipulations.

In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the
salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction
between the services rendered by foreign-hires and local-hires. The practice of the School of according higher
salaries to foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of this Court.

We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires. LLjur

A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the entire body
of employees, consistent with equity to the employer indicate to be the best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the law." 29 The factors in determining the
appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of
the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and
working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of
employment status. 30 The basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their collective bargaining
rights. 31

It does not appear that foreign-hires have indicated their intention to be grouped together with local-hires for
purposes of collective bargaining. The collective bargaining history in the School also shows that these groups were
always treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-
hires perform similar functions under the same working conditions as the local-hires, foreign-hires are accorded
certain benefits not granted to local-hires. These benefits, such as housing, transportation, shipping costs, taxes,
and home leave travel allowance, are reasonably related to their status as foreign-hires, and justify the exclusion
of the former from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either
group the exercise of their respective collective bargaining rights.

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The Orders of the
Secretary of Labor and Employment dated June 10, 1996 and March 19, 1997, are hereby REVERSED and SET
ASIDE insofar as they uphold the practice of respondent School of according foreign-hires higher salaries than local
hires.

SO ORDERED.

||| (International School Alliance of Educators v. Quisumbing, G.R. No. 128845, [June 1, 2000], 388 PHIL 661-
678)

FIRST DIVISION

[G.R. No. 151326. November 23, 2005.]

ST. JAMES SCHOOL OF QUEZON CITY, petitioner, vs. SAMAHANG MANGGAGAWA SA ST. JAMES
SCHOOL OF QUEZON CITY, respondent.

Alentajan Law Office for petitioner.

Florante M. Yambot for respondent.

SYLLABUS
LABOR AND SOCIAL LEGISLATION; LABOR CODE; OMNIBUS RULES IMPLEMENTING THE LABOR CODE; LABOR
RELATIONS; CERTIFICATION ELECTIONS; QUALIFICATION OF VOTERS; QUORUM, HOW COMPUTED; CASE AT BAR.
— St. James has five campuses — the Philamlife and Scout Alcaraz, Quezon City campuses which are pre-schools;
the Parañaque City and Calamba, Laguna campuses which offer elementary, secondary and college education; and
the Tandang Sora, Quezon City campus which offers elementary and secondary education. The members of
Samahang Manggagawa are employees in the Tandang Sora campus. Under its constitution and by-laws,
Samahang Manggagawa seeks to represent the motor pool, construction and transportation employees of the
Tandang Sora campus. Thus, the computation of the quorum should be based on the rank and file motor pool,
construction and transportation employees of the Tandang Sora campus and not on all the employees in St. James'
five campuses. Section 2, Rule XII, Book V of the Omnibus Rules provides: "Section 2. Qualification of voters;
inclusion-exclusion proceedings. — All employees who are members of the appropriate bargaining unit sought to be
represented by the petitioner at the time of the certification or consent election shall be qualified to vote. A
dismissed employee whose dismissal is being contested in a pending case shall be allowed to vote in the election.
In case of disagreement over the voters' list or over the eligibility of voters, all contested voters shall be allowed to
vote. However, their votes shall be segregated and sealed in individual envelopes in accordance with Section 9 of
these Rules." The motor pool, construction and transportation employees of the Tandang Sora campus had 149
qualified voters at the time of the certification election. Hence, the 149 qualified voters should be used to
determine the existence of a quorum. Since a majority or 84 out of the 149 qualified voters cast their votes, a
quorum existed in the certification election.

DECISION

CARPIO, J p:

The Case
Before the Court is a petition for review 1 assailing the 5 September 2001 Decision and 3 January 2002 Resolution
of the Court of Appeals 2 in CA-G.R. SP No. 60197. The Court of Appeals sustained the Decision of the Department
of Labor and Employment ("DOLE") directing the opening of the challenged ballots cast during the certification
election.

The Antecedent Facts

The Samahang Manggagawa sa St. James School of Quezon City ("Samahang Manggagawa") filed a petition for
certification election to determine the collective bargaining representative of the motor pool, construction and
transportation employees of St. James School of Quezon City ("St. James"). On 26 June 1999, the certification
election was held at the DOLE office in Intramuros, Manila. There were 149 eligible voters and 84 voters cast their
votes. St. James filed a certification election protest challenging the 84 votes. St. James alleged that it had 179
rank and file employees, none of whom voted in the certification election. St. James argued that those who voted
were not its regular employees but construction workers of an independent contractor, Architect Conrado Bacoy
("Architect Bacoy").

In an Order dated 6 January 2000, 3 Med-Arbiter Tomas F. Falconitin ("Med-Arbiter Falconitin") ruled that at the
time of the certification election, the 84 voters were no longer working at St. James. Med-Arbiter Falconitin
supported his ruling using the roster of rank and file employees submitted by St. James, which did not include the
names of the 84 voters. Med-Arbiter Falconitin also ruled that since the construction projects have ceased, some of
the workers were no longer entitled to vote in the certification election. Finally, Med-Arbiter Falconitin ruled that
even if the 84 workers were to be included in the 179 rank and file employees of St. James, the total number of
voters would be 263. Thus, the 84 votes cast would not be sufficient to constitute a majority of all eligible voters to
have a valid certification election. The dispositive portion of the Order reads:

WHEREFORE, premises considered, the certification election protest is hereby given due
course.

Accordingly, judgment is hereby rendered, declaring the certification election for the rank and
file employees of respondent/protestant St. James School of Quezon City conducted on June
26, 1999, a failure; and null and void ab initio. TIEHSA

SO ORDERED. 4
Samahang Manggagawa appealed to the Secretary of Labor. In its Decision 5 dated 5 May 2000, the
DOLE 6 reversed the ruling of Med-Arbiter Falconitin. The DOLE ruled that Samahang Manggagawa seeks to
represent the non-academic personnel or the rank and file employees from the motor pool, construction and
transportation departments, and not all the rank and file employees of St. James. According to the DOLE, Med-
Arbiter Falconitin erred in including all the rank and file employees of St. James, whether teaching or non-teaching
personnel, in the computation of the total number of employees. The DOLE ruled that the list submitted by St.
James contained only the administrative, teaching and office personnel of the school. The dispositive portion of the
Decision reads:

WHEREFORE, the appeal is hereby GRANTED and the order dated 06 January 2000 of the Med-
Arbiter is REVERSED and SET ASIDE. In lieu thereof, an order is hereby issued directing the
Election Officer, Lilibeth Cagara, DOLE-National Capital Region to open and canvass the 84
challenged ballots within ten (10) days from receipt hereof, subject to usual notice and
representation by the parties and thereafter to issue the corresponding certification of the
results.

SO DECIDED. 7

St. James filed a motion for reconsideration. The DOLE 8 denied the motion in its 19 June 2000 Resolution. 9 St.
James filed a special civil action before the Court of Appeals.

In a Decision 10 dated 5 September 2001, the Court of Appeals dismissed the petition and ruled that the DOLE did
not commit grave abuse of discretion in reversing the ruling of Med-Arbiter Falconitin. In its 3 January 2002
Resolution, 11 the Court of Appeals denied St. James' motion for reconsideration.

Hence, the petition before this Court.

The Issues
St. James questions the validity of the formation of the labor union and the validity of the certification election. 12

The Ruling of the Court

The petition has no merit.

The Validity of the Formation of the Labor Union

St. James argues that majority of the members of Samahang Manggagawa are not its employees but employees of
Architect Bacoy, an independent contractor.

St. James may no longer question the validity of the formation of the labor union.

The records 13 show that prior to the holding of the certification election, St. James filed a petition for cancellation
of Samahang Manggagawa's union registration. Among the grounds cited in the petition was the lack of employer-
employee relationship between St. James and Samahang Manggagawa's members. The Med-Arbiter recommended
the cancellation of the union registration. DOLE Regional Director IV Romeo Young ("Director Young") adopted the
Med-Arbiter's recommendation and cancelled Samahang Manggagawa's union registration. Samahang Manggagawa
filed an appeal before the Bureau of Labor Relations ("BLR"). In its Decision 14 dated 22 January 1998, the
BLR 15 reversed Director Young's Decision. In its Resolution 16 of 12 February 1998, the BLR denied St. James'
motion for reconsideration. St. James filed a special civil action before the Court of Appeals. The case was docketed
as CA-G.R. SP No. 50918. In its 9 February 2001 Decision, 17 the Court of Appeals dismissed St. James' petition
and affirmed the BLR's Decision. The Court of Appeals ruled that the construction workers are actually St. James'
regular employees in its motor pool, construction and transportation departments. The Court of Appeals also ruled
that Architect Bacoy is a labor-only contractor and thus an agent of St. James, which is the real employer. IHAcCS

St. James filed a petition for certiorari before this Court. The case was docketed as G.R. No. 149648. In a
Resolution dated 10 October 2001, this Court denied the petition for St. James' error in the choice or mode of
appeal. 18 The Court's 10 October 2001 Resolution closed any issue on the validity of the formation of the labor
union.

The Validity of the Certification Election

Section 13, Rule XII, Book V of the Omnibus Rules Implementing the Labor Code ("Omnibus Rules") provides:

Section 13. Proclamation and certification of results by election officer; when proper. — Upon
completion of the canvass there being a valid election, the election officer shall proclaim and
certify as winner the union which obtained a majority of the valid votes cast under any of the
following conditions:

a) No protest had been filed or, even if one was filed, the same was not perfected
within the five-day period for perfection of the protest;
 b) No challenge of eligibility issue was raised or even if one was raised, the resolution
of the same will not materially change the result.

For this purpose, the election officer shall immediately issue the corresponding certification,
copy furnished all parties, which shall form part of the records of the case. The winning union
shall have the rights, privileges and obligations of a duly certified collective bargaining
representative from the time the certification is issued. The proclamation and certification so
issued shall not be appealable.

According to St. James, the certification election was conducted without quorum. St. James alleges that it has 179
rank and file employees in its Quezon City Campus. When the certification election was held, none of these
qualified rank and file employees cast their votes because they were all on duty in the school premises. The 84
voters who cast their votes are employees of Architect Bacoy. St. James also alleges that it has 570 rank and file
employees in all its campuses. Even if the 84 voters are its employees, the votes do not constitute a majority vote
of its rank and file employees because the quorum should be based on its 570 rank and file employees.

We cannot sustain the argument.

St. James has five campuses — the Philamlife and Scout Alcaraz, Quezon City campuses which are pre-schools; the
Parañaque City and Calamba, Laguna campuses which offer elementary, secondary and college education; and the
Tandang Sora, Quezon City campus which offers elementary and secondary education. 19

The members of Samahang Manggagawa are employees in the Tandang Sora campus. Under its constitution and
by-laws, Samahang Manggagawa seeks to represent the motor pool, construction and transportation employees of
the Tandang Sora campus. 20 Thus, the computation of the quorum should be based on the rank and file motor
pool, construction and transportation employees of the Tandang Sora campus and not on all the employees in St.
James' five campuses.

Section 2, Rule XII, Book V of the Omnibus Rules provides:

Section 2. Qualification of voters; inclusion-exclusion proceedings. — All employees who are

members of the appropriate bargaining unit sought to be represented by the petitioner at the
time of the certification or consent election shall be qualified to vote. A dismissed employee
whose dismissal is being contested in a pending case shall be allowed to vote in the election.

In case of disagreement over the voters' list or over the eligibility of voters, all contested
voters shall be allowed to vote. However, their votes shall be segregated and sealed in
individual envelopes in accordance with Section 9 of these Rules.

The motor pool, construction and transportation employees of the Tandang Sora campus had 149 qualified voters
at the time of the certification election. Hence, the 149 qualified voters should be used to determine the existence
of a quorum. Since a majority or 84 out of the 149 qualified voters cast their votes, a quorum existed in the
certification election. TDCAHE

St. James further alleges that the names of the 84 voters are not on the list of its rank and file employees. On this
score, we sustain the factual finding of the DOLE that the list submitted by St. James consists of its administrative,
teaching and office personnel. These administrative, teaching and office personnel are not members of Samahang
Manggagawa. They do not belong to the bargaining unit that Samahang Manggagawa seeks to represent. Hence,
the list submitted by St. James may not be used as basis to determine the members of Samahang Manggagawa.

WHEREFORE, we DENY the petition. We AFFIRM the 5 September 2001 Decision and the 3 January 2002 Resolution
of the Court of Appeals in CA-G.R. SP No. 60197.

SO ORDERED.

||| (St. James School of Quezon City v. Samahang Manggagawa sa St. James School of Quezon City, G.R. No.
151326, [November 23, 2005], 512 PHIL 417-424)

SECOND DIVISION

[G.R. No. 77395. November 29, 1988.]

BELYCA CORPORATION, petitioner, vs. DIR. PURA FERRER CALLEJA, LABOR RELATIONS,
MANILA, MINISTRY OF LABOR AND EMPLOYMENT; MED-ARBITER, RODOLFO S. MILADO,
 MINISTRY OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR
UNION (ALU-TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY, respondents.

Soriano and Araña Law Offices for petitioner.

The Solicitor General for public respondent.

Francisco D. Alas for respondent Associated Labor Unions-TUCP.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; COLLECTIVE BARGAINING UNIT; PROPER CONSTITUENCY,
CITED. — Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil
1103 [1958]) are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's interest, such as
substantial similarity of work and duties or similarity of compensation and working conditions; (3) prior collective
bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees".

2. ID.; ID.; ID.; ID.; BASIC TEST OF ACCEPTABILITY. — In any event, whether importance is focused on the
employment status or the mutuality of interest of the employees concerned "the basic test of an asserted
bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights" (Democratic Labor Association v. Cebu Stevedoring Co.
Inc. supra)

3. ID.; ID.; CERTIFICATION ELECTION; CALL IS MANDATORY WHERE STATUTORY REQUIREMENT IS MET. — Under
Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no choice but
to call a certification election (Atlas Free Workers Union (AFWU) PSSLU Local v. Noriel, 104 SCRA 565 [1981];
Vismico Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]). It becomes in the language of the
New Labor Code "Mandatory for the Bureau to conduct a certification election for the purpose of determining the
representative of the employees in the appropriate bargaining unit and certify the winner as the exclusive
bargaining representative of all employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros
Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414
[1977]); more so when there is no existing collective bargaining agreement. (Samahang Manggagawa Ng Pacific
Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has not been a certification election in the company for the
past three years (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as in the
instant case.

4. ID.; ID.; ID.; ID.; DOUBTS AS TO THE AUTHENTICITY OF SIGNATURE OR TO THE REQUIRED PERCENTAGE DO
NOT BAR HOLDING OF ELECTION. — Any doubt cast on the authenticity of signatures to the petition for holding a
certification election cannot be a bar to its being granted (Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]).
Even doubts as to the required 30% being met warrant holding of the certification election (PLUM Federation of
Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]). In fact, once the required percentage
requirement has been reached, the employees' withdrawal from union membership taking place after the filing of
the petition for certification election will not affect said petition. On the contrary, the presumption arises that the
withdrawal was not free but was procured through duress, coercion or for a valuable consideration (La Suerte Cigar
and Cigarette Factory v. Director of the Bureau of Labor Relations, 123 SCRA 679 [1983]).

5. ID.; ID.; ID.; ID.; UNTIL A DECISION ON THE STRIKE HAS BECOME FINAL STRIKERS CANNOT BE DENIED IN
THE ELECTION. — Until a decision, final in character, has been issued declaring the strike illegal and the mass
dismissal or retrenchment valid, the strikers cannot be denied participation in the certification election
notwithstanding, the vigorous condemnation of the strike and the fact that the picketing were attended by
violence. Under the foregoing circumstances, it does not necessarily follow that the strikers in question are no
longer entitled to participate in the certification election on the theory that they have automatically lost their jobs.
(Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the duty of the employer to bargain collectively is
nullified if the purpose of the dismissal of the union members is to defeat the union in the consent requirement for
certification election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA 507 [1980]).

6. ID.; ID.; ID.; CERTIFICATION ELECTION; A SOLE CONCERN OF WORKERS, EXCEPTION. — As a general rule, a
certification election is the sole concern of the workers. The only exception is where the employer has to file a
petition for certification election pursuant to Art. 259 of the Labor Code because the latter was requested to
bargain collectively. But thereafter the role of the employer in the certification process ceases. The employer
becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64
[1983]).
7. ID.; ID.; ID.; NOT A LITIGATION BUT A MERE INVESTIGATION OF A NON-ADVERSARY CHARACTER. —
Considering that 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 (LVN Pictures, Inc. v. Philippine Musicians
Guild, supra; Bulakeña Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George Peter
Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149 SCRA 470
[1987]), and its only purpose is to give the employees true representation in their collective bargaining with an
employer (Confederation of Citizens Labor Unions (CCLU) v. Noriel, 116 SCRA 694 [1982]), there appears to be no
reason for the employer's objection to the formation of subject union, much less for the filing of the petition for a
certification election.

DECISION

PARAS, J p:

This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the
resolution of the Bureau of Labor Relations dated November 24, 1986 and denying the appeal, and the Bureau's
resolution dated January 13, 1987 denying petitioner's motion for reconsideration.

The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4) reads as follows:

"WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and the appeal
therefrom denied.

Let, therefore, the pertinent records of the case be remanded to the office of origin for the
immediate conduct of the certification election."

The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as follows:

WHEREFORE, the Motion for Reconsideration filed by respondent Belyca Corporation (Livestock
Agro-Division) is hereby dismissed for lack of merit and the Bureau's Resolution dated 24
November 1986 is affirmed. Accordingly, let the records of this case be immediately forwarded
to the Office of origin for the holding of the certification elections.

No further motion shall hereafter be entertained."

The antecedents of the case are as follows:

On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor organization duly
registered with the Ministry of Labor and Employment under Registration Certificate No. 783-IP, filed with the
Regional Office No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a petition for direct certification
as the sole and exclusive bargaining agent of all the rank and file employees/workers of Belyca Corporation
(Livestock and Agro-Division), a duly organized, registered and existing corporation engaged in the business of
poultry raising, piggery and planting of agricultural crops such as corn, coffee and various vegetables, employing
approximately 205 rank and file employees/workers, the collective bargaining unit sought in the petition, or in case
of doubt of the union's majority representation, for the issuance of an order authorizing the immediate holding of a
certification election (Rollo, p. 18). Although the case was scheduled for hearing at least three times, no amicable
settlement was reached by the parties. During the scheduled hearing of July 31, 1986 they, however, agreed to
submit simultaneously their respective position papers on or before August 11, 1986 (rollo. p. 62).

Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged, among others, (1) that
there is no existing collective bargaining agreement between the respondent employer, petitioner herein, and any
other existing legitimate labor unions; (2) that there had neither been a certification election conducted in the
proposed bargaining unit within the last twelve (12) months prior to the filing of the petition nor a contending
union requesting for certification as the sole and exclusive bargaining representative in the proposed bargaining
unit; (3) that more than a majority of respondent employer's rank-and-file employees/workers in the proposed
bargaining unit or one hundred thirty-eight (138) as of the date of the filing of the petition, have signed
membership with the ALU-TUCP and have expressed their written consent and authorization to the filing of the
petition; (4) that in response to petitioner union's two letters to the proprietor/General Manager of respondent
employer, dated April 21, 1986 and May 8, 1986, requesting for direct recognition as the sole and exclusive
bargaining agent of the rank-and-file workers, respondent employer has locked out 119 of its rank-and-file
employees in the said bargaining unit and had dismissed earlier the local union president, vice-president and three
other active members of the local unions for which an unfair labor practice case was filed by petitioner union
against respondent employer last July 2, 1986 before the NLRC in Cagayan de Oro City (Rollo, pp. 18; 263). prcd
Respondent employer, on the other hand, alleged in its position paper, among others, (1) that due to the nature of
its business, very few of its employees are permanent, the overwhelming majority of which are seasonal and
casual and regular employees; (2) that of the total 138 rank-and-file employees who authorized, signed and
supported the filing of the petition (a) 14 were no longer working as of June 3, 1986 (b) 4 resigned after June,
1986 (c) 6 withdrew their membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were
dismissed due to malicious insubordination and destruction of property and (f) 100 simply abandoned their work or
stopped working; (3) that the 128 incumbent employees or workers of the livestock section were merely
transferred from the agricultural section as replacement for those who have either been dismissed, retrenched or
resigned; and (4) that the statutory requirement for holding a certification election has not been complied with by
the union (Rollo, p. 26).

