G.R. No. 80882 April 24, 1989
Mindanao Miners Employees Union-Sandigan ng
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.
GUTIERREZ, JR., J.:
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, 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 0. 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:
l. Southern Philippines Federation of Labor (SPFL)
2.
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 (1 9) 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.
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;
1
 2 Seventy-three (73) probationary
employees; and
3 Nineteen (19) Supervisors 1;
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:
l. 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
2
 canvassed by Labor Regional Office XI, "WHEREFORE, the Motion for
Davao City. Let, therefore, the records of reconsideration of Petitioner SPFL is hereby
this case be immediately remanded to the denied for lack of merit. Meanwhile,
said office, for the immediate intervenor Mindanao Employees Union-
implementation of this Resolution." Sandigan Ng Manggagawang Pilipino
(MMEU- SANDIGAN) is hereby certified
Petitioner Union moved for a reconsideration of the as the sole and exclusive bargaining
resolution dated April 14, 1987. Meanwhile, on May 21, representative of the rank-and-file
1987, Med-Arbiter Macasa opened and canvassed the 197 employees of respondent Apex Mining
challenged ballots with the result as follows: Company, Inc. Accordingly, the
management of Apex Mining Company,
SPFL 12 votes Inc., is directed to negotiate with (MMEU-
SANDIGAN 178 votes SANDIGAN) for the conclusion of a
No Union 2 votes collective bargaining agreement (CBA)."
Spoiled 4 votes
Envelop with Hence, this petition.
no ballots 1 vote
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
TOTAL 197 votes the certification election when, as alleged by the petitioner, they are
disqualified by express provision of law or under the existing collective
As a consequence of the opening and canvass of the bargaining agreement.
challenged ballots, the outcome of the certification election
became: It is maintained by the petitioner that under the Labor Code, managerial
employees are excluded from forming or joining a collective bargaining unit;
SPFL 626 votes and under the collective bargaining agreement executed between Apex and
SANDIGAN 706 votes respondent union, among those who are excluded from the bargaining unit
No Union 11 votes 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
TOTAL 1,343 votes employees holding the positions of Supervisors II and III and those in the
confidential payrolls should be excluded from joining the bargaining unit and
Based on the aforementioned results, respondent Union filed from voting in the certification election. Likewise, those employees who are
a Manifestation with the BLR with prayer for the issuance of not paying union dues should be excluded from the same since the existing
Certification Order certifying it as the sole and exclusive CBA contains a Union shop provision.
bargaining representative of the rank-and-file employees of
APEX. On June 23, 1987, Director Calleja issued an Order, The contentions have no merit.
the dispositive portion of which reads:
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
3
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, (1 57 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-18938, 11 SCRA 766 [1964]).
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
4
the bargaining unit even though they are non-union members or not paying G.R. No. 77231 May 31, 1989
union dues.
SAN JOSE CITY ELECTRIC SERVICE COOPERATIVE, INC.
WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. (SAJELCO), petitioner,
Costs against the petitioner. vs.
MINISTRY OF LABOR AND EMPLOYMENT and MAGKAISA-
SO ORDERED. ADLO, respondents.

MEDIALDEA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court.

Petitioner San Jose City Electric Service Cooperative, Inc. (SAJELCO, for
brevity) seeks the reversal of the Order (pp. 38-40, Rollo) of Pura Ferrer-
Calleja, Director of Bureau of Labor Relations in BLR Case No. A-10-259-
86 which affirmed the Order of Med-Arbiter Antonio R. Cortez to conduct a
certification election among the rank-and-file employees of SAJELCO.

The antecedent facts of the instant case are as follows:

On July 29, 1986, private respondent Manggagawang Nagkakaisa ng

SAJELCO-Association of Democratic Labor Organization (MAGKAISA-
ADLO) filed a petition (pp. 16-18, Rollo) for direct certification election with
the Regional Office No. 111 of the Department of Labor and Employment in
San Fernando, Pampanga. The petition alleged that MAGKAISA-ADLO is a
legitimate labor organization duly registered with the Ministry of Labor and
Employment; that there are more or less fifty-four (54) rank and file
employees in SAJELCO; that almost 62% of the employees sought to be
represented have supported the filing of the petition; that there has been no
valid certification election held in SAJELCO during the twelve (12) month
period prior to the filing of the petition and that there is no other union in the
bargaining unit.

In its answer (pp. 19-21, Rollo), SAJELCO opposed the petition for direct
certification election contending, inter alia, that the employees who sought to
be represented by private respondent are members-consumers of the
Cooperative itself and at the same time composed the General Assembly
which, pursuant to the By-laws is also the final arbiter of any dispute arising
in the Cooperative. Thus:

xxx

5
 5. That some, if not most, of the employees who sought to be
represented by the petitioner, are member-consumers, and as
such are members of the General or Special Assembly which
is the final arbiter on any dispute which a member and/or the
Board, or the Cooperative may have, and that such "some"of
said alleged supporters, in their capacity as member-
consumers, enjoy two personalities in that as employees
and/or members of the General Assembly, and therefore
cannot fairly and prudently represent such opposing
personalities that merge into one juridical or natural person,
and these special and unique status or personalities of the
supposed supporters cannot qualify to be represented by the
petitioner, without doing injustice, in equity and unfair status
or advantage to those member-consumers who have not that
destiny or status of becoming employees;
6 No valid and lawful representation can be obtained by
petitioner in behalf of the supposed supporters, who are also
member-consumer, that are bound by the Article of
Incorporation, By-laws of the respondent Cooperative and
pertinent Decrees and laws, to support and defend the basic
policies of the Government on Electric Cooperatives;
7. There is no possible legal way by which to dismantle the
personalities of some of the supporters of the petitioner, as
employees, from their status as consumer-members, who are,
under the By-laws, part and parcels of the General or Special
Assembly that finally decides any dispute, and no reasonable
or valid scale of justice could be invoked to divide a person
who, in conscience, is also the other fellow against whom a
remedy is sought for in allowing this to happen is tantamount
to slaughtering a man to his own ends;
xxx
On September 5, 1986, the Med-Arbiter who was assigned to the case issued
an Order (pp. 24-26, Rollo) granting the petition for direct certification
election on the basis of the pleadings filed. The Order said that while some of
the members of petitioner union are members of the cooperative, it cannot be
denied that they are also employees within the contemplation of the Labor
Code and are therefore entitled to enjoy all the benefits of employees,
including the right to self-organization (pp. 25, Rollo). This Order was
appealed by SAJELCO to the Bureau of Labor Relations.
In its appeal, (pp. 27-36, Rollo) SAJELCO reiterated its position that:
. . . upon the principle that in electric cooperative — as in the
case of respondent, there is a merger of the consumer-
members that composed of the assembly and that of the
rank-and-file members of the petitioners-into one person or
juridical status thus rendering the proposed collective
bargaining agent ineffective and/or uncalled for —
considering that a grievance machinery for employees and/or
member-consumers of the cooperative-has been provided for
by the By-laws as a built-in over-all arbiter involving
disputes affecting said cooperative;
Respondent Director of the Bureau of Labor Relations dismissed the appeal
and sustained the ruling of the Med-Arbiter in an order dated January 5,
1987.
On February 19, 1987, SAJELCO filed the instant petition
for certiorari praying that the order of respondent Director be set aside and
another one rendered denying the holding or conduct of a certification
election among the rank and file employees of SAJELCO.
In a letter dated June 20, 1987, Atty. Ricardo Soto, Jr., counsel for private
respondent union, manifested that a direct certification election was
conducted in SAJELCO, there being no restraining order from this Court
enjoining the holding thereof Likewise, Atty. Soto was of the opinion that in
view of the direct certification election conducted, the petition brought before
this Court by SAJELCO has become moot and academic (p. 48, Rollo).
Attached to his letter is a copy of the minutes of the certification election
held on April 13, 1987 showing that of forty three (43) employees who
voted, thirty (30) voted for respondent union and thirteen (13) voted for "no
union."
In the resolution of this court (First Division) dated September 29, 1987,
respondents were required to comment on the petition. The Solicitor General
filed its comment dated October 30, 1987 wherein it took a stand contrary to
that of respondent Director. To support its stand, the Solicitor General argued
firstly, that the union members who seek to be represented by the union are
6
the very members of the cooperative, thereby resulting in a fusion of two
personalities. Thus, it will be inconsistent for the union members to bargain
with themselves. Secondly, he said that article 243 of the Labor Code;
requires that before one can form, join or assist a labor union, he must first be
employed and to be an employee one must be under hire and must have no
involvement in the ownership of the firm. A labor union is formed for
purposes of collective bargaining. The duty to bargain exists only between
employer and employees and not between an employer and his co-owners.
Thirdly, he also said that under the National Electrification Decree (P.D. No.
269, August 6, 1973) members of an electric cooperative such as petitioner,
besides contributing financially to its establishments and maintenance,
participate in its management. In the latter aspect, they possess the powers
and prerogatives of managerial employees who are not eligible to join, assist
or form any labor organization (pp. 4-6 of Comment; pp 43-45, Rollo).
On November 25, 1987, We required Atty. Soto, Jr. to comment on the
comment of the Solicitor General (p. 47, Rollo). However, the notices sent to
him were returned and stamped "moved to an unknown address." But
respondent Director of the Bureau of Labor Relations filed a comment on the
aforesaid comment of the Solicitor General reiterating his stand that members
of private respondent union fall under the general provision of Article 244 of
the Code on who are qualified to form, join or assist in the formation of
unions as they are neither managerial employees nor persons belonging to
subversive organizations. Thus, on May 25, 1988, we gave due course to the
petition (p. 79, Rollo).
The only issue presented for resolution in this petition is whether or not the
employees-members of an electric cooperative can organize themselves for
purposes of collective bargaining.
This Court had the occasion to rule on this issue in the consolidated cases
of Batangas I-Electric Cooperative Labor Union vs. Romeo Young, et al.,
G.R. No. 62386, Bulacan II- Electric Cooperative, Inc., vs. Hon. Eliseo A.
Penaflor, et al., G.R. No. 70880 and Albay Electric Cooperative vs.
Crescencio B. Trajano et. al., G.R. No. 74560 (November 9, 1988), citing the
case of Cooperative Rural Bank of Davao City, Inc. vs. Pura Ferrer-Calleja,
G.R. No. 77951, September 26,1988, where it was held that:
A cooperative, therefore, is by its nature different from an
ordinary business concern being run either, by persons,
partnerships or corporations. Its owners and/or members are
the ones who run and operate the business while the others
are its employees. As above stated, irrespective of the name
of shares owned by its members they are entitled to cast one
vote each in deciding upon the affair of the cooperative.
Their share capital earn limited interests, They enjoy special
privileges as — exemption from income tax and sales taxes,
preferential right to supply their products to State agencies
and even exemption from minimum wage laws.
An employee therefore of such a cooperative who is a
member and co-owner thereof cannot invoke the right to
collective bargaining for certainly an owner cannot bargain
with himself or his co-owners. In the opinion of August 14,
1981 of the Solicitor General, he corectly opined that
employees of cooperatives who are themselves members of
the cooperative have no right to form or join labor
organizations for purposes of collective bargaining for being
themselves co-owners of the cooperative.
However, in so far as it involves cooperatives with
employees who are not members or co-owners thereof,
certainly such employees are entitled to exercise the rights of
all workers to organization, collective bargaining,
negotiations and others as are enshrined in the Constitution
and existing laws of the country.
In this petition, San Jose City Electric Service Cooperative, Inc. (SAJELCO)
claims that its employees are also members of the cooperative. It cited
Section 17(18) of its By-laws which declares that:
The Board shall also create positions for subordinate
employees and fix their duties and remunerations. Only
member-consumers or members of their immediate family
shall be employed by the cooperative (Emphasis supplied).
The above-cited provision, however, mentions two types of employees,
namely: the members-consumers and the members of their immediate
families. As regards employees of SAJELCO who are members-consumers,
the rule is settled that they are not qualified to form, join or assist labor
organizations for purposes of collective bargaining. The reason for
withholding from employees of a cooperative who are members-co-owners
7
the right to collective bargaining is clear: an owner cannot bargain with G.R. No. 85750 September 28, 1990
himself. However, employees who are not members-consumers may form,
join or assist labor organizations for purposes of collective bargaining INTERNATIONAL CATHOLIC IMMIGRATION
notwithstanding the fact that employees of SAJELCO who are not members- COMMISSION, petitioner
consumers were employed ONLY because they are members of the vs
immediate family of members-consumers. The fact remains that they are not HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE
themselves members-consumers, and as such, they are entitled to exercise the BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE
rights of all workers to organization, collective bargaining, negotiations and PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.
others as are enshrined in Section 8, Article III and Section 3, Article XIII of
the 1987 Constitution, Labor Code of the Philippines and other related laws G.R. No. 89331 September 28, 1990
(Cooperative Rural Bank of Davao City, Inc., supra, p. 10).
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED
ACCORDINGLY, the petition is GRANTED. The assailed Order of LABOR ASSOCIATION IN LINE INDUSTRIES AND
respondent Pura Ferrer-Calleja, Director of the Bureau of Labor Relations is AGRICULTURE, petitioner,
hereby MODIFIED to the effect that only the rank-and-file employees of vs
petitioner who are not its members-consumers are entitled to self- SECRETARY OF LABOR AND EMPLOYMENT AND
organization, collective bargaining, and negotiations, while other employees INTERNATIONAL RICE RESEARCH INSTITUTE, INC., respondents.
who are members-consumers thereof cannot enjoy such right. The direct
certification election conducted on April 13, 1987 is hereby set aside. The MELENCIO-HERRERA, J.:
Regional Office III of the Department of Labor and Employment in San
Fernando, Pampanga is hereby directed: (a) to determine the number of rank Consolidated on 11 December 1989, these two cases involve the validity of
and file employees of SAJELCO who are not themselves members- the claim of immunity by the International Catholic Migration Commission
consumers; (b) to resolve whether or not there is compliance with the (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the
requirements set forth in Article 257 of the Labor Code; and (c) in the application of Philippine labor laws.
affirmative, to immediately conduct a direct certification election among the
rank and file employees of SAJELCO who are not members-consumers.
I. Facts and Issues
SO ORDERED.
A. G.R. No. 85750 — the International Catholic Migration
Commission (ICMC) Case.

As an aftermath of the Vietnam War, the plight of Vietnamese refugees

fleeing from South Vietnam's communist rule confronted the international
community.

In response to this crisis, on 23 February 1981, an Agreement was forged

between the Philippine Government and the United Nations High
Commissioner for Refugees whereby an operating center for processing
Indo-Chinese refugees for eventual resettlement to other countries was to be
established in Bataan (Annex "A", Rollo, pp. 22-32).