The Labor Arbiter granted the certification election sought for by petitioner union in his order dated August 18,
1986 (Rollo, p. 62).

On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor Arbiter to the
Bureau of Labor Relations in Manila (Rollo, p. 67) which denied the appeal (Rollo, p. 80) and the motion for
reconsideration (Rollo, p. 92). Thus, the instant petition received in this Court by mail on February 20, 1987 (Rollo,
p. 3).

In the resolution of March 4, 1987, the Second Division of this Court required respondent Union to comment on the
petition and issued a temporary restraining order (Rollo, p. 95).

Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents filed its comment on
April 8, 1987 (Rollo, p. 218).

On May 4, 1987, the Court resolved to give due course to the petition and to require the parties to submit their
respective memoranda within twenty (20) days from notice (Rollo, p. 225).

The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the comment for public
respondents as its memorandum (Rollo, p. 226); memorandum for respondent ALU was filed on June 30, 1987
(Rollo, p. 231); and memorandum for petitioner, on July 30, 1987 (Rollo, p. 435).

The issues raised in this petition are:

I
WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE BARGAINING UNIT.

II
WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF THE EMPLOYEES
IN THE PROPOSED BARGAINING UNIT, ASKING FOR A CERTIFICATION ELECTION HAD BEEN
STRICTLY COMPLIED WITH.

In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining agent of all the
rank-and-file workers of the livestock and agro division of petitioner BELYCA Corporation (Rollo, p. 232), engaged
in piggery, poultry raising and the planting of agricultural crops such as corn, coffee and various vegetables (Rollo,
p. 26). But petitioner contends that the bargaining unit must include all the workers in its integrated business
concerns ranging from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single
bargaining unit into fragmented bargaining units (Rollo, p. 435).

The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256
of the Code provides:

"Art. 256. Exclusive bargaining representative. — The labor organization designated or selected
by the majority of the employees in an appropriate collective bargaining unit shall be exclusive
representative of the employees in such unit for the purpose of collective bargaining. However,
an individual employee or group of employees shall have the right at any time to present
grievances to their employer.

According to Rothenberg, a proper bargaining unit may be said to be a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective interests of all the employees,
consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties
under the collective bargaining provisions of the law (Rothenberg in Labor Relations, p. 482).

This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective
bargaining unit.
Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958])
are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's interest, such as substantial
similarity of work and duties or similarity of compensation and working conditions; (3) prior collective bargaining
history; and (4) employment status, such as temporary, seasonal and probationary employees".

Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial
court's conclusion that two separate bargaining units should be formed in dealing with respondent company, one
consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Otherwise
stated, temporary employees should be treated separately from permanent employees. But more importantly, this
Court laid down the test of proper grouping, which is community and mutuality of interest. llcd

Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra Employees' Association,
107 Phil. 28 [1960]) where the employment status was not at issue but the nature of work of the employees
concerned; the Court stressed the importance of the second factor otherwise known as the substantial-mutual-
interest test and found no reason to disturb the finding of the lower Court that the employees in the administrative,
sales and dispensary departments perform work which has nothing to do with production and maintenance, unlike
those in the raw leaf, cigar, cigarette, packing and engineering and garage departments and therefore have a
community of interest which justifies the formation or existence as a separate appropriate collective bargaining
unit.

Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the employees concerned
was again challenged, the Court reiterating the rulings, both in Democratic Labor Association v. Cebu Stevedoring
Co. Inc., supra and Alhambra Cigar and Cigarette Co. et al. v. Alhambra Employees' Association (supra) held that
among the factors to be considered are: employment status of the employees to be affected, that is the positions
and categories of work to which they belong, and the unity of employees' interest such as substantial similarity of
work and duties.

In any event, whether importance is focused on the employment status or the mutuality of interest of the
employees concerned "the basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their collective bargaining
rights (Democratic Labor Association v. Cebu Stevedoring Co. Inc., supra)

Hence, still later following the substantial-mutual interest test, the Court ruled that there is a substantial difference
between the work performed by musicians and that of other persons who participate in the production of a film
which suffice to show that they constitute a proper bargaining unit. (LVN Pictures, Inc. v. Philippine Musicians
Guild, 1 SCRA 132 [1961]).

Coming back to the case at bar, it is beyond question that the employees of the livestock and agro division of
petitioner corporation perform work entirely different from those performed by employees in the supermarts and
cinema. Among others, the noted difference are: their working conditions, hours of work, rates of pay, including
the categories of their positions and employment status. As stated by petitioner corporation in its position paper,
due to the nature of the business in which its livestock-agro division is engaged very few of its employees in the
division are permanent, the overwhelming majority of which are seasonal and casual and not regular employees
(Rollo, p. 26). Definitely, they have very little in common with the employees of the supermarts and cinemas. To
lump all the employees of petitioner in its integrated business concerns cannot result in an efficacious bargaining
unit comprised of constituents enjoying a community or mutuality of interest. Undeniably, the rank and file
employees of the livestock-agro division fully constitute a bargaining unit that satisfies both requirements of
classification according to employment status and of the substantial similarity of work and duties which will
ultimately assure its members the exercise of their collective bargaining rights. LLphil

II
It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs more or less two
hundred five (205) rank-and-file employees and workers. It has no existing duly certified collective bargaining
agreement with any legitimate labor organization. There has not been any certification election conducted in the
proposed bargaining unit within the last twelve (12) months prior to the filing of the petition for direct certification
and/or certification election with the Ministry of Labor and Employment, and there is no contending union
requesting for certification as the sole and exclusive bargaining representative in the proposed bargaining unit.

The records show that on the filing of the petition for certification and/or certification election on June 3, 1986; 124
employees or workers which are more than a majority of the rank-and-file employees or workers in the proposed
bargaining unit had signed membership with respondent ALU-TUCP and had expressed their written consent and
authorization to the filing of the petition. Thus, the Labor Arbiter ordered the certification election on August 18,
1986 on a finding that 30% of the statutory requirement under Art. 258 of the Labor Code has been met.
But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six (6) subsequently
withdrew their membership; five (5) were retrenched; twelve (12) were dismissed for illegally and unlawfully
barricading the entrance to petitioner's farm; and one hundred (100) simply abandoned their work.

Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119 employees dated July
28, 1986 showing that the employees were on strike, which was confirmed by the finding of the Bureau of Labor
Relations to the effect that they went on strike on July 24, 1986 (Rollo, p. 419). Earlier the local union president,
Warrencio Maputi; the Vice-president, Gilbert Redoblado; and three other active members of the union Carmen
Saguing, Roberto Romolo and Iluminada Bonio were dismissed and a complaint for unfair labor practice, illegal
dismissal etc. was filed by the Union in their behalf on July 2, 1986 before the NLRC of Cagayan de Oro City (Rollo,
p. 415). The complaint was amended on August 20, 1986 for respondent Union to represent Warrencio Maputi and
137 others against petitioner corporation and Bello Casanova President and General Manager for unfair labor
practice, illegal dismissal, illegal lockout, etc. (Rollo, p. 416)

Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no
choice but to call a certification election (Atlas Free Workers Union (AFWU) PSSLU Local v. Noriel, 104 SCRA 565
[1981]; Vismico Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It becomes in the
language of the New Labor Code "Mandatory for the Bureau to conduct a certification election for the purpose of
determining the representative of the employees in the appropriate bargaining unit and certify the winner as the
exclusive bargaining representative of all employees in the unit." (Federacion Obrera de la Industria Tabaquera y
Otros Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA
414 [1977]); more so when there is no existing collective bargaining agreement. (Samahang Manggagawa Ng
Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has not been a certification election in the company
for the past three years (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as
in the instant case.

It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have expressed
their written consent to the certification election or more than a majority of the rank and file employees and
workers; much more than the required 30% and over and above the present requirement of 20% by Executive
Order No. 111 issued on December 24, 1980 and applicable only to unorganized establishments under Art. 257, of
the Labor Code, to which the BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321,
June 20, 1988).) More than that, any doubt cast on the authenticity of signatures to the petition for holding a
certification election cannot be a bar to its being granted (Filipino Metals Corp. v. Ople, 107 SCRA 211 [1981]).
Even doubts as to the required 30% being met warrant holding of the certification election (PLUM Federation of
Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]). In fact, once the required percentage
requirement has been reached, the employees' withdrawal from union membership taking place after the filing of
the petition for certification election will not affect said petition. On the contrary, the presumption arises that the
withdrawal was not free but was procured through duress, coercion or for a valuable consideration (La Suerte Cigar
and Cigarette Factory v. Director of the Bureau of Labor Relations, 123 SCRA 679 [1983]). Hence, the subsequent
disaffiliation of the six (6) employees from the union will not be counted against or deducted from the previous
number who had signed up for certification elections (Vicmico Industrial Workers Association (VIWA) v. Noriel, 131
SCRA 569 [1984]). Similarly, until a decision, final in character, has been issued declaring the strike illegal and the
mass dismissal or retrenchment valid, the strikers cannot be denied participation in the certification election
notwithstanding, the vigorous condemnation of the strike and the fact that the picketing were attended by
violence. Under the foregoing circumstances, it does not necessarily follow that the strikers in question are no
longer entitled to participate in the certification election on the theory that they have automatically lost their jobs.
(Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the duty of the employer to bargain collectively is
nullified if the purpose of the dismissal of the union members is to defeat the union in the consent requirement for
certification election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA 507 [1980]). As stressed by this
Court, the holding of a certification election is a statutory policy that should not be circumvented. (George and
Peter Lines Inc. v. Associated Labor Unions (ALU), 134 SCRA 82 [1986]).

Finally, as a general rule, a certification election is the sole concern of the workers. The only exception is where the
employer has to file a petition for certification election pursuant to Art. 259 of the Labor Code because the latter
was requested to bargain collectively. But thereafter the role of the employer in the certification process ceases.
The employer becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120
SCRA 64 [1983]). LLpr

There is no showing that the instant case falls under the above mentioned exception. However, it will be noted that
petitioner corporation from the outset has actively participated and consistently taken the position of adversary in
the petition for direct certification as the sole and exclusive bargaining representative and/or certification election
filed by respondent Associated Labor Unions (ALU)-TUCP to the extent of filing this petition for certiorari in this
Court. Considering that a petition for certification election is not a litigation but a mere investigation of a non-
adversary character to determining the bargaining unit to represent the employees (LVN Pictures, Inc. v. Philippine
Musicians Guild, supra; Bulakeña Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George
Peter Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149
SCRA 470 [1987]), and its only purpose is to give the employees true representation in their collective bargaining
with an employer (Confederation of Citizens Labor Unions (CCLU) v. Noriel, 116 SCRA 694 [1982]), there appears
to be no reason for the employer's objection to the formation of subject union, much less for the filing of the
petition for a certification election.

PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the Bureau of Labor
Relations dated Nov. 24, 1986 is AFFIRMED; and the temporary restraining order issued by the Court on March 4,
1987 is LIFTED permanently. llcd

SO ORDERED.

||| (Belyca Corp. v. Calleja, G.R. No. 77395, [November 29, 1988], 250 PHIL 193-205)

THIRD DIVISION

[G.R. No. 156292. January 11, 2005.]

ME-SHURN CORPORATION AND SAMMY CHOU, petitioners, vs. ME-SHURN WORKERS UNION-
FSM AND ROSALINA * CRUZ, respondents.

DECISION

PANGANIBAN, J p:

To justify the closure of a business and the termination of the services of the concerned employees, the law
requires the employer to prove that it suffered substantial actual losses. The cessation of a company's operations
shortly after the organization of a labor union, as well as the resumption of business barely a month after, gives
credence to the employees' claim that the closure was meant to discourage union membership and to interfere in
union activities. These acts constitute unfair labor practices.

The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, seeking to annul the November 29, 2002
Decision 2 of the Court of Appeals (CA) in CA-GR SP No. 69675, the decretal portion of which reads:

"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 4 of the National Labor Relations Commission (NLRC), Third Division,
disposed as follows:

"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
On June 7, 1998, the regular rank and file employees of Me-Shurn Corporation organized Me-Shurn Workers
Union-FSM, an affiliate of the February Six Movement (FSM). 6 Respondent union had a pending application 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 union's 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 union's appeal and ordered the holding
of a certification election among the rank and file employees of the corporation. 11

Meanwhile, on August 4, 1998, respondent union filed a Notice of Strike against petitioner corporation on the
ground of unfair labor practice (illegal lockout and union busting). This matter was docketed as Case No. NCMB-
RO3-BEZ-NZ-08-42-98. 12

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. 13 After the signing of the Agreement, the
operations of the corporation resumed in September 1998. 14

On November 5, 1998, the union reorganized and elected a new set of officers. Respondent Rosalina Cruz was
elected president. 15 Thereafter, it filed two Complaints docketed as NLRC Case Nos. RAB-III-11-9586-98 and
RAB-III-09-0322-99. These cases were consolidated and assigned to Labor Arbiter Henry Isorena for compulsory
arbitration. Respondents charged petitioner corporation with unfair labor practice, illegal dismissal, underpayment
of wages and deficiency in separation pay, for which they prayed for damages and attorney's fees.

The corporation countered that because of economic reversals, it was compelled to close and cease its operations
to prevent serious business losses; that under Article 283 of the Labor Code, it had the right to do so; that in
August 1998, it had paid its 342 laid off employees separation pay and benefits in the total amount of
P1,682,863.88; and that by virtue of these payments, the cases had already become moot and academic. It also
averred that its resumption of operations in September 1998 had been announced and posted at the Bataan Export
Processing Zone, and that some of the former employees had reapplied. 2005jurcd

Petitioner corporation questioned the legality of the representation of respondent union. Allegedly, it was not the
latter, but the Me-Shurn Independent Employees' Union — with Christopher Malit as president — that was
recognized as the existing exclusive bargaining agent of the rank and file employees and as the one that had
concluded a Collective Bargaining Agreement (CBA) with the corporation on May 19, 1999. 16 Hence, the
corporation asserted that Undersecretary Dimapilis-Baldoz's Decision ordering the holding of a certification election
had become moot and academic.

On the other hand, respondents contested the legality of the formation of the Me-Shurn Independent Employees'
Union and petitioners' recognition of it as the exclusive bargaining agent of the employees. Respondents argued
that the pendency of the representation issue before the DOLE had barred the alleged recognition of the
aforementioned union.

Labor Arbiter Isorena dismissed the Complaints for lack of merit. He ruled that (1) actual and expected losses
justified the closure of petitioner corporation and its dismissal of its employees; (2) the voluntary acceptance of
separation pay by the workers precluded them from questioning the validity of their dismissal; and (3) the claim
for separation pay lacked factual basis. 17

On appeal, the NLRC reversed the Decision of Labor Arbiter Isorena. Finding petitioners guilty of unfair labor
practice, the Commission ruled that the closure of the corporation shortly after respondent union had been
organized, as well as the dismissal of the employees, had been effected under false pretenses. The true reason
therefor was allegedly to bar the formation of the union. Accordingly, the NLRC held that the illegally dismissed
employees were entitled to back wages. 18

After the denial of their Motion for Reconsideration, 19 petitioners elevated the cases to the CA via a Petition
for Certiorari under Rule 65. 20 They 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 corporation's
cessation of operations in August 1998 had been tainted with unfair labor practice. HaAISC

Petitioners added that respondent union's 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:

"Me Shurn Workers Union-FSM — 1

No Union — 135

Spoiled — 2
Challenged — 52

Total Votes Cast — 190" 21

Ruling of the Court of Appeals

The CA dismissed the Petition because of the failure of petitioners to submit sufficient proof of business losses. It
found that they had wanted merely to abort or frustrate the formation of respondent union. The burden of proving
that the dismissal of the employees was for a valid or authorized cause rested on the employer.

The appellate court further affirmed the union's legal personality to represent the employees. It held that (1)
registration was not a prerequisite to the right of a labor organization to litigate; and (2) the cases may be treated
as representative suits, with respondent union acting for the benefit of all its members.

Hence, this Petition. 22

Issues
In their Supplemental Memorandum, petitioners submit the following issues for our consideration:

"(1) Whether the dismissal of the employees of petitioner Meshurn Corporation is for an
authorized cause, and

(2) Whether respondents can maintain a suit against petitioners." 23

The Court's Ruling

The Petition lacks merit.

First Issue:
Validity of the Dismissal
The reason invoked by petitioners to justify the cessation of corporate operations was alleged business losses. Yet,
other than generally referring to the financial crisis in 1998 and to their supposed difficulty in obtaining an export
quota, interestingly, they never presented any report on the financial operations of the corporation during the
period before its shutdown. Neither did they submit any credible evidence to substantiate their allegation of
business losses. caIEAD

Basic is the rule in termination cases that the employer bears the burden of showing that the dismissal was for a
just or authorized cause. Otherwise, the dismissal is deemed unjustified. Apropos this responsibility, petitioner
corporation should have presented clear and convincing evidence 24 of imminent economic or business reversals as
a form of affirmative defense in the proceedings before the labor arbiter or, under justifiable circumstances, even
on appeal with the NLRC.

However, as previously stated, in all the proceedings before the two quasi-judicial bodies and even before the CA,
no evidence was submitted to show the corporation's alleged business losses. It is only now that petitioners have
belatedly submitted the corporation’s income tax returns from 1996 to 1999 as proof of alleged continued losses
during those years.

Again, elementary is the principle barring a party from introducing fresh defenses and facts at the appellate
stage. 25 This Court has ruled that matters 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.26 Petitioners must bear the consequence of their neglect. Indeed, their unexplained failure to present
convincing evidence of losses at the early stages of the case clearly belies the credibility of their present claim. 27

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 29 held that an employer 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. CHIEDS

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 employer's just obligations to the affected
employees. 30 This requirement is 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 union's activities or affiliations. It is enough that the
discrimination was a contributing factor. 31 If the basic inspiration for the act of the employer is derived from the
affiliation or activities of the union, the former's assignment of another reason, no matter how seemingly valid, is
unavailing. 32

Concededly, the determination to cease operations is a management prerogative that the State does not usually
interfere in. Indeed, no business can be required to continue operating at a loss, simply to maintain the workers in
employment. That would be a taking of property without due process of law. But where it is manifest that the
closure is motivated not by a desire to avoid further losses, but to discourage the workers from organizing
themselves into a union for more effective negotiations with management, the State is bound to intervene. 33

Second Issue:
Legal Personality of Respondent Union
Neither are we prepared to believe petitioners' argument that respondent union was not legitimate. It should be
pointed out that on June 29, 1998, it filed a Petition for Certification Election. While this Petition was initially
dismissed by the med-arbiter on the basis of a supposed retraction, note that the appeal was granted and that
Undersecretary Dimapilis-Baldoz ordered the holding of a certification election.
The DOLE would not have entertained the Petition if the union were not a legitimate labor organization within the
meaning of the Labor Code. Under this Code, in an unorganized establishment, only a legitimate union may file a
petition for certification election. 34 Hence, while it is not clear from the record whether respondent union is a
legitimate organization, we are not readily inclined to believe otherwise, especially in the light of the pro-labor
policies enshrined in the Constitution and the Labor Code. 35

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.36 "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." 37

Finally, in view of the discriminatory acts committed by petitioners against respondent union prior to the holding of
the certification election on September 27, 2000 — acts that included their immediate grant of exclusive
recognition to another union as a bargaining agent despite the pending Petition for certification election — the
results of that election cannot be said to constitute a repudiation by the affected employees of the union's right to
represent them in the present case.

WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Costs against the petitioners.

SO ORDERED.

||| (Me-Shurn Corp. v. Me-Shurn Workers Union-FSM, G.R. No. 156292, [January 11, 2005], 489 PHIL 37-51)

FIRST DIVISION

[G.R. No. 82260. July 19, 1989.]

ASSOCIATED LABOR UNIONS (ALU), petitioner, vs. HON. PURA FERRER-CALLEJA, DIRECTOR,
BUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR AND EMPLOYMENT AND NATIONAL
FEDERATION OF LABOR (NFL), respondents.