8
ICMC was one of those accredited by the Philippine Government to operate
the refugee processing center in Morong, Bataan. It was incorporated in New
York, USA, at the request of the Holy See, as a non-profit agency involved in
international humanitarian and voluntary work. It is duly registered with the
United Nations Economic and Social Council (ECOSOC) and enjoys
Consultative Status, Category II. As an international organization rendering
voluntary and humanitarian services in the Philippines, its activities are
parallel to those of the International Committee for Migration (ICM) and the
International Committee of the Red Cross (ICRC) [DOLE Records of BLR
Case No. A-2-62-87, ICMC v. Calleja, Vol. 1].
On 14 July 1986, Trade Unions of the Philippines and Allied Services
(TUPAS) filed with the then Ministry of Labor and Employment a Petition
for Certification Election among the rank and file members employed by
ICMC The latter opposed the petition on the ground that it is an international
organization registered with the United Nations and, hence, enjoys
diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and
dismissed the petition for lack of jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor
Relations (BLR), reversed the Med-Arbiter's Decision and ordered the
immediate conduct of a certification election. At that time, ICMC's request
for recognition as a specialized agency was still pending with the Department
of Foreign Affairs (DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government,
through the DEFORAF, granted ICMC the status of a specialized agency
with corresponding diplomatic privileges and immunities, as evidenced by a
Memorandum of Agreement between the Government and ICMC (Annex
"E", Petition, Rollo, pp. 41-43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for
Certification Election invoking the immunity expressly granted but the same
was denied by respondent BLR Director who, again, ordered the immediate
conduct of a pre-election conference. ICMC's two Motions for
Reconsideration were denied despite an opinion rendered by DEFORAF on
17 October 1988 that said BLR Order violated ICMC's diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for
Certiorari with Preliminary Injunction assailing the BLR Order.
On 28 November 1988, the Court issued a Temporary Restraining Order
enjoining the holding of the certification election.
On 10 January 1989, the DEFORAF, through its Legal Adviser, retired
Justice Jorge C. Coquia of the Court of Appeals, filed a Motion for
Intervention alleging that, as the highest executive department with the
competence and authority to act on matters involving diplomatic immunity
and privileges, and tasked with the conduct of Philippine diplomatic and
consular relations with foreign governments and UN organizations, it has a
legal interest in the outcome of this case.
Over the opposition of the Solicitor General, the Court allowed DEFORAF
intervention.
On 12 July 1989, the Second Division gave due course to the ICMC Petition
and required the submittal of memoranda by the parties, which has been
complied with.
As initially stated, the issue is whether or not the grant of diplomatic
privileges and immunites to ICMC extends to immunity from the application
of Philippine labor laws.
ICMC sustains the affirmative of the proposition citing (1) its Memorandum
of Agreement with the Philippine Government giving it the status of a
specialized agency, (infra); (2) the Convention on the Privileges and
Immunities of Specialized Agencies, adopted by the UN General Assembly
on 21 November 1947 and concurred in by the Philippine Senate through
Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification
was signed by the President on 30 August 1949 and deposited with the UN
on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987
Constitution, which declares that the Philippines adopts the generally
accepted principles of international law as part of the law of the land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and
seeks an affirmance of the DEFORAF determination that the BLR Order for
a certification election among the ICMC employees is violative of the
diplomatic immunity of said organization.
9
Respondent BLR Director, on the other hand, with whom the Solicitor
General agrees, cites State policy and Philippine labor laws to justify its
assailed Order, particularly, Article II, Section 18 and Article III, Section 8 of
the 1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as
amended, ibid. In addition, she contends that a certification election is not a
litigation but a mere investigation of a non-adversary, fact-finding character.
It is not a suit against ICMC its property, funds or assets, but is the sole
concern of the workers themselves.
B. G.R. No. 89331 — (The International Rice Research Institute [IRRI]
Case).
Before a Decision could be rendered in the ICMC Case, the Third Division,
on 11 December 1989, resolved to consolidate G.R. No. 89331 pending
before it with G.R. No. 85750, the lower-numbered case pending with the
Second Division, upon manifestation by the Solicitor General that both cases
involve similar issues.
The facts disclose that on 9 December 1959, the Philippine Government and
the Ford and Rockefeller Foundations signed a Memorandum of
Understanding establishing the International Rice Research Institute (IRRI)
at Los Baños, Laguna. It was intended to be an autonomous, philanthropic,
tax-free, non-profit, non-stock organization designed to carry out the
principal objective of conducting "basic research on the rice plant, on all
phases of rice production, management, distribution and utilization with a
view to attaining nutritive and economic advantage or benefit for the people
of Asia and other major rice-growing areas through improvement in quality
and quantity of rice."
Initially, IRRI was organized and registered with the Securities and
Exchange Commission as a private corporation subject to all laws and
regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19
April 1979, IRRI was granted the status, prerogatives, privileges and
immunities of an international organization.
The Organized Labor Association in Line Industries and Agriculture
(OLALIA), is a legitimate labor organization with an existing local union,
the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in
respondent IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct Certification
Election with Region IV, Regional Office of the Department of Labor and
Employment (DOLE).
IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it
the status of an international organization and granting it immunity from all
civil, criminal and administrative proceedings under Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on
the basis of Pres. Decree No. 1620 and dismissed the Petition for Direct
Certification.
On appeal, the BLR Director, who is the public respondent in the ICMC
Case, set aside the Med-Arbiter's Order and authorized the calling of a
certification election among the rank-and-file employees of IRRI. Said
Director relied on Article 243 of the Labor Code, as amended, infra and
Article XIII, Section 3 of the 1987 Constitution, 1 and held that "the
immunities and privileges granted to IRRI do not include exemption from
coverage of our Labor Laws." Reconsideration sought by IRRI was denied.
On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside
the BLR Director's Order, dismissed the Petition for Certification Election,
and held that the grant of specialized agency status by the Philippine
Government to the IRRI bars DOLE from assuming and exercising
jurisdiction over IRRI Said Resolution reads in part as follows:
Presidential Decree No. 1620 which grants to the IRRI the
status, prerogatives, privileges and immunities of an
international organization is clear and explicit. It provides in
categorical terms that:
Art. 3 — The Institute shall enjoy immunity from any penal,
civil and administrative proceedings, except insofar as
immunity has been expressly waived by the Director-
General of the Institution or his authorized representative.
Verily, unless and until the Institute expressly waives its
immunity, no summons, subpoena, orders, decisions or
proceedings ordered by any court or administrative or quasi-
judicial agency are enforceable as against the Institute. In the
10
 case at bar there was no such waiver made by the Director-
General of the Institute. Indeed, the Institute, at the very first
opportunity already vehemently questioned the jurisdiction
of this Department by filing an ex-parte motion to dismiss
the case.
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave
abuse of discretion by respondent Secretary of Labor in upholding IRRI's
diplomatic immunity.
The Third Division, to which the case was originally assigned, required the
respondents to comment on the petition. In a Manifestation filed on 4 August
1990, the Secretary of Labor declared that it was "not adopting as his
own" the decision of the BLR Director in the ICMC Case as well as the
Comment of the Solicitor General sustaining said Director. The last pleading
was filed by IRRI on 14 August 1990.
Instead of a Comment, the Solicitor General filed a Manifestation and
Motion praying that he be excused from filing a comment "it appearing that
in the earlier case of International Catholic Migration Commission v. Hon.
Pura Calleja, G.R. No. 85750. the Office of the Solicitor General had
sustained the stand of Director Calleja on the very same issue now before it,
which position has been superseded by respondent Secretary of Labor in
G.R. No. 89331," the present case. The Court acceded to the Solicitor
General's prayer.
The Court is now asked to rule upon whether or not the Secretary of Labor
committed grave abuse of discretion in dismissing the Petition for
Certification Election filed by Kapisanan.
Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI
the status, privileges, prerogatives and immunities of an international
organization, invoked by the Secretary of Labor, is unconstitutional in so far
as it deprives the Filipino workers of their fundamental and constitutional
right to form trade unions for the purpose of collective bargaining as
enshrined in the 1987 Constitution.
A procedural issue is also raised. Kapisanan faults respondent Secretary of
Labor for entertaining IRRI'S appeal from the Order of the Director of the
Bureau of Labor Relations directing the holding of a certification election.
Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of
the Omnibus Rules Implementing the Labor Code, the Order of the BLR
Director had become final and unappeable and that, therefore, the Secretary
of Labor had no more jurisdiction over the said appeal.
On the other hand, in entertaining the appeal, the Secretary of Labor relied on
Section 25 of Rep. Act. No. 6715, which took effect on 21 March 1989,
providing for the direct filing of appeal from the Med-Arbiter to the Office of
the Secretary of Labor and Employment instead of to the Director of the
Bureau of Labor Relations in cases involving certification election orders.
III
Findings in Both Cases.
There can be no question that diplomatic immunity has, in fact, been granted
ICMC and IRRI.
Article II of the Memorandum of Agreement between the Philippine
Government and ICMC provides that ICMC shall have a status "similar to
that of a specialized agency." Article III, Sections 4 and 5 of the Convention
on the Privileges and Immunities of Specialized Agencies, adopted by the
UN General Assembly on 21 November 1947 and concurred in by the
Philippine Senate through Resolution No. 19 on 17 May 1949, explicitly
provides:
Art. III, Section 4. The specialized agencies, their property
and assets, wherever located and by whomsoever held,
shall enjoy immunity from every form of legal process except
insofar as in any particular case they have expressly waived
their immunity. It is, however, understood that no waiver of
immunity shall extend to any measure of execution.
Sec. 5. — The premises of the specialized agencies shall be
inviolable. The property and assets of the specialized
agencies, wherever located and by whomsoever held shall be
immune from search, requisition, confiscation, expropriation
and any other form of interference, whether by executive,
administrative, judicial or legislative action. (Emphasis
supplied).
11
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its
grant of immunity, thus:
Art. 3. Immunity from Legal Process. — The Institute shall
enjoy immunity from any penal, civil and administrative
proceedings, except insofar as that immunity has been
expressly waived by the Director-General of the Institute or
his authorized representatives.
Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S
invocation of immunity when in a Memorandum, dated 17 October 1988, it
expressed the view that "the Order of the Director of the Bureau of Labor
Relations dated 21 September 1988 for the conduct of Certification Election
within ICMC violates the diplomatic immunity of the organization."
Similarly, in respect of IRRI, the DEFORAF speaking through The Acting
Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987,
to the Secretary of Labor, maintained that "IRRI enjoys immunity from the
jurisdiction of DOLE in this particular instance."
The foregoing opinions constitute a categorical recognition by the Executive
Branch of the Government that ICMC and IRRI enjoy immunities accorded
to international organizations, which determination has been held to be a
political question conclusive upon the Courts in order not to embarrass a
political department of Government.
It is a recognized principle of international law and under our
system of separation of powers that diplomatic immunity is
essentially a political question and courts should refuse to
look beyond a determination by the executive branch of the
government, and where the plea of diplomatic immunity is
recognized and affirmed by the executive branch of the
government as in the case at bar, it is then the duty of the
courts to accept the claim of immunity upon appropriate
suggestion by the principal law officer of the government . . .
or other officer acting under his direction. Hence, in
adherence to the settled principle that courts may not so
exercise their jurisdiction . . . as to embarrass the executive
arm of the government in conducting foreign relations, it is
accepted doctrine that in such cases the judicial department
of (this) government follows the action of the political
branch and will not embarrass the latter by assuming an
antagonistic jurisdiction. 3
A brief look into the nature of international organizations and specialized
agencies is in order. The term "international organization" is generally used
to describe an organization set up by agreement between two or more
states. 4 Under contemporary international law, such organizations are
endowed with some degree of international legal personality 5 such that they
are capable of exercising specific rights, duties and powers. 6 They are
organized mainly as a means for conducting general international business in
which the member states have an interest. 7 The United Nations, for instance,
is an international organization dedicated to the propagation of world peace.
"Specialized agencies" are international organizations having functions in
particular fields. The term appears in Articles 57 8 and 63 9 of the Charter of
the United Nations:
The Charter, while it invests the United Nations with the
general task of promoting progress and international
cooperation in economic, social, health, cultural, educational
and related matters, contemplates that these tasks will be
mainly fulfilled not by organs of the United Nations itself
but by autonomous international organizations established by
inter-governmental agreements outside the United Nations.
There are now many such international agencies having
functions in many different fields, e.g. in posts,
telecommunications, railways, canals, rivers, sea transport,
civil aviation, meteorology, atomic energy, finance, trade,
education and culture, health and refugees. Some are
virtually world-wide in their membership, some are regional
or otherwise limited in their membership. The Charter
provides that those agencies which have "wide international
responsibilities" are to be brought into relationship with the
United Nations by agreements entered into between them
and the Economic and Social Council, are then to be known
as "specialized agencies." 10
The rapid growth of international organizations under contemporary
international law has paved the way for the development of the concept of
international immunities.
12
 It is now usual for the constitutions of international
organizations to contain provisions conferring certain
immunities on the organizations themselves, representatives
of their member states and persons acting on behalf of the
organizations. A series of conventions, agreements and
protocols defining the immunities of various international
organizations in relation to their members generally are now
widely in force; . . . 11
There are basically three propositions underlying the grant of international
immunities to international organizations. These principles, contained in the
ILO Memorandum are stated thus: 1) international institutions should have a
status which protects them against control or interference by any one
government in the performance of functions for the effective discharge of
which they are responsible to democratically constituted international bodies
in which all the nations concerned are represented; 2) no country should
derive any national financial advantage by levying fiscal charges on common
international funds; and 3) the international organization should, as a
collectivity of States members, be accorded the facilities for the conduct of
its official business customarily extended to each other by its individual
member States. 12 The theory behind all three propositions is said to be
essentially institutional in character. "It is not concerned with the status,
dignity or privileges of individuals, but with the elements of functional
independence necessary to free international institutions from national
control and to enable them to discharge their responsibilities impartially on
behalf of all their members. 13 The raison d'etre for these immunities is the
assurance of unimpeded performance of their functions by the agencies
concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly
necessitated by their international character and respective purposes. The
objective is to avoid the danger of partiality and interference by the host
country in their internal workings. The exercise of jurisdiction by the
Department of Labor in these instances would defeat the very purpose of
immunity, which is to shield the affairs of international organizations, in
accordance with international practice, from political pressure or control by
the host country to the prejudice of member States of the organization, and to
ensure the unhampered performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means deprives
labor of its basic rights, which are guaranteed by Article II, Section
18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987
Constitution; and implemented by Articles 243 and 246 of the Labor
Code, 16 relied on by the BLR Director and by Kapisanan.
For, ICMC employees are not without recourse whenever there are disputes
to be settled. Section 31 of the Convention on the Privileges and Immunities
of the Specialized Agencies of the United Nations 17 provides that "each
specialized agency shall make provision for appropriate modes of settlement
of: (a) disputes arising out of contracts or other disputes of private character
to which the specialized agency is a party." Moreover, pursuant to Article IV
of the Memorandum of Agreement between ICMC the the Philippine
Government, whenever there is any abuse of privilege by ICMC, the
Government is free to withdraw the privileges and immunities accorded.
Thus:
Art. IV. Cooperation with Government Authorities. — 1.
The Commission shall cooperate at all times with the
appropriate authorities of the Government to ensure the
observance of Philippine laws, rules and regulations,
facilitate the proper administration of justice and prevent the
occurrences of any abuse of the privileges and immunities
granted its officials and alien employees in Article III of this
Agreement to the Commission.
2. In the event that the Government determines that there has
been an abuse of the privileges and immunities granted
under this Agreement, consultations shall be held between
the Government and the Commission to determine whether
any such abuse has occurred and, if so, the Government shall
withdraw the privileges and immunities granted the
Commission and its officials.
Neither are the employees of IRRI without remedy in case of dispute with
management as, in fact, there had been organized a forum for better
management-employee relationship as evidenced by the formation of the
Council of IRRI Employees and Management (CIEM) wherein "both
management and employees were and still are represented for purposes of
maintaining mutual and beneficial cooperation between IRRI and its
employees." The existence of this Union factually and tellingly belies the
argument that Pres. Decree No. 1620, which grants to IRRI the status,
13
privileges and immunities of an international organization, deprives its
employees of the right to self-organization.
The immunity granted being "from every form of legal process except in so
far as in any particular case they have expressly waived their immunity," it is
inaccurate to state that a certification election is beyond the scope of that
immunity for the reason that it is not a suit against ICMC. A certification
election cannot be viewed as an independent or isolated process. It could
tugger off a series of events in the collective bargaining process together with
related incidents and/or concerted activities, which could inevitably involve
ICMC in the "legal process," which includes "any penal, civil and
administrative proceedings." The eventuality of Court litigation is neither
remote and from which international organizations are precisely shielded to
safeguard them from the disruption of their functions. Clauses on
jurisdictional immunity are said to be standard provisions in the constitutions
of international Organizations. "The immunity covers the organization
concerned, its property and its assets. It is equally applicable to
proceedings in personam and proceedings in rem." 18
We take note of a Manifestation, dated 28 September 1989, in the ICMC
Case (p. 161, Rollo), wherein TUPAS calls attention to the case
entitled "International Catholic Migration Commission v. NLRC, et als.,
(G.R. No. 72222, 30 January 1989, 169 SCRA 606), and claims that, having
taken cognizance of that dispute (on the issue of payment of salary for the
unexpired portion of a six-month probationary employment), the Court is
now estopped from passing upon the question of DOLE jurisdiction petition
over ICMC.
We find no merit to said submission. Not only did the facts of said
controversy occur between 1983-1985, or before the grant to ICMC on 15
July 1988 of the status of a specialized agency with corresponding
immunities, but also because ICMC in that case did not invoke its immunity
and, therefore, may be deemed to have waived it, assuming that during that
period (1983-1985) it was tacitly recognized as enjoying such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state that the
Decision of the BLR Director, dated 15 February 1989, had not become final
because of a Motion for Reconsideration filed by IRRI Said Motion was
acted upon only on 30 March 1989 when Rep. Act No. 6715, which provides
for direct appeals from the Orders of the Med-Arbiter to the Secretary of
Labor in certification election cases either from the order or the results of the
election itself, was already in effect, specifically since 21 March 1989.
Hence, no grave abuse of discretion may be imputed to respondent Secretary
of Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's
allegations. The pertinent portion of that law provides:
Art. 259. — Any party to an election may appeal the order or
results of the election as determined by the Med-
Arbiter directly to the Secretary of Labor and Employment
on the ground that the rules and regulations or parts thereof
established by the Secretary of Labor and Employment for
the conduct of the election have been violated. Such appeal
shall be decided within 15 calendar days (Emphasis
supplied).
En passant, the Court is gratified to note that the heretofore antagonistic
positions assumed by two departments of the executive branch of
government have been rectified and the resultant embarrassment to the
Philippine Government in the eyes of the international community now,
hopefully, effaced.
WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is
GRANTED, the Order of the Bureau of Labor Relations for certification
election is SET ASIDE, and the Temporary Restraining Order earlier issued
is made PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse
of discretion having been committed by the Secretary of Labor and
Employment in dismissing the Petition for Certification Election.
No pronouncement as to costs.
14
G.R. No. L-25246 September 12, 1974
BENJAMIN VICTORIANO, plaintiff-appellee,
vs.
ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE
FACTORY, INC., defendants, ELIZALDE ROPE WORKERS'
UNION, defendant-appellant.
ZALDIVAR, J.:p
Appeal to this Court on purely questions of law from the decision of the
Court of First Instance of Manila in its Civil Case No. 58894.
The undisputed facts that spawned the instant case follow:
Benjamin Victoriano (hereinafter referred to as Appellee), a member of the
religious sect known as the "Iglesia ni Cristo", had been in the employ of the
Elizalde Rope Factory, Inc. (hereinafter referred to as Company) since 1958.
As such employee, he was a member of the Elizalde Rope Workers' Union
(hereinafter referred to as Union) which had with the Company a collective
bargaining agreement containing a closed shop provision which reads as
follows:
Membership in the Union shall be required as a condition of
employment for all permanent employees workers covered
by this Agreement.
The collective bargaining agreement expired on March 3, 1964 but was
renewed the following day, March 4, 1964.
Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its
amendment by Republic Act No. 3350, the employer was not precluded
"from making an agreement with a labor organization to require as a
condition of employment membership therein, if such labor organization is
the representative of the employees." On June 18, 1961, however, Republic
Act No. 3350 was enacted, introducing an amendment to — paragraph (4)
subsection (a) of section 4 of Republic Act No. 875, as follows: ... "but such
agreement shall not cover members of any religious sects which prohibit
affiliation of their members in any such labor organization".
Being a member of a religious sect that prohibits the affiliation of its
members with any labor organization, Appellee presented his resignation to
appellant Union in 1962, and when no action was taken thereon, he reiterated
his resignation on September 3, 1974. Thereupon, the Union wrote a formal
letter to the Company asking the latter to separate Appellee from the service
in view of the fact that he was resigning from the Union as a member. The
management of the Company in turn notified Appellee and his counsel that
unless the Appellee could achieve a satisfactory arrangement with the Union,
the Company would be constrained to dismiss him from the service. This
prompted Appellee to file an action for injunction, docketed as Civil Case
No. 58894 in the Court of First Instance of Manila to enjoin the Company
and the Union from dismissing Appellee.1 In its answer, the Union invoked
the "union security clause" of the collective bargaining agreement; assailed
the constitutionality of Republic Act No. 3350; and contended that the Court
had no jurisdiction over the case, pursuant to Republic Act No. 875, Sections
24 and 9 (d) and (e).2 Upon the facts agreed upon by the parties during the
pre-trial conference, the Court a quo rendered its decision on August 26,
1965, the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, judgment is rendered
enjoining the defendant Elizalde Rope Factory, Inc. from
dismissing the plaintiff from his present employment and
sentencing the defendant Elizalde Rope Workers' Union to
pay the plaintiff P500 for attorney's fees and the costs of this
action.3
From this decision, the Union appealed directly to this Court on purely
questions of law, assigning the following errors:
I. That the lower court erred when it did not rule that
Republic Act No. 3350 is unconstitutional.
II. That the lower court erred when it sentenced appellant
herein to pay plaintiff the sum of P500 as attorney's fees and
the cost thereof.
In support of the alleged unconstitutionality of Republic Act No. 3350, the
Union contented, firstly, that the Act infringes on the fundamental right to
form lawful associations; that "the very phraseology of said Republic Act
3350, that membership in a labor organization is banned to all those
belonging to such religious sect prohibiting affiliation with any labor
15
organization"4 , "prohibits all the members of a given religious sect from
joining any labor union if such sect prohibits affiliations of their members
thereto"5 ; and, consequently, deprives said members of their constitutional
right to form or join lawful associations or organizations guaranteed by the
Bill of Rights, and thus becomes obnoxious to Article III, Section 1 (6) of the
1935 Constitution. 6
Secondly, the Union contended that Republic Act No. 3350 is
unconstitutional for impairing the obligation of contracts in that, while the
Union is obliged to comply with its collective bargaining agreement
containing a "closed shop provision," the Act relieves the employer from its
reciprocal obligation of cooperating in the maintenance of union membership
as a condition of employment; and that said Act, furthermore, impairs the
Union's rights as it deprives the union of dues from members who, under the
Act, are relieved from the obligation to continue as such members.7
Thirdly, the Union contended that Republic Act No. 3350 discriminatorily
favors those religious sects which ban their members from joining labor
unions, in violation of Article Ill, Section 1 (7) of the 1935 Constitution; and
while said Act unduly protects certain religious sects, it leaves no rights or
protection to labor organizations.8
Fourthly, Republic Act No. 3350, asserted the Union, violates the
constitutional provision that "no religious test shall be required for the
exercise of a civil right," in that the laborer's exercise of his civil right to join
associations for purposes not contrary to law has to be determined under the
Act by his affiliation with a religious sect; that conversely, if a worker has to
sever his religious connection with a sect that prohibits membership in a
labor organization in order to be able to join a labor organization, said Act
would violate religious freedom.9
Fifthly, the Union contended that Republic Act No. 3350, violates the "equal
protection of laws" clause of the Constitution, it being a discriminately
legislation, inasmuch as by exempting from the operation of closed shop
agreement the members of the "Iglesia ni Cristo", it has granted said
members undue advantages over their fellow workers, for while the Act
exempts them from union obligation and liability, it nevertheless entitles
them at the same time to the enjoyment of all concessions, benefits and other
emoluments that the union might secure from the employer. 10
Sixthly, the Union contended that Republic Act No. 3350 violates the
constitutional provision regarding the promotion of social justice. 11
Appellant Union, furthermore, asserted that a "closed shop provision" in a
collective bargaining agreement cannot be considered violative of religious
freedom, as to call for the amendment introduced by Republic Act No.
3350; 12and that unless Republic Act No. 3350 is declared unconstitutional,
trade unionism in this country would be wiped out as employers would prefer
to hire or employ members of the Iglesia ni Cristo in order to do away with
labor organizations. 13
Appellee, assailing appellant's arguments, contended that Republic Act No.
3350 does not violate the right to form lawful associations, for the right to
join associations includes the right not to join or to resign from a labor
organization, if one's conscience does not allow his membership therein, and
the Act has given substance to such right by prohibiting the compulsion of
workers to join labor organizations; 14 that said Act does not impair the
obligation of contracts for said law formed part of, and was incorporated into,
the terms of the closed shop agreement; 15 that the Act does not violate the
establishment of religion clause or separation of Church and State, for
Congress, in enacting said law, merely accommodated the religious needs of
those workers whose religion prohibits its members from joining labor
unions, and balanced the collective rights of organized labor with the
constitutional right of an individual to freely exercise his chosen religion;
that the constitutional right to the free exercise of one's religion has primacy
and preference over union security measures which are merely contractual 16;
that said Act does not violate the constitutional provision of equal protection,
for the classification of workers under the Act depending on their religious
tenets is based on substantial distinction, is germane to the purpose of the
law, and applies to all the members of a given class; 17 that said Act, finally,
does not violate the social justice policy of the Constitution, for said Act was
enacted precisely to equalize employment opportunities for all citizens in the
midst of the diversities of their religious beliefs." 18
I. Before We proceed to the discussion of the first assigned error, it is
necessary to premise that there are some thoroughly established principles
which must be followed in all cases where questions of constitutionality as
obtains in the instant case are involved. All presumptions are indulged in
favor of constitutionality; one who attacks a statute, alleging
unconstitutionality must prove its invalidity beyond a reasonable doubt, that
a law may work hardship does not render it unconstitutional; that if any
16
reasonable basis may be conceived which supports the statute, it will be
upheld, and the challenger must negate all possible bases; that the courts are
not concerned with the wisdom, justice, policy, or expediency of a statute;
and that a liberal interpretation of the constitution in favor of the
constitutionality of legislation should be adopted. 19
1. Appellant Union's contention that Republic Act No. 3350 prohibits and
bans the members of such religious sects that forbid affiliation of their
members with labor unions from joining labor unions appears nowhere in the
wording of Republic Act No. 3350; neither can the same be deduced by
necessary implication therefrom. It is not surprising, therefore, that appellant,
having thus misread the Act, committed the error of contending that said Act
is obnoxious to the constitutional provision on freedom of association.
Both the Constitution and Republic Act No. 875 recognize freedom of
association. Section 1 (6) of Article III of the Constitution of 1935, as well as
Section 7 of Article IV of the Constitution of 1973, provide that the right to
form associations or societies for purposes not contrary to law shall not be
abridged. Section 3 of Republic Act No. 875 provides that employees shall
have the right to self-organization and to form, join of assist labor
organizations of their own choosing for the purpose of collective bargaining
and to engage in concerted activities for the purpose of collective bargaining
and other mutual aid or protection. What the Constitution and the Industrial
Peace Act recognize and guarantee is the "right" to form or join associations.
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. 20 It is clear, therefore, that the right to join a union includes the right to
abstain from joining any union. 21 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 right to refrain from joining labor organizations recognized by Section 3
of the Industrial Peace Act is, however, limited. The legal protection granted
to such right to refrain from joining is withdrawn by operation of law, where
a labor union and an employer have agreed on a closed shop, by virtue of
which the employer may employ only member of the collective bargaining
union, and the employees must continue to be members of the union for the
duration of the contract in order to keep their jobs. Thus Section 4 (a) (4) of
the Industrial Peace Act, before its amendment by Republic Act No. 3350,
provides that although it would be an unfair labor practice for an employer
"to discriminate in regard to hire or tenure of employment or any term or
condition of employment to encourage or discourage membership in any
labor organization" the employer is, however, not precluded "from making an
agreement with a labor organization to require as a condition of employment
membership therein, if such labor organization is the representative of the
employees". By virtue, therefore, of a closed shop agreement, before the
enactment of Republic Act No. 3350, if any person, regardless of his
religious beliefs, wishes to be employed or to keep his employment, he must
become a member of the collective bargaining union. Hence, the right of said
employee not to join the labor union is curtailed and withdrawn.
To that all-embracing coverage of the closed shop arrangement, Republic Act
No. 3350 introduced an exception, when it added to Section 4 (a) (4) of the
Industrial Peace Act the following proviso: "but such agreement shall not
cover members of any religious sects which prohibit affiliation of their
members in any such labor organization". Republic Act No. 3350 merely
excludes ipso jure from the application and coverage of the closed shop
agreement the employees belonging to any religious sects which prohibit
affiliation of their members with any labor organization. What the exception
provides, therefore, is that members of said religious sects cannot be
compelled or coerced to join labor unions even when said unions have closed
shop agreements with the employers; that in spite of any closed shop
agreement, members of said religious sects cannot be refused employment or
dismissed from their jobs on the sole ground that they are not members of the
collective bargaining union. It is clear, therefore, that the assailed Act, far
from infringing the constitutional provision on freedom of association,
upholds and reinforces it. It does not prohibit the members of said religious
sects from affiliating with labor unions. It still leaves to said members the
liberty and the power to affiliate, or not to affiliate, with labor unions. If,
17
notwithstanding their religious beliefs, the members of said religious sects
prefer to sign up with the labor union, they can do so. If in deference and
fealty to their religious faith, they refuse to sign up, they can do so; the law
does not coerce them to join; neither does the law prohibit them from joining;
and neither may the employer or labor union compel them to join. Republic
Act No. 3350, therefore, does not violate the constitutional provision on
freedom of association.
2. Appellant Union also contends that the Act is unconstitutional for
impairing the obligation of its contract, specifically, the "union security
clause" embodied in its Collective Bargaining Agreement with the Company,
by virtue of which "membership in the union was required as a condition for
employment for all permanent employees workers". This agreement was
already in existence at the time Republic Act No. 3350 was enacted on June
18, 1961, and it cannot, therefore, be deemed to have been incorporated into
the agreement. But by reason of this amendment, Appellee, as well as others
similarly situated, could no longer be dismissed from his job even if he
should cease to be a member, or disaffiliate from the Union, and the
Company could continue employing him notwithstanding his disaffiliation
from the Union. The Act, therefore, introduced a change into the express
terms of the union security clause; the Company was partly absolved by law
from the contractual obligation it had with the Union of employing only
Union members in permanent positions, It cannot be denied, therefore, that
there was indeed an impairment of said union security clause.
According to Black, any statute which introduces a change into the express
terms of the contract, or its legal construction, or its validity, or its discharge,
or the remedy for its enforcement, impairs the contract. The extent of the
change is not material. It is not a question of degree or manner or cause, but
of encroaching in any respect on its obligation or dispensing with any part of
its force. There is an impairment of the contract if either party is absolved by
law from its performance. 22 Impairment has also been predicated on laws
which, without destroying contracts, derogate from substantial contractual
rights. 23
It should not be overlooked, however, that the prohibition to impair the
obligation of contracts is not absolute and unqualified. The prohibition is
general, affording a broad outline and requiring construction to fill in the
details. The prohibition is not to be read with literal exactness like a
mathematical formula, for it prohibits unreasonable impairment only. 24 In
spite of the constitutional prohibition, the State continues to possess authority
to safeguard the vital interests of its people. Legislation appropriate to
safeguarding said interests may modify or abrogate contracts already in
effect. 25 For not only are existing laws read into contracts in order to fix the
obligations as between the parties, but the reservation of essential attributes
of sovereign power is also read into contracts as a postulate of the legal
order. All contracts made with reference to any matter that is subject to
regulation under the police power must be understood as made in reference to
the possible exercise of that power. 26 Otherwise, important and valuable
reforms may be precluded by the simple device of entering into contracts for
the purpose of doing that which otherwise may be prohibited. The policy of
protecting contracts against impairment presupposes the maintenance of a
government by virtue of which contractual relations are worthwhile a
government which retains adequate authority to secure the peace and good
order of society. The contract clause of the Constitution must, therefore, be
not only in harmony with, but also in subordination to, in appropriate
instances, the reserved power of the state to safeguard the vital interests of
the people. It follows that not all legislations, which have the effect of
impairing a contract, are obnoxious to the constitutional prohibition as to
impairment, and a statute passed in the legitimate exercise of police power,
although it incidentally destroys existing contract rights, must be upheld by
the courts. This has special application to contracts regulating relations
between capital and labor which are not merely contractual, and said labor
contracts, for being impressed with public interest, must yield to the common
good. 27
In several occasions this Court declared that the prohibition against impairing
the obligations of contracts has no application to statutes relating to public
subjects within the domain of the general legislative powers of the state
involving public welfare. 28 Thus, this Court also held that the Blue Sunday
Law was not an infringement of the obligation of a contract that required the
employer to furnish work on Sundays to his employees, the law having been
enacted to secure the well-being and happiness of the laboring class, and
being, furthermore, a legitimate exercise of the police power. 29
In order to determine whether legislation unconstitutionally impairs contract
obligations, no unchanging yardstick, applicable at all times and under all
circumstances, by which the validity of each statute may be measured or
determined, has been fashioned, but every case must be determined upon its
own circumstances. Legislation impairing the obligation of contracts can be
sustained when it is enacted for the promotion of the general good of the
people, and when the means adopted to secure that end are reasonable. Both
18
the end sought and the means adopted must be legitimate, i.e., within the
scope of the reserved power of the state construed in harmony with the
constitutional limitation of that power. 30
What then was the purpose sought to be achieved by Republic Act No. 3350?
Its purpose was to insure freedom of belief and religion, and to promote the
general welfare by preventing discrimination against those members of
religious sects which prohibit their members from joining labor unions,
confirming thereby their natural, statutory and constitutional right to work,
the fruits of which work are usually the only means whereby they can
maintain their own life and the life of their dependents. It cannot be gainsaid
that said purpose is legitimate.
The questioned Act also provides protection to members of said religious
sects against two aggregates of group strength from which the individual
needs protection. The individual employee, at various times in his working
life, is confronted by two aggregates of power — collective labor, directed by
a union, and collective capital, directed by management. The union, an
institution developed to organize labor into a collective force and thus protect
the individual employee from the power of collective capital, is,
paradoxically, both the champion of employee rights, and a new source of
their frustration. Moreover, when the Union interacts with management, it
produces yet a third aggregate of group strength from which the individual
also needs protection — the collective bargaining relationship. 31
The aforementioned purpose of the amendatory law is clearly seen in the
Explanatory Note to House Bill No. 5859, which later became Republic Act
No. 3350, as follows:
It would be unthinkable indeed to refuse employing a person
who, on account of his religious beliefs and convictions,
cannot accept membership in a labor organization although
he possesses all the qualifications for the job. This is
tantamount to punishing such person for believing in a
doctrine he has a right under the law to believe in. The law
would not allow discrimination to flourish to the detriment
of those whose religion discards membership in any labor
organization. Likewise, the law would not commend the
deprivation of their right to work and pursue a modest means
of livelihood, without in any manner violating their religious
faith and/or belief. 32
It cannot be denied, furthermore, that the means adopted by the Act to
achieve that purpose — exempting the members of said religious sects from
coverage of union security agreements — is reasonable.
It may not be amiss to point out here that the free exercise of religious
profession or belief is superior to contract rights. In case of conflict, the latter
must, therefore, yield to the former. The Supreme Court of the United States
has also declared on several occasions that the rights in the First Amendment,
which include freedom of religion, enjoy a preferred position in the
constitutional system. 33 Religious freedom, although not unlimited, is a
fundamental personal right and liberty, 34 and has a preferred position in the
hierarchy of values. Contractual rights, therefore, must yield to freedom of
religion. It is only where unavoidably necessary to prevent an immediate and
grave danger to the security and welfare of the community that infringement
of religious freedom may be justified, and only to the smallest extent
necessary to avoid the danger.
3. In further support of its contention that Republic Act No. 3350 is
unconstitutional, appellant Union averred that said Act discriminates in favor
of members of said religious sects in violation of Section 1 (7) of Article Ill
of the 1935 Constitution, and which is now Section 8 of Article IV of the
1973 Constitution, which provides:
No law shall be made respecting an establishment of
religion, or prohibiting the free exercise thereof, and the free
exercise and enjoyment of religious profession and worship,
without discrimination and preference, shall forever be
allowed. No religious test shall be required for the exercise
of civil or political rights.
The constitutional provision into only prohibits legislation for the support of
any religious tenets or the modes of worship of any sect, thus forestalling
compulsion by law of the acceptance of any creed or the practice of any form
of worship, 35 but also assures the free exercise of one's chosen form of
religion within limits of utmost amplitude. It has been said that the religion
clauses of the Constitution are all designed to protect the broadest possible
liberty of conscience, to allow each man to believe as his conscience directs,
to profess his beliefs, and to live as he believes he ought to live, consistent
with the liberty of others and with the common good. 36 Any legislation
whose effect or purpose is to impede the observance of one or all religions,
or to discriminate invidiously between the religions, is invalid, even though
19
the burden may be characterized as being only indirect. 37 But if the stage
regulates conduct by enacting, within its power, a general law which has for
its purpose and effect to advance the state's secular goals, the statute is valid
despite its indirect burden on religious observance, unless the state can
accomplish its purpose without imposing such burden. 38
In Aglipay v. Ruiz 39 , this Court had occasion to state that the government
should not be precluded from pursuing valid objectives secular in character
even if the incidental result would be favorable to a religion or sect. It has
likewise been held that the statute, in order to withstand the strictures of
constitutional prohibition, must have a secular legislative purpose and a
primary effect that neither advances nor inhibits religion. 40 Assessed by
these criteria, Republic Act No. 3350 cannot be said to violate the
constitutional inhibition of the "no-establishment" (of religion) clause of the
Constitution.
The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not
spiritual or religious or holy and eternal. It was intended to serve the secular
purpose of advancing the constitutional right to the free exercise of religion,
by averting that certain persons be refused work, or be dismissed from work,
or be dispossessed of their right to work and of being impeded to pursue a
modest means of livelihood, by reason of union security agreements. To help
its citizens to find gainful employment whereby they can make a living to
support themselves and their families is a valid objective of the state. In fact,
the state is enjoined, in the 1935 Constitution, to afford protection to labor,
and regulate the relations between labor and capital and industry. 41 More so
now in the 1973 Constitution where it is mandated that "the State shall afford
protection to labor, promote full employment and equality in employment,
ensure equal work opportunities regardless of sex, race or creed and regulate
the relation between workers and employers. 42
The primary effects of the exemption from closed shop agreements in favor
of members of religious sects that prohibit their members from affiliating
with a labor organization, is the protection of said employees against the
aggregate force of the collective bargaining agreement, and relieving certain
citizens of a burden on their religious beliefs; and by eliminating to a certain
extent economic insecurity due to unemployment, which is a serious menace
to the health, morals, and welfare of the people of the State, the Act also
promotes the well-being of society. It is our view that the exemption from the
effects of closed shop agreement does not directly advance, or diminish, the
interests of any particular religion. Although the exemption may benefit
those who are members of religious sects that prohibit their members from
joining labor unions, the benefit upon the religious sects is merely incidental
and indirect. The "establishment clause" (of religion) does not ban regulation
on conduct whose reason or effect merely happens to coincide or harmonize
with the tenets of some or all religions. 43 The free exercise clause of the
Constitution has been interpreted to require that religious exercise be
preferentially aided. 44
We believe that in enacting Republic Act No. 3350, Congress acted
consistently with the spirit of the constitutional provision. It acted merely to
relieve the exercise of religion, by certain persons, of a burden that is
imposed by union security agreements. It was Congress itself that imposed
that burden when it enacted the Industrial Peace Act (Republic Act 875), and,
certainly, Congress, if it so deems advisable, could take away the same
burden. It is certain that not every conscience can be accommodated by all
the laws of the land; but when general laws conflict with scrupples of
conscience, exemptions ought to be granted unless some "compelling state
interest" intervenes. 45 In the instant case, We see no such compelling state
interest to withhold exemption.
Appellant bewails that while Republic Act No. 3350 protects members of
certain religious sects, it leaves no right to, and is silent as to the protection
of, labor organizations. The purpose of Republic Act No. 3350 was not to
grant rights to labor unions. The rights of labor unions are amply provided
for in Republic Act No. 875 and the new Labor Code. As to the lamented
silence of the Act regarding the rights and protection of labor unions, suffice
it to say, first, that the validity of a statute is determined by its provisions, not
by its silence 46 ; and, second, the fact that the law may work hardship does
not render it unconstitutional. 47
It would not be amiss to state, regarding this matter, that to compel persons to
join and remain members of a union to keep their jobs in violation of their
religious scrupples, would hurt, rather than help, labor unions, Congress has
seen it fit to exempt religious objectors lest their resistance spread to other
workers, for religious objections have contagious potentialities more than
political and philosophic objections.
Furthermore, let it be noted that coerced unity and loyalty even to the
country, and a fortiori to a labor — union assuming that such unity and
loyalty can be attained through coercion — is not a goal that is
20
constitutionally obtainable at the expense of religious liberty. 48 A desirable
end cannot be promoted by prohibited means.
4. Appellants' fourth contention, that Republic Act No. 3350 violates the
constitutional prohibition against requiring a religious test for the exercise of
a civil right or a political right, is not well taken. The Act does not require as
a qualification, or condition, for joining any lawful association membership
in any particular religion or in any religious sect; neither does the Act require
affiliation with a religious sect that prohibits its members from joining a
labor union as a condition or qualification for withdrawing from a labor
union. Joining or withdrawing from a labor union requires a positive act.
Republic Act No. 3350 only exempts members with such religious affiliation
from the coverage of closed shop agreements. So, under this Act, a religious
objector is not required to do a positive act — to exercise the right to join or
to resign from the union. He is exempted ipso jure without need of any
positive act on his part. A conscientious religious objector need not perform a
positive act or exercise the right of resigning from the labor union — he is
exempted from the coverage of any closed shop agreement that a labor union
may have entered into. How then can there be a religious test required for the
exercise of a right when no right need be exercised?
We have said that it was within the police power of the State to enact
Republic Act No. 3350, and that its purpose was legal and in consonance
with the Constitution. It is never an illegal evasion of a constitutional
provision or prohibition to accomplish a desired result, which is lawful in
itself, by discovering or following a legal way to do it. 49
5. Appellant avers as its fifth ground that Republic Act No. 3350 is a
discriminatory legislation, inasmuch as it grants to the members of certain
religious sects undue advantages over other workers, thus violating Section 1
of Article III of the 1935 Constitution which forbids the denial to any person
of the equal protection of the laws. 50
The guaranty of equal protection of the laws is not a guaranty of equality in
the application of the laws upon all citizens of the state. It is not, therefore, a
requirement, in order to avoid the constitutional prohibition against
inequality, that every man, woman and child should be affected alike by a
statute. Equality of operation of statutes does not mean indiscriminate
operation on persons merely as such, but on persons according to the
circumstances surrounding them. It guarantees equality, not identity of rights.
The Constitution does not require that things which are different in fact be
treated in law as though they were the same. The equal protection clause does
not forbid discrimination as to things that are different. 51 It does not prohibit
legislation which is limited either in the object to which it is directed or by
the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows
classification. Classification in law, as in the other departments of knowledge
or practice, is the grouping of things in speculation or practice because they
agree with one another in certain particulars. A law is not invalid because of
simple inequality. 52 The very idea of classification is that of inequality, so
that it goes without saying that the mere fact of inequality in no manner
determines the matter of constitutionality. 53 All that is required of a valid
classification is that it be reasonable, which means that the classification
should be based on substantial distinctions which make for real differences;
that it must be germane to the purpose of the law; that it must not be limited
to existing conditions only; and that it must apply equally to each member of
the class. 54 This Court has held that the standard is satisfied if the
classification or distinction is based on a reasonable foundation or rational
basis and is not palpably arbitrary. 55
In the exercise of its power to make classifications for the purpose of
enacting laws over matters within its jurisdiction, the state is recognized as
enjoying a wide range of discretion. 56 It is not necessary that the
classification be based on scientific or marked differences of things or in
their relation. 57 Neither is it necessary that the classification be made with
mathematical nicety. 58 Hence legislative classification may in many cases
properly rest on narrow distinctions, 59 for the equal protection guaranty does
not preclude the legislature from recognizing degrees of evil or harm, and
legislation is addressed to evils as they may appear.
We believe that Republic Act No. 3350 satisfies the aforementioned
requirements. The Act classifies employees and workers, as to the effect and
coverage of union shop security agreements, into those who by reason of
their religious beliefs and convictions cannot sign up with a labor union, and
those whose religion does not prohibit membership in labor unions. Tile
classification rests on real or substantial, not merely imaginary or whimsical,
distinctions. There is such real distinction in the beliefs, feelings and
sentiments of employees. Employees do not believe in the same religious
faith and different religions differ in their dogmas and cannons. Religious
beliefs, manifestations and practices, though they are found in all places, and
in all times, take so many varied forms as to be almost beyond imagination.
21
There are many views that comprise the broad spectrum of religious beliefs
among the people. There are diverse manners in which beliefs, equally
paramount in the lives of their possessors, may be articulated. Today the
country is far more heterogenous in religion than before, differences in
religion do exist, and these differences are important and should not be
ignored.
Even from the phychological point of view, the classification is based on real
and important differences. Religious beliefs are not mere beliefs, mere ideas
existing only in the mind, for they carry with them practical consequences
and are the motives of certain rules. of human conduct and the justification of
certain acts. 60 Religious sentiment makes a man view things and events in
their relation to his God. It gives to human life its distinctive character, its
tone, its happiness or unhappiness its enjoyment or irksomeness. Usually, a
strong and passionate desire is involved in a religious belief. To certain
persons, no single factor of their experience is more important to them than
their religion, or their not having any religion. Because of differences in
religious belief and sentiments, a very poor person may consider himself
better than the rich, and the man who even lacks the necessities of life may
be more cheerful than the one who has all possible luxuries. Due to their
religious beliefs people, like the martyrs, became resigned to the inevitable
and accepted cheerfully even the most painful and excruciating pains.
Because of differences in religious beliefs, the world has witnessed turmoil,
civil strife, persecution, hatred, bloodshed and war, generated to a large
extent by members of sects who were intolerant of other religious beliefs.
The classification, introduced by Republic Act No. 3350, therefore, rests on
substantial distinctions.
The classification introduced by said Act is also germane to its purpose. The
purpose of the law is precisely to avoid those who cannot, because of their
religious belief, join labor unions, from being deprived of their right to work
and from being dismissed from their work because of union shop security
agreements.
Republic Act No. 3350, furthermore, is not limited in its application to
conditions existing at the time of its enactment. The law does not provide that
it is to be effective for a certain period of time only. It is intended to apply for
all times as long as the conditions to which the law is applicable exist. As
long as there are closed shop agreements between an employer and a labor
union, and there are employees who are prohibited by their religion from
affiliating with labor unions, their exemption from the coverage of said
agreements continues.
Finally, the Act applies equally to all members of said religious sects; this is
evident from its provision. The fact that the law grants a privilege to
members of said religious sects cannot by itself render the Act
unconstitutional, for as We have adverted to, the Act only restores to them
their freedom of association which closed shop agreements have taken away,
and puts them in the same plane as the other workers who are not prohibited
by their religion from joining labor unions. The circumstance, that the other
employees, because they are differently situated, are not granted the same
privilege, does not render the law unconstitutional, for every classification
allowed by the Constitution by its nature involves inequality.
The mere fact that the legislative classification may result in actual inequality
is not violative of the right to equal protection, for every classification of
persons or things for regulation by law produces inequality in some degree,
but the law is not thereby rendered invalid. A classification otherwise
reasonable does not offend the constitution simply because in practice it
results in some inequality. 61 Anent this matter, it has been said that whenever
it is apparent from the scope of the law that its object is for the benefit of the
public and the means by which the benefit is to be obtained are of public
character, the law will be upheld even though incidental advantage may
occur to individuals beyond those enjoyed by the general public. 62
6. Appellant's further contention that Republic Act No. 3350 violates the
constitutional provision on social justice is also baseless. Social justice is
intended to promote the welfare of all the people. 63 Republic Act No. 3350
promotes that welfare insofar as it looks after the welfare of those who,
because of their religious belief, cannot join labor unions; the Act prevents
their being deprived of work and of the means of livelihood. In determining
whether any particular measure is for public advantage, it is not necessary
that the entire state be directly benefited — it is sufficient that a portion of
the state be benefited thereby.
Social justice also means the adoption by the Government of measures
calculated to insure economic stability of all component elements of society,
through the maintenance of a proper economic and social equilibrium in the
inter-relations of the members of the community. 64 Republic Act No. 3350
insures economic stability to the members of a religious sect, like the Iglesia
ni Cristo, who are also component elements of society, for it insures security
22
in their employment, notwithstanding their failure to join a labor union
having a closed shop agreement with the employer. The Act also advances
the proper economic and social equilibrium between labor unions and
employees who cannot join labor unions, for it exempts the latter from the
compelling necessity of joining labor unions that have closed shop
agreements and equalizes, in so far as opportunity to work is concerned,
those whose religion prohibits membership in labor unions with those whose
religion does not prohibit said membership. Social justice does not imply
social equality, because social inequality will always exist as long as social
relations depend on personal or subjective proclivities. Social justice does not
require legal equality because legal equality, being a relative term, is
necessarily premised on differentiations based on personal or natural
conditions. 65 Social justice guarantees equality of opportunity 66 , and this is
precisely what Republic Act No. 3350 proposes to accomplish — it gives
laborers, irrespective of their religious scrupples, equal opportunity for work.
7. As its last ground, appellant contends that the amendment introduced by
Republic Act No. 3350 is not called for — in other words, the Act is not
proper, necessary or desirable. Anent this matter, it has been held that a
statute which is not necessary is not, for that reason, unconstitutional; that in
determining the constitutional validity of legislation, the courts are
unconcerned with issues as to the necessity for the enactment of the
legislation in question. 67 Courts do inquire into the wisdom of
laws. 68 Moreover, legislatures, being chosen by the people, are presumed to
understand and correctly appreciate the needs of the people, and it may
change the laws accordingly. 69 The fear is entertained by appellant that
unless the Act is declared unconstitutional, employers will prefer employing
members of religious sects that prohibit their members from joining labor
unions, and thus be a fatal blow to unionism. We do not agree. The threat to
unionism will depend on the number of employees who are members of the
religious sects that control the demands of the labor market. But there is
really no occasion now to go further and anticipate problems We cannot
judge with the material now before Us. At any rate, the validity of a statute is
to be determined from its general purpose and its efficacy to accomplish the
end desired, not from its effects on a particular case. 70 The essential basis for
the exercise of power, and not a mere incidental result arising from its
exertion, is the criterion by which the validity of a statute is to be
measured. 71
II. We now pass on the second assignment of error, in support of which the
Union argued that the decision of the trial court ordering the Union to pay
P500 for attorney's fees directly contravenes Section 24 of Republic Act No.
875, for the instant action involves an industrial dispute wherein the Union
was a party, and said Union merely acted in the exercise of its rights under
the union shop provision of its existing collective bargaining contract with
the Company; that said order also contravenes Article 2208 of the Civil
Code; that, furthermore, Appellee was never actually dismissed by the
defendant Company and did not therefore suffer any damage at all . 72
In refuting appellant Union's arguments, Appellee claimed that in the instant
case there was really no industrial dispute involved in the attempt to compel
Appellee to maintain its membership in the union under pain of dismissal,
and that the Union, by its act, inflicted intentional harm on Appellee; that
since Appellee was compelled to institute an action to protect his right to
work, appellant could legally be ordered to pay attorney's fees under Articles
1704 and 2208 of the Civil Code. 73
The second paragraph of Section 24 of Republic Act No. 875 which is relied
upon by appellant provides that:
No suit, action or other proceedings shall be maintainable in
any court against a labor organization or any officer or
member thereof for any act done by or on behalf of such
organization in furtherance of an industrial dispute to which
it is a party, on the ground only that such act induces some
other person to break a contract of employment or that it is in
restraint of trade or interferes with the trade, business or
employment of some other person or with the right of some
other person to dispose of his capital or labor. (Emphasis
supplied)
That there was a labor dispute in the instant case cannot be disputed for
appellant sought the discharge of respondent by virtue of the closed shop
agreement and under Section 2 (j) of Republic Act No. 875 a question
involving tenure of employment is included in the term "labor
dispute". 74 The discharge or the act of seeking it is the labor dispute itself. It
being the labor dispute itself, that very same act of the Union in asking the
employer to dismiss Appellee cannot be "an act done ... in furtherance of an
industrial dispute". The mere fact that appellant is a labor union does not
necessarily mean that all its acts are in furtherance of an industrial
dispute. 75 Appellant Union, therefore, cannot invoke in its favor Section 24
of Republic Act No. 875. This case is not intertwined with any unfair labor
23
practice case existing at the time when Appellee filed his complaint before
the lower court.
Neither does Article 2208 of the Civil Code, invoked by the Union, serve as
its shield. The article provides that attorney's fees and expenses of litigation
may be awarded "when the defendant's act or omission has compelled the
plaintiff ... to incur expenses to protect his interest"; and "in any other case
where the court deems it just and equitable that attorney's fees and expenses
of litigation should be recovered". In the instant case, it cannot be gainsaid
that appellant Union's act in demanding Appellee's dismissal caused Appellee
to incur expenses to prevent his being dismissed from his job. Costs
according to Section 1, Rule 142, of the Rules of Court, shall be allowed as a
matter of course to the prevailing party.
WHEREFORE, the instant appeal is dismissed, and the decision, dated
August 26, 1965, of the Court of First Instance of Manila, in its Civil Case
No. 58894, appealed from is affirmed, with costs against appellant Union. It
is so ordered.
G.R. Nos. 43633-34 September 14, 1990
PABLO ARIZALA, SERGIO MARIBAO, LEONARDO JOVEN, and
FELINO BULANDUS, petitioners,
vs.
THE COURT OF APPEALS and THE PEOPLE OF THE
PHILIPPINES, respondents.
NARVASA, J.:
Under the Industrial Peace Act, 1 government-owned or controlled
corporations had the duty to bargain collectively and were otherwise subject
to the obligations and duties of employers in the private sector.2 The Act also
prohibited supervisors to become, or continue to be, members of labor
organizations composed of rank-and-file employees, 3 and prescribed
criminal sanctions for breach of the prohibition. 4
It was under the regime of said Industrial Peace Act that the Government
Service Insurance System (GSIS, for short) became bound by a collective
bargaining agreement executed between it and the labor organization
representing the majority of its employees, the GSIS Employees Association.
The agreement contained a "maintenance-of-membership" clause, 5 i.e., that
all employees who, at the time of the execution of said agreement, were
members of the union or became members thereafter, were obliged to
maintain their union membership in good standing for the duration of the
agreement as a condition for their continued employment in the GSIS.
There appears to be no dispute that at that time, the petitioners occupied
supervisory positions in the GSIS. Pablo Arizala and Sergio Maribao were,
respectively, the Chief of the Accounting Division, and the Chief of the
Billing Section of said Division, in the Central Visayas Regional Office of
the GSIS. Leonardo Joven and Felino Bulandus were, respectively, the
Assistant Chief of the Accounting Division (sometimes Acting Chief in the
absence of the Chief) and the Assistant Chief of the Field Service and Non-
Life Insurance Division (and Acting Division Chief in the absence of the
Chief), of the same Central Visayas Regional Office of the GSIS. Demands
were made on all four of them to resign from the GSIS Employees
Association, in view of their supervisory positions. They refused to do so.
Consequently, two (2) criminal cases for violation of the Industrial Peace Act
were lodged against them in the City Court of Cebu: one involving Arizala
and Maribao 6 and the other, Joven and Bulandus. 7
24
Both criminal actions resulted in the conviction of the accused in separate
decisions. 8 They were each sentenced "to pay a fine of P 500.00 or to suffer
subsidiary imprisonment in case of insolvency." They appealed to the Court
of Appeals.9 Arizala's and Maribao's appeal was docketed as CA-G.R. No.
14724-CR; that of Joven and Bulandus, as CA-G.R. No. 14856-CR.
The appeals were consolidated on motion of the appellants, and eventuated in
a judgment promulgated on January 29, 1976 affirming the convictions of all
four appellants. The appellants moved for reconsideration. They argued that
when the so called "1973 Constitution" took effect on January 17, 1973
pursuant to Proclamation No. 1104, the case of Arizala and Maribao was still
pending in the Court of Appeals and that of Joven and Bulandus, pending
decision in the City Court of Cebu; that since the provisions of that
constitution and of the Labor Code subsequently promulgated (eff.,
November 1, 1974), repealing the Industrial Peace Act-placed employees of
all categories in government-owned or controlled corporations without
distinction within the Civil Service, and provided that the terms and
conditions of their employment were to be "governed by the Civil Service
Law, rules and regulations" and hence, no longer subject of collective
bargaining, the appellants ceased to fall within the coverage of the Industrial
Peace Act and should thus no longer continue to be prosecuted and exposed
to punishment for a violation thereof. They pointed out further that the
criminal sanction in the Industrial Peace Act no longer appeared in the Labor
Code. The Appellate Court denied their plea for reconsideration.
Hence, the present petition for review on certiorari.
The crucial issue obviously is whether or not the petitioners' criminal liability
for a violation of the Industrial Peace Act may be deemed to have been
obliterated in virtue of subsequent legislation and the provisions of the 1973
and 1987 Constitutions.
The petitioners' contention that their liability had been erased is made to rest
upon the following premises:
1. Section 1, Article XII-B of the 1973 Constitution does indeed provide that
the "Civil Service embraces every branch, agency, subdivision and
instrumentality of the government, including government-owned or
controlled corporations, .. administered by an independent Civil Service
Commission.
2. Article 292 of the Labor Code repealed such parts and provisions of the
Industrial Peace Act as were "not adopted as part" of said Code "either
directly or by reference." The Code did not adopt the provision of the
Industrial Peace Act conferring on employees of government-owned or
controlled corporations the right of self-organization and collective
bargaining; in fact it made known that the "terms and conditions of
employment of all government employees, including employees of
government-owned and controlled corporations," would thenceforth no
longer be fixed by collective bargaining but "be governed by the Civil
Service Law, rules and regulations." 10
3. The specific penalty for violation of the prohibition on supervisors being
members in a labor organization of employees under their supervision has
disappeared.
4. The Code also modified the concept of unfair labor practice, decreeing that
thenceforth, "it shall be considered merely as an administrative offense rather
than a criminal offense (and that) (u)nfair labor practice complaints shall x x
be processed like any ordinary labor disputes."11
On the other hand, in justification of the Appellate Tribunal's affirmance of
the petitioners' convictions of violations of the Industrial Peace Act, the
People-
1) advert to the fact that said Labor Code also states that "all actions or
claims accruing prior to ... (its) effectivity ... shall be determined in
accordance with the laws in force at the time of their accrual;" and
2) argue that the legislature cannot generally intervene and vacate the
judgment of the courts, either directly or indirectly, by the repeal of the
statute under which said judgment has been rendered.
The legal principles governing the rights of self-organization and collective
bargaining of rank-and-file employees in the government- particularly as
regards supervisory, and high level or managerial employees have undergone
alterations through the years.
Republic Act No. 875
25
As already intimated, under RA 875 (the Industry Peace Act), 12 persons
"employed in proprietary functions of the Government, including but not
limited to governmental corporations," had the right of self-organization and
collective bargaining, including the right to engage in concerted activities to
attain their objectives, e.g. strikes.
But those "employed in governmental functions" were forbidden to "strike for
the purpose of securing changes or modification in their terms and conditions
of employment" or join labor organizations which imposed on their members
the duty to strike. The reason obviously was that the terms and conditions of
their employment were "governed by law" and hence could not be fixed,
altered or otherwise modified by collective bargaining.
Supervisory employees were forbidden to join labor organizations composed
of employees under them, but could form their own unions. Considered
"supervisors' were those 'having authority in the interest of an employer to
hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or
discipline other employees, or responsibly to direct them, and to adjust their
grievance or effectively to recommend such acts if, in connection with the
foregoing, the exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment." 13
Republic Act No. 2260
Similar provisions were found in R.A. No. 2260, the Civil Service Act of
1959. This Act declared that the "Philippine Civil Service ... (embraced) all
branches, subdivisions and instrumentalities of the government including
government-owned and controlled corporations." 14
It prohibited such civil service employees who were "employed in
governmental functions" to belong to any labor organization which imposed
on their members "the obligation to strike or to join strikes." And one of the
first issuances of the President after the proclamation of martial law in
September, 1972, was General Order No. 5 which inter alia banned strikes in
vital industries," as well as 'all rallies, demonstrations and other forms of
group actions." 15
Not so prohibited, however, were those "employed in proprietary
functions of the Government including, but not limited to, governmental
corporations."16 The Act also penalized any person who "violates, refuses or
neglects to comply with any ... provisions (of the Act) or rules (thereunder
promulgated) ... by a fine not exceeding one thousand pesos or by
imprisonment not exceeding six months or both such fine and imprisonment
in the discretion of the court." 17
The 1973 Constitution
The 1973 Constitution laid down the broad principle that "(t)he State shall
assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work," 18 and directed
that the "National Assembly shall provide for the standardization of
compensation of government officials and employees, including those in
government-owned or controlled corporations, taking into account the nature
of the responsibilities pertaining to, and the qualifications required for, the
positions concerned." 19
PD 442, The Labor Code
The Labor Code of the Philippines, Presidential Decree No. 442, enacted
within a year from effectivity of the 1973 Constitution, 20 incorporated the
proposition that the "terms and conditions of employment of all government
employees, including employees of government-owned and controlled
corporations ... (are) governed by the Civil Service Law, rules and
regulations." 21 It incorporated, too, the constitutional mandate that the
salaries of said employees "shall be standardized by the National Assembly."
The Labor Code, 22 however "exempted" government employees from the
right to self-organization for purposes of collective bargaining. While the
Code contained provisions acknowledging the right of "all persons employed
in commercial, industrial and agricultural enterprises, including religious,
medical or educational institutions operating for profit" to "self-organization
and to form, join or assist labor organizations for purposes of collective
bargaining," they "exempted from the foregoing provisions:
a) security guards;
b) government employees, including employees of government government-
owned and/ or controlled corporations;
c) managerial employees; and
26
d) employees of religious, charitable, medical and educational institutions not
operating for profit, provided the latter do not have existing collective
agreements or recognized unions at the time of the effectivity of the code or
have voluntarily waived their exemption."23
The reason for denying to government employees the right to "self-
organization and to form, join or assist labor organizations for purposes of
collective bargaining" is presumably the same as that under the Industrial
Peace Act, i.e., that the terms and conditions of government employment are
fixed by law and not by collective bargaining.
Some inconsistency appears to have arisen between the Labor Code and the
Civil Service Act of 1959. Under the Civil Service Act, persons "employed
in proprietary functions of the government including, but not limited to,
governmental corporations'-not being within "the policy of the Government
that the employees therein shall not strike for the purpose of securing
changes in their terms and conditions of employment"-could legitimately
bargain with their respective employers through their labor organizations,
and corollarily engage in strikes and other concerted activities in an attempt
to bring about changes in the conditions of their work. They could not
however do so under the Labor Code and its Implementing Rules and
Regulations; these provided that "government employees, including
employees of government-owned and/or controlled corporations," without
distinction as to function, were "exempted" (excluded is the better term) from
"the right to self-organization and to form, join or assist labor organizations
for purposes of collective bargaining," and by implication, excluded as well
from the right to engage in concerted activities, such as strikes, as coercive
measures against their employers.
Members of supervisory unions who were not managerial employees, were
declared by the Labor Code to be "eligible to join or assist the rank and file
labor organization, and if none exists, to form or assist in the forming of such
rank and file organization " 24 Managerial employees, on the other hand, were
pronounced as 'not eligible to join, assist or form any labor
organization." 25 A "managerial employee" was defined as one vested with
power 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." 26
Presidential Decree No. 807
Clarification of the matter seems to have been very shortly attempted by the
Civil Service Decree of the Philippines, Presidential Decree No. 807 (eff.,
Oct. 6,1975) which superseded the Civil Service Law of 1959 (RA
2260) 27 and repealed or modified "all laws, rules and regulations or parts
thereof inconsistent with the provisions" thereof. The Decree categorically
described the scope and coverage of the "Civil Service" as embracing 44
every branch, agency, subdivision, and instrumentality of the
government, including every government owned or controlled corporation
whether performing governmental or propriety function. 28 The effect was
seemingly to prohibit government employees (including those "employed in
proprietary functions of the Government") to "strike for the purpose of
securing changes of their terms and conditions of employment," 29 something
which, as aforestated, they were allowed to do under the Civil Service Act of
1959.30
Be this as it may it seems clear that PD 807 (the Civil Service Decree) did
not modify the declared ineligibility of "managerial employees" from
joining, assisting or forming any labor organization.
Executive Order No. 111
Executive Order No. 111, issued by President Corazon C. Aquino on
December 24, 1986 in the exercise of legislative powers under the Freedom
Constitution, modified the general disqualification above mentioned of
'government employees, including employees of government-owned and/or
controlled corporations" from "the right to self-organization and to form, join
or assist labor organizations for purposes of collective bargaining.' It granted
to employees "of government corporations established under the
Corporation Code x x the right to organize and to bargain collectively with
their respective employers." 31 To all 'other employees in the civil service, ...
(it granted merely) the right to form associations for purposes not contrary to
law," 32 not for "purposes of collective bargaining."
The 1987 Constitution
The provisions of the present Constitution on the matter appear to be
somewhat more extensive. They declare that the "right to self organization
shall not be denied to government employees;"33 that the State "shall
guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to
strike in accordance with law;" and that said workers "shall be entitled to
27
security of tenure, humane conditions of work, and a living wage, ... (and)
also participate in policy and decision-making processes affecting their rights
and benefits as may be provided by law. 34
CSC Memorandum Circular No. 6
Memorandum Circular No. 6 of the Civil Service Commission, issued on
April 21, 1987 enjoined strikes by government officials and employees, to
wit: 35
... Prior to the enactment by Congress of applicable laws
concerning strike by government employees, and
considering that there are existing laws which prohibit
government officials and employees from resorting to strike,
the Commission enjoins, under pain of administrative
sanctions, all government officers and employees from
staging strikes, demonstrations, mass leaves, walk-outs and
other forms of mass action which will result in temporary
stoppage or disruption of public services. To allow otherwise
is to undermine or prejudice the government system.
Executive Order No. 180
The scope of the constitutional right to self-organization of "government
employees" above mentioned, was defined and delineated in Executive Order
No. 180 (eff. June 1, 1987). According to this Executive Order, the right of
self-organization does indeed pertain to all "employees of all branches,
subdivisions, instrumentalities and agencies of the Government, including
government-owned or controlled corporations with original charters;" 36 such
employees "shall not be discriminated against in respect of their employment
by reason of their membership in employees' organizations or participation in
the normal activities of their organization x x (and their) employment shall
not be subject to the condition that they shall not join or shall relinquish their
membership in the employees' organizations. 37
However, the concept of the government employees' right of self-
organization differs significantly from that of employees in the private sector.
The latter's right of self-organization, i.e., "to form, join or assist labor
organizationsfor purposes of collective bargaining," admittedly includes the
right to deal and negotiate with their respective employers in order to fix the
terms and conditions of employment and also, to engage in concerted
activities for the attainment of their objectives, such as strikes, picketing,
boycotts. But the right of government employees to "form, join or assist
employees organizations of their own choosing" under Executive Order No.
180 is not regarded as existing or available for "purposes of collective
bargaining," but simply "for the furtherance and protection of their
interests." 38
In other words, the right of Government employees to deal and negotiate
with their respective employers is not quite as extensive as that of private
employees. Excluded from negotiation by government employees are the
"terms and conditions of employment ... that are fixed by law," it being only
those terms and conditions not otherwise fixed by law that "may be subject of
negotiation between the duly recognized employees' organizations and
appropriate government authorities," 39 And while EO No. 180 concedes to
government employees, like their counterparts in the private sector, the right
to engage in concerted activities, including the right to strike, the executive
order is quick to add that those activities must be exercised in accordance
with law, i.e. are subject both to "Civil Service Law and rules" and "any
legislation that may be enacted by Congress," 40 that "the resolution of
complaints, grievances and cases involving government employees" is not
ordinarily left to collective bargaining or other related concerted activities,
but to "Civil Service Law and labor laws and procedures whenever
applicable;" and that in case "any dispute remains unresolved after
exhausting all available remedies under existing laws and procedures, the
parties may jointly refer the dispute to the (Public Sector Labor-
Management) Council for appropriate action."41 What is more, the Rules and
Regulations implementing Executive Order No. 180 explicitly provide that
since the "terms and conditions of employment in the government, including
any political subdivision or instrumentality thereof and government-owned
and controlled corporations with original charters are governed by law, the
employees therein shall not strike for the purpose of securing changes
thereof. 42
On the matter of limitations on membership in labor unions of government
employees, Executive Order No. 180 declares that "high level employees
whose functions are normally considered as policy making or managerial, or
whose duties are of a highly confidential nature shall not be eligible to join
the organization of rank-and-file government employees. 43 A "high level
employee" is one "whose functions are normally considered policy
determining, managerial or one whose duties are highly confidential in
nature. A managerial function refers to the exercise of powers such as: 1. To
28
effectively recommend such managerial actions; 2. To formulate or execute
management policies and decisions; or 3. To hire, transfer, suspend, lay off,
recall, dismiss, assign or discipline employees. 44
Republic Act No. 6715
The rule regarding membership in labor organizations of managerial and
supervisory employees just adverted to, was clarified and refined by
Republic Act No. 6715, effective on March 21, 1989, further amending the
Labor Code.
Under RA 6715 labor unions are regarded as organized either (a) "for
purposes of negotiation," or (b) "for furtherance and protection"of the
members' rights. Membership in unions organized "for purposes of
negotiation" is open only to rank-and-file employees. "Supervisory
employees" are ineligible "for membership in a labor organization of the
rank-and-file employees but may join, assist or form separate labor
organizations of their own," i.e., one organized "for furtherance and
protection" of their rights and interests. However, according to the Rules
implementing RA 6715, "supervisory employees who are included in an
existing rank-and- file bargaining unit, upon the effectivity of Republic Act
No. 6715 shall remain in that unit ..." Supervisory employees are "those who,
in the interest of the employer, effectively recommend such managerial
actions 45 if the exercise of such authority is not merely routinary or clerical
in nature but requires the use of independent judgment. 46
Membership in employees' organizations formed for purposes of negotiation
are open to rank-and-file employees only, as above mentioned, and not
to high level employees. 47 Indeed, "managerial employees" or "high level
employees" are, to repeat, "not eligible to join, assist or form any labor
organization" at all. 48 A managerialemployee 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."49
This is how the law now stands, particularly with respect to supervisory
employees vis a vis labor organizations of employees under them.
Now, the GSIS performs proprietary functions. It is a non-stock corporation,
managed by a Board of Trustees exercising the "usual corporate powers."50 In
other words, it exercises all the powers of a corporation under the
Corporation Law in so far as they are not otherwise inconsistent with other
applicable law. 51 It is engaged essentially in insurance, a business that "is not
inherently or exclusively a governmental function, ... (but) is on the contrary,
in essence and practice, of a private nature and interest." 52
1. The petitioners contend that the right of self-organization and
collectivebargaining had been withdrawn by the Labor Code from
government employees including those in government-owned and controlled
corporations- chiefly for the reason that the terms and conditions of
government employment, all embraced in civil service, may not be modified
by collective bargaining because set by law. It is therefore immaterial, they
say, whether supervisors are members of rank-and-file unions or not; after
all, the possibility of the employer's control of the members of the union thru
supervisors thus rendering collective bargaining illusory, which is the main
reason for the prohibition, is no longer of any consequence.
This was true, for a time. As already discussed, both under the Labor Code
and PD 807, government employees, including those in government-owned
or controlled corporations, were indeed precluded from bargaining as regards
terms and conditions of employment because these were set by law and
hence could not possibly be altered by negotiation.
But EO 111 restored the right to organize and to negotiate and bargain of
employees of "government corporations established under the Corporation
Code." And EO 180, and apparently RA 6715, too, granted to all government
employees the right of collective bargaining or negotiation except as regards
those terms of their employment which were fixed by law; and as to said
terms fixed by law, they were prohibited to strike to obtain changes thereof.
2. The petitioners appear to be correct in their view of the disappearance
from the law of the prohibition on supervisors being members of labor
organizations composed of employees under their supervision. The Labor
Code (PD 442) allowed supervisors (if not managerial) to join rank-and-file
unions. And under the Implementing Rules of RA 6715, supervisors who
were members of existing labor organizations on the effectivity of said RA
6715 were explicitly authorized to "remain therein."
3. The correctness of the petitioners' theory that unfair labor practices ceased
to be crimes and were deemed merely administrative offenses in virtue of the
Labor Code, cannot be gainsaid. Article 250 of the Labor Code did provide
as follows:
29
 ART. 250. Concept of unfair labor practice.-The concept of
unfair labor practice is hereby modified. Henceforth, it shall
be considered merely as an administrative offense rather than
a criminal offense. Unfair labor practice complaints shall,
therefore, be processed like any ordinary labor disputes.
But unfair labor practices were declared to be crimes again by later
amendments of the Labor Code effected by Batas Pambansa Blg. 70,
approved on May 1, 1980. As thus amended, the Code now pertinently reads
as follows:
ART. 248. Concept of unfair labor practice and procedure
for prosecution thereof. — Unfair labor practices violate the
right of workers and employees to self organization, are
inimical to the legitimate interests of both labor and
management including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom
and mutual respect, and hinder the promotion of healthy and
stable labor management relations. Consequently, unfair
labor practices are not only violations of the civil rights of
both labor and management but are also offenses against the
State which shall be subject to prosecution and punishment
as herein provided.
xxx xxx xxx
Recovery of civil liability in the administrative proceedings
shall bar recovery under the Civil Code.
No criminal prosecution under this title may be instituted
without a final judgment, finding that an unfair labor practice
was committed having been first obtained in the preceding
paragraph. ...
The decisive consideration is that at present, supervisors who were already
members of a rank-and-file labor organization at the time of the effectivity of
R.A. No. 6715, are authorized to "remain therein." It seems plain, in other
words, that the maintenance by supervisors of membership in a rank-and-file
labor organization even after the enactment of a statute imposing a
prohibition on such membership, is not only not a crime, but is explicitly
allowed, under present law.
Now, in a case decided as early as 1935, People v. Tamayo, 53 where the
appellants had appealed from a judgment convicting them of a violation of a
municipal -ordinance, and while their appeal was pending, the ordinance was
repealed such that the act complained of ceased to be a criminal act but
became legal, this Court dismissed the criminal proceedings, pronouncing the
effects of the repeal to be as follows:
In the leading case of the United States vs. Cuna (12 Phil.
241), and Wing vs. United States (218 U.S. 272), the doctrine
was clearly established that in the Philippines repeal of a
criminal act by its reenactment, even without a saving clause
would not destroy criminal liability. But not a single
sentence in either derision indicates that there was any desire
to hold that a person could be prosecuted convicted, and
punished for acts no longer criminal.
There is no question that at common law and in America a
much more favorable attitude towards the accused exists
relative to statutes that have been repealed than has been
adopted here. Our rule is more in conformity with the
Spanish doctrine, but even in Spain, where the offense
ceased to be criminal, petition cannot be had (1 Pacheco,
Commentaries, 296).
The repeal here was absolute and not a reenactment and
repeal by implication. Nor was there any saving clause. The
legislative intent as shown by the action of the municipal is
that such conduct, formerly denounced, is no longer deemed
criminal, and it would be illogical for this court to attempt to
sentence appellant for the offense that no longer exists.
We are therefore of the opinion that the proceedings against
appellant must be dismissed.
To the same effect and in even more unmistakable language is People v.
Almuete 54 where the defendants-appellees were charged under section 39 of
Republic Act No. 1199, as amended (the Agricultural Land Tenancy Law of
1954) which penalized pre-threshing by either agricultural tenant or his
landlord. They sought and secured a dismissal on the ground, among others,
that there was no law punishing the act charged-a reference to the fact that
Republic Act No. 1199 had already been superseded by the Agricultural
30
Land Reform Code of 1963 which instituted the leasehold system and No. 5275-R and Crim. Case No. 4130-R rendered by the Trial Court, are
abolished share tenancy subject to certain conditions. On appeal by the REVERSED and the accused-appellants ACQUITTED of the charges against
Government, this Court upheld the dismissal, saying: them, with costs de officio.