SYLLABUS

1. LABOR LAW; COLLECTIVE BARGAINING; ART. 257 OF LABOR CODE APPLIES TO UNORGANIZED
ESTABLISHMENTS WHICH HAVE NO CERTIFIED BARGAINING UNIT. — Art 257 of the Labor Code finds no
application in the case at bar primarily because it applies to unorganized establishments. For the said provision to
apply, the establishment concerned must have no certified bargaining agent. This is not the case in the present
petition where there was a collective bargaining agreement entered into by the management of the Soriano Fruits
Corporation and ALU, the petitioner, which was then the bargaining agent.

2. ID.; ID.; CERTIFICATION ELECTION; FILING OF PETITION, A SUFFICIENT BASIS TO GRANT CERTIFICATION
ELECTION. — The provision of Article 256 which provides that the Med-Arbiter shall automatically order an
election is clear and leaves no room for further interpretation. The mere filing of a petition for certification election
within the freedom period is sufficient basis for the respondent Director to order the holding of a certification
election.

3. ID.; ID.; ID.; ABSENCE OF UNION FROM HEARING DOES NOT AFFECT PETITION FOR CERTIFICATION
ELECTION; PROCEEDINGS IS NON-ADVERSARY. — The fact that NFL did not appear during the hearings set by the
Med-Arbiter is of no moment. As the Solicitor General correctly pointed out, there is no prohibition on the conduct
of hearings by the Med-Arbiter on the competing stands of the unions. Neither does the law require the same to be
held whereby the absence or presence therefrom of any union representative would affect the petition for
certification election. In fact, it is the denial of the petition for certification election grounded solely on the absence
of NFL in the scheduled hearings which is frowned upon by the law. This is consistent with the principle in labor
legislation that "certification proceedings is not a litigation in the sense in which the term is ordinarily understood,
but an investigation of non-adversary and fact finding character. As such, it is not bound by technical rules of
evidence."

4. ID.; ID.; ID.; WORKERS' CHOICE OF REPRESENTATIVE IS OF PARAMOUNT IMPORTANCE. — Petitioner suggests
that to grant the petition for certification election would "open the floodgates to unbridled and scrupulous (sic)
petitions whose only objective is to prejudice the industrial peace and stability existing in the Company." This Court
believes however that the workers' choice regarding their representative who inevitably reflects and works for their
common interest is of paramount importance. This policy was lengthily explained in the concurring opinion of then
Chief Justice Fernando in the case of Confederation of Citizens Labor Unions (CCLU) vs. National Labor Relations
Commission where he categorically stated that "the slightest doubt therefore cannot be entertained that what
possesses significance in a petition for certification is that through such a device the employees are given the
opportunity to make known who shall have the right to represent them. What is equally important is that not only
some but all of them should have the right to do so."

5. ID.; ID.; ID.; 20% REQUIREMENT APPLIES TO UNORGANIZED ESTABLISHMENT. — The requirement of 20%
under Art. 257 of the Labor Code applies only to unorganized establishments. It is Article 256 instead which must
be applied. A perusal of the said Article would confirm the falsity of the claim of petitioner. Nowhere in the said
provision does it require the written consent of twenty percent (20%) of the employees in the bargaining unit.
Hence, the issue of whether or not the petition for certification election is supported by twenty percent (20%) of
the bargaining unit concerned is immaterial to the case at bar. What is essential is that the petition was filed during
the sixty-day freedom period.

6. ID.; ID.; ID.; ALLEGATION THAT EMPLOYEES ARE SATISFIED WITH THE SERVICES OF INCUMBENT UNION HAS
NO RIGHT. — The petition to dismiss the petition for certification election filed by NFL and signed by some 224
employees signifying their satisfaction with the services of the incumbent union should not be given any weight at
all. The possibility that the workers were merely coerced to sign the petition such that they did so for fear of
reprisal from the members of ALU is not remote. However, this does not discount the possibility that the workers
voluntarily signed the said petition. Whatever reason the workers may have had for signing the same may be
ascertained once a certification election is held. It is in this democratic process that the workers are given the
opportunity to freely choose, by secret ballot, who they want to represent them. In this manner, the workers are
free of any undue pressure which either competing union may exert upon them.

7. ID.; ID.; ID.; CONTRACT BAR RULE; RENEWED AGREEMENT HASTILY AND PREMATURELY ENTERED IS NOT A
BAR TO THE PETITION FOR CERTIFICATION ELECTION. — The collective bargaining agreement was hastily and
prematurely entered into apparently in an attempt to avoid the holding of a certification election. The records show
that the old collective bargaining agreement of the petitioner with Soriano Fruits Corporation was to expire on
August 31, 1987. However, three (3) months and eight (8) days before its expiry date, or on June 22, 1987, the
petitioner renewed the same with the consent and collaboration of management. The renewed agreement was then
ratified by the members of the bargaining unit and was thereafter sent to the Bureau of Labor Relations for
certification. In the meantime, on August 10, 1987 (21 days before the expiration of the old collective bargaining
agreement on August 31, 1987) a petition for certification election was filed by respondent union, NFL. From the
foregoing facts, it is quite obvious that the renewed agreement cannot constitute a bar to the instant petition for
certification election for the very reason that the same was not yet in existence when the petition for certification
election was filed on August 10, 1987 inasmuch as the same was to take effect only on September 1, 1987, after
the old agreement expires on August 31, 1987.

8. ID.; ID.; COLLECTIVE BARGAINING AGREEMENT; ART. 254 OF THE LABOR CODE PROHIBITS MODIFICATION
AND ALTERATION DURING THE AGREEMENT LIFETIME. — What Art. 254 prohibits is the modification and alteration
of the present collective bargaining agreement during its lifetime. In the present case, the alterations and
modifications were to take effect only on September 1, 1987, i.e., after the expiration of the old agreement. It
must be noted that the new agreement did not suspend the old one. Neither did it terminate nor modify the same.
Petitioner therefore did not commit any violation of Article 254 of the Labor Code, contrary to the allegations of the
Solicitor General.

DECISION

GANCAYCO, J p:

This is a petition for the issuance of the extraordinary remedy of certiorari for the reversal of the Decision 1 of the
Director of Bureau of Labor Relations ordering the holding of a certification election among the workers of Soriano
Fruits Corporation.

The antecedent facts of the case are as follows:

Petitioner Associated Labor Unions, ALU for brevity, had a collective bargaining agreement with the employer
Soriano Fruits Corporation which expired on September 30, 1987. Prior to the said date, or on June 22, 1987,
petitioner and the employer signed a collective bargaining agreement which was to take effect on September 1,
1987 and was to remain so until August 31, 1990. The said collective bargaining agreement was unanimously
approved and ratified by the members of the bargaining unit.

However, on August 10, 1987, private respondent National Federation of Labor (NFL), filed a petition for
certification election questioning the majority status of the incumbent union, pursuant to Executive Order 111 and
its Implementing Rules, there being more than majority of its members who have expressed doubts on the
sincerity of the incumbent union. 2 Acting on the said petition the Med-Arbiter scheduled a hearing on August 21,
1987 to determine the majority status of herein petitioner but the NFL representative failed to appear despite due
notice. Consequently, the hearing was reset to September 8, 1987 to give NFL an opportunity to substantiate its
claim but again, the NFL was not represented. Thereafter, the parties were asked to submit their position papers.
To bolster its claim, ALU submitted several petitions signed by members of the bargaining unit to dismiss any
petition filed by any union which seeks to question the majority status of the incumbent union. The signatories to
the petition also reaffirmed its loyalty to ALU.

On October 2, 1987, the Med-Arbiter promulgated an Order 3 dismissing the petition for certification election on
the ground of failure to prosecute. An appeal to the Bureau of Labor Relations however, proved fruitful. On
December 22, 1987 the respondent Director of the Bureau of Labor Relations held that the Med-Arbiter erred in
dismissing the petition for certification election. The dispositive portion of the decision reads thus:

"WHEREFORE, in view of the foregoing, the appeal of petitioner, National Federation of Labor is
hereby given due course and the Order of the Med-Arbiter is set aside. Let, therefore a
certification election proceed at Soriano Fruits Corporation, after a pre-election conference to
thresh out the list of eligible voters, with the following choices:

1. National Federation of Labor (NFL);

2. Associated Labor Unions (ALU).

SO ORDERED." 4

ALU sought a reconsideration of the above-cited decision but to no avail. Hence, the instant petition for certiorari.

Petitioner alleges that in granting the petition for certification election, the respondent Director acted with grave
abuse of discretion amounting to lack or in excess of jurisdiction in that:

"I. THE HONORABLE DIRECTOR MISSED THE LEGAL INTENT OF ARTICLE 257 AS AMENDED
BY EXECUTIVE ORDER 111.

II. THE HONORABLE DIRECTOR ERRED IN CLAIMING THAT THE PETITION IS SUPPORTED BY
MORE THAN TWENTY (20%) OF THE RANK AND FILE.

III. THE RATIFICATION OF THE CONCLUDED COLLECTIVE BARGAINING AGREEMENT RENDERS

THE CERTIFICATION ELECTION MOOT AND ACADEMIC."

This Court finds the petition bereft of merit.

Petitioner hinges its claim on Art. 257 of the Labor Code which provides:

"Art. 257. Petitions in unorganized establishments. In any establishment where there is no

certified bargaining agent, the petition for certification election filed by a legitimate labor
organization shall be supported by the written consent of at least twenty (20%) percent of all
the employees in the bargaining unit. Upon receipt and verification of such petition, the Med-
Arbiter shall automatically order the conduct of a certification election."

But this provision finds no application in the case at bar primarily because it applies to unorganized establishments.
For the said provision to apply, the establishment concerned must have no certified bargaining agent. This is not
the case in the present petition where there was a collective bargaining agreement entered into by the
management of the Soriano Fruits Corporation and ALU, the petitioner, which was then the bargaining agent. This
Court however, finds that it is Article 256 as amended by Executive Order 111 which must be considered in the
resolution of the present petition. The said article states:

"Article 256. Representation Issues in Organized Establishments. In organized establishments,

when a petition questioning the majority status of the incumbent bargaining agent is filed
before the Ministry within the sixty (60) day period before the expiration of the collective
bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot to
ascertain the will of the employees in the appropriate bargaining unit." (Emphasis supplied)

A review of the records of this case would confirm the fact that the petition for certification election filed by NFL on
August 10, 1987 was well within the prescribed sixty (60) day freedom period.

Petitioner however maintains that the respondent Director misconstrued the legal intent behind the above-cited
provision and that it should not have been given a literal interpretation. Petitioner insists further that the right of
the members of the bargaining unit to choose which union should represent them is not an absolute one since a
prior hearing must be had to ascertain the veracity of the allegations contained in the petition.

This argument is untenable.

The provision of Article 256 which provides that the Med-Arbiter shall automatically order an election is clear and
leaves no room for further interpretation. The mere filing of a petition for certification election within the freedom
period is sufficient basis for the respondent Director to order the holding of a certification election. The fact that
NFL did not appear during the hearings set by the Med-Arbiter is of no moment. As the Solicitor General correctly
pointed out, there is no prohibition on the conduct of hearings by the Med-Arbiter on the competing stands of the
unions. Neither does the law require the same to be held whereby the absence or presence therefrom of any union
representative would affect the petition for certification election. In fact, it is the denial of the petition for
certification election grounded solely on the absence of NFL in the scheduled hearings which is frowned upon by the
law. This is consistent with the principle in labor legislation that "certification proceedings is not a litigation in the
sense in which the term is ordinarily understood, but an investigation of non-adversary and fact finding character.
As such, it is not bound by technical rules of evidence." 5

Petitioner suggests that to grant the petition for certification election would "open the floodgates to unbridled and
scrupulous (sic) petitions whose only objective is to prejudice the industrial peace and stability existing in the
Company." 6 This Court believes however that the workers' choice regarding their representative who inevitably
reflects and works for their common interest is of paramount importance. This policy was lengthily explained in the
concurring opinion of then Chief Justice Fernando in the case of Confederation of Citizens Labor Unions (CCLU) vs.
National Labor Relations Commission 7 where he categorically stated that "the slightest doubt therefore cannot be
entertained that what possesses significance in a petition for certification is that through such a device the
employees are given the opportunity to make known who shall have the right to represent them. What is equally
important is that not only some but all of them should have the right to do so." 8

Petitioner next contends that the respondent Director erred in relying upon the claim of the respondent Union that
the petition for certification election is supported by more than twenty percent (20%) of the rank and file
considering that the said petition merely contained the lone signature of the NFL representative.

This averment is likewise unmeritorious.

Petitioner bases its argument again on Article 257 which prescribes the twenty percent (20%) requirement. But it
must be reiterated that the said requirement applies only to unorganized establishments. It is Article 256 instead
which must be applied. A perusal of the said Article would confirm the falsity of the claim of petitioner. Nowhere in
the said provision does it require the written consent of twenty percent (20%) of the employees in the bargaining
unit. Hence, the issue of whether or not the petition for certification election is supported by twenty percent (20%)
of the bargaining unit concerned is immaterial to the case at bar. What is essential is that the petition was filed
during the sixty-day freedom period.

The petition to dismiss the petition for certification election 9 filed by NFL and signed by some 224 employees
signifying their satisfaction with the services of the incumbent union should not be given any weight at all. The
possibility that the workers were merely coerced to sign the petition such that they did so for fear of reprisal from
the members of ALU is not remote. However, this does not discount the possibility that the workers voluntarily
signed the said petition. Whatever reason the workers may have had for signing the same may be ascertained once
a certification election is held. It is in this democratic process that the workers are given the opportunity to freely
choose, by secret ballot, who they want to represent them. In this manner, the workers are free of any undue
pressure which either competing union may exert upon them.

Finally, the petitioner assails the decision of the respondent Director on the ground that "the ratification of the
collective bargaining agreement renders the certification election moot and academic." 10

This contention finds no basis in law.

The petitioner was obviously referring to the contract-bar rule where the law prohibits the holding of certification
elections during the lifetime of the collective bargaining agreement. Said agreement was hastily and prematurely
entered into apparently in an attempt to avoid the holding of a certification election. The records show that the old
collective bargaining agreement of the petitioner with Soriano Fruits Corporation was to expire on August 31, 1987.
However, three (3) months and eight (8) days before its expiry date, or on June 22, 1987, the petitioner renewed
the same with the consent and collaboration of management. The renewed agreement was then ratified by the
members of the bargaining unit and was thereafter sent to the Bureau of Labor Relations for certification. In the
meantime, on August 10, 1987 (21 days before the expiration of the old collective bargaining agreement on August
31, 1987) a petition for certification election was filed by respondent union, NFL. From the foregoing facts, it is
quite obvious that the renewed agreement cannot constitute a bar to the instant petition for certification election
for the very reason that the same was not yet in existence when the petition for certification election was filed on
August 10, 1987 inasmuch as the same was to take effect only on September 1, 1987, after the old agreement
expires on August 31, 1987.
In the case of Associated Trade Unions-ATU vs. Noriel, 11 this Court held that "it is indubitably clear from the facts
heretofore unfolded that management and petitioner herein proceeded with such indecent haste in renewing their
CBA way ahead of the sixty-day freedom period in their obvious desire to frustrate the will of the rank and file
employees in selecting their bargaining representative. To countenance the actuation of the company and the
petitioner herein would be violative of the employees constitutional right to self-organization. 12

The Solicitor General, in his comment, brought the attention of this Court to the fact that petitioner had violated
the provisions of Article 254 13 when it renewed the collective bargaining agreement before the commencement of
the sixty-day freedom period. This Court does not subscribe to this view. What the aforecited rule prohibits is
the modification and alteration of the present collective bargaining agreement during its lifetime. In the present
case, the alterations and modifications were to take effect only on September 1, 1987, i.e., after the expiration of
the old agreement. It must be noted that the new agreement did not suspend the old one. Neither did it terminate
nor modify the same. Petitioner therefore did not commit any violation of Article 254 of the Labor Code, contrary to
the allegations of the Solicitor General.

However, it is apparent that certiorari does not lie in the instant petition for this Court does not see any substantial
reason to withhold the primordial right of workers to select their bargaining representative.

WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The temporary restraining
order issued by resolution of this Court of July 11, 1988 is hereby lifted and declared to be of no force and effect.
The decision is immediately executory. No costs.

SO ORDERED.

||| (Associated Labor Unions v. Ferrer-Calleja, G.R. No. 82260, [July 19, 1989], 256 PHIL 922-932)

SECOND DIVISION

[G.R. No. 104556. March 19, 1998.]

NATIONAL FEDERATION OF LABOR (NFL), petitioner, vs. THE SECRETARY OF LABOR OF THE
REPUBLIC OF THE PHILIPPINES AND HIJO PLANTATION INC. (HPI), respondents.

Apuzen Alforque & Lao Law Office for petitioner.

Dominguez Paderna Ibabao & Tan Law Offices Co. for private respondent.

SYNOPSIS

Petitioner union was chosen the bargaining agent of the rank-and-file employees of private respondent at a
certification election held on August 20, 1989. However, protests were filed by private respondent and three other
union against the results of the certification election. The other three unions claimed that the election was
conducted despite the pendency of the appeals denying the motion for intervention. On the other hand, the private
respondent alleged, among others, that the certification election was marred by massive fraud and irregularities
and that 54% of its rank-and-file workers were not able to vote, resulting in a failure of election. On the other
hand, petitioner contended that the private respondent had no legal personality to file an appeal because it was not
a party to the election but was only a bystander and the only instance wherein it may actively participate is when it
files a petition for certification election. Subsequently, the med-arbiter, upon order of the Acting Secretary of
Labor, conducted an investigation and found private respondent's allegations of massive disfranchisement of
employees and irregularities in the conduct of the election to be true. The Department of Labor and Employment
dismissed the election protests and upheld the certification election ruling that the choice of the exclusive
bargaining representative is the sole concern of the workers. However, on motion of private respondent and upon
written complaint of the workers protesting the conduct of the election, the Secretary of Labor reversed his
resolution and ordered the holding of a new certification election. Hence, this petition. ICAcTa

In affirming the questioned order of the Secretary of Labor, the Supreme Court held that it is not improper for
private respondent to show interest in the conduct of the election. What an employer is prohibited from doing is to
interfere with the conduct of the certification election for the purpose of influencing its outcome, but not in seeing
to it that the certification election is clean, peaceful, orderly and credible. The Court also held that a certification
election can be invalidated upon a showing of employees' disfranchisement, lack of secrecy in the voting and
bribery such as in the present case. The workers' right to self-organization would be rendered nugatory if the right
to choose their collective bargaining representative were denied. In case of doubt as to the result of the
certification election, the doubt should be resolved in favor of the holding of a certification election.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATIONS; LABOR RELATIONS; CERTIFICATION ELECTION; EMPLOYER PROHIBITED
FROM INTERFERING IN THE CONDUCT THEREOF IN ORDER TO INFLUENCE ITS OUTCOME. — It is not improper for
private respondent to show interest in the conduct of the election. Private respondent is the employer. The manner
in which the election was held could make the difference between industrial strife and industrial harmony in the
company. What an employer is prohibited from doing is to interfere with the conduct of the certification election for
the purpose of influencing its outcome. But certainly an employer has an abiding interest in seeing to it that the
election is clean, peaceful, orderly and credible. HDATSI

2. ID.; ID.; ID.; WORKERS DISFRANCHISED IN THE CASE AT BAR. — The complaint in this case was that a
number of employees were not able to cast their votes because they were not properly notified of the date. They
could not therefore have filed their protests within five (5) days. At all events, the Solicitor General states, that the
protests were not filed within five (5) days, is a mere technicality which should not be allowed to prevail over the
workers' welfare. As this Court stressed in LVN Pictures, Inc. v. Phil. Musicians Guild (1 SCRA 132 [1961]), it is
essential that the employees must be accorded an opportunity to freely and intelligently determine which labor
organization shall act in their behalf. The workers in this case were denied this opportunity. Not only were a
substantial number of them disfranchised, there were, in addition, allegations of fraud and other irregularities
which put in question the integrity of the election. Workers wrote letters and made complaints protesting the
conduct of the election. The Report of Med-Arbiter Pura who investigated these allegations found the allegations of
fraud and irregularities to be true.