The legislative intent not to punish anymore the tenant's act SO ORDERED.
of pre-reaping and pre-threshing without notice to the
landlord is inferable from the fact that, as already noted, the
Code of Agrarian Reforms did not reenact section 39 of the
Agricultural Tenancy Law and that it abolished share
tenancy which is the basis for penalizing clandestine pre-
reaping and pre-threshing.

xxx xxx xxx

As held in the Adillo case, 55 the act of pre-reaping and pre-

threshing without notice to the landlord, which is an offense
under the Agricultural Tenancy Law, had ceased to be an
offense under the subsequent law, the Code of Agrarian
Reforms. To prosecute it as an offense when the Code of
Agrarian Reforms is already in force would be repugnant or
abhorrent to the policy and spirit of that Code and would
subvert the manifest legislative intent not to punish anymore
pre-reaping and pre-threshing without notice to the
landholder.

xxx xxx xxx

The repeal of a penal law deprives the courts of jurisdiction

to punish persons charged with a violation of the old penal
law prior to its repeal (People vs. Tamayo, 61 Phil. 225;
People vs. Sindiong and Pastor, 77 Phil. 1000; People vs.
Binuya, 61 Phil. 208; U.S. vs. Reyes, 10 Phil. 423; U.S. vs.
Academia, 10 Phil. 431. See dissent in Lagrimas vs. Director
of Prisons, 57 Phil. 247, 252, 254).

The foregoing precedents dictate absolution of the appellants of the offenses

imputed to them.