3. ID.; ID.; ID.; INVALIDATED UPON SHOWING OF EMPLOYEES DISFRANCHISEMENT, LACK OF SECRECY IN THE
VOTING AND BRIBERY. — In one case this Court invalidated a certification election upon a showing of
disfranchisement, lack of secrecy in the voting and bribery. We hold the same in this case. The workers' right to
self-organization as enshrined in both the Constitution and Labor Code would be rendered nugatory if their right to
choose their collective bargaining representative were denied. Indeed, the policy of the Labor Code favors the
holding of a certification election as the most conclusive way of choosing the labor organization to represent
workers in a collective bargaining unit. In case of doubt, the doubt should be resolved in favor of the holding of a
certification election. AHTICD

4. CIVIL LAW; ACTIONS; LACHES; EMPLOYEES IN CASE AT BAR DID NOT SLEEP ON THIS THEIR RIGHTS. — The
record shows that as early as August 22 and 30, 1989, employees already wrote letters/affidavits/manifestoes
alleging irregularities in the elections and disfranchisement of workers. As the Solicitor General says in his
Comment, these affidavits and manifestoes, which were attached as Annexes "A" to "CC" and Annexes "DD" to
"DD-33" to private respondent's Supplemental Petition of September 5, 1989 — just 16 days after the August 20,
1989 election. It is not true therefore that the employees slept on their rights.

5. REMEDIAL LAW; EVIDENCE; TECHNICAL RULES OF EVIDENCE NOT BINDING IN LABOR CASES. — As to the
claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were prepared by
private respondent HPI and employees were merely asked to sign them, suffice it to say that this is plain
speculation which petitioner has not proven by competent evidence. As to the letters not being verified, suffice it to
say that technical rules of evidence are not binding in labor cases. cTDaEH

6. ID.; ID.; LETTERS OF WORKERS IN CASE AT BAR SUFFICIENTLY PROVED IRREGULARITIES OF THE
CERTIFICATION ELECTION. — The allegation that the letters did not contain evidence of intelligent acts does not
have merit. The earlier letters of the workers already gave details of what they had witnessed during the election,
namely the open balloting (with no secrecy), and the use of NFL vehicles for polling precincts. These letters
sufficiently give an idea of the irregularities of the certification election. Similarly, the letters containing the
signatures of those who were not able to vote are sufficient They indicate that the writers were not able to vote
because they thought the election had been postponed, especially given the fact that the two unions had pending
appeals at the time from orders denying them the right to intervene in the election.

DECISION
MENDOZA, J p:

Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file employees of the
Hijo Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a certification election held on August 20, 1989.
Protests filed by the company and three other unions against the results of the election were denied by the
Department of Labor and Employment in its resolution dated February 14, 1991 but, on motion of the company
(HPI), the DOLE reconsidered its resolution and ordered another certification election to be held. The DOLE
subsequently denied petitioner NFL's motion for reconsideration. LLphil

The present petition is for certiorari to set aside orders of the Secretary of Labor and Employment dated August 29,
1991, December 26, 1991 and February 17, 1992, ordering the holding of a new certification election to be
conducted in place of the one held on August 20, 1989 and, for this purpose, reversing its earlier resolution dated
February 14, 1991 dismissing the election protests of private respondent and the unions.

The facts of the case are as follows:

On November 12, 1988, a certification election was conducted among the rank-and-file employees of the Hijo
Plantation, Inc. resulting in the choice of "no union." However, on July 3, 1989, on allegations that the company
intervened in the election, the Director of the Bureau of Labor Relations nullified the results of the certification
election and ordered a new one to be held.

The new election was held on August 20, 1989 under the supervision of the DOLE Regional Office in Davao City
with the following results:

Total Votes cast 1,012

Associated Trade Unions (ATU) 39

TRUST KILUSAN 5

National Federation of Labor (NFL) 876

Southern Philippines Federation of Labor 4

SANDIGAN 6

UFW 15

No Union 55

Invalid 13

The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and General Workers of
the Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc. sought the nullification of the results of
the certification election on the ground that it was conducted despite the pendency of the appeals filed by Hijo
Labor Union and ULGWP from the order, dated August 17, 1989, of the Med-Arbiter denying their motion for
intervention. On the other hand, HPI claimed that it was not informed or properly represented at the pre-election
conference. It alleged that, if it was represented at all in the pre-election conference, its representative acted
beyond his authority and without its knowledge. Private respondent also alleged that the certification election was
marred by massive fraud and irregularities and that out of 1,692 eligible voters, 913, representing 54% of the
rank-and-file workers of private respondent, were not able to vote, resulting in a failure of election.

On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter, Phibun D. Pura, to
investigate the company's claim that 54% of the rank-and-file workers were not able to vote in the certification
election.

In his Report and Recommendation, dated February 9, 1990, Pura stated:

1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989 because of
confusion caused by the announcement of the company that the election had been postponed in view of the
appeals of ULGWP and Hijo Labor Union (HLU) from the order denying their motions for intervention. In addition,
the election was held on a Sunday which was a non-working day in the company.

2. There were irregularities committed in the conduct of the election. It was possible that some people could have
voted for those who did not show up. The election was conducted in an open and hot area. The secrecy of the
ballot had been violated. Management representatives were not around to identify the workers.
3. The total number of votes cast, as duly certified by the representation officer, did not tally with the 41-page
listings submitted to the Med-Arbitration Unit. The list contained 1,008 names which were checked or encircled
(indicating that they had voted) and 784 which were not, (indicating that they did not vote), or a total of 1,792,
but according to the representation officer the total votes cast in the election was 1,012.

Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not able to vote and
who were surprised to know that their names had been checked to indicate that they had voted.

But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of the
investigation conducted by Med-Arbiter Pura and so was not heard on its evidence. For this reason, the Med-Arbiter
was directed by the Labor Secretary to hear interested parties.

The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the annulment of the
results of the certification election. Hijo Labor Union manifested that it was joining private respondent HPI's appeal,
adopting as its own the documentary evidence presented by the company, showing fraud in the election of August
20, 1989. On the other hand, petitioner NFL reiterated its contention that management had no legal personality to
file an appeal because it was not a party to the election but was only a bystander which did not even extend
assistance in the election. Petitioner denied that private respondent HPI was not represented in the pre-election
conference, because the truth was that a certain Bartolo was present on behalf of the management and he in fact
furnished the DOLE copies of the list of employees, and posted in the company premises notices of the certification
election.

Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692
qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting
to all kinds of manipulation to frustrate the election and make the "Non Union" win.

In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election. With respect
to claim that election could not be held in view of the pendency of the appeals of the ULGWP and Hijo Labor Union
from the order of the Med-Arbiter denying their motions for intervention, the DOLE said: 1

. . . even before the conduct of the certification election on 12 November 1988 which was
nullified. Hijo Labor Union filed a motion for interventions. The same was however, denied for
being filed unseasonably, and as a result it was not included as one of the choices in the said
election. After it has been so disqualified thru an order which has become final and executory,
ALU filed a second motion for intervention when a second balloting was ordered conducted.
Clearly, said second motion is pro-forma and intended to delay the proceedings. Being so, its
appeal from the order of denial did not stay the election and the Med-Arbiter was correct and
did not violate any rule when he proceeded with the election even with the appeal. In fact, the
Med-Arbiter need not rule on the motion as it has already been disposed of with finality.

The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to
the election on September 1988 and its motion to withdraw was granted by the Med-Arbiter on
October motion for intervention filed before the conduct of a second balloting where the
choices has already been pre-determined.

Let it be stressed that ULGWP and HLU were disqualified to participate in the election through
valid orders that have become final and executory even before the first certification election
was conducted. Consequently, they may not be allowed to disrupt the proceeding through the
filing of nuisance motions. Much less are they possessed of the legal standing to question the
results of the second election considering that they are not parties thereto.

The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive
fraud and irregularities. Although affidavits were submitted showing that the election was held outside the
company premises and private vehicles were used as makeshift precincts, the DOLE found that this was because
respondent company did not allow the use of its premises for the purpose of holding the election, company guards
were allegedly instructed not to allow parties, voters and DOLE representation officers to enter the company
premises, and notice was posted on the door of the company that the election had been postponed.

Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been
disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been violated, first, because
the NFL was not given notice of the investigation nor the chance to present its evidence to dispute this finding and,
second, the Med Arbiter's report was not supported by the minutes of the proceedings nor by any record of the
interviews of the 315 workers. Moreover, it was pointed out that the report did not state the names of the persons
investigated, the questions asked and the answers given. The DOLE held that the report was "totally baseless."

The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the exclusive
bargaining representative is the sole concern of the workers. It said: "If indeed there were irregularities committed
during the election, the contending unions should have been the first to complain considering that they are the
ones which have interest that should be protected." 2
Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-KILUSAN,
HLU and the HPI and instead certified petitioner NFL as the sole and exclusive bargaining representative of the
rank-and-file employees of private respondent HPI.

However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of February 14,
1991. Petitioner NFL filed a motion for reconsideration but its motion was denied in an order, dated December 26,
1991. Petitioner's second motion for reconsideration was likewise denied in another order dated February 17, 1992.
Hence, this petition.

First. Petitioner contends that certification election is the sole concern of the employees and the employer is a mere
bystander. The only instance wherein the employer may actively participate is when it files a petition for
certification election under Art. 258 of the Labor Code because it is requested to bargain collectively. Petitioner
says that this is not the case here and so the DOLE should not have given due course to private respondent's
petition for annulment of the results of the certification election.

In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier resolution because
"workers of Hijo Plantation, Inc. have deluged this Office with their letter-appeal, either made singly or collectively
expressing their wish to have a new certification election conducted" and that as a result "the firm position we held
regarding the integrity of the electoral exercise had been somewhat eroded by this recent declaration of the
workers, now speaking in their sovereign capacity."

It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not the petition of
the employer but the letter-appeals that the employees sent to his office denouncing the irregularities committed
during the August 20, 1989 certification election. The petition of private respondent was simply the occasion for the
employees to voice their protests against the election. Private respondent HPI attached to its Supplemental Appeal
filed on September 5, 1989 the affidavits and appeals of more or less 784 employees who claimed that they had
been disfranchised, as a result of which they were not able to cast their votes at the August 20, 1989 election. It
was the protests of employees which moved the DOLE to reconsider its previous resolution of February 14, 1991,
upholding the election. LLphil

Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the
employer. The manner in which the election was held could make the difference between industrial strife and
industrial harmony in the company. What an employer is prohibited from doing is to interfere with the conduct of
the certification election for the purpose of influencing its outcome. But certainly an employer has an abiding
interest in seeing to it that the election is clean, peaceful, orderly and credible.

Second. The petitioner argues that any protest concerning the election should be registered and entered into the
minutes of the election proceedings before it can be considered. In addition, the protest should be formalized by
filing it within five (5) days. Petitioner avers that these requirements are condition precedents in the filing of an
appeal. Without these requisites the appeal cannot prosper. It cites the following provisions of Book V, Rule VI of
the Implementing Rules and Regulations of the Labor Code:

SEC. 3. Representation officer may rule on any on-the-spot questions. — The Representation
officer may rule on any on-the-spot question arising from the conduct of the election. The
interested party may however, file a protest with the representation officer before the close of
the proceedings.

Protests not so raised are deemed waived. Such protests shall be contained in the minutes of
the proceedings.

SEC. 4. Protest to be decided in twenty (20) working days. — Where the protest is formalized
before the med-arbiter within five (5) days after the close of the election proceedings, the
med-arbiter shall decide the same within twenty (20) working days from the date of its
formalization. If not formalized within the prescribed period, the protest shall be deemed
dropped. The decision may be appealed to the Bureau in the same manner and on the same
grounds as provided under Rule V.

In this case, petitioner maintains that private respondent did not make any protest regarding the alleged
irregularities (e.g., massive disfranchisement of employees) during the election. Hence, the appeal and motions for
reconsideration of private respondent HPI should have been dismissed summarily.

The complaint in this case was that a number of employees were not able to cast their votes because they were not
properly notified of the date. They could not therefore have filed their protests within five (5) days. At all events,
the Solicitor General states, that the protests were not filed within five (5) days, is a mere technicality which
should not be allowed to prevail over the workers' welfare. 3 As this Court stressed in LVN Pictures,
Inc. v. Phil. Musicians Guild, 4 it is essential that the employees must be accorded an opportunity to freely and
intelligently determine which labor organization shall act in their behalf. The workers in this case were denied this
opportunity. Not only were a substantial number of them disfranchised, there were, in addition, allegations of fraud
and other irregularities which put in question the integrity of the election. Workers wrote letters and made
complaints protesting the conduct of the election. The Report of Med-Arbiter Pura who investigated these
allegations found the allegations of fraud and irregularities to be true.

In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in the
voting and bribery. 5 We hold the same in this case. The workers' right to self-organization as enshrined in both
the Constitution and Labor Code would be rendered nugatory if their right to choose their collective bargaining
representative were denied. Indeed, the policy of the Labor Code favors the holding of a certification election as the
most conclusive way of choosing the labor organization to represent workers in a collective bargaining unit. 6 In
case of doubt, the doubt should be resolved in favor of the holding of a certification election.

Third. Petitioner claims that the contending unions, namely, the Association of Trade Union (ATU), the Union of
Filipino Workers (UFW), as well as the representation officers of the DOLE affirmed the regularity of the conduct of
the election and they are now estopped from questioning the election.

In its comment, ATU-TUCP states,

. . . The representative of the Association of Trade Unions really attest to the fact that we
cannot really identify all the voters who voted on that election except some workers who were
our supporters in the absence of Hijo Plantation representatives. We also attest that the polling
precinct were not conducive to secrecy of the voters since it was conducted outside of the
Company premises. The precincts were (sic) the election was held were located in a passenger
waiting shed in front of the canteen across the road; on the yellow pick-up; at the back of a
car; a waiting shed near the Guard House and a waiting shed in front of the Guard House
across the road. Herein private respondents also observed during the election that there were
voters who dictated some voters the phrase "number 3" to those who were casting their votes
and those who were about to vote. Number 3 refers to the National Federation of Labor in the
official ballot.

ATU-TUCP explains that it did not file any protest because it expected workers who had been aggrieved by the
conduct of the election would file their protest since it was in their interests that they do so.
Fourth. Petitioner points out that the letter-appeals were written almost two years after the election and they bear
the same dates (May 7 and June 14, 1991); they are not verified; they do not contain details or evidence of
intelligent acts; and they do not explain why the writers failed to vote. Petitioner contends that the letter-appeals
were obtained through duress by the company.

We find the allegations to be without merit. The record shows that as early as August 22 and 30, 1989, employees
already wrote letters/affidavits/manifestoes alleging irregularities in the elections and disfranchisement of
workers. 7 As the Solicitor General says in his Comment, 8 these affidavits and manifestoes, which were attached
as Annexes "A" to "CC" and Annexes "DD" to "DD-33" to private respondent's Supplemental Petition of September
5, 1989 — just 16 days after the August 20, 1989 election. It is not true therefore that the employees slept on
their rights.

As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were
prepared by private respondent HPI and employees were merely asked to sign them, suffice it to say that this is
plain speculation which petitioner has not proven by competent evidence.

As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases.

The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier
letters 9 of the workers already gave details of what they had witnessed during the election, namely the open
balloting (with no secrecy), and the use of NFL vehicles for polling precincts. These letters sufficiently give an idea
of the irregularities of the certification election. Similarly, the letters containing the signatures of those who were
not able to vote are sufficient. They indicate that the writers were not able to vote because they thought the
election had been postponed, especially given the fact that the two unions had pending appeals at the time from
orders denying them the right to intervene in the election.

WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary of Labor and
Employment are AFFIRMED.

SO ORDERED. LLphil

||| (National Federation of Labor v. Secretary of Labor, G.R. No. 104556, [March 19, 1998], 351 PHIL 94-103)
 THIRD DIVISION

[G.R. No. 142000. January 22, 2003.]

TAGAYTAY HIGHLAND'S INTERNATIONAL GOLF CLUB INCORPORATED, petitioner, vs.

TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO,respondent.

Cayetano Sebastian Dado & Cruz for petitioner.

Romeo C. Lagman for private respondent.

SYNOPSIS

The Tagaytay Highlands Employees Union (THEU), a legitimate labor organization representing majority of the
rank-and-file employees of petitioner, filed a petition for certification election before the Department of Labor and
Employment (DOLE) Mediation-Arbitration Unit, Regional Branch No. IV. Petitioner opposed the petition on the
ground that the list of union members submitted by it was defective and fatally flawed as it included the names
and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as
employees of The Country Club, Inc., a corporation distinct and separate from petitioner; and that out of the 192
signatories to the petition, only 71 were actual rank-and-file employees of petitioner. Despite petitioner's
opposition, the DOLE Med-Arbiter ordered the holding of a certification election among the rank-and-file employees
of petitioner. The latter appealed to the Office of the DOLE Secretary which set aside the said Med-Arbiter's Order
and accordingly dismissed the petition for certification election on the ground that there is a "clear absence of
community or mutuality of interests," finding that the union sought to represent two separate bargaining units
(supervisory employees and rank-and-file employees) as well as employees of two separate and distinct corporate
entities. Upon motion for reconsideration by the union, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by
authority of the DOLE Secretary, issued a Resolution setting aside the June 4, 1998 Resolution dismissing the
petition for certification election. Records of the case were ordered remanded to the Office of the Med-Arbiter for
the conduct of certification election. Petitioner's motion for reconsideration having been denied, it filed a petition
for certiorari before the Supreme Court. The Court, however, referred the petition to the Court of Appeals. The
appellate court denied petitioner's petition and affirmed the DOLE Resolution. The appellate court ruled that
petitioner failed to adduce substantial evidence to support its allegations. Hence. the present petition
for certiorari. HaTSDA

The Supreme Court denied the petition. The inclusion in a union of disqualified employees is not among the
grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code. The union, having been validly
issued a certificate of registration, should be considered to have already acquired juridical personality which may
not be assailed collaterally. As for petitioner's allegation that some of the signatures in the petition for certification
election were obtained through fraud, false statement and misrepresentation, the proper procedure is for petitioner
to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification
election. As for the lack of mutuality of interest, petitioner's argument does not lie given its failure to present
substantial evidence that the assailed employees are actually occupying supervisory positions. While petitioner
submitted a list of its employees with their corresponding job titles and ranks, there is nothing mentioned about
the supervisors' respective duties, powers and prerogatives that would show that they can effectively recommend
managerial actions which require the use of independent judgment.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR ORGANIZATIONS; GROUNDS FOR CANCELLATION OF UNION
REGISTRATION; THE INCLUSION IN A UNION OF DISQUALIFIED EMPLOYEES IS NOT A GROUND FOR
CANCELLATION UNLESS SUCH INCLUSION IS DUE TO MISREPRESENTATION, FALSE STATEMENT OR FRAUD
UNDER THE CIRCUMSTANCES ENUMERATED IN SECTIONS (a) AND (c) OF ARTICLE 239 OF THE LABOR CODE. —
After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. It
may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book IV
of the "Rules to Implement the Labor Code." The grounds for cancellation of union registration are provided for
under Article 239 of the Labor Code. The inclusion in a union of disqualified employees is not among the grounds
for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article 139 of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be considered to have already acquired
juridical personality which may not be assailed collaterally. As for petitioner's allegation that some of the signatures
in the petition for certification election were obtained through fraud, false statement and misrepresentation, the
proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and
not to intervene in a petition for certification election.

2. ID.; ID.; ID.; LACK OF MUTUALITY OF INTEREST ARGUMENT OF PETITIONER WILL NOT LIE IN CASE AT BAR;
NO SUBSTANTIAL EVIDENCE THAT THE ASSAILED EMPLOYEES ARE ACTUALLY OCCUPYING SUPERVISORY
POSITIONS. — As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as
found by the court a quo, its failure to present substantial evidence that the assailed employees are actually
occupying supervisory positions. While petitioner submitted a list of its employees with their corresponding job
titles and ranks, there is nothing mentioned about the supervisors' respective duties, powers and prerogatives that
would show that they can effectively recommend managerial actions which require the use of independent
judgment. As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor: Designation should be
reconciled with the actual job description of subject employees . . . The mere fact that an employee is designated
manager does not necessarily make him one. Otherwise, there would be an absurd situation where one can be
given the title just to be deprived of the right to be a member of a union. In the case of National Steel Corporation
vs. Laguesma (G.R. No. 103743, January 29, 1996), it was stressed that: What is essential is the nature of the
employee's function and not the nomenclature or title given to the job which determines whether the employee has
rank-and-file or managerial status or whether he is a supervisory employee. TaCIDS

DECISION

CARPIO MORALES, J p:

Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International Golf Club
Incorporated (THIGCI) assailing the February 15, 2002 decision of the Court of Appeals denying its petition to
annul the Department of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29,
1998.