WHEREFORE, the judgments of conviction in CA-G.R. No. 14724-CR and

CA-G.R. No. 14856-CR, subject of the appeal, as well as those in Crim. Case

31
G.R. No. 96189 July 14, 1992
UNIVERSITY OF THE PHILIPPINES, petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor
Relations, Department of Labor and Employment, and THE ALL U.P.
WORKERS' UNION, represented by its President, Rosario del
Rosario, respondent.
NARVASA, C.J.:
In this special civil action of certiorari the University of the Philippines
seeks the nullification of the Order dated October 30, 1990 of Director Pura
Ferrer-Calleja of the Bureau of Labor Relations holding that "professors,
associate professors and assistant professors (of the University of the
Philippines) are . . rank-and-file employees . . ;" consequently, they should,
together with the so-called non-academic, non-teaching, and all other
employees of the University, be represented by only one labor
organization. 1 The University is joined in this undertaking by the Solicitor
General who "has taken a position not contrary to that of petitioner and, in
fact, has manifested . . that he is not opposing the petition . . ." 2
The case 3 was initiated in the Bureau of Labor Relations by a petition filed
on March 2, 1990 by a registered labor union, the "Organization of Non-
Academic Personnel of UP" (ONAPUP). 4 Claiming to have a membership of
3,236 members — comprising more than 33% of the 9,617 persons
constituting the non-academic personnel of UP-Diliman, Los Baños, Manila,
and Visayas, it sought the holding of a certification election among all said
non-academic employees of the University of the Philippines. At a
conference thereafter held on March 22, 1990 in the Bureau, the University
stated that it had no objection to the election.
On April 18, 1990, another registered labor union, the "All UP Workers'
Union," 5 filed a comment, as intervenor in the certification election
proceeding. Alleging that its membership covers both academic and non-
academic personnel, and that it aims to unite all UP rank-and-file employees
in one union, it declared its assent to the holding of the election provided the
appropriate organizational unit was first clearly defined. It observed in this
connection that the Research, Extension and Professional Staff (REPS), who
are academic non-teaching personnel, should not be deemed part of the
organizational unit.
For its part, the University, through its General Counsel, 6 made of record its
view that there should be two (2) unions: one for academic, the other for non-
academic or administrative, personnel considering the dichotomy of interests,
conditions and rules governing these employee groups.
Director Calleja ruled on the matter on August 7, 1990. 7 She declared that
"the appropriate organizational unit . . should embrace all the regular rank-
and-file employees, teaching and non-teaching, of the University of the
Philippines, including all its branches" and that there was no sufficient
evidence "to justify the grouping of the non-academic or administrative
personnel into an organization unit apart and distinct from that of the
academic or teaching personnel." Director Calleja adverted to Section 9 of
Executive Order No. 180, viz.:
Sec. 9. The appropriate organizational unit shall be the
employer unit consisting of rank-and-file employees, unless
circumstances otherwise require.
and Section 1, Rule IV of the Rules Implementing said EO 180 (as
amended by SEC. 2, Resolution of Public Sector Labor Management
Council dated May 14, 1989, viz.:
xxx xxx xxx
For purposes of registration, an appropriate organizational
unit may refer to:
xxx xxx xxx
d. State universities or colleges, government-owned or
controlled corporations with original charters.
She went on to say that the general intent of EO 180 was "not to
fragmentize the employer unit, as "can be gleaned from the definition
of the term "accredited employees' organization," which refers to:
. . a registered organization of the rank-and-file employees as
defined in these rules recognized to negotiate for the
employees in an organizational unit headed by an officer
32
 with sufficient authority to bind the agency, such as . . . . . .
state colleges and universities.
The Director thus commanded that a certification election be "conducted
among rank-and-file employees, teaching and non-teaching" in all four
autonomous campuses of the UP, and that management appear and bring
copies of the corresponding payrolls for January, June, and July, 1990 at the
"usual pre-election conference . . ."
At the pre-election conference held on March 22, 1990 at the Labor
Organizational Division of the DOLE, 8 the University sought further
clarification of the coverage of the term, "rank-and-file" personnel, asserting
that not every employee could properly be embraced within both teaching
and non-teaching categories since there are those whose positions are in truth
managerial and policy-determining, and hence, excluded by law.
At a subsequent hearing (on October 4, 1990), the University filed a
Manifestation seeking the exclusion from the organizational unit of those
employees holding supervisory positions among non-academic personnel,
and those in teaching staff with the rank of Assistant Professor or higher,
submitting the following as grounds therefor:
1) Certain "high-level employees" with policy-making, managerial, or
confidential functions, are ineligible to join rank-and-file employee
organizations under Section 3, EO 180:
Sec. 3. High-level employees whose functions are normally
considered as policy-making or managerial or whose duties
are of a highly confidential nature shall not be eligible to join
the organization of rank-and file government employees;
2) In the University hierarchy, not all teaching and non-teaching personnel
belong the rank-and file: just as there are those occupying managerial
positions within the non-teaching roster, there is also a dichotomy between
various levels of the teaching or academic staff;
3) Among the non-teaching employees composed of Administrative Staff and
Research personnel, only those holding positions below Grade 18 should be
regarded as rank-and-file, considering that those holding higher grade
positions, like Chiefs of Sections, perform supervisory functions including
that of effectively recommending termination of appointments or initiating
appointments and promotions; and
4) Not all teaching personnel may be deemed included in the term, "rank-
and-file;" only those holding appointments at the instructor level may be so
considered, because those holding appointments from Assistant Professor to
Associate Professor to full Professor take part, as members of the University
Council, a policy-making body, in the initiation of policies and rules with
respect to faculty tenure and promotion. 9
The ONAPUP quite categorically made of record its position; that it was not
opposing the University's proferred classification of rank-and file employees.
On the other hand, the "All UP Workers' Union" opposed the University's
view, in a Position Paper presented by it under date of October 18, 1990.
Director Calleja subsequently promulgated an Order dated October 30, 1990,
resolving the "sole issue" of "whether or not professors, associate professors
and assistant professors are included in the definition of high-level
employee(s)" in light of Rule I, Section (1) of the Implementing Guidelines
of Executive Order No. 180, defining "high level employee" as follows:
1. High Level Employee — is one whose functions are
normally considered policy determining, managerial or one
whose duties are highly confidential in nature. A managerial
function refers to the exercise of powers such as:
1. To effectively recommend such
managerial actions;
2. To formulate or execute management
policies and decisions; or
3. To hire, transfer, suspend, lay-off, recall,
dismiss, assign or discipline employees.
The Director adjudged that said teachers are rank-and-file employees
"qualified to join unions and vote in certification elections." According to her
—
33
 A careful perusal of the University Code . . shows that the
policy-making powers of the Council are limited to academic
matters, namely, prescribing courses of study and rules of
discipline, fixing student admission and graduation
requirements, recommending to the Board of Regents the
conferment of degrees, and disciplinary power over students.
The policy-determining functions contemplated in the
definition of a high-level employee pertain to managerial,
executive, or organization policies, such as hiring, firing, and
disciplining of employees, salaries, teaching/working hours,
other monetary and non-monetary benefits, and other terms
and conditions of employment. They are the usual issues in
collective bargaining negotiations so that whoever wields
these powers would be placed in a situation of conflicting
interests if he were allowed to join the union of rank-and-file
employees.
The University seasonably moved for reconsideration, seeking to make the
following points, to wit:
1) UP professors do "wield the most potent managerial powers: the power to
rule on tenure, on the creation of new programs and new jobs, and
conversely, the abolition of old programs and the attendant re-assignment of
employees.
2) To say that the Council is "limited to (acting on) academic matters" is
error, since academic decisions "are the most important decisions made in a
University . . (being, as it were) the heart, the core of the University as a
workplace.
3) Considering that the law regards as a "high level" employee, one who
performs either policy-determining, managerial, or confidential functions, the
Director erred in applying only the "managerial functions" test, ignoring the
"policy-determining functions" test.
4) The Director's interpretation of the law would lead to absurd results, e.g.:
"an administrative officer of the College of Law is a high level employee,
while a full Professor who has published several treatises and who has
distinguished himself in argument before the Supreme Court is a mere rank-
and-file employee. A dormitory manager is classified as a high level
employee, while a full Professor or Political Science with a Ph. D. and
several Honorary doctorates is classified as rank-and-file." 10
The motion for reconsideration was denied by Director Calleja, by Order
dated November 20, 1990.
The University would now have this Court declare void the Director's Order
of October 30, 1990 as well as that of November 20, 1990. 11 A temporary
restraining order was issued by the Court, by Resolution dated December 5,
1990 conformably to the University's application therefor.
Two issues arise from these undisputed facts. One is whether or not
professors, associate professors and assistant professors are "high-level
employees" "whose functions are normally considered policy determining,
managerial or . . highly confidential in nature." The other is whether or not,
they, and other employees performing academic functions, 12 should
comprise a collective bargaining unit distinct and different from that
consisting of the non-academic employees of the University, 13 considering
the dichotomy of interests, conditions and rules existing between them.
As regards the first issue, the Court is satisfied that it has been correctly
resolved by the respondent Director of Bureau Relations. In light of
Executive Order No. 180 and its implementing rules, as well as the
University's charter and relevant regulations, the professors, associate
professors and assistant professors (hereafter simply referred to as
professors) cannot be considered as exercising such managerial or highly
confidential functions as would justify their being categorized as "high-level
employees" of the institution.
The Academic Personnel Committees, through which the professors
supposedly exercise managerial functions, were constituted "in order to
foster greater involvement of the faculty and other academic personnel in
appointments, promotions, and other personnel matters that directly affect
them." 14 Academic Personnel Committees at the departmental and college
levels were organized "consistent with, and demonstrative of the very idea of
consulting the faculty and other academic personnel on matters directly
affecting them" and to allow "flexibility in the determination of guidelines
peculiar to a particular department or college." 15
Personnel actions affecting the faculty and other academic personnel should,
however, "be considered under uniform guidelines and consistent with the
34
Resolution of the Board (of Regents) adopted during its 789th Meeting (11-
26-69) creating the University Academic Personnel Board." 16 Thus, the
Departmental Academic Personnel Committee is given the function of
"assist(ing) in the review of the recommendations initiated by the
Department Chairman with regard to recruitment, selection, performance
evaluation, tenure and staff development, in accordance with the general
guidelines formulated by the University Academic Personnel Board and the
implementing details laid down by the College Academic Personnel
Committee;" 17 while the College Academic Personnel Committee is
entrusted with the following functions: 18
1. Assist the Dean in setting up the details for the
implementation of policies, rules, standards or general
guidelines as formulated by the University Academic
Personnel Board;
2. Review the recommendation submitted by the DAPCs
with regard to recruitment, selection, performance
evaluation, tenure, staff development, and promotion of the
faculty and other academic personnel of the College;
3. Establish departmental priorities in the allocation of
available funds for promotion;
4. Act on cases of disagreement between the Chairman and
the members of the DAPC particularly on personnel matters
covered by this Order;
5. Act on complaints and/or protests against personnel
actions made by the Department Chairman and/or the
DAPC.
The University Academic Personnel Board, on the other hand, performs the
following functions: 19
1. Assist the Chancellor in the review of the
recommendations of the CAPC'S.
2. Act on cases of disagreement between the Dean and the
CAPC.
3. Formulate policies, rules, and standards with respect to the
selection, compensation, and promotion of members of the
academic staff.
4. Assist the Chancellor in the review of recommendations
on academic promotions and on other matters affecting
faculty status and welfare.
From the foregoing, it is evident that it is the University Academic Personnel
Committee, composed of deans, the assistant for academic affairs and the
chief of personnel, which formulates the policies, rules and standards
respecting selection, compensation and promotion of members of the
academic staff. The departmental and college academic personnel
committees' functions are purely recommendatory in nature, subject to
review and evaluation by the University Academic Personnel Board.
In Franklin Baker Company of the Philippines vs. Trajano, 20 this Court
reiterated the principle laid down in National Merchandising Corp. vs. Court
of Industrial Relations, 21 that the power to recommend, in order to qualify an
employee as a supervisor or managerial employee "must not only
be effective but the exercise of such authority should not be merely of a
routinary or clerical nature but should require the use of independent
judgment." 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.
Significantly, the personnel actions that may be recommended by the
departmental and college academic personnel committees must conform with
the general guidelines drawn up by the university personnel academic
committee. This being the case, the members of the departmental and college
academic personnel committees are not unlike the chiefs of divisions and
sections of the National Waterworks and Sewerage Authority whom this
Court considered as rank-and-file employees in National Waterworks &
Sewerage Authority vs. NWSA Consolidated Unions, 22because "given ready
policies to execute and standard practices to observe for their execution, . . .
they have little freedom of action, as their main function is merely to carry
out the company's orders, plans and policies."
The power or prerogative pertaining to a high-level employee "to effectively
recommend such managerial actions, to formulate or execute management
policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss,
35
assign or discipline employees" 23 is exercised to a certain degree by the
university academic personnel board/committees and ultimately by the Board
of Regents in accordance with Section 6 of the University
Charter, 24 thus:
(e) To appoint, on the recommendation of the President of
the University, professors, instructors, lecturers and other
employees of the University; to fix their compensation,
hours of service, and such other duties and conditions as it
may deem proper; to grant them in its discretion leave of
absence under such regulations as it may promulgate, any
other provision of law to the contrary notwithstanding, and
to remove them for cause after investigation and hearing
shall have been had.
Another factor that militates against petitioner's espousal of managerial
employment status for all its professors through membership in the
departmental and college academic personnel committees is that not all
professors are members thereof. Membership and the number of members in
the committees are provided as follows: 25
Sec. 2. Membership in Committees. — Membership in
committees may be made either through appointment,
election, or by some other means as may be determined by
the faculty and other academic personnel of a particular
department or college.
Sec. 3. Number of Members. — In addition to the Chairman,
in the case of a department, and the Dean in the case of a
college, there shall be such number of members representing
the faculty and academic personnel as will afford a fairly
representative, deliberative and manageable group that can
handle evaluation of personnel actions.
Neither can membership in the University Council elevate the professors to
the status of high-level employees. Section 6 (f) and 9 of the UP Charter
respectively provide: 26
Sec. 6. The Board of Regents shall have the following
powers and duties . . . ;
xxx xxx xxx
(f) To approve the courses of study and rules of discipline
drawn up by the University Council as hereinafter provided;
...
Sec. 9. There shall be a University Council consisting of the
President of the University and of all instructors in the
university holding the rank of professor, associate professor,
or assistant professor. The Council shall have the power to
prescribe the courses of study and rules of discipline, subject
to the approval of the Board of Regents. It shall fix the
requirements for admission to any college of the university,
as well as for graduation and the receiving of a degree. The
Council alone shall have the power to recommend students
or others to be recipients of degrees. Through its president or
committees, it shall have disciplinary power over the
students within the limits prescribed by the rules of
discipline approved by the Board of Regents. The powers
and duties of the President of the University, in addition to
those specifically provided in this Act shall be those usually
pertaining to the office of president of a university.
It is readily apparent that the policy-determining functions of the University
Council are subject to review, evaluation and final approval by the Board of
Regents. The Council's power of discipline is likewise circumscribed by the
limits imposed by the Board of Regents. What has been said about the
recommendatory powers of the departmental and college academic personnel
committees applies with equal force to the alleged policy-determining
functions of the University Council.
Even assuming arguendo that UP professors discharge policy-determining
functions through the University Council, still such exercise would not
qualify them as high-level employees within the context of E.O. 180. As
correctly observed by private respondent, "Executive Order No. 180 is a law
concerning public sector unionism. It must therefore be construed within that
context. Within that context, the University of the Philippines represents the
government as an employer. 'Policy-determining' refers to policy-
determination in university mattes that affect those same matters that may be
the subject of negotiation between public sector management and labor. The
reason why 'policy-determining' has been laid down as a test in segregating
36
rank-and-file from management is to ensure that those who lay down policies
in areas that are still negotiable in public sector collective bargaining do not
themselves become part of those employees who seek to change these
policies for their collective welfare." 27
The policy-determining functions of the University Council refer to academic
matters, i.e. those governing the relationship between the University and its
students, and not the University as an employer and the professors as
employees. It is thus evident that no conflict of interest results in the
professors being members of the University Council and being classified as
rank-and-file employees.
Be that as it may, does it follow, as public respondent would propose, that all
rank-and-file employees of the university are to be organized into a single
collective bargaining unit?
A "bargaining unit" has been defined as a group of employees of a given
employer, comprised of all or less than all of the entire body of employees,
which the collective interest of all the employees, consistent with equity to
the employer, indicate to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law. 28
Our labor laws do not however provide the criteria for determining the proper
collective bargaining unit. Section 12 of the old law, Republic Act No. 875
otherwise known as the Industrial Peace Act, simply reads as follows: 29
Sec. 12. Exclusive Collective Bargaining Representation for
Labor Organizations. — The labor organization designated
or selected for the purpose of collective bargaining by the
majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of all
the employees in such unit for the purpose of collective
bargaining in respect to rates of pay, wages, hours of
employment, or other conditions of employment; Provided,
That any individual employee or group of employees shall
have the right at any time to present grievances to their
employer.
Although said Section 12 of the Industrial Peace Act was subsequently
incorporated into the Labor Code with minor changes, no guidelines were
included in said Code for determination of an appropriate bargaining unit in a
given case. 30 Thus, apart from the single descriptive word "appropriate," no
specific guide for determining the proper collective bargaining unit can be
found in the statutes.
Even Executive Order No. 180 already adverted to is not much help. All it
says, in its Section 9, is that "(t)he appropriate organizational unit shall be the
employer unit consisting of rank-and-file employees, unless circumstances
otherwise require." Case law fortunately furnishes some guidelines.
When first confronted with the task of determining the proper collective
bargaining unit in a particular controversy, the Court had perforce to rely on
American jurisprudence. In Democratic Labor Association vs. Cebu
Stevedoring Company, Inc., decided on February 28, 1958, 31 the Court
observed that "the issue of how to determine the proper collective bargaining
unit and what unit would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on
the matter abound . . (to which resort may be had) considering that our
present Magna Carta has been patterned after the American law on the
subject." Said the Court:
. . . Under these precedents, there are various factors which
must be satisfied and considered in determining the proper
constituency of a bargaining unit. No one particular factor is
itself decisive of the determination. The weight accorded to
any particular factor varies in accordance with the particular
question or questions that may arise in a given case. What
are these factors? Rothenberg mentions a good number, but
the most pertinent to our case are: (1) will of the employees
(Globe Doctrine); (2) affinity and unit of employees' interest,
such as substantial similarity of work and duties, or
similarity of compensation and working conditions; (3) prior
collective bargaining history; and (4) employment status,
such as temporary, seasonal probationary employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an
appropriate bargaining unit is given in the 10th Annual
Report of the National Labor Relations Board wherein it is
emphasized that the factors which said board may consider
and weigh in fixing appropriate units are: the history, extent
37
 and type of organization of employees; the history of their
collective bargaining; the history, extent and type of
organization of employees in other plants of the same
employer, or other employers in the same industry; the skill,
wages, work, and working conditions of the employees; the
desires of the employees; the eligibility of the employees for
membership in the union or unions involved; and the
relationship between the unit or units proposed and the
employer's organization, management, and operation. . . .
. . In said report, it is likewise emphasized that the basic test
in determining the appropriate bargaining unit is that a unit,
to be appropriate, must affect a grouping of employees who
have substantial, mutual interests in wages, hours, working
conditions and other subjects of collective bargaining (citing
Smith on Labor Laws, 316-317; Francisco, Labor Laws,
162). . . .
The Court further explained that "(t)he test of the grouping is community or
mutuality of interests. And this is so because 'the basic test of an asserted
bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their
collective bargaining rights' (Rothenberg on Labor Relations, 490)." Hence,
in that case, the Court upheld the trial court's conclusion that two separate
bargaining units should be formed, one consisting of regular and permanent
employees and another consisting of casual laborers or stevedores.
Since then, the "community or mutuality of interests" test has provided the
standard in determining the proper constituency of a collective bargaining
unit. In Alhambra Cigar & Cigarette Manufacturing Company, et al. vs.
Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting
that the employees in the administrative, sales and dispensary departments of
a cigar and cigarette manufacturing firm perform work which have nothing to
do with production and maintenance, unlike those in the raw lead (malalasi),
cigar, cigarette, packing (precintera) and engineering and garage
departments, authorized the formation of the former set of employees into a
separate collective bargaining unit. The ruling in the Democratic Labor
Association case, supra, was reiterated in Philippine Land-Air-Sea Labor
Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees
were barred from joining the union of the permanent and regular employees.
Applying the same "community or mutuality of interests" test, but resulting
in the formation of only one collective bargaining units is the case
of National Association of Free Trade Unions vs. Mainit Lumber
Development Company Workers Union-United Lumber and General Workers
of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598. In said
case, the Court ordered the formation of a single bargaining unit consisting of
the Sawmill Division in Butuan City and the Logging Division in Zapanta
Valley, Kitcharao, Agusan Norte of the Mainit Lumber Development
Company. The Court reasoned:
Certainly, there is a mutuality of interest among the
employees of the Sawmill Division and the Logging
Division. Their functions mesh with one another. One group
needs the other in the same way that the company needs
them both. There may be difference as to the nature of their
individual assignments but the distinctions are not enough to
warrant the formation of a separate bargaining unit.
In the case at bar, the University employees may, as already suggested, quite
easily be categorized into two general classes: one, the group composed of
employees whose functions are non-academic, i.e., janitors, messengers,
typists, clerks, receptionists, carpenters, electricians, grounds-keepers,
chauffeurs, mechanics, plumbers; 32 and two, the group made up of those
performing academic functions, i.e., full professors, associate professors,
assistant professors, instructors — who may be judges or government
executives — and research, extension and professorial staff. 33 Not much
reflection is needed to perceive that the community or mutuality of interests
which justifies the formation of a single collective bargaining unit is wanting
between the academic and non-academic personnel of the university. It
would seem obvious that teachers would find very little in common with the
University clerks and other non-academic employees as regards
responsibilities and functions, working conditions, compensation rates, social
life and interests, skills and intellectual pursuits, cultural activities, etc. On
the contrary, the dichotomy of interests, the dissimilarity in the nature of the
work and duties as well as in the compensation and working conditions of the
academic and non-academic personnel dictate the separation of these two
categories of employees for purposes of collective bargaining. The formation
of two separate bargaining units, the first consisting of the rank-and-file non-
academic personnel, and the second, of the rank-and-file academic
employees, is the set-up that will best assure to all the employees the exercise
of their collective bargaining rights. These special circumstances, i.e., the
38
dichotomy of interests and concerns as well as the dissimilarity in the nature
and conditions of work, wages and compensation between the academic and
non-academic personnel, bring the case at bar within the exception
contemplated in Section 9 of Executive Order No. 180. It was grave abuse of
discretion on the part of the Labor Relations Director to have ruled
otherwise, ignoring plain and patent realities.
WHEREFORE, the assailed Order of October 30, 1990 is hereby
AFFIRMED in so far as it declares the professors, associate professors and
assistant professors of the University of the Philippines as rank-and-file
employees. The Order of August 7, 1990 is MODIFIED in the sense that the
non-academic rank-and-file employees of the University of the Philippines
shall constitute a bargaining unit to the exclusion of the academic employees
of the institution — i.e., full professors, associate professors, assistant
professors, instructors, and the research, extension and professorial staff, who
may, if so minded, organize themselves into a separate collective bargaining
unit; and that, therefore, only said non-academic rank-and-file personnel of
the University of the Philippines in Diliman, Manila, Los Baños and the
Visayas are to participate in the certification election.
SO ORDERED.
G.R. No. 107590 February 21, 1995
PAMANTASAN NG LUNGSOD NG MAYNILA (PLM), petitioner,
vs.
CIVIL SERVICE COMMISSION (CSC), PAMANTASAN NG
LUNGSOD NG MAYNILA FACULTY ORGANIZATION (PLMFO),
ROBERTO AMORES, ROLANDO AUSTRIA, VICENTE
BANAGALE, NEMENCIO CABATUANDO, MANOLO HINA,
ELEANOR JIMENEZ, ANITA LEYSON, JONATHAN MANZANO,
JOSE MEJIA, ESTELITA PINEDA, LORDEO POQUIZ, ALFREDO
RAZON, MA. ZELDA REYES, SALVACION RODRIGUEZ,
BELINDA SANTOS, and VIRGILIO ZAMORA respondents.
VITUG, J.:
This petition stemmed from a complaint for illegal dismissal and unfair labor
practice filed with public respondent Civil Service Commission ("CSC") by
private respondents, through Pamantasan Ng Lungsod Ng Maynila Faculty
Organization ("PLMFO"), against petitioner Pamantasan Ng Lungsod Ng
Maynila ("PLM") and its officers.
The sixteen (16) individual private respondents were full-time instructors of
PLM under "temporary contracts" of employment renewable on a yearly
basis. They, among other instructors, joined the PLMFO.
Uniform notices of termination, all dated 24 April 1990, were individually
sent to private respondents informing them of "the expiration of their
temporary appointments at the close of office hours on 31 May 1990" and the
non-renewal of their appointments for the school year (SY) 1990-1991. A
series of letter-complaints addressed to the CSC by private respondents
evoked a letter-response from PLM, dated 16 May 1990, traversing the
complainants' right to compel a renewal of the appointments. They were
advised that their retention was not recommended by their respective Deans.
On 29 May 1990, private respondents, through PLMFO, filed with the CSC a
verified complaint for illegal dismissal and unfair labor practice against
petitioner and its officers.
In a letter-comment, dated 13 July 1990, petitioner denied having committed
any unfair labor practice or having illegally dismissed private respondents. In
39
its defense, PLM interposed (1) the temporary nature of private respondents'
contracts of employment and (2) reasons that could justify the non- renewal
of the contracts.
Public respondent CSC referred the case to the Public Sector Labor-
Management Council1 ("PSLMC"). The latter, through its deputized hearing
officer, Med-Arbiter Hope Ruiz-Valenzuela of the Bureau of Labor Relations
of the Department of Labor and Employment, after due notice, heard the case
(PSLMC Case No. 00-06-91). During the proceedings, petitioner relied in
main on the temporary nature of private respondents' employment contracts.
In a Resolution,2 dated 16 December 1991, the PSLMC found petitioner
guilty of "Unfair Labor Practice" and held that private respondents "should
be reinstated." The dispositive portion of its Resolution read:
WHEREFORE, premises considered, the Council finds that
PLM Management committed Unfair Labor Practice when it
terminated the services of herein complainants, and for
which the latter should be reinstated.
Accordingly, let this Resolution be forwarded to the Civil
Service Commission for appropriate action.
SO ORDERED.3
Petitioner's request for reconsideration was denied in PSLMC's Order of 30
April 1992. Forthwith, the PSLMC transmitted the case to the CSC for
appropriate action.
On 15 May 1992, petitioner filed with this Court a petition
for certiorari, entitled "Pamantasan Ng Lungsod Ng Maynila vs. Public
Sector Labor-Management Council, et al.," docketed G.R. No. 105157, that
sought the annulment of the aforementioned PSLMC resolutions. In a Minute
Resolution, dated 27 May 1992, the Court dismissed the petition for PLM's
failure to submit the certification required under Circular 28-91 on forum-
shopping. The motion for the reconsideration of this resolution was
dismissed with finality, no compelling reason having been shown to
reconsider the dismissal of the petition. On 30 July 1992, the resolution
became final and executory and, in due course, was recorded in the Book of
Entries of Judgment.
In the meantime, public respondent CSC, acting on the case forwarded to it
by the PSLMC, issued its Resolution No. 92-814, dated 25 June 1992,
sustaining the findings of the PSLMC. The CSC, accordingly, directed the
reinstatement, with back salaries, of private respondents; thus —
WHEREFORE, foregoing premises considered, the
Commission hereby resolves to rule that the termination of
the services of Estelita Pineda, Vicente Banagale, Salvacion
Rodriguez, Anita Leyson, Eleanor Jimenez, Ma. Zelda
Reyes, Belinda Santos, Lordeo Poquiz, Rolando Austria,
Jonathan Manzano, Manolo Hina, Nemencio Cabatuando,
Alfredo Razon, Virgilio Zamora, Roberto Amores and Jose
Mejia, all of the Pamantasan ng Lungsod ng Maynila, is
illegal.
The PLM Management is hereby directed to reinstate these
employees to their former or equivalent positions and pay
them back salaries and other benefits from the time of their
illegal termination until their actual reinstatement.4
The request for the reconsideration of the order was denied by the CSC in its
Resolution No. 92-1573 of 20 October 1992. Respondent CSC, in denying
petitioner's motion, held, among other things, that the findings of fact by the
PSLMC deserved the respect of the Commission and that there was no
further need for it, to conduct a hearing of its own.
The PLM cites the following reasons for its instant petition
for certiorari (under Rule 65, not Rule 45 such as mistakenly referred to by
petitioner):
1. The Civil Service Commission acted with grave abuse of
discretion tantamount to lack of jurisdiction and denial of
due process when it adopted entirely, without according the
petitioner the opportunity to be heard, the findings of facts
and resolutions of the Public Sector Labor and Management
Council, a body separate and distinct and with different
jurisdiction from that of the Commission.
2. The Civil Service Commission acted with grave abuse
discretion in effectively denying the petitioner the
opportunity to present evidence to substantiate its allegations
40
 in its defense against the charge of illegal dismissal, to the
prejudice of civil service and public interest.
3. The Civil Service Commission committed a grave abuse
of discretion in directing reinstatement and payment of
backwages to private respondents whose temporary contracts
of employment had already expired.
On 11 May 1993, this Court, acting on petitioner's motion for the issuance of
a writ of preliminary injunction, issued, on 18 May 1993, a temporary
restraining order directing respondent CSC "to cease and desist from
executing (its) assailed Resolutions No. 92-814 and No. 92-1573.5
In our resolution, dated 17 August 1993, following the receipt of respondents'
comment, we gave due course to the petition and ordered the parties to file
their respective memoranda.
The Solicitor General took an adverse position to that of public respondent
and prayed that the petition be given due course, contending that it was
inappropriate for respondent CSC to rule on the aspect of illegal dismissal, an
act that involved an exercise of its original jurisdiction, without affording
anew petitioner an opportunity to be heard.
Public respondent CSC manifested its intention to file its own comment to
the instant petition; however, it failed to file any such comment within the
allotted period. The Court finally dispensed with the filing of the comment
and ordered CSC to instead file its memorandum in accordance with this
Court's resolution of 24 August 1993.6
On 20 January 1994, the Court dismissed the petition for failure to prosecute
on the part of petitioner, which likewise failed to file its memorandum, as
well as because of the "evident lack of interest of the parties"7 to pursue the
case. On petitioner's motion for reconsideration, however, the Court resolved,
on 24 February 1994, to reinstate the petition.
Petitioner stresses that the CSC and the PSLMC both exercise quasi-judicial
functions but not on identical issues and subject matter; that the PSLMC
possesses jurisdiction only over the unfair labor practice aspect of private
respondents' complaint but that it is the CSC which alone can take
cognizance over the question of illegal dismissal; and that, therefore, when
the CSC has simply adopted the recommendations of the PSLMC in the
unfair labor practice case in resolving the issue of illegal dismissal and
ordering the reinstatement of private respondents without conducting further
proceedings of its own, it has effectively denied petitioner of its right to due
process.
PSLMC's jurisdiction over the unfair labor practice case filed by private
respondents against petitioner is not disputed. The PSLMC, in case No. 00-
06-91, has conducted its proceedings in accordance with its legal
mandate.8The proceedings before Med-Arbiter Valenzuela, who had been
deputized to so act as the hearing officer, conform with the "Rules and
Regulations to Govern the Exercise of the Right of Government Employees
to Self Organization" —
Sec. 3. The Council may call on any officer or agency for
assistance. It may deputize officers to hear and recommend
action on complaints or grievances filed with the council.
Sec. 4. The procedure in the Council shall be non-adversarial
in nature. The parties may be required to submit their
respective position papers, together with all evidences
available in support of their respective positions within 15
days from receipt of notices.
Sec. 5. The decision of the Council shall be final.
The conclusion of the PSLMC regarding petitioner's alleged commission of
unfair labor practice against private respondents can no longer be considered
a proper issue either before the CSC or in this instance since this particular
matter has already been adjudged with finality in accordance with this
Court's resolution in G.R. No. 105157 heretofore mentioned.
The PSLMC, in part, said:
. . . Individual sixteen (16) complainants were part of the
original founders of the PLMFO and claim to be active
members thereof. Complainants Vicente Benagale, Roberto
Amores, and Anita Leyson were the President, Treasurer and
Secretary, respectively, of the PLMFO. At the time of
complainants separation, the union had just secured its
41
public sector union registration. All 16 complainants had
temporary employment contracts that were renewed on a
yearly basis. Half of the complainants had been with the
PLM for a long time, ranging from four (4) to six and one-
half (6 1/2) years.
It appears that the Faculty had many long-standing issues
with the PLM Management, which complainants claim
motivated the organization of the PLMFO. As gathered from
the evidence, the following are some of the more salient
issues:
1. Failure to appoint a true faculty representative to the
Board of Regents as provided in the PLM Charter;
2 No faculty participation in areas where normally the
faculty input is sought. i.e.
a. revision of the student curriculum
b. the development of criteria/policies
regarding faculty development and
promotion
3. While PLM has identified the academic qualifications and
teaching experience required for each level of hierarchy in
the faculty, the actual mechanics of promotion are vague.
The faculty remains in the dark as to whether they have
already qualified and therefore can apply for the next faculty
rank as a matter of right. The PLMFO maintains that this
vagueness in the procedure/policies for promotion is a
deliberate scheme to enable PLM management to establish
the faculty according to its whim;
4. On the matter of promotion scheme, the faculty is not
given the complete results of their performance evaluation;
5. The faculty is kept guessing about the official salary scale
according to rank, so that the implementation of such official
salary scale can be arbitrary and discriminatory . . .;
6. Management refuses to allow the concerned faculty to
participate in choosing the Chairperson in their respective
departments;
7. PLM's existing practice in the promotion of faculty
members either for permanent status or to the next higher
rank as undermined the university's standard of excellence.
Out of the 223, close to 30% of the faculty had no previous
teaching experience before joining PLM. There are only 29
assistant professors and 6 with the rank of professor. The
teachers holding temporary appointments comprise, almost
half of the faculty.
After securing its union registration, PLMFO began asserting
its rights.
xxx xxx xxx
In its complaint, PLMFO alleged that their actions and
determination to see changes in the management of PLM
angered PLM which prompted its decision to terminate the
services of the complainants.
xxx xxx xxx
Ordinarily, there is merit to respondent's argument that
employees who hold temporary contracts of employment
may not expect renewal of appointment as a matter of right,
the decision being a management prerogative. However,
when the exercise of this privilege is alleged to be the means
by which management hinders unionism or outrightly bust
unions and such allegation is supported by evidence, the act
needs to be examined and studied. It then becomes
incumbent upon Management to show that its intentions are
otherwise. Records of the case, however, reveal that despite
numerous opportunities to do so, PLM makes little attempt
to rebut the specific charges and instead rests its defense
largely on the argument that since complainants possess only
temporary contracts of employment, PLM has the right not
to renew their contracts without any need for justification.
42
 There is sufficient evidence to show that the management of
PLM is not particularly enthusiastic about faculty
participation in the formulation of policies concerning the
University and the Faculty itself, as shown from the very
nature of the majority of the complaints of the faculty against
the administration and the response/reaction of the
management to earlier attempts by the faculty to bring about
changes. . . .
. . . . The facts on record show that management did not
respond to any of the faculty issues. One accurate example is
the matter of the teachers' performance evaluation ratings
which were the basis for "renewal of appointment and
recommendation for permanent status." It was discussed in
the dialogue that the over-all rating score of the faculty
would include the Peer's evaluation. However, as can be seen
from the ratings of the complainants who were accused of
having poor performance, the Peer's evaluation was not
included as one of the factors for their evaluation.
xxx xxx xxx
. . . . In its position paper and other subsequent pleadings,
PLM has however, abandoned all efforts to pursue its line of
defense. It would appear therefore that the charges are false
and untenable. If this is so, why was PLM so bold as to
present them as grounds for the separation of complainants
in the first place? Perhaps, it was confident that because
complainants possessed temporary contracts of employment,
no serious attempt would be made to examine PLMFO's
complaint. Whatever other reasons PLM may have, the
circumstances obtaining in the instant case show that these
charges were created as an attempt to confuse/mislead PLM's
real motivations on the matter.9
In agreeing with the PSLMC, the CSC, in its own resolution of 25 June 1992,
stated:
In the arbitration proceedings, the PSLMC found that PLM
committed unfair labor practice when it terminated the
services of the complainants. It is undisputed that the PLM
Management did not renew the appointments of these
members of the faculty with temporary contracts but those
who were hired as replacements possess even lesser
qualifications than the 16 complainants. Further, the PLM
Management refused and still refuses to produce the results
of their evaluation of the performance of the complainants
which can be an indication that presentation of such
evidence would be detrimental to its case. Hence, this issue
before us.
Had complainants not been among those active officers
and/or members of the PLMFO, and had their qualifications,
training, experience and performance rating not been
impressive, the Commission would have agreed that the
termination or non-renewal of the contracts of complainants
does not constitute unfair labor practice. But the records
reveal otherwise. Hence, there is indeed no reason for PLM
Management to terminate the services of these employees
except to bust their organization. The Commission finds no
reason to disagree with the findings of facts by the PSLMC
that PLM Management committed an unfair labor practice.
xxx xxx xxx
Even temporary employees enjoy that basic right to form
organization or association for purposes not contrary to law.
PLMFO is that organization. Thus, its members cannot be
separated from the service for the simple reason of
membership in the said organization. And when the
appointment status of these members happens to be
temporary in nature, such becomes merely incidental and the
doctrine that temporary employees have no security of tenure
must yield or is not applicable. When the clear intent
therefore of PLM Management in terminating the services of
these employees is to abridge their constitutional right to
self-organization, the Commission has the duty to give them
protection and uphold their basic right. This constitutional
right of employees is superior to the right of management not
to renew the temporary appointment of its employees. When
the exercise of discretion by the management is calculated to
bust the union as what PLM Management had done, the
43
 Commission has no choice but to declare it as a grave abuse 5. Reyes, Zelda Poor Performance
of discretion. 10
6. Santos, Belinda Tardiness in class, says negative
Petitioner insists that when CSC has ruled on the matter of illegal dismissal
without conducting any further hearing of its own, relying, instead, on comments during faculty meeting
PSLMC's finding of unfair labor practice on the part of petitioner, the latter
has thereby been denied due process. Unfortunately for petitioner, however, 7. Poquiz, Lorredo Seldom returns test papers, taught in another university
the two supposed independent issues, i.e., the unfair labor practice charge
and the complaint for illegal dismissal both filed by private respondents, are, 8. Austria, Rolando Taught in another school for 2nd Semester of 1989-1990
in fact, here unavoidably interlinked. The non-renewal of an employment
contract with a term, it is true, is ordinarily a valid mode of removal at the 9. Manzano, Jonathan Taught in another university
end of each
period. 11 This rule, however, must yield to the superior constitutional right of
10. Hina, Manalo Poor class performance
employees, permanent or temporary, to self-organization. While, a temporary
employment may be ended with or without cause, it certainly may not,
however, be terminated for an illegal cause. 11. Cabatuando, Nemensio Poor class performance, taught in another
university
Petitioner claims that it was denied "due process." It itself admitted, however,
that "it manifested (before the PSLMC) its intention to submit evidence (that 12. Rodriguez, Salvacion none given
it had other valid grounds for not renewing private respondents' temporary
contracts of employment) which, inadvertently or otherwise, it failed to 13. Razon, Alfredo none given
present . . . 12 This supposed evidence, if true and being material to
substantiate its defense against the unfair labor charge, should have been duly 14. Jimenez, Eleanor Tardiness during 2nd sem. in school
presented, but it did not. Petitioner should not now be heard to complain that
it was denied due process. We ruled, time and again, that "due process" was 15. Leyson, Anita Enrolled in another law school
designed to afford an opportunity to be heard,13 not that an actual hearing
should always and indispensably be held. 16. Pineda, Estelita Unbecoming conduct, tardiness 14