On October 16, 1997, the Tagaytay Highlands Employees Union (THEU) — Philippine Transport and General
Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority
of the rank-and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-
Arbitration Unit, Regional Branch No. IV.

THIGCI, in its Comment 1 filed on November 27, 1997, opposed THEU's petition for certification election on the
ground that the list of union members submitted by it was defective and fatally flawed as it included the names
and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as
employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192
signatories to the petition, only 71 were actual rank-and-file employees of THIGCI.

THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed 2 to its
Comment to the petition for certification election. And it therein incorporated the following tabulation 3 showing the
number of signatories to said petition whose membership in the union was being questioned as disqualified and the
reasons for disqualification:

# of Reasons for Disqualification

Signatures

13 Supervisors of THIGCI

6 Resigned employees of THIGCI

2 AWOL employees of THIGCI

53 Rank-and-file employees of The Country Club at

Tagaytay Highlands, Inc.

14 Supervisors of The Country Club at Tagaytay

Highlands, Inc.

6 Resigned employees of The Country Club at

Tagaytay Highlands, Inc.
 3 Terminated employees of The Country Club at
Tagaytay Highlands, Inc.

1 AWOL employees of The Country Club at

Tagaytay Highlands, Inc.

4 Signatures that cannot be deciphered

16 Names in list that were erased

2 Names with first names only

THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and
deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from
participating in the petition. 4

Replying to THIGCI's Comment, THEU asserted that it had complied with all the requirements for valid affiliation
and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of
1997, 5 on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997; 6 and
that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to
collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded
to a legitimate organization.

THEU thus concluded in its Reply 7 that under the circumstances, the Med-Arbiter should, pursuant to Article 257
of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a
certification election.

By Order of January 28, 1998, 8 DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election
among the rank-and-file employees of THIGCI in this wise, quoted verbatim:

We evaluated carefully this instant petition and we are of the opinion that it is complete in form
and substance. In addition thereto, the accompanying documents show that indeed petitioner
union is a legitimate labor federation and its local/chapter was duly reported to this Office as
one of its affiliate local/chapter. Its due reporting through the submission of all the
requirements for registration of a local/chapter is a clear showing that it was already included
in the roster of legitimate labor organizations in this Office pursuant to Department Order No. 9
Series of 1997 with all the legal right and personality to institute this instant petition. Pursuant
therefore to the provisions of Article 257 of the Labor Code, as amended, and its Implementing
Rules as amended by Department Order No. 9, since the respondent's establishment is
unorganized, the holding of a certification election is mandatory for it was clearly established
that petitioner is a legitimate labor organization. Giving due course to this petition is therefore
proper and appropriate. 9 (Italics supplied)

Passing on THIGCI's allegation that some of the union members are supervisory, resigned and AWOL employees or
employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in
the exclusion-inclusion proceedings at the pre-election conference. As for the allegation that some of the signatures
were secured through fraudulent and deceitful means, he held that it should be coursed through an independent
petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any
event, the Med-Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and
other supporting documents to bolster its claim that they are disqualified from joining THEU.

THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-
Arbiter's Order and accordingly dismissed the petition for certification election on the ground that there is a "clear
absence of community or mutuality of interests," it finding that THEU sought to represent two separate bargaining
units (supervisory employees and rank-and-file employees) as well as employees of two separate and distinct
corporate entities.

Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the
DOLE Secretary, issued DOLE Resolution of November 12, 1998 10 setting aside the June 4, 1998 Resolution
dismissing the petition for certification election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-
Baldoz held that since THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary
for it to acquire legitimate status, hence, "the alleged retraction and withdrawal of support by 45 of the 70
remaining rank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition;"
that rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations, the
names of alleged disqualified supervisory employees and employees of the Country Club, Inc., a separate and
distinct corporation, should simply be removed from the THEU's roster of membership; and that regarding the
participation of alleged resigned and AWOL employees and those whose signatures are illegible, the issue can be
resolved during the inclusion-exclusion proceedings at the pre-election stage.

The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the conduct of certification
election.

THIGCI's Motion for Reconsideration of the November 12, 1998 Resolution having been denied by the DOLE
Undersecretary by Resolution of December 29, 1998, 11 it filed a petition for certiorari before this Court which, by
Resolution of April 14, 1999, 12 referred it to the Court of Appeals in line with its pronouncement in National
Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al., 13 and in strict observance of the hierarchy of
courts, as emphasized in the case of St. Martin Funeral Home v. National Labor Relations Commission. 14

By Decision of February 15, 2000, 15 the Court of Appeals denied THIGCI's Petition for Certiorari and affirmed the
DOLE Resolution dated November 12, 1998. It held that while a petition for certification election is an exception to
the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of
mutuality of interests of the members of the union as well as lack of employer-employee relationship following this
Court's ruling in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et
al. 16 and Dunlop Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et al., 17 petitioner failed to
adduce substantial evidence to support its allegations.

Hence, the present petition for certiorari, raising the following

"ISSUES/ASSIGNMENT OF ERRORS:

THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12

NOVEMBER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NON-EMPLOYEES
COULD SIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-FILE MEMBERSHIP
INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNION'S STATUS

THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12

NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES' STATUS COULD READILY BE
RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS

THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF
PETITIONER HAD BEEN DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE
SAME AND BY THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND
CONTAINED IN THE RECORDS OF THE CASE" 18 "

The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and vice-versa, is
Article 245 of the Labor Code, to wit:

Article 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.

While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union, it
does not provide what would be the effect if a rank-and-file union counts supervisory employees among its
members, or vice-versa.

Citing Toyota 19 which held that "a labor organization composed of both rank-and-file and supervisory employees
is no labor organization at all," and the subsequent case of Progressive Development Corp. — Pizza Hut
v. Ledesma 20 which held that:

"The Labor Code requires that in organized and unorganized establishments, a petition for
certification election must be filed by a legitimate labor organization. The acquisition of rights
by any union or labor organization, particularly the right to file a petition for certification
election, first and foremost, depends on whether or not the labor organization has attained the
status of a legitimate labor organization.

In the case before us, the Med-Arbiter summarily disregarded the petitioner's prayer that the
former look into the legitimacy of the respondent Union by a sweeping declaration that the
union was in the possession of a charter certificate so that 'for all intents and
purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimacy organization,
"' 21 (italics supplied),

petitioner contends that, quoting Toyota, "[i]t becomes necessary . . ., anterior to the granting of an order
allowing a certification election, to inquire into the composition of any labor organization whenever the status
of the labor organization is challenged on the basis of Article 245 of the Labor Code." 22
Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary "conveniently
deferred the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the
certification election" which is frowned upon as the following ruling of this Court shows:

We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in
the membership of the respondent union can be remedied in "the pre-election conference thru
the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file
positions will be excluded from the list of eligible voters." Public respondent gravely
misappreciated the basic antipathy between the interest of supervisors and the interest of
rank-and-file employees. Due to the irreconcilability of their interest we held in Toyota Motor
Philippines v. Toyota Motors Philippines Corporation Labor Union, viz:

'xxx xxx xxx

"Clearly, based on this provision Article 245, a labor organization composed of

both rank-and-file and supervisor employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor organization. Not being
one, an organization which carries a mixture of rank-and-file and supervisory
employees cannot posses any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the purpose of
collective bargaining. It becomes necessary, therefore, anterior to the granting
of an order allowing a certification election, to inquire into the composition of
any labor organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code." (Italics by petitioner)
(Dunlop Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; (italics
supplied by petitioner.)

The petition fails. After a certificate of registration is issued to a union, its legal personality cannot be subject to
collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5
of Rule V, Book IV of the "Rules to Implement the Labor Code" (Implementing Rules) which section reads:

Sec. 5. Effect of registration. The labor organization or workers' association shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of
registration. Such legal personality cannot thereafter be subject to collateral attack, but may
be questioned only in an independent petition for cancellation in accordance with these Rules.
(Italics supplied)

The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code, as follows:

Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds
for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of
the constitution and by-laws or amendments thereto, the minutes of ratification, and
the list of members who took part in the ratification;

(b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30)
days from adoption or ratification of the constitution and by-laws or amendments
thereto;

(c) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, the list of voters, or failure to subject these
documents together with the list of the newly elected/appointed officers and their
postal addresses within thirty (30) days from election;

(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the
losing of every fiscal year and misrepresentation, false entries or fraud in the
preparation of the financial report itself;

(e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any
activity prohibited by law;

(f) Entering into collective bargaining agreements which provide terms and conditions of
employment below minimum standards established by law;

(g) Asking for or accepting attorney's fees or negotiation fees from employers;
 (h) Other than for mandatory activities under this Code, checking off special assessments or
any other fees without duly signed individual written authorizations of the members;

(i) Failure to submit list of individual members to the Bureau once a year or whenever required
by the Bureau; and

(j) Failure to comply with the requirements under Articles 237 and 238, (Italics supplied),

while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the Implementing
Rules.
The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion
is due to misrepresentation, false statement or fraudunder the circumstances enumerated in Sections (a) and (c) of
Article 239 of above-quoted Article 239 of the Labor Code.

THEU, having been validly issued a certificate of registration, should be considered to have already acquired
juridical personality which may not be assailed collaterally.

As for petitioner's allegation that some of the signatures in the petition for certification election were obtained
through fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a
petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election.

Regarding the alleged withdrawal of union members from participating in the certification election, this Court's
following ruling is instructive:

"'[T]he best forum for determining whether there were indeed retractions from some of the
laborers is in the certification election itself wherein the workers can freely express their
choice in a secret ballot. Suffice it to say that the will of the rank-and-file employees should in
every possible instance be determined by secret ballot rather than by administrative or quasi-
judicial inquiry. Such representation and certification election cases are not to be taken as
contentious litigations for suits but as mere investigations of a non-adversary, fact-finding
character as to which of the competing unions represents the genuine choice of the workers to
be their sole and exclusive collective bargaining representative with their employer." 23

As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as found by the
court a quo, its failure to present substantial evidence that the assailed employees are actually occupying
supervisory positions.

While petitioner submitted a list of its employees with their corresponding job titles and ranks, 24 there is nothing
mentioned about the supervisors' respective duties, powers and prerogatives that would show that they can
effectively recommend managerial actions which require the use of independent judgment. 25

As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor: 26

Designation should be reconciled with the actual job description of subject employees . . . The
mere fact that an employee is designated manager does not necessarily make him
one. Otherwise, there would be an absurd situation where one can be given the title just to be
deprived of the right to be a member of a union. In the case ofNational Steel Corporation
vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that:

What is essential is the nature of the employee's function and not the nomenclature or
title given to the job which determines whether the employee has rank-and-file or
managerial status or whether he is a supervisory employee. (Italics supplied).

WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the
Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to
the usual pre-election conference.

SO ORDERED.

||| (Tagaytay Highlands International Golf Club Inc. v. Tagaytay Highlands Employees Union-PGTWO, G.R. No.
142000, [January 22, 2003], 443 PHIL 841-855)

SECOND DIVISION

[G.R. No. L-44350. November 25, 1976.]

 U.E. AUTOMOTIVE EMPLOYEES AND WORKERS UNIONTRADE UNIONS OF THE PHILIPPINES
AND ALLIED SERVICES, petitioners, vs. CARMELO C. NORIEL, PHILIPPINE FEDERATION OF
LABOR, AND U. E. AUTOMOTIVE MANUFACTURING CO., INC., respondents.

Tupaz & Associates for petitioners.

Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Reynato S. Puno and Trial
Attorney Joselito B. Floro for respondent Carmelo C. Noriel.

Alejandro C. Villaviza for respondent Phil Federation of Labor.

Poblador, Nazareno, Azada, Tomacruz & Paredes for respondent Company.

DECISION

FERNANDO, J p:

It is a notable feature of our Constitution that freedom of association is explicitly ordained; 1 it is not merely
derivative, peripheral or penumbral, as is the case in the United States. 2 It can trace its origin to the
Malolos Constitution. 3 More specifically, where it concerns the expanded rights of labor under the present Charter,
it is categorically made an obligation of the State to assure full enjoyment "of workers to self-organization [and]
collective bargaining." 4 It would be to show less than full respect to the above mandates of the fundamental law,
considering that petitioner union obtained the requisite majority at a fair and honest election, if it would not be
recognized as the sole bargaining agent. The objection by respondent Director fins no support in the wording of the
law. To sustain it, however, even on the assumption that it has merit, just because when petitioner asked for a
certification election, there was lacking the three-day period under the Industrial Peace Act then in force 5 for it to
be entitled to the rights and privileges of a labor organization, would be to accord priority to form over substance.
Moreover, it was not denied that respondent Director of Labor Relations on January 2, 1975 certified that it was
petitioner which should be "the sole and exclusive bargaining representative of all rank and file employees and
workers of the U.E. Automotive Manufacturing, Inc." 6 He had no choice as the voting was 59 in favor of petitioner
and 52 for private respondent Union. It would appear evident, therefore, that in the light of the constitutional
provisions set forth above and with the present Labor Code, the certification and ordering the holding of a new
election did amount to a grave abuse of discretion. That was to run counter to what the law commands. 7

The facts are undisputed. The comment submitted by respondent Director Carmelo C. Noriel, through Acting
Solicitor General Hugo E. Gutierrez, Jr. and Assistant Solicitor General Reynato S. Puno, 8 made it clear. There
was, on August 15, 1974, a petition for certification election with the National Labor Relations Commission filed by
petitioner. Thereafter, on August 26, 1974, private respondent Philippine Federation of Labor submitted a motion
for intervention. Three conferences between such labor organizations resulted in an agreement to hold a consent
election actually conducted on September 19, 1974 among the rank and file workers of respondent management
firm. Petitioner obtained fifty-nine votes, with respondent union having only fifty-two votes in such consent
election. There was, on September 19, 1874, a motion by petitioner to issue an order of certification duly granted
on January 2, 1975 by respondent Director who did certify petitioner as the sole land exclusive collective
bargaining representative of such rank and file employees of respondent firm. There was, however, a motion for
reconsideration which was granted notwithstanding opposition by the union on January 22, 1975, setting aside the
previous order certifying petitioner as the sole bargaining representative. It is such an order sustaining a motion
for reconsideration that resulted in this petition. 9

The submission of respondent Director to sustain the validity of his order in the comment submitted on his behalf
follows: "Petitioner union is not a legitimate labor organization. Section 2(f) of Republic Act Number 875 defines a
legitimate labor organization as any labor organization registered by the Department of Labor. Petitioner union
is not duly registered with the Department of Labor. The records of the Labor Registration Division of the Bureau of
Labor Relations, Department of Labor show that the application for registration of petitioner union was filed therein
on July 19, 1974. Petitioner union filed a petition for certification on August 15, 1974 or merely after a period of
twenty-seven (27) days. Section 23(b) of Republic Act Number 875 explicitly provides, thus: 'Any labor
organization, association or union of workers duly organized for the material, intellectual and moral well-being of
the members shall acquire legal personality and be entitled to all the rights and privilegeswithin thirty days of filing
with Office of the Secretary of Labor notice of its due application and existence and the following documents,
together with the amount of five pesos as registration fee, except as provided in paragraph "d" of this section
(emphasis supplied).' It is clear therefore that the petition for certification election was filedbefore the expiration of
the period of thirty (30) days. It is futile therefore for the petitioner to claim that it has already legal personality
and is entitled to all the rights and privileges granted by law to legitimate labor organizations by virtue of Section
23(b) of Republic Act Number 875." 10 As noted at the outset, such an argument rests on an infirm and shaky
foundation. It definitely runs counter to what this Court has held and continues to hold in a number of cases in
accordance with the constitutional freedom of association, more specifically, where labor is concerned, to the
fundamental rights of self-organization. Hence the merit in the present petition.

1. There is pertinence to this excerpt from a recent decision, Federacion Obrera de la Industria Tabaquera v.
Noriel; 11 "Clearly, what is at stake is the constitutional right to freedom of association on the part of employees.
Petitioner labor union was in the part of employees. Petitioner labor union was in the past apparently able to enlist
the Corporation. Thereafter, a number of such individuals joined private respondent labor union. That is a matter
clearly left to their sole uncontrolled judgment. There is this excerpt from Pan American World Airways, Inc. v. Pan
American Employees Association: "There is both a constitutional and statutory recognition that laborers have the
right to form unions to take care of their interests vis-a-vis their employees. Their freedom to form organizations
would be rendered nugatory if they could not choose their own leaders to speak on their behalf and to bargain for
them.' It cannot be otherwise, for the freedom to choose which labor organization to join is an aspect of the
Industrial Peace Act, there was a statute setting forth the guidelines for the registration of labor unions. As implied
in Manila Hotel Co. v. Court of Industrial Relations, it was enacted pursuant to what is ordained in the Constitution.
Thus in Umali v. Lovina, it was held that mandamus lies to compel the registration of a labor organization. There is
this apt summary of what is signified in Philippine Land-Air-Sea Labor Union v. Court of Industrial Relations, 'to
allow a labor union to organize itself and acquire a personality distinct and separate from its members and to serve
as an instrumentality to conclude collective bargaining agreements . . .' It is no coincidence that in the first
decision of this Court citing the industrial Peace Act, Pambujan United Mine Workers v. Samar Mining Company, the
role of a labor union as the agency for the expression of the collective will affecting its members both present and
prospective, was stressed. That statute certainly was much more emphatic as to the vital aspect of such a right as
expressly set forth in the policy of the law. What is more, there is in such enactment this categorical provision on
the right of employees to self-organization and to form, join or assist labor organizations of their own choosing for
the purpose of collective bargaining through representatives of their own choosing and engage in concerted
activities for the purpose of collective bargaining and other mutual aid or protection.' The new Labor Code is
equally explicit on the matter. Thus: 'The State shall assure the rights of workers of self-organization, collective
bargaining, security of tenure and just and humane conditions of work.'" 12

2. The matter received further elaboration in the Federation Obrera decision in these words: "It is thus of the very
essence of the regime of industrial democracy sought to be attained through the collective bargaining process that
there be no obstacle to the freedom identified with the exercise of the right to self-organization. Labor is to be
represented by a union that can express its collective will. In the event, and this is usually the case, that there is
more than one such group fighting for that privilege, a certification election must be conducted. That is the
teaching of a recent decision under the new Labor Code, United Employees Union of Gelmart Industries v. Noriel.
There is this relevant except: "The institution of collective bargaining is, to recall Cox, a prime manifestation of
industrial democracy at work. The two parties to the relationship, labor and management, make their own rules by
coming to terms. That is to govern themselves in matters that really count. As labor, however, is composed of a
number of individuals, it is indispensable that they be represented by a labor organization of their choice. Thus
may be discerned how crucial is a certification election. So our decisions from the case of PLDT Employees Union v.
PLDT Co. Free Telephone Workers Union to the latest, Philippine Communications, Electronics & Electricity Workers'
Federation (PCWF) v. Court of Industrial Relations, have made clear.' An even later pronouncement in Philippine
Association of Free Labor Unions v. Bureau of Labor Relations, speaks similarly; 'Petitioner thus appears to be
woefully lacking in awareness of the significance of a certification election for the collective bargaining process. It is
the fairest and most effective way of determining which labor organization can truly represent the working force. It
is a fundamental postulate that the will of the majority, if given expression in an honest election with freedom on
the part of the voters to make their choice, is controlling. No better advice can assure the institution of industrial
democracy with the two parties to a business enterprise, management and labor, establishing a regime of self-
rule.'" 13

3. Deference to the above principles so often reiterated in a host of decisions ought to have exerted a compelling
force on respondent Director of Labor Relations. As a matter of fact, that appeared to be the case. He did certify on
January 2, 1975 that petitioner should be "the sole and exclusive collective bargaining representative of all rank-
and-file employees and workers of the UE Automotive Manufacturing, Inc." 14 The voting, have been 59 in favor of
petitioner and 52 for private respondent Union, had to be respected. Had he stood firm, there would have been no
occasion for the certiorari petition. He did, however, have a change of mind. On February 24, 1975, he set aside
such certification. In his comment, earlier referred to, he would predicate this turnabout on the Union lacking the
three-day period before filing the petition for certification under the appropriate provision of the Industrial Peace
Act then in force. That could be an explanation, but certainly not a justification. It would amount, to use a phrase
favored by Justice Cardozo, to a stultification of a constitutional right.

4. The excuse offered for the action taken place lacks any persuasive force. It may even be looked upon as
insubstantial, not to say flimsy. The law is quite clear; the expression is within thirty days, not after thirty days.
Even if meritorious, however, it can be disregarded under the maxim de minimis non curat lex. 15 Then, too, the
weakness of such a pretext is made apparent by the well-settled principle in the Philippines that where it concerns
the weight to be accorded to the wishes of the majority as expressed in an election conducted fairly and honestly,
certain provisions that may be considered mandatory before the voting takes place becomes thereafter merely
directory in order that the wishes of the electorate prevail. 16 The indefensible character of the order of February
24, 1975 setting aside the previous order certifying to petitioner as the exclusive bargaining representative
becomes truly apparent.

5. Nor is the different outcome called for just because at the time of the challenged order, there was as yet no
registration of petitioner Union. If at all, that is a circumstance far from flattering as far as the Bureau of Labor
Relations is concerned. It must be remembered that as admitted in the comment of respondent Director, the
application for registration was filed on July 19, 1974. The challenged order was issued seven months later. There
is no allegation that such application suffered from any infirmity. Moreover, if such were the case, the attention of
petitioner should have been called so that it could be corrected. Only thus may the right to association be accorded
full respect. As far back as Umali v. Lovina, 17 a 1950 decision, it was held by this Court that under appropriate
circumstances, mandamus lies to compel registration. There is, in addition, a letter signed by a certain Jesus C.
Cuenca, who identified himself as the Acting Registrar of Labor Organizations, stating that this Office "has taken
due note of your letter of July 25, 1974 informing us that this union has been accepted by the Federation as local
chapter No. 580." 18 When it is taken into consideration that the Bureau of Labor Relations itself had allowed
another labor union not registered but affiliated with the same Federation to be entitled to the rights of a duly
certified labor organization, there would appear clearly an element of arbitrariness in the actuation of respondent
Director. 19 It is likewise impressed with a character of a denial of equal protection. Lastly, this Court, in
Nationalista Party v. Bautista, 20 where one of the defenses raised is lack of capacity of petitioner as a juridical
person entitled to institute proceedings, after holding that it was entitled to the remedy of prohibition sought,
allowed it either to amend its petition so as to substitute a juridical person, or to show that it is entitled to institute
such proceeding. So it should be in this Case. In the absence of any fatal defect to the application for registration,
there is no justification for withholding it from petitioner to enable it to exercise fully its constitutional right to
freedom of association. In the alternative, the petition could very well be considered as having been filed by the
parent labor federation. What is decisive is that the members of petitioner Union did exercise their fundamental
right to self-organization and did win in a fair and honest election.

WHEREFORE, the writ of prohibition is granted, the challenged order of February 24, 1975 setting aside the
certification is nullified and declared void, and the previous order of January 2, 1975 certifying to petitioner Union
as the 'sole and exclusive collective bargaining representative of all rank and file employees and workers of the
U.E. Automotive Manufacturing Company, Inc.," declared valid and binding. Whatever other rights petitioner Union
may have under the present Labor Code should likewise be accorded recognition by respondent Director of the
Bureau of Labor Relations. This decision is immediately executory. No costs.

Barredo, Antonio, Aquino and Concepcion, Jr., JJ., concur.

||| (U.E. Automotive Employees and Workers Union v. Noriel, G.R. No. L-44350, [November 25, 1976], 165 PHIL
697-707)

EN BANC

[G.R. No. L-53406. December 14, 1981.]

NATIONAL UNION OF BANK EMPLOYEES, petitioner, vs. THE HONORABLE MINISTER OF LABOR,
THE HONORABLE DEPUTY MINISTER OF LABOR, THE HONORABLE DIRECTOR OF THE BUREAU
OF LABOR RELATIONS, AND PRODUCERS BANK OF THE PHILIPPINES, respondents.

Jose G. Espinas for petitioner.

Lorenzo Tan for private respondent.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Octavio R. Ramirez and Trial
Attorney Elimer A. Ybañez for public respondent.

Jose G. Espinas for petitioner.

Lorenzo Tan for private respondent.

 Solicitor General Estelito P. Mendoza, Assistant Solicitor General Octavio R. Ramirez and Trial
Attorney Elimer A. Ybañez for public respondents.

SYNOPSIS

While a petition for the cancellation of the registration certificate of petitioner union on the ground of
the alleged illegal strikes staged by the leaders and members of the intervenor union and petitioner union was
pending resolution in the Bureau of Labor Relations, the Med-Arbiter issued an Order directing the holding of
certification election among the rank and file employees but sustained the stand of respondent company as to
the exclusion of certain employees. Both parties appealed to the Director of Labor, the petitioner questioning
the aforementioned exclusion while respondent company questioned the jurisdiction of the Med-Arbiter to
issue the aforesaid order, the same properly belonging to the Office of the Minister of Labor. The Director of
Labor affirmed the Order of the Med-Arbiter with certain modifications which in effect rendered the question of
jurisdiction moot and academic. Respondent Bank appealed to the Minister of Labor who did not act on the
appeal nor on petitioner's motion to dismiss with motion to execute.
On Mandamus, the Supreme Court held that the pendency of a petition for cancellation of the
certificate of registration should not suspend the holding of a certification election where there is no order
directing such cancellation.
Petition granted.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE OF THE PHILIPPINES; PETITION FOR CANCELLATION OF
UNION'S CERTIFICATE OF REGISTRATION; PENDENCY NOT A BAR TO CERTIFICATION ELECTION. — The pendency
of the petition for cancellation of the registration certificate of petitioner union founded on the alleged illegal strikes
staged by the leaders and members of the intervenor union and petitioner union should not suspend the holding of
a certification election because there is no order directing such cancellation (Cf. Dairy Queen Products Company of
the Phil., Inc., vs. CIR, et al., No. L-35009, Aug. 31, 1977).

2. ID.; ID.; ID.; ID.; A CASE OF; PETITION INTENDED TO DELAY ELECTION; CASE AT BAR. — The petition for
cancellation of petitioner union's registration certificate based on the alleged illegal strikes staged on October 12,
1979 and later November 5-7, 1979 was evidently intended to delay the early disposition of the case for
certification election considering that the same was apparently filed only after the October 18, 1979 Order of Med-
Arbiter Plagata which directed the holding of a certification election.

3. ID.; ID.; ID.; ID.; POLICY OF LIBERAL APPROACH OBSERVED BY THE COURT IN MATTERS OF CERTIFICATION
ELECTION. — In the recent case of Atlas Free Workers Union (AFWU) PSSLU Local vs. Hon. Carmelo C. Noriel, et
al. (No. 51005, May 26, 1981),"[T]he Court resolves to grant the petition (for Mandamus) in line with the liberal
approach consistently adhered to by this Court on matters of certification election. The whole democratic process is
geared towards the determination, of representation not only in government but in other sectors as well, by
election. Thus, the Court has declared its commitment to the view that a certification election is crucial to the
institution of collective bargaining, for it gives substance to the principle of majority rule as one of the basic
concepts of a democratic policy" (National Mines and Allied Workers Union vs. Luna, 83 SCRA 610).

4. ID.; ID.; ID.; ID.; VIOLATION OF THE LABOR CODE; CANCELLATION OF REGISTRATION CERTIFICATE, NOT THE
ONLY RESULTANT PENALTY. — As can be gleaned from Section 8, Role 11, Book V of the Labor Code in relation to
Article 273, Chapter IV, Title VIII thereof, cancellation of the registration certificate is not the only resultant penalty
in case of any violation of the Labor Code. The penalty imposable should be commensurate to the nature or gravity
of the illegal activities conducted and to the number of members and leaders of the union staging the illegal strike.

5. CONSTITUTIONAL LAW; CONSTITUTION; PROVISIONS FOR THE PROTECTION OF LABOR; ASSOCIATION

SHOULD NOT BE PUNISHED FOR ACTS IMPUTABLE TO OFFICERS AND MEMBERS. — As aptly ruled by respondent
Bureau of Labor Relations Director Noriel: "The rights of workers to self-organization finds general and specific
constitutional guarantees. Section 7, Article IV of the Philippine Constitution provides that the right to form
associations or societies for purposes not contrary to law shall not be abridged. This right is more pronounced in
the case of labor. Section 9, Article II (ibid) specifically declares that the State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure and just and humane conditions of work. Such
constitutional guarantees should not be lightly taken, much less easily nullified. A healthy respect for the freedom
of association demands that acts imputable to officers or members be not easily visited with capital punishments
against the association itself."
 DECISION

MAKASIAR, J p:

This is a petition for mandamus filed by petitioner Union to compel public respondents to conduct a certification
election among the rank and file employees of the respondent employer in Case No. LRD-M-8-360-79 or in the
alternative, to require the respondent Minister of Labor or his Deputy to act on private respondent's "Appeal" and
on petitioner's "Motion to Dismiss with Motion to Execute."

It appears that on August 17, 1979, petitioner Union filed a petition to be directly certified as collective bargaining
agent of the rank and file employees of private respondent corporation (Annex "A"; p. 26, rec.) LLphil

On September 7, 1979, the date of the hearing, private respondent was required to submit on October 5, 1979 a
payroll of employees as of July 31, 1979. On the same date, in a handwritten manifestation, respondent employer
through counsel, agreed that as soon as the registration certificate of the local union was issued by the Ministry of
Labor and that it was shown that the local union represents the majority of the rank and file, the Bank would
recognize the said union and would negotiate accordingly (Annex "B"; p. 27, rec.)

On October 5, 1979, the abovesaid registration certificate of the local union [Certificate No. 9352-LC, issued by the
Ministry of Labor] was secured. On October 15, 1979, petitioner filed a Manifestation and Urgent Motion to Decide
and submitted a copy of the Registration Certificate of the local union and union membership application of 183
members out of more or less 259 rank and file employees of employer Bank, authorizing the National Union of
Bank Employees (NUBE) [herein petitioner] to represent them "as their sole and exclusive collective bargaining
agent in all matters relating to salary rates, hours of work and other terms and conditions of employment in the
Producers Bank of the Philippines" (p. 38, rec.). Nonetheless, respondent corporation failed to submit the required
payroll and the list of rank and file workers based on said payroll.

On October 18, 1979, Med-Arbiter Climaco G. Plagata issued an order directing the holding of a certification
election, the dispositive portion of which reads:

"WHEREFORE, premises considered, a certification election is hereby ordered held, conducted,

and supervised by representation officers of this office within 20 days from receipt hereof. The
same representation officers shall conduct pre-election conferences in order to thresh out the
mechanics and other minor details of this election including the inclusion and exclusion
proceedings to determine the qualified electors in this election. The choice shall be either YES,
for Petitioner, or NO, for NO UNION DESIRED.

"SO ORDERED" (Annex "C", pp. 28-29, rec.)

On October 19, 1979, respondent corporation filed a motion to suspend further proceedings in view of an allegedly
prejudicial issue consisting of a pending proceeding for cancellation of the registration of petitioning union for
allegedly engaging in prohibited and unlawful activities in violation of the laws (Annex "D"; pp. 30-32, rec.)

On October 23, 1979, by agreement of the parties, respondent then Deputy Minister of Labor Amado Inciong,
acting for the Minister of Labor, assumed jurisdiction over the certification election case and the application for
clearance to terminate the services of thirteen (13) union officers by private respondent corporation. Thus, an
order was issued on the same date which reads: LLpr

"On October 23, 1979 the parties entered into an agreement that the Office of the Ministry of
Labor shall assume jurisdiction over the following disputes under P.D. No. 823 in the interest of
speedy labor justice and industrial peace:

"1. certification election case; and

"2. application for clearance to terminate thirteen (13) employees with

preventive suspension.

(Agreement, October 23, 1979)

"Accordingly, the Deputy Minister deputized Atty. Luna C. Piezas, Chief of the Med-Arbiter
Section, National Capital Region, to conduct summary investigations for the purpose of
determining the definition of the appropriate bargaining unit sought to be represented by the
petitioning union as well as compliance with the 30% mandatory written consent in support of
the petition under the bargaining unit as shall have been defined.

"On the application for clearance to terminate with preventive suspension, this Office deems it
necessary, for the mutual protection of each party's interest and to assure continuance of the
 exercise of their respective rights within legal limits, to lift the imposition of preventive
suspension on the subject employees. The lifting of the preventive suspension shall include
Messrs. Castro and Sumibcay, who are presently on leave of absence with pay in pursuance of
the agreement reached at the level of the Regional Director. Further, should the two (2)
employees' leave credits be exhausted, they are to go on leave without pay, but this shall not
be construed as done in pursuance of the preventive suspension.

"Finally, the lifting of the preventive suspension shall be without prejudice to the continuance
of the hearing on the application for clearance involving the thirteen (13) employees the
determination of the merits of which shall be disposed of at the Regional level" (Annex "E", pp.
33-34, rec.)

Hence, Med-Arbiter Luna Piezas conducted hearings but withdrew, in view of the alleged utter disrespect for
authority, gross bad faith, malicious refusal to appreciate effective, prompt and honest service and resorting in
malicious and deliberate lying in dealing with Ministry of Labor officials by a certain Mr. Jun Umali, spokesman of
the Producers Bank Employees Association. The case was then transferred to Med-Arbiter Alberto Abis on
November 7, 1979 (Annex "F", p. 35, rec.)

During the hearing on November 9, 1979, respondent Bank failed to submit a list of rank and file employees
proposed to be excluded from the bargaining unit. Respondent Bank's counsel however, in a verbal manifestation
pressed for the exclusion of the following personnel from the bargaining unit:

1. Secretaries;
2. Staff of Personnel Department;
3. Drivers;
4. Telephone Operators;
5. Accounting Department;
6. Credit Investigators;
7. Collectors;
8. Messengers;
9. Auditing Department Personnel;
10. Signature Verifiers;
11. Legal Department Personnel;
12. Loan Security Custodians; and
13. Trust Department Personnel.

On November 19, 1979, Med-Arbiter Alberto Abis Jr. ordered the holding of certification election among the rank
and file employees but sustained the stand of respondent company as to the exclusion of certain employees. Thus,
the pertinent portion of said order reads: Cdpr

"After a careful perusal of the records, evaluation of the evidence on hand and consideration of
the positions taken by the parties, we find and so hold that Petitioner-Union has substantially
complied with the mandatory and jurisdictional requirement of 30% subscription of all the
employees in the bargaining unit as prescribed by Section 2, Rule 5, Book V of the Rules and
Regulations Implementing the Labor Code. Submission by the Petitioner during the hearing of
copies of the application and membership forms of its members wherein they have duly
authorized Petitioner 'as their sole and exclusive collective bargaining agent' constitutes
substantial compliance of the mandatory and jurisdictional 30% subscription requirement, it
appearing from the records that out of the 264 total rank and file employees, 188 are union
members who have so authorized Petitioner to represent.

"With respect to respondent bank's motion to suspend the proceedings in the instant case
pending resolution of the cancellation proceedings now pending in the Bureau of Labor
Relations, we find that the same is not tenable in the absence of a restraining order.

"In consideration of the agreement of the parties, it is hereby ordered that the scope or
coverage of the appropriate bargaining unit should include the Head Office of the Producers
Bank of the Philippines and all its branch offices and shall comprise of all the regular rank and
file employees of the bank. Excluded are all managerial and supervisory employees,
probationary, contractual and casual employees and security guards.

It is further ordered that by virtue and in consonance with industry practice as revealed by the
CBAs of 10 banks submitted by Petitioner-Union, the following positions should likewise be
excluded from the bargaining unit; Secretaries of bank officials; employees of the Personnel
Department, EXCEPT Manuel Sumibcay, Primi Zamora and Carmelita Sy; employees of the
Accounting Department; employees of the Legal Department; employees of the Trust
 Department, credit investigators, telephone operators, and loan security custodians. Signature
verifiers, drivers, messengers and other non-confidential employees included in the bank's list
of proposed exclusions should be allowed to vote, but the votes should be segregated as
challenged. In case a doubt arises as to whether or not the position held by an employee is
confidential in nature, the employee should be allowed to vote, but his vote should be
segregated as challenged.

"WHEREFORE, in the light of the foregoing considerations, it is hereby ordered that a

certification election be conducted among the regular rank and file employees of the Producers
Bank of the Philippines (the appropriate bargaining unit of which is defined above) after the
usual pre-election conference called to formulate the list of qualified voters and discuss the
mechanics of the election.

"It is further ordered that the election in the bank's branches outside the Metro Manila area be
conducted by the appropriate Regional Offices of the Ministry of Labor having jurisdiction over
them.

"SO ORDERED (pp. 5-7, Annex "G"; pp. 41-43, rec.; emphasis supplied)

On November 29, 1979, petitioner filed a partial appeal to the Director of Bureau of Labor Relations questioning the
exclusions made by Med-Arbiter Abis of those employees who are not among those expressly enumerated under
the law to be excluded. It vigorously urged the inclusion of the rest of the employees which is allegedly the usual
practice in the banking industry. It likewise urged the holding of a certification election allowing all those excluded
by Med-Arbiter Abis to vote but segregating their votes as challenged in the meantime. Hence, it averred;

"It is in the position of the petitioner that notwithstanding the statements above that the
petition for certification should be held immediately by allowing all those not excluded from
Arbiter Abis' order to vote without prejudice to a final decision on the matters subject of these
appeal. Which we also submit that in order to expedite the proceedings these exclusions should
also be allowed to vote even pending resolution of the appeal but segregating them for further
consideration" (pp. 3-4, Annex "H"; p. 46-47, rec.)

On December 4, 1979, respondent bank likewise appealed from the aforesaid November 19, 1979 order of Med-
Arbiter Alberto Abis, Jr. to the Minister of Labor on the following grounds;

(1) that the act of Med-Arbiter Abis in issuing the abovesaid Order is ultra vires, full and
complete jurisdiction over the questioned petition being vested in the office of the Minister of
Labor and hence the only adjudicative body empowered to resolve the petition;

(2) that the fact that petitioner's Union registration was subject of cancellation proceedings
with the Bureau of Labor Relations rendered the issuance of the abovequestioned Order
directing the holding of a certification election premature; and

(3) that the bargaining unit was not appropriately defined [Annex "I"; pp. 49-57, rec.]

On December 7, 1979, the entire records of the case were allegedly elevated as an appealed case by Regional
Director Francisco L. Estrella to the Director of the Bureau of Labor Relations and was docketed thereat as appealed
case No. A-1599-79. prLL

On January 21, 1980, the Union of the Producers Bank Employees Chapter-NATU filed a motion to intervene in the
said petition for certification election alleging among other things that it has also some signed up members in the
respondent Bank and consequently has an interest in the petition for certification election filed by petitioner as it
will directly affect their rights as to who will represent the employees in the collective bargaining negotiations
(Annex "P"; pp. 100-101, rec.)