In any case, in its reply to public respondents' comment, PLM enumerates the The PSLMC has noted, however, that the charges are either false or
alleged causes for the non-renewal of the contracts, to wit: untenable; hence, its following findings:

Name Cause . . . In the case of complainants Zelda Reyes, Hina Manalo

and Nemencio Cabatuando, PLM alleged that they scored
1. Zamora, Virgilio Failure to finish MA after 2 years poorly in their performance evaluation ratings. However,
check with their actual performance scores (see pp. 252-264,
2. Benagale, Vicente Poor over-all performance records) shows that their grades are near perfect. PLMFO's
President Vicente Benagale was accused of having poor
3. Mejia, Jose Worked with DAR while with PLM class performance scores. His evaluation forms were,
however, not available for scrutiny.
4. Amores, Roberto Failure to complete MA

44
On two occasions, PLM was directed to produce the
evaluation results of the 16 complainants, the first, through
an Order of Director Salvador Fernandez dated May 28,
1990 (see p. 148 records) and the second, in the conference
of January 24, 1990 (see p. 278, records). PLM failed to
comply on both occasions. This Council can only deduce
that the presentation of such evidence would be detrimental
to its case.
Roberto Amores and Virgilio Zamora were separated on the
ground that they failed to complete their MA degrees. A
glance at their number of years of service makes PLM's
charge spurious. In the case of Roberto Amores, records
show that he has been with PLM for 6 1/2 years and was still
on a temporary appointment basis. Under Board Resolution
1025, he should be considered as a permanent employee, his
contract of employment having been renewed after the
interim period. If PLM were sincere in applying the rule that
all permanent faculty must have a Masters Degree, it should
have disqualified Mr. Amores after his interim period of
appointment. It therefore appears that PLM sought to
enforce this rule only after Mr. Amores was elected union
treasurer. On the other hand, PLM's objection as regards
Virgilio Zamora is premature. Mr. Zamora was only in his
4th year at the university. Based on the concept of interim
appointment, he is given up to the fifth year to complete his
Masters.
The cause for termination of Leyson's services was her
enrollment in another school without allegedly asking
permission from PLM management. On record (p. 507,
records) is a letter dated January 7, 1989 of Anita Leyson to
the University, asking permission to continue her studies at
the Arellano Law School for the 2nd semester of 1989. PLM
challenges complainant to show proof that her request had
been granted. Even if complainant, however, cannot produce
any document showing that she was granted permission, in
like manner, neither can PLM present any document
expressly prohibiting her to enroll at the Arellano University.
PLM's non-response, if this is indeed the case, must be
construed as consent. Complainant's request was for
continuance of her studies. If this act was truly
objectionable, PLM should have questioned about her
previous enrollment at the Arellano University.
Moreover, this Council cannot help but comment that as part
of every person's basic human right, there is nothing to
prevent nor prohibit Ms. Leyson to enroll in the law school
of her choice. As borne out by her excellent
performance ratings, complainant has rendered an exemplary
service. Penalizing complainant for seeking to further
improve herself is bordering on oppression.
In the same conference of January 24, 1991, PLM was
directed to further substantiate the validity of its charges
against complainants. In its position paper and other
subsequent pleadings, PLM has however, abandoned all
efforts to pursue its line of defense. It would appear therefore
that the charges are false and untenable. If this is so, why
was PLM so bold as to present them as grounds for the
separation of complainants in the first place? Perhaps, it was
confident that because complainants possessed, temporary
contracts of employment, no serious attempt would be made
to examine PLMFO's complaint. Whatever other reasons
PLM may have, the circumstances obtaining in the instant
case show that these charges were created as an attempt to
confuse/mislead PLM's real motivations on the matter.15
The finding of the PSLMC that the non-renewal by petitioner of the
questioned contracts of employment had been motivated by private
respondents' union activities is conclusive on the parties. Indeed, this Court's
resolution in G.R. No. 105157 (PLM vs. PSLMC et al.) which has long
become final and executory should now render that matter a fait accompli.
When the case was thus referred to the CSC by the PSLMC to take
"appropriate action" it understandably meant that the CSC should take the
necessary steps of reinstating the illegally dismissed employees.
WHEREFORE, the petition for certiorari is DISMISSED and the appealed
resolutions of the Civil Service Commission are AFFIRMED. The temporary
restraining order issued by this Court on 18 May 1993, is LIFTED. No costs.
45
SO ORDERED. Petitioner is a union of supervisory employees. It appears that on March 20,
1995 the union filed a petition for certification election on behalf of the route
managers at Pepsi-Cola Products Philippines, Inc. However, its petition was
denied by the med-arbiter and, on appeal, by the Secretary of Labor and
Employment, on the ground that the route managers are managerial
employees and, therefore, ineligible for union membership under the first
sentence of Art. 245 of the Labor Code, which provides:

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.

Petitioner brought this suit challenging the validity of the order dated August
31, 1995, as reiterated in the order dated September 22, 1995, of the
Secretary of Labor and Employment. Its petition was dismissed by the Third
Division for lack of showing that respondent committed grave abuse of
discretion. But petitioner filed a motion for reconsideration, pressing for
resolution its contention that the first sentence of Art. 245 of the Labor Code,
so far as it declares managerial employees to be ineligible to form, assist or
join unions, contravenes Art. III, §8 of the Constitution which provides:

The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes
not contrary to law shall not be abridged.

For this reason, the petition was referred to the Court en banc.

The Issues in this Case

G.R. No. 122226 March 25, 1998
Two questions are presented by the petition: (1) whether the route managers
at Pepsi-Cola Products Philippines, Inc. are managerial employees and (2)
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, whether Art. 245, insofar as it prohibits managerial employees from forming,
vs. joining or assisting labor unions, violates Art. III, §8 of the Constitution.
HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS,
PHILIPPINES, INC. respondents.

MENDOZA, J.:
46
In resolving these issues it would be useful to begin by defining who are FIRST-LINE MANAGERS — The lowest level in an organization at
"managerial employees" and considering the types of "managerial which individuals are responsible for the work of others is
employees." called first-line or first-level management. First-line managers direct
operating employees only; they do not supervise other
Types of Managerial Employees managers. Examples of first-line managers are the "foreman" or
production supervisor in a manufacturing plant, the technical
The term "manager" generally refers to "anyone who is responsible for supervisor in a research department, and the clerical supervisor in a
subordinates and other organizational resources."1 As a class, managers large office. First-level managers are often called supervisors.
constitute three levels of a pyramid:
MIDDLE MANAGERS — The term middle management can refer
Top management to more than one level in an organization. Middle managers direct
the activities of other managers and sometimes also those of
———————— operating employees. Middle managers' principal responsibilities are
to direct the activities that implement their organizations' policies
Middle and to balance the demands of their superiors with the capacities of
their subordinates. A plant manager in an electronics firm is an
example of a middle manager.
Management
TOP MANAGERS — Composed of a comparatively small group of
——————————
executives, top management is responsible for the overall
management of the organization. It establishes operating policies and
First-Line guides the organization's interactions with its environment. Typical
titles of top managers are "chief executive
Management officer," "president," and "senior vice-president." Actual titles vary
from one organization to another and are not always a reliable guide
(also called to membership in the highest management classification.2

Supervisor) As can be seen from this description, a distinction exists between those who
have the authority to devise, implement and control strategic and operational
==================== policies (top and middle managers) and those whose task is simply to ensure
that such policies are carried out by the rank-and-file employees of an
Operatives organization (first-level managers/supervisors). What distinguishes them
from the rank-and-file employees is that they act in the interest of the
or employer in supervising such rank-and-file employees.