On January 24, 1980, the Bureau of Labor Relations Director Carmelo C. Noriel rendered a decision affirming the
Med-Arbiter's order with certain modifications, the pertinent portion of which reads:

"Preliminarily, the issue of jurisdiction is being raised by respondent bank but we need not be
drawn into nor tarry in this issue but instead proceed to consider the merits of the case. Suffice
it rather to say that the appealed order was signed by the med-arbiter a quo and the records of
the case were elevated on appeal to this Bureau by the Regional Director of the National
Capital Region. Besides respondent should not unduly press the jurisdictional issue. Such
question does not lead nor contribute to the resolution of the real pressing issue — the
certification election issue. What is at stake here is the right of the employees to organize and
be represented for collective bargaining purposes by a union at the respondent bank where
none existed up to the present time. On this consideration alone, respondent's vigorous
objection alleging want of jurisdiction cracks from tangency of the issue.
xxx xxx xxx

"The matter of defining the bargaining unit, that is to say the appropriateness thereof, usually
presents for determination three questions, to wit, the general type of the bargaining unit or
whether it should be an industrial unit embracing all the employees in a broad class or a craft
unit that is confined to a small specialized group within a broad class, the scope of the
bargaining unit or whether it would embrace all employees in a given class at only one plant or
at several plants of an employer, and the specific composition of the bargaining unit, that is,
whether or not the unit should include employees of different occupational groups, like clerks,
inspectors, technical employees, etc. On these questions, we are not without legal guidelines.
The law and the Rules are clear. The petition for certification election, whether filed by a
legitimate labor organization or by an employer in appropriate case, shall contain, inter alia,
the description of the bargaining unit which shall be the employer unit unless circumstances
otherwise require. Thus, the policy under the Labor Code on the matter of fixing the bargaining
unit is to favor larger units and this is sought to be implemented on a two-tiered basis. On the
lower tier, the law mandates the employer unit as the normal unit of organization at the
company level, thus discouraging if not stopping fragmentation into small craft or occupational
units as what prevailed prior to the Labor Code. But the Code envisions further consolidation
into larger bargaining units. Thus, on the higher tier, the law mandates the eventual
restructuring of the labor movement along the 'one union, one industry' basis. There should
therefore be no doubt as to the law and policy on the fixing of the appropriate bargaining unit
which is generally the employer unit. Applying this rule to the instant case, the appropriate
bargaining unit should embrace all the regular rank and file employees at the head as well as
branch offices of respondent bank. Of course, the exception to this employer unit rule is when
circumstances otherwise require. But such is not at issue here, respondent not having adduced
circumstances that would justify a contrary composition of the bargaining unit.

"Respondent however insists on the definition of the appropriate bargaining unit upon the
question of whether or not to exclude admittedly regular rank and file employees which it
considers confidential, managerial and technical. This question, it should be pointed out, does
not enter the matter of defining the bargaining unit. The definition of the appropriate unit
refers to the grouping or more precisely, the legal collectivity of eligible employees for
purposes of collective bargaining. The presumption is that these employees are entitled to the
rights to self-organization and collective bargaining, otherwise they would not be, in the first
place be considered at all in the determination of the appropriate bargaining unit.

"The question therefore of excluding certain rank and file employees for being allegedly
confidential, managerial or technical does not simply involve a definition of the bargaining unit
but rather raises the fundamental issue of coverage under or eligibility for the exercise of the
workers' rights to self-organization and collective bargaining. On this score, the law on
coverage and exclusion on the matter should by now be very clear. Article 244 of the Labor
Code states that all persons employed in commercial, industrial and agricultural enterprises,
including religious, charitable, medical or educational institutions operating for profit shall have
the right to self-organization and to form, join, or assist labor organizations for purposes of
collective bargaining. Articles 245 and 246 (ibid) provide that security guards and managerial
employees are not eligible to form, assist or join any labor organization. As defined by the
Code, a managerial employee is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees, or to effectively recommend such managerial actions. All
employees not falling within this definition are considered rank and file employees for purposes
of self-organization and collective bargaining.

"It is in the light of the foregoing provisions of law that the challenged order, in so far as it
excludes all managerial and supervisory employees, secretaries of bank officials, credit
investigators, telephone operators, loan security custodians, employees in the accounting,
auditing, legal, trust and personal departments respectively, should be modified for being
either superfluous, discriminatory or simply contrary to law. The express exclusion of
managerial employees in the Order is superfluous for the same is already provided for by law
and is presumed when the bargaining unit was defined as comprising all the regular rank and
file employees of the bank. It is also anomalous and discriminatory when it excluded
employees of the personnel department but included specific individuals like Manuel Sumibcay,
Primi Zamora and Carmelita Sy. Exclusion as managerial employee is not based on the
personality of the occupant but rather on the nature and function of the positions. The
exclusion of the other positions is likewise contrary to law, there being no clear showing that
they are managerial employees. The mere fact of being a supervisor or a confidential employee
does not exclude him from coverage. He must strictly come within the category of a
managerial employee as defined by the Code. TheConstitution assures to all workers such
rights to self-organization and collective bargaining. Exclusions, being the exception and being
in derogation of such constitutional mandate, should be construed in strictissimi juris.

"Furthermore, to uphold the order of exclusion would be to allow the emasculation of the
workers' right to self-organization and to collective bargaining, statutory rights which have
received constitutional recognition when they were enshrined in the 1973 Constitution. Indeed,
the further rulings that 'other non-confidential employees included in the bank's list of
proposed exclusion be allowed to vote but the votes should be segregated as challenged' and
'that in case of doubt as to whether or not the position held by an employee is confidential in
nature, the employee should be allowed to vote but his vote should be segregated as
challenged' both complete the said order's self-nullifying effects.

"At the most and indeed as a policy, exclusion of confidential employees from the bargaining
unit is a matter for negotiation and agreement of the parties. Thus, the parties may agree in
the CBA, to exclude certain highly confidential positions from the bargaining unit. Absent such
agreement, coverage must be observed. In any event, any negotiation and agreement can
come after the representation issue is resolved and this is just the situation in the instant case.

"In fine, the appropriate bargaining unit shall include all the regular rank and file employees of
the respondent including the positions excluded in the challenged order dated 19 November
1979, with the exception of the secretaries to the Bank President, Executive Vice-President,
Senior Vice President and other Vice Presidents as agreed upon by the parties during the
hearings.

"Respondent vehemently interposes also the pendency of cancellation proceedings against

petitioner as a prejudicial issue which should suspend the petition for certification election.

"We cannot fully concur with this contention. Unless there is an order of cancellation which is
final, the union's certificate of registration remains and its legal personality intact. It is entitled
to the rights and privileges accorded by law, including the right to represent its members and
employees in a bargaining unit for collective bargaining purposes including participation in a
representation proceeding. This is especially true where the grounds for the cancellation of its
union certificate do not appear indubitable.

"The rights of workers to self-organization finds general and specific constitutional guarantees.
Section 7, Article IV of the Philippine Constitution provides that the right to form associations
or societies for purposes not contrary to law shall not be abridged. This right is more
pronounced in the case of labor. Section 9, Article II (ibid) specifically declares that the State
shall assure the rights of workers to self-organization, collective bargaining, security of tenure
and just and humane conditions of work. Such constitutional guarantees should not be lightly
taken much less easily nullified. A healthy respect for the freedom of association demands that
acts imputable to officers or members be not easily visited with capital punishments against
the association itself .

"On the 30% consent requirement, respondent contends that the bargaining unit is not
appropriately defined hence, the med-arbiter's finding that there was compliance with the 30%
'jurisdictional requirement is patently erroneous.' To this we must disagree. As earlier stated,
the definition of the appropriate bargaining unit does not call for an actual head count or
identification of the particular employees belonging thereto. That is done in the pre-election
conference. It is sufficient that the bargaining unit is defined such that the employees who are
part thereof may be readily ascertained for purposes of exclusions and inclusions during the
pre-election conference when the list of the eligible voters are determined.

"In this regard, respondent does not really seriously question the 264 total number of
employees except for the alleged exclusion which should reduce the number thus allegedly
affecting the sufficiency of the supporting signatures submitted. We have already ruled against
the exclusions as violative of the constitutional guarantee of workers' right to self-organization.
Consequently, since 188 of the 264 employees subscribed to the petition, which constitutes
70% of the total employees in bargaining unit, the 30% consent requirement has been more
than sufficiently complied with. In any case, even if we grant the alleged exclusions totalling
about 45, the same will not give any refuge to respondent's position. For assuming
momentarily that the exclusions are valid, the same will not fatally affect the 30% consent
compliance.

"Finally, lest it be so easily forgotten, a certification election is but an administration device for
determining the true choice of the employees in the appropriate bargaining unit as to their
 bargaining representative. Unnecessary obstacles should not therefore be thrown on its way.
Rather, the parties should take their case, if they have, directly to the real and ultimate arbiter
on the matter, the employees sought to be represented in the bargaining unit.

"WHEREFORE, in the light of the foregoing considerations, the Order dated 19 November 1979
calling for a certification election is hereby affirmed with the modification that the same shall
be conducted among all the regular rank and file employees of the respondent bank and its
head and branch offices, including those excluded in said Order, except only the positions of
secretary to the Bank President, Executive Vice-President and other Vice-Presidents which
agreed to be excluded from the bargaining unit by the parties during the hearings. The choice
shall be between the petitioner and no union.

"Let the certification election be conducted within twenty (20) days from receipt hereof. The
pre-election conference shall be immediately called to thresh out the mechanics of the election.
The list of qualified voters shall be based on the July 1979 payroll of the company.

"SO ORDERED" (pp. 5-9, Annex "J"; pp. 63-67, rec.; emphasis supplied)

On February 11, 1980, petitioner received an undated and unverified appeal of the respondent bank to the Minister
of Labor questioning the decision of Bureau of Labor Relations Director Carmelo C. Noriel which appeal alleged
that: LLjur

"I. THE QUESTIONED ORDER IS NULL AND VOID FOR HAVING BEEN ISSUED WITHOUT OR IN EXCESS OF
JURISDICTION SINCE—

"(i) It is this Honorable Office, not the BLR, that has jurisdiction over the parties' appeals from
the Order of Med-Arbiter Alberto A. Abis Jr.

"II. ASSUMING, AD ARGUENDO, THAT THE BLR HAS JURISDICTION, THE APPEALED ORDER IS NONETHELESS
NULL AND VOID, THE BLR HAVING GRAVELY ABUSED ITS DISCRETION IN NOT FINDING THAT THE ORDER, DATED
NOVEMBER 19, 1979, OF MED-ARBITER ABIS IS NULL AND VOID FOR HAVING BEEN ISSUED WITHOUT
AUTHORITY/JURISDICTION CONSIDERING THAT —

"(i) Full and complete jurisdiction over this petition is vested in this Office, which, under P.D.
823, as amended, and by agreement of the parties, is the adjudicative body solely and
exclusively empowered to resolve this petition.

"(ii) The fact that petitioner's Union registration is now the subject of cancellation proceedings
before the BLR renders the issuance of an Order directing the holding of a certification election
premature; and

"(iii) The bargaining unit is not appropriately defined; hence, the BLR's and before it, the Med-
Arbiter's finding that there was compliance with the 30% jurisdictional requirement is
completely without basis and, therefore, grossly erroneous.

"III. THE MOTION FOR INTERVENTION FILED BY INTERVENOR UNION OF PRODUCERS BANK EMPLOYEE'S
CHAPTER-NATU WHICH THE BLR, FOR UNKNOWN REASON(S), FAILED TO RESOLVE, RENDERS IMPERATIVE THE
REDETERMINATION OF WHETHER OR NOT THE MANDATORY 30% JURISDICTIONAL REQUIREMENT HAS BEEN
MET." (Pp. 2-3, Annex 'K'; pp. 69-70, rec.)

On February 21, 1980, petitioner union filed a manifestation on respondent's undated and unverified appeal (Annex
"L"; pp. 91-94, rec.)

On the same date, petitioner filed a motion to dismiss with motion to execute (Annex "M"; pp. 95-96, rec.)

On March 3, 1980, petitioner filed an urgent motion to resolve respondent's appeal together with petitioner's
motion to dismiss and motion for execution (Annex "N"; pp. 97-98, rec.)

On March 14, 1980, petitioner received a copy of a letter endorsement dated March 7, 1980 which reads:

"Respectfully referred to the Honorable Minister of Labor, the herein attached Motion to
Execute and Manifestation to Dismiss with Motion to Execute and Manifestation on
Respondent's undated and unverified Appeal dated February 21, 1980 and February 20, 1980
respectively, for appropriate action.

"In a memorandum dated 9 November 1979, the Deputy Minister of Labor completely inhibited
himself in this case" (p 169, rec.)
Public respondent Director Carmelo C. Noriel did not proceed to hold the certification election, neither did the
Minister of Labor act on the appeal of private respondent and on petitioner's motion to dismiss with motion to
execute.

Hence, petitioner filed the instant petition on March 19, 1980. LibLex

On May 2, 1980, private respondent Bank filed its comments (pp. 111-122, rec.)

On June 25, 1980, public respondents filed their comment (pp. 131-142, rec.)

On August 16, 1980, petitioner filed its memorandum (pp. 155-169, rec.)

On September 2, 1980, private respondent Bank filed its memorandum (pp. 179-197, rec.)

On October 1, 1980, public respondents filed a manifestation in lieu of memorandum alleging inter alia that:

"1. The instant petition for mandamus seeks to compel the respondent Minister of Labor to act
on respondent Producers Bank's Appeal and on petitioner's motion to execute the decision of
respondent Director of Labor Relations dated January 24, 1980, directing the holding of a
certification election in said bank;.

"2. The said petition, however, is now moot and academic because:

"(a) Respondent Minister of Labor had already acted on the said appeal in his
decisions dated April 11, 1980 the dispositive portion of which is as follows:

"Wherefore, respondent Bank's Appeal is hereby dismissed and the validity of

the Decision of January 24, 1980, herein adopted is hereby recognized. No motion for
reconsideration of this Order shall be entertained.'

"(b) Petitioner may now file, if it so desires, with respondent Director of Labor
Relations, a motion for the execution of his decision so that the certification election
can be held at respondent bank;

"WHEREFORE, it is respectfully prayed that the instant petition be dismissed for being moot
and academic" (pp. 201-202, rec., italics supplied).

On October 10, 1980, petitioner filed a "Manifestation Re: Decision of the Minister of Labor" alleging among other
things that:

xxx xxx xxx

"2. Petitioner had not received any copy of such April 11, 1980 decision of the Minister of Labor
mentioned by the Honorable Solicitor General. In fact, the Comment of the public respondents
dated June 11, 1980 signed by Assistant Solicitor General Octavio R. Ramirez and Trial
Attorney Elihu A. Ybañez made no mention of the same in the private respondent's
memorandum of September 2, 1980" (p. 204, rec.)

On October 28, 1980, petitioner filed a comment on manifestation of the Honorable Solicitor General dated 30
September 1980 and motion alleging therein that despite inquiries made, no official copy of the alleged April 11,
1980 decision of the Minister of Labor mentioned in the manifestation of the Solicitor General has been furnished
the petitioner. Hence, it prayed that the Minister of Labor be requested to submit to this Court a certified copy of
the aforesaid April 11, 1980 decision of the Minister of Labor. llcd

On October 30, 1980, petitioner filed a manifestation and comment stating that:

"1. On October 29, 1980, it received a copy of the decision of the Honorable Minister of Labor
in Case No. NCR-LRD-8-360-79 as may be seen from Annex 'A'.

"2. The decision is dated October 23, 1980 and not April 11, 1980 as stated in the
Manifestation in Lieu of Memorandum of the Office of the Honorable Solicitor General, dated 30
September 1980.

"3. Petitioner respectfully request an explanation from the public respondents on this apparent
discrepancy which has in fact misled even this Honorable Court" (p. 211, rec.)

On November 11, 1980, private respondent Bank filed a manifestation /motion stating that the
aforementioned April 11, 1980 decision of the Minister of Labor is non-existent, as in fact the Minister of Labor
issued an order affirming the decision of BLR Director Noriel only on October 23, 1980.

xxx xxx xxx

 "3. Notwithstanding the issuance of the October 23, 1980 Order by the Minister of Labor, the
Bank respectfully submits that this petition for mandamus, initiated by petitioner on March 19,
1980 and given due course by this Honorable Court should not be dismissed. The petitioner
herein prays from this Honorable Court that 'public respondents be ordered to conduct the
certification election as ordered by Med-Arbiter Plagata, Abis and BLR Director Noriel among
the rank and file employees. . .' of the Bank. Alternatively, the petitioner prays that the
Minister of Labor or his Deputy be required 'to act forthwith' on the appeal filed by petitioner
herein. As could be gleaned clearly from the allegations and prayer in this petition for
mandamus, the petitioner primarily seeks the holding of a certification election. Only
secondarily is it asking this Court to command the Minister of Labor or his Deputy to resolve
the appeal filed by the Bank.

"4. The affirmance by the Minister of the disputed order of BLR Director Noriel thus renders
moot and academic only the secondary or alternative prayer of the Union in this mandamus
case. What still remains for resolution by this Honorable Court is the issue squarely put before
it on the propriety or impropriety of holding a certification election. This issue has been
traversed by the petitioner and the Bank in their respective memoranda filed with this Court,
with the Bank stressing that a certification election would be improper because, among others,
the petitioning Union violated the strike ban, there is a pending case for cancellation of its
registration certificate, and applications for clearance to dismiss the Union's striking members
are pending approval by the BLR Director.

"5. A dismissal of this petition for mandamus would unduly delay the resolution of the issue of
whether a certification election should be held or not.

"IN VIEW OF THE FOREGOING, it is respectfully moved that this Honorable Court rule on the
issue of whether or not a certification election should be held under circumstances obtaining in
the present case" (pp. 214-216, rec.; emphasis supplied)

On November 24, 1980, public respondents filed a reply to the manifestation and comment of petitioner explaining
the discrepancy of the two dates — October 23, 1980, the actual date of the order of the Minister of Labor
affirming the decision of the BLR Director and April 11, 1980, the date mentioned by the Solicitor General as the
alleged date of the aforesaid order of the Minister of Labor. Thus the pertinent portion of the letter of Director
Noriel to the Solicitor General likewise explaining the apparent discrepancy of the aforesaid dates reads: cdrep

"I should likewise invite your attention to the date of the Order which is October 23, 1980 and
not April 11, 1980 as indicated in the 'Manifestation in Lieu of Memorandum' dated September
30, 1980 of the Solicitor General filed with the Supreme Court. The April 11, 1980 date must
have been based on a draft order which was inadvertently included in the records of the case
that was forwarded to your office. We wish to point out, however, that the dispositive portion
as quoted in the Manifestation is exactly the same as that in the Order eventually signed and
released by the Labor Minister on October 23, 1980" (p. 220, rec.)

Public respondents further averred that "(I)n any event, whether the order is dated April 11, 1980 or October 23,
1980 will not matter since both 'orders' dismissed the appeal of the respondent Bank, upon which dismissal the
Manifestation in Lieu of Memorandum dated September 30, 1980, of public respondents, was based." Public
respondents thus reiterated their prayer that the instant petition be dismissed for being allegedly moot and
academic (pp. 219-222, rec.)

On December 5, 1980, petitioner filed a comment to manifestation/motion of counsel for private respondent
alleging inter alia that ". . . should the Honorable Court be minded to resolve the issue raised in the
Manifestation/Motion of private respondent — i.e. — whether the alleged strike ban violation is a bar to a
certification election, it will be noted that the matter of whether there has been a 'violation' of the strike ban or not
is still to be heard by the Regional Director through Labor Arbiter Crescencio Trajano after this Honorable Court
dismissed G.R. No. L-52026 on the matter of jurisdictional competence of the Regional Director to hear the
question raised therein. To the present, although, the Regional Director has commenced to act on the case, there is
no decision on whether the strike ban has been violated by the petitioner union." Petitioner union vigorously
asserted that while private respondent Bank has a pending petition for cancellation of the registration certificate of
herein petitioner union, it is still premature for private respondent Bank to claim that the petitioner union has
violated the strike ban. Petitioner then alleged that "(T)here is also no proof or decision that acts indulged in by the
petitioner and its members amounted to a strike and even assuming arguendo that such act (which was the
holding of a meeting for 30 minutes before office time in the morning) constitutes a 'strike' and further that such
act violates the strike ban. It has been held through Honorable Justice Antonio P. Barredo in Petrophil vs. Malayang
Manggagawa sa Esso (75 SCRA 73) that only the leaders and members who participated in the illegal activity are
held responsible. If this were so, then the rest of the members who are innocent are still entitled to the benefits of
collective bargaining. There is thus no need to delay the holding of a certification election on the alleged
ground that there is a pending action of the respondent company against the petitioner union for 'violation of the
strike ban' " (pp. 226-227, rec.)

It is likewise pointed out by petitioner union that even if it would be ultimately confirmed that indeed petitioner
union has violated the strike ban, cancellation of the registration certificate of petitioner union is not the only
disciplinary action or sanction provided for under the law but other penalties may be imposed and not necessarily
cancellation of its registration certificate.