Operating "Managerial employees" may therefore be said to fall into two distinct
categories: the "managers" per se, who compose the former group described
Employees above, and the "supervisors" who form the latter group. Whether they belong
to the first or the second category, managers, vis-a-vis employers, are,
likewise, employees.3

47
The first question is whether route managers are managerial employees or
supervisors.
Previous Administrative Determinations of
the Question Whether Route Managers
are Managerial Employees
It appears that this question was the subject of two previous determinations
by the Secretary of Labor and Employment, in accordance with which this
case was decided by the med-arbiter.
In Case No. OS-MA-10-318-91, entitled Worker's Alliance Trade Union
(WATU) v. Pepsi-Cola Products Philippines, Inc., decided on November 13,
1991, the Secretary of Labor found:
We examined carefully the pertinent job descriptions of the subject
employees and other documentary evidence on record vis-a-
vis paragraph (m), Article 212 of the Labor Code, as amended, and
we find that only those employees occupying the position of route
manager and accounting manager are managerial employees. The
rest i.e. quality control manager, yard/transport manager and
warehouse operations manager are supervisory employees.
To qualify as managerial employee, there must be a clear showing of
the exercise of managerial attributes under paragraph (m), Article
212 of the Labor Code as amended. Designations or titles of
positions are not controlling. In the instant case, nothing on record
will support the claim that the quality control manager,
yard/transport manager and warehouse operations manager are
vested with said attributes. The warehouse operations manager, for
example, merely assists the plant finance manager in planning,
organizing, directing and controlling all activities relative to
development and implementation of an effective management
control information system at the sale offices. The exercise of
authority of the quality control manager, on the other hand, needs the
concurrence of the manufacturing manager.
As to the route managers and accounting manager, we are convinced
that they are managerial employees. Their job descriptions clearly
reveal so.
On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92.
entitled In Re: Petition for Direct Certification and/or Certification Election-
Route Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc.,
as follows:
The issue brought before us is not of first impression. At one time,
we had the occasion to rule upon the status of route manager in the
same company vis a vis the issue as to whether or not it is
supervisory employee or a managerial employee. In the case
of Workers Alliance Trade Unions (WATU) vs. Pepsi Cola Products,
Phils., Inc. (OS-MA-A-10-318-91 ), 15 November 1991, we ruled
that a route manager is a managerial employee within the context of
the definition of the law, and hence, ineligible to join, form or assist
a union. We have once more passed upon the logic of our Decision
aforecited in the light of the issues raised in the instant appeal, as
well as the available documentary evidence on hand, and have come
to the view that there is no cogent reason to depart from our earlier
holding. Route Managers are, by the very nature of their functions
and the authority they wield over their subordinates, managerial
employees. The prescription found in Art. 245 of the Labor Code, as
amended therefore, clearly applies to them.4
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations
Commission,5 however, petitioner argues that these previous administrative
determinations do not have the effect of res judicata in this case, because
"labor relations proceedings" are "non-litigious and summary in nature
without regard to legal technicalities."6 Nasipit Lumber Co. involved a
clearance to dismiss an employee issued by the Department of Labor. The
question was whether in a subsequent proceeding for illegal dismissal, the
clearance was res judicata. In holding it was not, this Court made it clear that
it was referring to labor relations proceedings of a non-adversary character,
thus:
The requirement of a clearance to terminate employment was a
creation of the Department of labor to carry out the Labor Code
provisions on security of tenure and termination of employment. The
proceeding subsequent to the filing of an application for clearance to
terminate employment was outlined in Book V, Rule XIV of the
Rules and Regulations Implementing the Labor Code. The fact that
said rule allowed a procedure for the approval of the clearance with
or without the opposition of the employee concerned (Secs. 7 & 8),
48
 demonstrates the non-litigious and summary nature of the supervisors may wittingly or unwittingly be classified as managerial
proceeding. The clearance requirement was therefore necessary only personnel and thus denied the right of self-organization, has decided to
as an expeditious shield against arbitrary dismissal without the review the record of this case.
knowledge and supervision of the Department of Labor. Hence, a
duly approved clearance implied that the dismissal was legal or for DOLE's Finding that Route Managers are
cause (Sec. 2).7 Managerial Employees Supported by
Substantial Evidence in the Record
But the doctrine of res judicata certainly applies to adversary administrative
proceedings. As early as 1956, in Brillantes v. Castro,8 we sustained the The Court now finds that the job evaluation made by the Secretary of Labor
dismissal of an action by a trial court on the basis of a prior administrative is indeed supported by substantial evidence. The nature of the job of route
determination of the same case by the Wage Administration Service, managers is given in a four-page pamphlet, prepared by the company, called
applying the principle of res judicata. Recently, in Abad v. NLRC9 we "Route Manager Position Description," the pertinent parts of which read:
applied the related doctrine of stare decisis in holding that the prior
determination that certain jobs at the Atlantic Gulf and Pacific Co., were A. BASIC PURPOSE
project employments was binding in another case involving another group of
employees of the same company. Indeed, in Nasipit Lumber Co., this Court A Manager achieves objectives through others.
clarified toward the end of its opinion that "the doctrine of res
judicata applies . . . to judicial or quasi judicial proceedings and not to the As a Route Manager, your purpose is to meet the
exercise of administrative powers."10 Now proceedings for certification sales plan; and you achieve this objective through
election, such as those involved in Case No. OS-M-A-10-318-91 and Case the skillful MANAGEMENT OF YOUR JOB AND
No. OS-A-3-71-92, are quasi judicial in nature and, therefore, decisions THE MANAGEMENT OF YOUR PEOPLE.
rendered in such proceedings can attain finality.11
These then are your functions as Pepsi-Cola Route
Thus, we have in this case an expert's view that the employees concerned are Manager. Within these functions — managing your
managerial employees within the purview of Art. 212 which provides: job and managing your people — you are
accountable to your District Manager for the
(m) "managerial employee" is one who is vested with powers or execution and completion of various tasks and
prerogatives to lay down and execute management policies and/or to activities which will make it possible for you to
hire, transfer, suspend, lay off, recall, discharge, assign or discipline achieve your sales objectives.
employees. Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial actions if the B. PRINCIPAL ACCOUNTABILITIES
exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment. All employees not
1.0 MANAGING YOUR JOB
falling within any of the above definitions are considered rank-and-
file employees for purposes of this Book.
The Route Manager is accountable
for the following:
At the very least, the principle of finality of administrative determination
compels respect for the finding of the Secretary of Labor that route managers
are managerial employees as defined by law in the absence of anything to 1.1 SALES DEVELOPMENT
show that such determination is without substantial evidence to support it.
Nonetheless, the Court, concerned that employees who are otherwise
49
1.1.1 Achieve the suggested retail
sales plan. pricing.

1.1.2 Achieve all 1.1.9 Study from

distribution and time to time
new account individual route
objectives. coverage and
productivity for
1.1.3 Develop new possible
business adjustments to
opportunities thru maximize
personal contacts utilization of
with dealers. resources.

1.1.4 Inspect and 1.2 Administration

ensure that all
merchandizing [sic] 1.2.1 Ensure the
objectives are proper loading of
achieved in all route trucks before
outlets. check-out and the
proper sorting of
1.1.5 maintain and bottles before
improve check-in.
productivity of all
cooling equipment 1.2.2 Ensure the
and kiosks. upkeep of all route
sales reports and all
1.1.6 Execute and other related reports
control all and forms required
authorized on an accurate and
promotions. timely basis.

1.1.7 Develop and 1.2.3 Ensure proper

maintain dealer implementation of
goodwill. the various
company policies
1.1.8 Ensure all and procedures incl.
accounts comply but not limited to
with company shakedown; route
shortage;
progressive
50
 discipline; sorting; enhancement of
spoilages; effective sales and
credit/collection; merchandizing [sic]
accident; techniques of the
attendance. salesmen and
helpers. Conduct
1.2.4 Ensure group training at
collection of least 1 hour each
receivables and week on a
delinquent designated day and
accounts. of specific topic.

2.0 MANAGING YOUR PEOPLE 2.2 Code of Conduct

The Route Manager is accountable 2.2.1 Maintain the

for the following: company's
reputation through
2.1 Route Sales Team Development strict adherence to
PCPPI's code of
2.1.2 Conduct route conduct and the
rides to train, universal standards
evaluate and of unquestioned
develop all assigned business
route salesmen and ethics.12
helpers at least 3
days a week, to be Earlier in this opinion, reference was made to the distinction between
supported by managers per se (top managers and middle managers) and supervisors (first-
required route ride line managers). That distinction is evident in the work of the route managers
documents/reports which sets them apart from supervisors in general. Unlike supervisors who
& back check/spot basically merely direct operating employees in line with set tasks assigned to
check at least 2 them, route managers are responsible for the success of the company's main
days a week to be line of business through management of their respective sales teams. Such
supported by management necessarily involves the planning, direction, operation and
required evaluation of their individual teams and areas which the work of supervisors
documents/reports. does not entail.

2.1.2 Conduct sales The route managers cannot thus possibly be classified as mere supervisors
meetings and because their work does not only involve, but goes far beyond, the simple
morning huddles. direction or supervision of operating employees to accomplish objectives set
Training should by those above them. They are not mere functionaries with simple oversight
focus on the functions but business administrators in their own right. An idea of the role
51
of route managers as managersper se can be gotten from a memo sent by the
director of metro sales operations of respondent company to one of the route
managers. It reads:13

03 April 1995

To : CESAR T . REOLADA

From : REGGIE M. SANTOS

Subj : SALARY INCREASE

Effective 01 April 1995, your basic monthly salary of P11,710 will be

increased to P12,881 or an increase of 10%. This represents the
added managerial responsibilities you will assume due to the recent
restructuring and streamlining of Metro Sales Operations brought
about by the continuous losses for the last nine (9) months.
Let me remind you that for our operations to be profitable, we have
to sustain the intensity and momentum that your group and yourself
have shown last March. You just have to deliver the desired volume
targets, better negotiated concessions, rationalized sustaining deals,
eliminate or reduced overdues, improved collections, more cash
accounts, controlled operating expenses, etc. Also, based on the
agreed set targets, your monthly performance will be closely
monitored.
You have proven in the past that your capable of achieving your
targets thru better planning, managing your group as a fighting
team, and thru aggressive selling. I am looking forward to your
success and I expect that you just have to exert your doubly best in
turning around our operations from a losing to a profitable one!
Happy Selling!!
The plasticized card given to route managers, quoted in the separate opinion
of Justice Vitug, although entitled "RM's Job Description," is only a
summary of performance standards. It does not show whether route
managers are managers per se or supervisors. Obviously, these performance
standards have to be related to the specific tasks given to route managers in
the four-page "Route Manager Position Description," and, when this is done,
the managerial nature of their jobs is fully revealed. Indeed, if any, the card
indicates the great latitude and discretion given to route managers — from
servicing and enhancing company goodwill to supervising and auditing
accounts, from trade (new business) development to the discipline, training
and monitoring of performance of their respective sales teams, and so forth,
— if they are to fulfill the company's expectations in the "key result areas."
Article 212(m) says that "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." Thus, their only power is to
recommend. Certainly, the route managers in this case more than merely
recommend effective management action. They perform operational, human
resource, financial and marketing functions for the company, all of which
involve the laying down of operating policies for themselves and their teams.
For example, with respect to marketing, route managers, in accordance with
B.1.1.1 to B.1.1.9 of( the Route Managers Job Description, are charged,
among other things,Swith expanding the dealership base of their respective
g the goodwill of current dealers, and distributing the
sales areas, maintaining
d
company's various promotional items as they see fit. It is difficult to see how
.
supervisors can be given such responsibility when this involves not just the
52
routine supervision of operating employees but the protection and expansion
of the company's business vis-a-visits competitors.
While route managers do not appear to have the power to hire and fire
people (the evidence shows that they only "recommended" or "endorsed" the
taking of disciplinary action against certain employees), this is because this
is a function of the Human Resources or Personnel Department of the
company.14 And neither should it be presumed that just because they are
given set benchmarks to observe, they are ipso facto supervisors. Adequate
control methods (as embodied in such concepts as "Management by
Objectives [MBO]" and "performance appraisals") which require a
delineation of the functions and responsibilities of managers by means of
ready reference cards as here, have long been recognized in management as
effective tools for keeping businesses competitive.
This brings us to the second question, whether the first sentence of Art. 245
of the Labor Code, prohibiting managerial employees from forming,
assisting or joining any labor organization, is constitutional in light of Art.
III, §8 of the Constitution which provides:
The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not be abridged.
As already stated, whether they belong to the first category (managers per
se) or the second category (supervisors), managers are employees.
Nonetheless, in the United States, as Justice Puno's separate opinion notes,
supervisors have no right to form unions. They are excluded from the
definition of the term "employee" in §2(3) of the Labor-Management
Relations Act of 1947.15 In the Philippines, the question whether managerial
employees have a right of self-organization has arisen with respect to first-
level managers or supervisors, as shown by a review of the course of labor
legislation in this country.
Right of Self-Organization of Managerial
Employees under Pre-Labor Code Laws
Before the promulgation of the Labor Code in 1974, the field of labor
relations was governed by the Industrial Peace Act (R.A. No. 875).
In accordance with the general definition above, this law defined
"supervisor" as follows:
Sec. 2. . . .
(k) "Supervisor" means any person having authority in the interest of
an employer, to hire, transfer, suspend, lay-off, recall, discharge,
assign, recommend, or discipline other employees, or responsibly to
direct them, and to adjust their grievances, or effectively to
recommend such acts, if, in connection with the foregoing, the
exercise of such authority is not of a merely routinary or clerical
nature but requires the use of independent judgment.16
The right of supervisors to form their own organizations was affirmed:
Sec. 3. Employees' Right to Self-Organization. — Employees shall
have the right to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective
bargaining and other mutual aid and protection. Individuals
employed as supervisors shall not be eligible for membership in a
labor organization of employees under their supervision but may
form separate organizations of their own.17
For its part, the Supreme Court upheld in several of its decisions the right of
supervisors to organize for purposes of labor relations.18
Although it had a definition of the term "supervisor," the Industrial Peace
Act did not define the term "manager." But, using the commonly-understood
concept of "manager," as above stated, it is apparent that the law used the
term "supervisors" to refer to the sub-group of "managerial employees"
known as front-line managers. The other sub-group of "managerial
employees," known as managers per se, was not covered.
However, in Caltex Filipino Managers and Supervisors Association v. Court
of Industrial Relations,19 the right of all managerial employees to self-
organization was upheld as a general proposition, thus:
53
 It would be going too far to dismiss summarily the point raised by Payroll Position Title
respondent Company — that of the alleged identity of interest
between the managerial staff and the employing firm. That should Assistant to Mgr. — National Acct. Sales
ordinarily be the case, especially so where the dispute is between
management and the rank and file. It does not necessarily follow Jr. Sales Engineer
though that what binds the managerial staff to the corporation
forecloses the possibility of conflict between them. There could be a Retail Development Asst.
real difference between what the welfare of such group requires and
the concessions the firm is willing to grant. Their needs might not be Staff Asst. — 0 Marketing
attended to then in the absence of any organization of their own. Nor
is this to indulge in empty theorizing. The record of respondent
Sales Supervisor
Company, even the very case cited by it, is proof enough of their
uneasy and troubled relationship. Certainly the impression is
difficult to erase that an alien firm failed to manifest sympathy for Supervisory Assistant
the claims of its Filipino executives. To predicate under such
circumstances that agreement inevitably marks their relationship, Jr. Supervisory Assistant
ignoring that discord would not be unusual, is to fly in the face of
reality. Credit Assistant

. . . The basic question is whether the managerial personnel can Lab. Supvr. — Pandacan
organize. What respondent Company failed to take into account is
that the right to self-organization is not merely a statutory creation. Jr. Sales Engineer B
It is fortified by our Constitution. All are free to exercise such right
unless their purpose is contrary to law. Certainly it would be to Operations Assistant B
attach unorthodoxy to, not to say an emasculation of, the concept of
law if managers as such were precluded from organizing. Having Field Engineer
done so and having been duly registered, as did occur in this case,
their union is entitled to all the rights under Republic Act No. 875. Sr. Opers. Supvr. — MIA A/S
Considering what is denominated as unfair labor practice under
Section 4 of such Act and the facts set forth in our decision, there can Purchasing Assistant
be only one answer to the objection raised that no unfair labor
practice could be committed by respondent Company insofar as
Jr. Construction Engineer
managerial personnel is concerned. It is, as is quite obvious, in the
negative.20
Sr. Sales Supervisor
Actually, the case involved front-line managers or supervisors only, as the
plantilla of employees, quoted in the main opinion,21 clearly indicates: Deport Supervisor A

CAFIMSA members holding the following Supervisory Payroll Terminal Accountant B

Position Title are Recognized by the Company
Merchandiser
54
Dist. Sales Prom. Supvr.
Instr. — Merchandising
Asst. Dist. Accountant B
Sr. Opers. Supervisor
Jr. Sales Engineer A
Asst. Bulk Ter. Supt.
Sr. Opers. Supvr.
Credit Supervisor A
Asst. Stores Supvr. A
Ref. Supervisory Draftsman
Refinery Shift Supvr. B
Asst. Supvr. A — Operations (Refinery)
Refinery Shift Supvr. B
Asst. Lab. Supvr. A (Refinery)
St. Process Engineer B (Refinery)
Asst. Supvr. A — Maintenance (Refinery)
Asst. Supvr. B — Maintenance (Refinery)
Supervisory Accountant (Refinery)
Communications Supervisor (Refinery)
Finally, also deemed included are all other employees excluded from
the rank and file unions but not classified as managerial or
otherwise excludable by law or applicable judicial precedents.
Right of Self-Organization of Managerial
Employees under the Labor Code
Thus, the dictum in the Caltex case which allowed at least for the theoretical
unionization of top and middle managers by assimilating them with the
supervisory group under the broad phrase "managerial personnel," provided
the lynchpin for later laws denying the right of self-organization not only to
top and middle management employees but to front line managers or
supervisors as well. Following the Caltex case, the Labor Code, promulgated
in 1974 under martial law, dropped the distinction between the first and
second sub-groups of managerial employees. Instead of treating the terms
"supervisor" and "manager" separately, the law lumped them together and
called them "managerial employees," as follows:
Art. 212. Definitions . . . .
(k) "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 this Book.22
The definition shows that it is actually a combination of the commonly
understood definitions of both groups of managerial employees,
grammatically joined by the phrase "and/or."
This general definition was perhaps legally necessary at that time for two
reasons. First, the 1974 Code denied supervisors their right to self-organize
as theretofore guaranteed to them by the Industrial Peace Act. Second, it
stood the dictum in the Caltex case on its head by prohibiting all types of
managers from forming unions. The explicit general prohibition was
contained in the then Art. 246 of the Labor Code.
The practical effect of this synthesis of legal concepts was made apparent in
the Omnibus Rules Implementing the Labor Code which the Department of
55
Labor promulgated on January 19, 1975. Book V, Rule II, §11 of the Rules
provided:
Supervisory unions and unions of security guards to cease operation.
— All existing supervisory unions and unions of security guards
shall, upon the effectivity of the Code, cease to operate as such and
their registration certificates shall be deemed automatically
canceled. However, existing collective agreements with such unions,
the life of which extends beyond the date of effectivity of the Code,
shall be respected until their expiry date insofar as the economic
benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition
of managerial employees shall become eligible to join or assist the
rank and file labor organization, and if none exists, to form or assist
in the forming of such rank and file organization. The determination
of who are managerial employees and who are not shall be the
subject of negotiation between representatives of the supervisory
union and the employer. If no agreement is reached between the
parties, either or both of them may bring the issue to the nearest
Regional Office for determination.
The Department of Labor continued to use the term "supervisory unions"
despite the demise of the legal definition of "supervisor" apparently because
these were the unions of front line managers which were then allowed as a
result of the statutory grant of the right of self-organization under the
Industrial Peace Act. Had the Department of Labor seen fit to similarly ban
unions of top and middle managers which may have been formed following
the dictum in Caltex, it obviously would have done so. Yet it did not,
apparently because no such unions of top and middle managers really then
existed.
Real Intent of the 1986 Constitutional Commission
This was the law as it stood at the time the Constitutional Commission
considered the draft of Art. III, §8. Commissioner Lerum sought to amend the
draft of what was later to become Art. III, §8 of the present Constitution:
MR. LERUM. My amendment is on Section 7, page 2, line 19, which
is to insert between the words "people" and "to" the following:
WHETHER EMPLOYED BY THE STATE OR PRIVATE
ESTABLISHMENTS. In other words, the section will now read as
follows: "The right of the people WHETHER EMPLOYED BY THE
STATE OR PRIVATE ESTABLISHMENTS to form associations,
unions, or societies for purposes not contrary to law shall not be
abridged."23
Explaining his proposed amendment, he stated:
MR. LERUM. Under the 1935 Bill of Rights, the right to form
associations is granted to all persons whether or not they are
employed in the government. Under that provision, we allow unions
in the government, in government-owned and controlled
corporations and in other industries in the private sector, such as the
Philippine Government Employees' Association, unions in the GSIS,
the SSS, the DBP and other government-owned and controlled
corporations. Also, we have unions of supervisory employees and of
security guards. But what is tragic about this is that after the 1973
Constitution was approved and in spite of an express recognition of
the right to organize in P.D. No. 442, known as the Labor Code, the
right of government workers, supervisory employees and security
guards to form unions was abolished.
And we have been fighting against this abolition. In every tripartite
conference attended by the government, management and workers,
we have always been insisting on the return of these rights. However,
both the government and employers opposed our proposal, so
nothing came out of this until this week when we approved a
provision which states:
Notwithstanding any provision of this article, the
right to self-organization shall not be denied to
government employees.
We are afraid that without any corresponding provision covering the
private sector, the security guards, the supervisory employees or
majority employees [sic] will still be excluded, and that is the
purpose of this amendment.
I will be very glad to accept any kind of wording as long as it will
amount to absolute recognition of private sector employees, without
exception, to organize.
56
 THE PRESIDENT. What does the Committee say?
FR. BERNAS. Certainly, the sense is very acceptable, but the point
raised by Commissioner Rodrigo is well-taken. Perhaps, we can
lengthen this a little bit more to read: "The right of the people
WHETHER UNEMPLOYED OR EMPLOYED BY STATE OR
PRIVATE ESTABLISHMENTS.
I want to avoid also the possibility of having this interpreted as
applicable only to the employed.
MR. DE LOS REYES. Will the proponent accept an amendment to
the amendment, Madam President?
MR. LERUM. Yes, as long as it will carry the idea that the right of
the employees in the private sector is recognized.24
Lerum thus anchored his proposal on the fact that (1) government employees,
supervisory employees, and security guards, who had the right to organize
under the Industrial Peace Act, had been denied this right by the Labor
Code, and (2) there was a need to reinstate the right of these employees. In
consonance with his objective to reinstate the right of government, security,
and supervisory employees to organize, Lerum then made his proposal:
MR. LERUM. Mr. Presiding Officer, after a consultation with
several Members of this Commission, my amendment will now read
as follows: "The right of the people INCLUDING THOSE
EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS to form
associations, unions, or societies for purposes not contrary to law
shall not be abridged. In proposing that amendment I ask to make of
record that I want the following provisions of the Labor Code to be
automatically abolished, which read:
Art. 245. Security guards and other personnel
employed for the protection and security of the
person, properties and premises of the employers
shall not be eligible for membership in a labor
organization.
Art. 246. Managerial employees are not eligible to
join, assist, and form any labor organization.
THE PRESIDING OFFICER (Mr. Bengzon). What does the
Committee say?
FR. BERNAS. The Committee accepts.
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has
accepted the amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the
amendment, as amended, is approved.25
The question is what Commissioner Lerum meant in seeking to
"automatically abolish" the then Art. 246 of the Labor Code. Did he simply
want "any kind of wording as long as it will amount to absolute recognition
of private sector employees, without exception, to organize"?26 Or, did he
instead intend to have his words taken in the context of the cause which
moved him to propose the amendment in the first place, namely, the denial of
the right of supervisory employees to organize, because he said, "We are
afraid that without any corresponding provision covering the private sector,
security guards, supervisory employees or majority [of] employees will still
be excluded, and that is the purpose of this amendment"?27
It would seem that Commissioner Lerum simply meant to restore the right of
supervisory employees to organize. For even though he spoke of the need to
"abolish" Art. 246 of the Labor Code which, as already stated, prohibited
"managerial employees" in general from forming unions, the fact was that in
explaining his proposal, he repeatedly referred to "supervisory employees"
whose right under the Industrial Peace Act to organize had been taken away
by Art. 246. It is noteworthy that Commissioner Lerum never referred to the
then definition of "managerial employees" in Art. 212(m) of the Labor Code
which put together, under the broad phrase "managerial employees," top and
middle managers and supervisors. Instead, his repeated use of the term
"supervisory employees," when such term then was no longer in the statute
books, suggests a frame of mind that remained grounded in the language of
the Industrial Peace Act.
57
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of all
managerial employees to organize, despite the fact that the Industrial Peace
Act did not expressly provide for the right of top and middle managers to
organize. If Lerum was aware of the Caltex dictum, then his insistence on the
use of the term "supervisory employees" could only mean that he was
excluding other managerial employees from his proposal. If, on the other
hand, he was not aware of the Caltex statement sustaining the right to
organize to top and middle managers, then the more should his repeated use
of the term "supervisory employees" be taken at face value, as it had been
defined in the then Industrial Peace Act.
At all events, that the rest of the Commissioners understood his proposal to
refer solely to supervisors and not to other managerial employees is clear
from the following account of Commissioner Joaquin G. Bernas, who writes:
In presenting the modification on the 1935 and 1973 texts,
Commissioner Eulogio R. Lerum explained that the modification
included three categories of workers: (1) government employees, (2)
supervisory employees, and (3) security guards. Lerum made of
record the explicit intent to repeal provisions of P.D. 442, the Labor
Code. The provisions referred to were:
Art. 245. Security guards and other personnel
employed for the protection and security of the
person, properties and premises of the employers
shall not be eligible for membership in a labor
organization.
Art. 246. Managerial employees are not eligible to
join, assist, and form any labor organization.28
Implications of the Lerum Proposal
In sum, Lerum's proposal to amend Art. III, §8 of the draft Constitution by
including labor unions in the guarantee of organizational right should be
taken in the context of statements that his aim was the removal of the
statutory ban against security guards and supervisory employees joining
labor organizations. The approval by the Constitutional Commission of his
proposal can only mean, therefore, that the Commission intended the
absolute right to organize of government workers, supervisory employees,
and security guards to be constitutionally guaranteed. By implication, no
similar absolute constitutional right to organize for labor purposes should be
deemed to have been granted to top-level and middle managers. As to them
the right of self-organization may be regulated and even abridged
conformably to Art. III, §8.
Constitutionality of Art. 245
Finally, the question is whether the present ban against managerial
employees, as embodied in Art. 245 (which superseded Art. 246) of the Labor
Code, is valid. This provision reads:
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.29
This provision is the result of the amendment of the Labor Code in 1989 by
R.A. No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the
Industrial Peace Act or the provisions of the Labor Code which it
superseded, R.A. No. 6715 provides separate definitions of the terms
"managerial" and "supervisory employees," as follows:
Art. 212. Definitions. . . .
(m) "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. 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.
Although the definition of "supervisory employees" seems to have been
unduly restricted to the last phrase of the definition in the Industrial Peace
Act, the legal significance given to the phrase "effectively recommends"
58
remains the same. In fact, the distinction between top and middle managers, forming unions. After all, those who qualify as top or middle managers are
who set management policy, and front-line supervisors, who are merely executives who receive from their employers information that not only is
responsible for ensuring that such policies are carried out by the rank and confidential but also is not generally available to the public, or to their
file, is articulated in the present definition.30 When read in relation to this competitors, or to other employees. It is hardly necessary to point out that to
definition in Art. 212(m), it will be seen that Art. 245 faithfully carries out the say that the first sentence of Art. 245 is unconstitutional would be to
intent of the Constitutional Commission in framing Art. III, §8 of the contradict the decision in that case.
fundamental law.
WHEREFORE, the petition is DISMISSED.
Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban
against managerial employees forming a union. The right guaranteed in Art. SO ORDERED.
III, §8 is subject to the condition that its exercise should be for purposes "not
contrary to law." In the case of Art. 245, there is a rational basis for
prohibiting managerial employees from forming or joining labor
organizations. As Justice Davide, Jr., himself a constitutional commissioner,
said in his ponencia in Philips Industrial Development, Inc. v. NLRC:31

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 joint a labor union equally applies to them.