On January 12, 1981, pursuant to the resolution of this Court dated December 4, 1980, petitioner union filed its
rejoinder which reiterated the stand of the Solicitor General that the present case has become moot and academic
by virtue of the decision of the Minister of Labor affirming the decision of the BLR Director which ordered a
certification election (p. 230, rec.)

It is quite obvious from the facts set forth above that the question of jurisdiction vigorously asserted by herein
private respondent Bank has become moot and academic.

What therefore remains for this Court to resolve is the issue as to whether or not a certification election should be
held under the circumstances obtaining in the present case. Is it proper to order a certification election despite the
pendency of the petition to cancel herein petitioner union's certificate of registration?

The Court rules in the affirmative. The pendency of the petition for cancellation of the registration certificate of
herein petitioner union is not a bar to the holding of a certification election. The pendency of the petition for
cancellation of the registration certificate of petitioner union founded on the alleged illegal strikes staged by the
leaders and members of the intervenor union and petitioner union should not suspend the holding of a certification
election, because there is no order directing such cancellation (cf. Dairy Queen Products Company of the
Philippines, Inc. vs. Court of Industrial Relations, et al., No. L-35009, Aug. 31, 1977). In said Dairy Queen case,
one of the issues raised was whether the lower court erred and concomitantly committed grave abuse of discretion
in disregarding the fact that therein respondent union's permit and license have been cancelled by the then
Department of Labor and therefore could not be certified as the sole and exclusive bargaining representative of the
rank and file employees of therein petitioner company.

While the rationale of the decision was principally rested on the subsequent rescission of the decision ordering the
cancellation of the registration certificate of the respondent union, thereby restoring its legal personality and all the
rights and privileges accorded by law to a legitimate organization, this Court likewise declared: "There is no
showing, however, that when the respondent court issued the order dated December 8, 1971, certifying the Dairy
Queen Employees Association-CCLU as the sole and exclusive bargaining representative of all regular rank and file
employees of the Dairy Queen Products Company of the Philippines, Inc., for purposes of collective bargaining with
respect to wages, rates of pay, hours of work and other terms and conditions for appointment, the order of
cancellation of the registration certificate of the Dairy Queen Employees Association-CCLU had become final" (78
SCRA 444-445, supra, emphasis supplied). LLphil

It may be worthy to note also that the petition for cancellation of petitioner union's registration certificate based on
the alleged illegal strikes staged on October 12, 1979 and later November 5-7, 1979 was evidently intended to
delay the early disposition of the case for certification election considering that the same was apparently filed only
after the October 18, 1979 Order of Med-Arbiter Plagata which directed the holding of a certification election.

Aside from the fact that the petition for cancellation of the registration certificate of petitioner union has not yet
been finally resolved, there is another fact that militates against the stand of private respondent Bank, the liberal
approach observed by this Court as to matters of certification election. In a recent case, Atlas Free Workers Union
(AFWU)-PSSLU Local vs. Hon. Carmelo C. Noriel, et al. (No. 51005, May 26, 1981), "[T]he Court resolves to grant
the petition (for mandamus) in line with the liberal approach consistently adhered to by this Court in matters of
certification election. The whole democratic process is geared towards the determination of representation, not only
in government but in other sectors as well, by election. Thus, the Court has declared its commitment to the view
that a certification election is crucial to the institution of collective bargaining, for it gives substance to the principle
of majority rule as one of the basic concepts of a democratic policy" (National Mines and Allied Workers Union vs.
Luna, 83 SCRA 610)

Likewise, Scout Ramon V. Albano Memorial College vs. Noriel, et al. (L-48347, Oct. 3, 1978, 85 SCRA 494, 497,
498), this Court citing a long catena of cases ruled:

". . . 'The institution of collective bargaining is, to recall Cox, a prime manifestation of industrial
democracy at work. The two parties to the relationship, labor and management, make their
own rules by coming to terms. That is to govern themselves in matters that really count. As
labor, however, is composed of a number of individuals, it is indispensable that they be
represented by a labor organization of their choice. Thus may be discerned how crucial is a
certification election. So our decisions from the earliest case of PLDT Employees Union v. PLDT
Co., Free Telephone Workers Union to the latest, Philippine Communications, Electronics &
Electricity Workers' Federation (PCWF) v. Court of Industrial Relations, had made clear.' The
 same principle was again given expression in language equally emphatic in the subsequent
case of Philippine Association of Free Labor Unions v. Bureau of Labor Relations: "Petitioner
thus appears to be woefully lacking in awareness of the significance of a certification election
for the collective bargaining process. It is the fairest and most effective way of determining
which labor organization can truly represent the working force. It is a fundamental postulate
that the will of the majority, if given expression in an honest election with freedom on the part
of the voters to make their choice, is controlling. No better device can assure the institution of
industrial democracy with the two parties to a business enterprise, management and labor,
establishing a regime of self-rule.' That is to accord-respect to the policy of the Labor Code,
indisputably partial to the holding of a certification election so as to arrive in a manner
definitive and certain concerning the choice of the labor organization to represent the workers
in a collective bargaining unit" (Emphasis supplied).

It is true that under Section 8, Rule II, Book V of the Labor Code, cancellation of registration certificate may
be imposed on the following instances:

(a) Violation of Articles 234, 238, 239 and 240 of the Code;

(b) Failure to comply with Article 237 of the Code;

(c) Violation of any of the provisions of Article 242 of the Code; and

(d) Any violation of the provisions of this Book.

The aforementioned provisions should be read in relation to Article 273, Chapter IV, Title VIII which explicitly
provides:

"Art. 273. Penalties.— (a) Violation of any provision of this Title shall be punished by a fine of
One Thousand Pesos [P1,000.00] to Ten Thousand Pesos [P10,000.00] and/or imprisonment of
one (1) year to five (5) years.

"(b) Any person violating any provision of this Title shall be dealt with in accordance with
General Order No. 2-A and General Order No. 49.

"(c) Violation of this Title by any legitimate labor organization shall be grounds for disciplinary
action including, but not limited to, the cancellation of its registration permit.

xxx xxx xxx

(emphasis supplied)
From the aforequoted provisions, We are likewise convinced that as it can be gleaned from said provisions,
cancellation of the registration certificate is not the only resultant penalty in case of any violation of the Labor
Code.

Certainly, the penalty imposable should be commensurate to the nature or gravity of the illegal activities conducted
and to the number of members and leaders of the union staging the illegal strike. cdll

As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to self-organization,
finds general and specific constitutional guarantees. Section 7, Article IV of the Philippine Constitution provides that
the right to form associations or societies for purposes not contrary to law shall not be abridged. This right is more
pronounced in the case of labor. Section 9, Article II (ibid) specifically declares that the State shall assure the
rights of workers to self-organization, collective bargaining, security of tenure and just and humane conditions of
work. Such constitutional guarantees should not be lightly taken much less easily nullified. A healthy respect for
the freedom of association demands that acts imputable to officers or members be not easily visited with capital
punishments against the association itself" (p. 8, Annex "J"; p. 66, rec.)

WHEREFORE, THE WRIT OF MANDAMUS PRAYED FOIS GRANTED AND RESPONDENT BLR DIRECTOR NORIEL
HEREBY ORDERED TO CALL AND DIRECT THE IMMEDIATE HOLDING OF A CERTIFICATION ELECTION. NO COSTS.

SO ORDERED.

||| (National Union of Bank Employees v. Minister of Labor, G.R. No. L-53406, [December 14, 1981])

SECOND DIVISION

[G.R. No. L-32853. September 25, 1981.]

 JUAN S. BARRERA, (doing business under the firm and trade name, MACHINERY AND STEEL
PRODUCTS ENGINEERING (MASPE), petitioner, vs. THE HONORABLE COURT OF INDUSTRIAL
RELATIONS, Philippine Associated Workers Union (PAWO), and MASPE WORKERS'
UNION, respondents.

Manuel M. Crudo for petitioner.

Bonifacio V. Tupas for respondent MASPE.

Sergio B. Bognot for respondent PAWO.

SYNOPSIS

Machinery and Steel Products Engineering, (MASPE), through its employer, filed an action to dismiss or hold in
abeyance a pending certification election proceeding on the ground that one of the contending parties, the MASPE
Workers Union, is guilty of unfair labor practice and of having staged an illegal strike thus making uncertain the
status of the union and the members in relation to the requested certification election and its outcome. The Court
of Industrial Relations en banc denied such motion to dismiss as well as the motion for reconsideration filed
thereafter. Hence, this petition.

The Supreme Court, following the ruling laid down in the case of B.F. Goodrich Philippines, Inc. vs. Goodrich
(Marikina Factory) Confidential and Salaried Employees Union-NATU, L-34069-70 decided on February 27,1973,
after the filing of this petition, dismissed this present action, there being no valid reason for the postponement of
the cerfication election sought by petitioner for should management be allowed to have its way, the result might be
to dilute or fritter away the strength of an organization bent on a more zealous defense of labor's prerogatives. A
suit of this character, filed by management, should not be allowed to lend itself as a means, whether intended or
not, to present a truly free expression of the will of the labor group as to the organization that will represent it.

Petition dismissed.

SYLLABUS

1. CONSTITUTIONAL LAW; PROTECTION TO LABOR; CERTIFICATION ELECTION; POSTPONEMENT THEREOF

PENDING DETERMINATION OF AN UNFAIR LABOR PRACTICE; SETTLED LAW. — What it settled law, dating from the
case of Standard Cigarette Workers' Union v. Court of Industrial Relations, decided in 1957, is that if it were a
labor organization objecting to the participation in a certification election of a company-dominated union, as a
result of which a complaint for an unfair labor practice case against the employer was filed, the status of the latter
union must be first cleared in such a proceeding before such voting could take place.

2. ID.; ID.; ID.; ID.; FILING BY MANAGEMENT OF AN UNFAIR LABOR PRACTICE CASE SHOULD NOT PREVENT THE
EXPRESSION OF A LABOR GROUP'S CHOICE OF REPRESENTATIVE. — The reason that justifies the postponement of
a certification election pending an inquiry as to the bona fides of a labor union calls for a different conclusion where
it is management that would have an unfair labor practice case filed by it for illegal strike engaged in by some of its
employees concluded before it would agree to the holding of a certification election. If management is allowed to
have its way, the result might be to dilute or fritter away the strength of an organization bent on a more zealous
defense of labor's prerogatives. The difficulties and obstacles that must be then hurdled would not be lost on the
rest of the personnel, who had not as yet made up their minds one way or the other. This is not to say that
management is to be precluded from filing an unfair labor practice case.

3. ID.; ID.: ID.; SELECTION OF REPRESENTATIVE BY THE MAJORITY OF THE EMPLOYEES IN THE COLLECTIVE
BARGAINING UNIT. — The Industrial Peace Act speaks of the labor organizations designated or selected for the
purpose of collective bargaining by the majority of the employees in an appropriate collective bargaining unit
representative of all the employees in such unit for the purpose of collective bargaining. The law clearly
contemplates all the employees, not only some of them. As much as possible then, there is to be no unwarranted
reduction in the number of those taking part in a certification election, even under the guise that in the meanwhile,
which may take some time, some of those who are employees could possibly lose such status, by virtue of a
pending unfair labor practice case.

4. ID.; ID.; RIGHT TO STRIKE; NOT EVERY FORM OF VIOLENCE RENDERS A STRIKE ILLEGAL. — In a 1971 decision
of the Supreme Court, Shell Oil Workers' Union v. Shell Company of the Philippines, Ltd., it was clearly held: "A
strike otherwise vaild, if violent in character, may be placed beyond the pale. Care is to be taken, however,
especially where an unfair labor practice is involved, to avoid stamping it with illegality just because it is tainted by
such acts. To avoid rendering illusory the recognition of the right to strike, responsibility in such a case should be
individual and not collective. A different conclusion would be called for, of course, if the existence of force while the
strike lasts is pervasive and widespread, consistently and deliberately resorted to as a matter of policy. It could be
reasonably concluded then that even if justified as to ends, it becomes illegal because of the means employed."

DECISION

FERNANDO, C.J p:

It was the absence of any definite ruling at the time this petition was filed on the question of whether or not a
pending certification election proceeding may be dismissed or held in abeyance, there being such a motion on the
part of the employer Juan S. Barrera, doing business under the firm and trade name of Machinery and Steel
Products Engineering (MASPE), alleging an unfair labor practice against one of the contending parties, private
respondents MASPE Workers Union, the other being private respondent Philippine Associated Workers Union, that
led this Court to give it due course. The unfair labor practice imputed to such labor union consisted of failure to
bargain collectively, aggravated by an illegal strike. Respondent Court of Industrial Relations denied such a motion
to dismiss, stating that the grounds therein alleged "appear not to be indubitable." A motion for reconsideration
having proved futile, this petition was filed. Subsequently, to be precise, in 1973, in the case of B.F. Goodrich
Philippines, Inc. v. Goodrich (Marikina Factory) Confidential and Salaried Employees Union-Natu, 1 such a question
was given an answer by this Court, one adverse to the claim of petitioner. This petition, therefore, must be
dismissed. LLjur

The case for petitioner was put most vigorously in the exhaustive and scholarly brief of its counsel, Manuel M.
Crudo. To quote from its pertinent portion: "On September 22, 1970 the petitioner Barrera filed a motion to
dismiss or hold case in abeyance, in CIR Case No. 2759-MC. In said motion, we called attention to the admission of
Maspe Workers Union as intervenor in the case. We stated that the intervenor union, its officers and members had
committed various acts of unfair labor practice and were on illegal strike punctuated by force,
violence and intimidation. We called attention to our formal charge of unfair labor practice against the intervenor
union. We called attention to the fact that in the charge of unfair labor practice among the reliefs prayed for were
to declare respondents therein collectively and individually guilty of unfair labor practice; to declare the strike, and
other concerted actions resorted to in pursuance of said unfair labor practice illegal; to declare the Maspe Workers
Union as consequently having lost all rights and privileges accorded by law to a legitimate labor union; and to
declare all individual respondents therein and others as having lost their employment status by virtue of the
illegality of the strike staged by them. We then pointed out that unless the case for unfair labor practice against
Maspe Workers Union, its officers and members is decided the status of that union and its members who are
respondents would be uncertain(i.e., in relation to the requested certification election and the outcome thereof)." .
. . Unfortunately, the respondent Honorable Court of Industrial Relations denied our motion to dismiss or hold case
in abeyance. . . . ." 2 It remains only to be added that subsequently the Court of Industrial Relations en
banc denied a motion for reconsideration, failing "to find sufficient justification to alter or to modify the aforesaid
Order." 3

To repeat, the petition cannot prosper.

1. As set forth in the B.F. Goodrich Philippines, Inc. decision: "There is novelty in the specific question raised, as to
whether or not a certification election may be stayed at the instance of the employer, pending the determination of
an unfair labor practice case filed by it against certain employees affiliated with respondent-unions. That is a
matter of which this Court has not had an opportunity to speak on previously. What is settled law, dating from the
case of Standard Cigarette Workers' Union v. Court of Industrial Relations, decided in 1957, is that if it were a
labor organization objecting to the participation in a certification election of a company-dominated union, as a
result of which a complaint for an unfair labor practice case against the employer was filed, the status of the latter
union must be first cleared in such a proceeding before such voting could take place." 4

2. This is the more relevant excerpt: "The unique situation before us, however, is exactly the reverse. It is
management that would have an unfair labor practice case filed by it for illegal strike engaged in by some of its
employees concluded, before it would agree to the holding of a certification election. That is the stand of petitioner.
It does not carry conviction. The reason that justifies the postponement of a certification election pending an
inquiry, as to the bona fides of a labor union, precisely calls for a different conclusion. If under the circumstances
disclosed, management is allowed to have its way, the result might be to dilute or fritter away the strength of an
organization bent on a more zealous defense of labor's prerogatives. The difficulties and obstacles that must be
then hurdled would not be lost on the rest of the personnel, who had not as yet made up their minds one way or
the other. This is not to say that management is to be precluded from filing an unfair labor practice case. It is
merely to stress that such a suit should not be allowed to lend itself as a means, whether intended or not, to
prevent a truly free expression of the will of the labor group as to the organization that will represent it. It is not
only the loss of time involved, in itself not likely to enhance the prospect of respondent-unions, but also the fear
engendered in the mind of an ordinary employee that management has many weapons in its arsenal to bring the
full force of its undeniable power against those of its employees dissatisfied with things as they are. There is no
valid reason then for the postponement sought. This is one instance that calls for the application of the maxim, lex
dilationes semper exhorret. Moreover, is there not in the posture taken by petitioner a contravention of what is
expressly set forth in the Industrial Peace Act, which speaks of the labor organizations 'designated or selected for
the purpose of collective bargaining by the majority of the employees in an appropriate collective bargaining unit
[be the exclusive] representative of all the employees in such unit for the purpose of collective bargaining.' The law
clearly contemplates all the employees, not only some of them. As much as possible then, there is to be no
unwarranted reduction in the number of those taking part in a certification election, even under the guise that in
the meanwhile, which may take some time, some of those who are employees could possibly lose such status, by
virtue of a pending unfair labor practice case." 5

3. Even on the assumption that the vigorous condemnation of the strike and the picketing were attended by
violence, it does not automatically follow that thereby the strikers in question are no longer entitled to participate
in the certification election for having automatically lost their jobs. So it was made clear in another B.F. Goodrich
decision: 6 "What was set forth in the facts as found by respondent Judge Salvador would indicate that it was
during the picketing, certainly not peaceful, that the imputed acts of violence did occur. It cannot be ignored,
however, that there were injuries on both sides because management did not, understandably, play a passive role
confronted as it was with the unruly disruptive tactics of labor. This is not, by any means, to condone activities of
such character, irrespective of the parties responsible. It is merely to explain what cannot be justified.
Nonetheless, did the acts in question call for an automatic finding of illegality? Again, the order issued on February
4, 1972 appeared to be oblivious of a 1971 decision of this Court, Shell Oil Workers' Union v. Shell Company of the
Philippines, Ltd. There it was clearly held: 'A strike otherwise valid, if violent in character, may be placed beyond
the pale. Care is to be taken, however, especially where an unfair labor practice is involved, to avoid stamping it
with illegality just because it is tainted by such acts. To avoid rendering illusory the recognition of the right to
strike, responsibility in such a case should be individual and not collective. A different conclusion would be called
for, of course, if the existence of force while the strike lasts is pervasive and widespread, consistently and
deliberately resorted to as a matter of policy. It could be reasonably concluded then that even if justified as to
ends, it becomes illegal because of the means employed.' It must be pointed out likewise that the facts as there
found would seem to indicate a greater violence. Thus: 'Respondent Court must have been unduly impressed by
the evidence submitted by the Shell Company to the effect that the strike was marred by acts of force, intimidation
and violence on the evening of June 14 and twice in the mornings of June 15 and 16, 1967 in Manila. Attention was
likewise called to the fact that even on the following day, with police officials stationed at the strike-bound area,
molotov bombs did explode and the streets were obstructed with wooden planks containing protruding nails.
Moreover, in the branches of the Shell Company in Iloilo City as well as in Bacolod, on dates unspecified, physical
injuries appeared to have been inflicted on management personnel. Respondent Court in the appealed decision did
penalize with loss of employment the ten individuals responsible for such acts. Nor is it to be lost sight of that
before the certification on June 27, 1967, one month had elapsed during which the Union was on strike. Except on
those few days specified then, the Shell Company could not allege that the strike was conducted in a manner other
than peaceful. Under the circumstances, it would be going too far to consider that it thereby became illegal.' Then,
mention was made of a decision 'in Insular Life Assurance Co., Ltd. Employees' Association v. Insular Life
Assurance Co., Ltd. [where] there is the recognition by this Court, speaking through Justice Castro, of picketing as
such being "inherently explosive." It is thus clear that not every form of violence suffices to affix the seal of
illegality on a strike or to cause the loss of employment by the guilty party.'" 7

WHEREFORE, this petition is dismissed and the appealed order affirmed. No costs.

Aquino, Guerrero, Abad Santos and De Castro, JJ., concur.

Barredo J., is on official leave.

Concepcion Jr., J., is on sick leave.

||| (Barrera v. Court of Industrial Relations, G.R. No. L-32853, [September 25, 1981], 194 PHIL 531-539)