In Bulletin Publishing Co., Inc. v. 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.32

To be sure, the Court in Philips Industrial was dealing with the right of
confidential employees to organize. But the same reason for denying them the
right to organize justifies even more the ban on managerial employees from
59
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.
PARAS, J.:
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 O. Macasa, Sr., in NLRC Case No. R-418-ROXI-
MED-UR-8886, 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.
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;
60
 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.
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.
61
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.
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.
G.R. No. L-98050 March 17, 1994
PHILIPPINE PHOSPHATE FERTILIZER
CORPORATION, petitioner,
vs.
HON. RUBEN D. TORRES, Secretary of Labor and Employment, HON.
RODOLFO S. MILADO, Department of Labor and Employment
Mediator-Arbiter for Region VIII, Tacloban, City, and PHILPHOS
MOVEMENT FOR PROGRESS, INC. (PMPI), respondents.
BELLOSILLO, J.:
PHILIPPINE PHOSPHATE FERTILIZER CORPORATION (PHILPHOS)
assails the decision of the Secretary of Labor of 7 August 1990 affirming the
order of the Mediator-Arbiter of 28 March 1990 which directed the
immediate conduct of a certification election among the supervisory,
professional or technical, and confidential employees of petitioner
corporation.
On 7 July 1989, Philphos Movement for Progress, Inc. (PMPI for brevity),
filed with the Department of Labor and Employment a petition for
certification election among the supervisory employees of petitioner, alleging
that as a supervisory union duly registered with the Department of Labor and
Employment it was seeking to represent the supervisory employees of
Philippine Phosphate Fertilizer Corporation.
The petition for certification election filed by PMPI was not opposed by
PHILPHOS. In fact, on 11 August 1989, PHILPHOS submitted a position
paper with the Mediator-Arbiter stating that its management welcomed the
creation of a supervisory employees' union provided the necessary requisites
of law were properly observed, but exempting from the union
its superintendents who were managerial and not supervisory employees as
they managed a division, subdivision or section, and were vested with
powers or prerogatives to lay down and execute management policies.
PHILPHOS also asserted that its professional or technical employees were
not within the definition of supervisory employees under the Labor Code as
they were immediately under the direction and supervision of its
superintendents and supervisors. Moreover, the professional and technical
employees did not have a staff of workers under them. Consequently,
petitioner prayed for the exclusion of
62
its superintendents andprofessional/technical employees from the PMPI
supervisory union.
On 13 October 1989, Mediator-Arbiter Rodolfo S. Milado issued an order
directing the holding of a certification election among the supervisory
employees of petitioner, excluding therefrom the superintendents and
theprofessional and technical employees. He also directed the parties to
attend the pre-election conference on 19 April 1990 for the determination of
the mechanics of the election process and the qualifications and eligibility of
those allowed to vote.
On 15 November 1989, PMPI filed an amended petition with the Mediator-
Arbiter wherein it sought to represent not only the supervisory employees of
petitioner but also its professional/technical and confidential employees. The
amended petition was filed in view of the amendment of the PMPI
Construction which included in its membership
the professional/technical and confidential employees.
On 14 December 1989, the parties therein agreed to submit their respective
position papers and to consider the amended petition submitted for decision
on the basis thereof and related documents.
On 28 March 1990, Mediator-Arbiter Milado issued an order granting the
petition and directing the holding of a certification election among
the "supervisory, professional (engineers, analysts, mechanics, accountants,
nurses, midwives, etc.), technical, and confidential employees" 1 to comprise
the proposed bargaining unit.
On 16 April 1990, PHILPHOS appealed the order of 28 March 1990 to the
Secretary of Labor and Employment who on 7 August 1990 rendered a
decision through Undersecretary Bienvenido Laguesma dismissing the
appeal. PHILPHOS moved for reconsideration but the same was denied;
hence, the instant petition alleging grave abuse of discretion on the part of
public respondents in rendering the assailed rulings.
On 8 July 1991, this Court issued a temporary restraining order enjoining
respondents from holding the certification election among
petitioner's supervisory, professional/technical, and confidential
employees scheduled on 12 July 1991.
There are two (2) issues raised by petitioner: (1) whether it was denied due
process in the proceedings before respondent Mediator-Arbiter; and, (2)
whether its professional/technical and confidential employees may validly
join respondent PMPI union which is composed of supervisors.
PHILPHOS claims that it was denied due process when respondent
Mediator-Arbiter granted the amended petition of respondent PMPI without
according PHILPHOS a new opportunity to be heard.
We do not see it the way PHILPHOS does here. The essence of due process
is simply an opportunity to be heard or, as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek a
reconsideration of the action or ruling complained of.2 Where, as in the
instant case, petitioner PHILPHOS agreed to file its position paper with the
Mediator-Arbiter and to consider the case submitted for decision on the basis
of the position papers filed by the parties, there was sufficient compliance
with the requirement of due process, as petitioner was afforded reasonable
opportunity to present its side.3 Moreover, petitioner could have, if it so
desired, insisted on a hearing to confront and examine the witnesses of the
other party. But it did
not; 4 instead, it opted to submit its position paper with the Mediator-Arbiter.
Besides, petitioner had all the opportunity to ventilate its arguments in its
appeal to the Secretary of Labor.
As regards the second issue, we are with petitioner that being a supervisory
union, respondent PMPI cannot represent
the professional/technical and confidential employees of petitioner whose
positions we find to be more of the rank and file than supervisory.
With the enactment in March 1989 of R.A. 6715, employees were thereunder
reclassified into three (3) groups, namely: (a) managerial employees, (b)
supervisory employees, and (c) rank and file employees. The category of
supervisory employees is once again recognized in the present law.
Article 212, par. (m), of the Labor Code, as amended, provides, that
"(s)upervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of
independent judgment." The definition of managerial employees is limited to
those having authority to hire and fire, while those who only recommend
effectively the hiring or firing or transfer of personnel; are considered closer
63
to rank and file employees. The exclusion therefore of mid-level executives
from the category of managers has brought about a third classification, the
supervisory employees. The peculiar role of supervisors is such that while
they are not managers, when they recommend action implementing
management policy or ask for the discipline or dismissal of subordinates,
they identify with the interests of the employer and may act contrary to the
interests of the rank and file.5
In its position paper submitted to the Mediator-Arbiter, petitioner described
the positions and functions of itsprofessional/technical employees,
(engineers, analysts, mechanics, accountants, nurses, and midwives). The
guidelines, which were not refuted by respondent PMPI, state:
. . . . Professional and Technical positions are those whose
primary duty consists of the performance of work directly
related to management programs; who customarily, regularly
and routinarily exercise judgment in the application of
concepts, methods, systems and procedures in their
respective fields of specialization; who regularly and directly
assist a managerial and/or supervisory employee, execute
under general supervision, work along specialized or
technical lines requiring special training, experience or
knowledge, or execute under general supervision special
assignments and task . . . . They are immediately under the
direction and supervision of supervisors or superintendents.
They have no men under them but are regularly called upon
by their supervisors or superintendents on some technical
matters.6
Moreover, Herculano, A. Duhaylungsod, Personnel Officer of petitioner,
attested that there was no community of interests between the supervisors of
petitioner and the professional/technical employees; that as of 25 July 1990,
personnel records showed that there were 125 supervisors and
271 professional/technical employees; that of the 271 professional/technical
employees, 150 were directly under and being supervised by supervisors,
while the rest were staff members of superintendents.7
The certification of Personnel Officer Duhaylungsod that
its professional/technical employees occupy positions that are non-
supervisory is evidence that said employees belong to the rank and
file.8 Quite obviously, theseprofessional/technical employees cannot
effectively recommend managerial actions with the use of independent
judgment because they are under the supervision of superintendents and
supervisors. Because it is unrefuted that these professional/technical
employees are performing non-supervisory functions, hence considered
admitted, they should be classified, at least for purposes of this case, as rank
and file employees. Consequently, theseprofessional/technical
employees cannot be allowed to join a union composed of supervisors.
Conversely, supervisory employees cannot join a labor organization of
employees under their supervision but may validly form a separate
organization of their own.9 This is provided in Art. 245 of the Labor Code, as
amended by R.A. No. 6715, to wit:
. . . 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.
Respondent PMPI is supposed to be a union of 125 supervisors. If
the professional/technical employees are included as members, and records
show that they are 271 in all or much more than the supervisors, then PMPI
will turn out to be a rank and file union with the supervisors as members.
This is precisely the situation which the law prohibits. It would create an
obvious conflict of views among the members, or at least between two (2)
groups of members espousing opposing interests. The intent of the law is to
avoid a situation where supervisors would merge with the rank and file, or
where the supervisors' labor organization would represent conflicting
interests, especially where, as in the case at bar, the supervisors will be
commingling with those employees whom they directly supervise in their
own bargaining unit. Members of the supervisory union might refuse to carry
out disciplinary measures against their co-member rank and file
employees. 10
Supervisors have the right to form their own union or labor organization.
What the law prohibits is a union whose membership comprises
of supervisors merging with the rank and file employees because this is
where conflict of interests may arise in the areas of discipline, collective
bargaining and strikes. 11 The professional/technical employees of petitioner
therefore may join the existing rank and file union, or form a union separate
64
and distinct from the existing union organized by the rank and file employees
of the same company.

As to the confidential employees of the petitioner, the latter has not shown
any proof or compelling reason to exclude them from joining respondent
PMPI and from participating in the certification election, unless these
confidential employees are the same professional/technical employees whom
we find to be occupying rank and file positions.

WHEREFORE, the petition is GRANTED. The decision of respondent

Secretary of Labor of 7 August 1990, as well as the order of the respondent
Mediator-Arbiter of 28 March 1990, is SET ASIDE. The
professional/technical employees of petitioner Philippine Phosphate Fertilizer
Corporation (PHILPHOS) are declared disqualified from affiliating with
respondent Philphos Movement for Progress, Inc. (PMPI).

The Department of Labor is directed to order immediately the conduct of

certification election among the supervisory employees of petitioner,
particularly excluding therefrom its professional and technical employees.

SO ORDERED.

Cruz, Davide, Jr., Quiason and Kapunan, JJ., concur.

65
Affiliation and Disaffiliation
G.R. No. L-35120 January 31, 1984
ADAMSON & ADAMSON, INC., petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS and ADAMSON &
ADAMSON SUPERVISORY UNION (FFW), respondents.
Sycip, Salazar, Luna & Feliciano for petitioner.
Jaime D. Lauron for respondents.
GUTIERREZ, JR., J.:
Adamson and Adamson, Inc., filed this petition to set aside orders of the
respondent Court of Industrial Relations (CIR) holding that the Adamson and
Adamson, Inc. supervisory Union (FFW) can legally represent supervisors of
the petitioner corporation notwithstanding the affiliation of the lank and file
union of the same company with the same labor federation, the Federation of
Free Workers.
The Adamson and Adamson, Inc. Supervisory Union (FFW) informed the
petitioner about its having organized on the same date that the Adamson and
Adamson, Inc. Salesmen Association (FFW) advised the petitioner that the
rank and file salesmen had formed their own union.
The CIR dismissed the petition in CIR Case No. 3267-MC entitled "In the
Matter of Representation of the Supervisory Employees of Adamson and
Adamson, Inc., Petitioner " thus prompting the filing of this petition for
review on certiorari.
Subsequently and during the pendency of the present petition, the rank and
file employees formed their own union, naming it Adamson and Adamson
Independent Workers (FFW).
The petitioner made a lone assignment of error, to wit:
THE RESPONDENT COURT OF INDUSTRIAL RELATIONS ERRED IN
SUSTAINING THE ELIGIBILITY OF THE RESPONDENT UNION TO
REPRESENT THE PETITIONER'S SUPERVISORY EMPLOYEES NOT-
WITHSTANDING THE AFFILIATION OF THE SAID UNION WITH
THE SAME NATIONAL FEDERATION WITH WHICH THE UNIONS
OF NON-SUPERVISORS IN THE PETITIONER COMPANY ARE ALSO
AFFILIATED.
The petitioner argues that the affiliation of the respondent union of
supervisors, the salesmen's association, and the Adamson and Adamson
independent Workers Union of rank and file personnel with the same
national federation (FFW) violates Section 3 of the Industrial Peace Act, as
amended, because — (1) it results in the indirect affiliation Of supervisors
and rank-and-file employees with one labor organization; (2) since
respondent union and the unions of non-supervisors in the same company are
governed by the same constitution and by-laws of the national federation, in
practical effect, there is but one union; and (3) it would result in the
respondent union's losing its independence because it becomes the alter ego
of the federation.
The petitioner also submits that should affiliation be allowed, this would
violate the requirement of separateness of bar units under Section 12 of the
Act because only one union will in fact represent both supervisors and rank-
and-file employees of the petitioner.
The respondents on the other hand argue that the supervisory employees of
an employer may validly join an organization of the rank-and-file employees
so long as the said rank and file employees are not under their supervision.
They submit that Adamson and Adamson Supervisory Union (FFW) is not
composed of sales supervisors and, therefore, the salesmen of the company
are not under the supervision of the supervisory employees forming the
union. Respondents also argue that even if the salesmen of the petitioner
company are under the supervision of the members of the supervisory union,
the prohibition would not apply because the salesmen and the supervisory
employees of the company have their separate and distinct labor
organizations, and, as a matter of fact, their respective unions sent separate
proposal for collective bargaining agreements. They contend that their
respective labor organizations, not the FFW, will represent their members in
the negotiations as well as in the signing of their respective contracts.
Respondents further argue that the Federation of Free Workers has, as its
affiliates, supervisory as well as rank-and-file employees, and should both
66
the supervisory and the rank-and-file employees of a certain employer who
have separate certificates of registration affiliate with the same federation,
the prohibition does not apply as the federation is not the organization of the
supervisory employees contemplated in the law.
The issue presented involves the correct interpretation of Section 3 of
Republic Act No. 875, the Industrial Peace Act, as amended, which states:
Employees shall have the right to self-organization and to form join or assist
labor organizations of their own choosing for the purpose 6f collective
bargaining through representatives of their own and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or
protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision but
may form separate organizations of their own.
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
and to engage in concerted activities for mutual aid or protection is a
fundamental right of labor that derives its existence from the Constitution. It
is recognized and implemented through the abovecited Section 3 of the
Industrial Peace Act as amended.
In interpreting the protection to labor and social justice provisions of the
Constitution and the labor laws or rules and regulations implementing the
constitutional mandates, we have always adopted the liberal approach which
favors the exercise of labor rights.
In deciding this case, we start with the recognized rule that the right of
supervisory employees to organize under the Industrial Peace Act carries
certain restrictions but the right itself may not be denied or unduly abridged.
The supervisory employees of an employer cannot join any labor
organization of employees under their supervision but may validly form a
separate organization of their own. As stated in Caltex Filipino Managers
and Supervisors Association v. Court of Industrial Relations (47 SCRA 112),
it would be to attach unorthodoxy to, not to say an emasculation of, the
concept of law if managers as such were precluded from organization. Thus,
if Republic Act 875, in its Section 3, recognizes the right of supervisors to
form a separate organization of their own, albeit they cannot be members of a
labor organization of employees under their supervision, that authority of
supervisors to form a separate labor union carries with it the right to bargain
collectively with the employer. (Government Service Insurance System v.
Government Service Insurance System Supervisors' Union, 68 SCRA 418).
The specific issue before us is whether or not a supervisor's union may
affiliate with a federation with which unions of rank and-file employees of
the same employer are also affiliated. We find without merit the contentions
of petitioner that if affilation will be allowed, only one union will in fact
represent both supervisors and rank-and-file employees of the petitioner; that
there would be an indirect affiliation of supervisors and rank-and-file
employees with one labor organization; that there would be emerging of two
bargaining units ; and that the respondent union will loose its independence
because it becomes an alter ego of the federation.
In Elisco-Elirol Labor Union (NAFLU) v. Noriel (80 SCRA 681) and Liberty
Cotton Mills Workers Union v. Liberty Cotton Mills, Inc. (66 SCRA 512), we
held :
xxx xxx xxx
... the court expressly cited and affirmed the basic principle
that '(T)he locals are separate and distinct units primarily
designed to secure and maintain the equality of bargaining
power between the employer and their employee-member in
the economic struggle for the fruits of the joint productive
effort of labor and capital; and the association of the locals
into the national union (as PAFLU) was in the furtherance of
the same end. These association are concensual entities
capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the
local unions into a common enterprise to increase by
collective action the common bargaining power in respect of
the terms and conditions of labor. Yet the locals remained
the basic units of association; free to serve their own and the
common-interest of all, subject to the restraints imposed
by the Constitution and By-laws of the Association; and free
also to renounce the affiliation for mutual welfare upon the
terms laid down in the agreement which brought it into
existence.
We agree with the Court of Industrial Relations when it ruled that:
67
 xxx xxx xxx
The confusion seems to have stemmed from the prefix of
FFW after the name of the local unions in the registration of
both. Nonetheless, the inclusion of FWW in the registration
is merely to stress that they are its affiliates at the time of
registrations. It does not mean that said local unions cannot
stand on their own Neither can it be construed that their
personalities are so merged with the mother federation that
for one difference or another they cannot pursue their own
ways, independently of the federation. This is borne by the
fact that FFW, like other federation is a legitimate labor
organization separate and distinct from its locals and
affiliates and to construe the registration certificates of the
aforecited unions, along the line of the Company's argument.
would tie up any affiliates to the shoe string of the
federation. ...
The Adamson and Adamson Supervisory Union and the Adamson and
Adamson, Inc., Salesmen Association (FFW), have their own respective
constitutions and by-laws. They are separately and independently registered
of each other. Both sent their separate proposals for collective bar agreements
with their employer. There could be no employer influence on rank-and-file
organizational activities nor their could be any rank and file influence on the
supervisory function of the supervisors because of the representation sought
to be proscribed.
WHEREFORE, the instant petition is DISMISSED for lack of merit. The
questioned order and the resolution en bancof the respondent Court of
Industrial Relations are AFFIRMED.
SO ORDERED.
G.R. Nos. 174040-41 September 22, 2010
INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner,
vs.
WATERFRONT INSULAR HOTEL DAVAO, Respondent.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari,1 under Rule 45 of the
Rules of Court, seeking to set aside the Decision2 dated October 11, 2005,
and the Resolution3 dated July 13, 2006 of the Court of Appeals (CA) in
consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R.
SP No. 83657. Said Decision reversed the Decision4 dated the April 5, 2004
of the Accredited Voluntary Arbitrator Rosalina L. Montejo (AVA Montejo).
The facts of the case, as culled from the records, are as follows:
On November 6, 2000, respondent Waterfront Insular Hotel Davao
(respondent) sent the Department of Labor and Employment (DOLE),
Region XI, Davao City, a Notice of Suspension of Operations5 notifying the
same that it will suspend its operations for a period of six months due to
severe and serious business losses. In said notice, respondent assured the
DOLE that if the company could not resume its operations within the six-
month period, the company would pay the affected employees all the benefits
legally due to them.
During the period of the suspension, Domy R. Rojas (Rojas), the President of
Davao Insular Hotel Free Employees Union (DIHFEU-NFL), the recognized
labor organization in Waterfront Davao, sent respondent a number of letters
asking management to reconsider its decision.
In a letter6 dated November 8, 2000, Rojas intimated that the members of the
Union were determined to keep their jobs and that they believed they too had
to help respondent, thus:
xxxx
68
Sir, we are determined to keep our jobs and push the Hotel up from sinking.
We believe that we have to help in this (sic) critical times. Initially, we intend
to suspend the re-negotiations of our CBA. We could talk further on possible
adjustments on economic benefits, the details of which we are hoping to
discuss with you or any of your emissaries. x x x7
In another letter8 dated November 10, 2000, Rojas reiterated the Union's
desire to help respondent, to wit:
We would like to thank you for giving us the opportunity to meet [with] your
representatives in order for us to air our sentiments and extend our helping
hands for a possible reconsideration of the company's decision.
The talks have enabled us to initially come up with a suggestion of solving
the high cost on payroll.
We propose that 25 years and above be paid their due retirement benefits and
put their length of service to zero without loss of status of employment with a
minimum hiring rate.
Thru this scheme, the company would be able to save a substantial amount
and reduce greatly the payroll costs without affecting the finance of the
families of the employees because they will still have a job from where they
could get their income.
Moreover, we are also open to a possible reduction of some economic
benefits as our gesture of sincere desire to help.
We are looking forward to a more fruitful round of talks in order to save the
hotel.9
In another letter10 dated November 20, 2000, Rojas sent respondent more
proposals as a form of the Union's gesture of their intention to help the
company, thus:
1) Suspension of [the] CBA for ten years, No strike no lock-out shall
be enforced.
2) Pay all the employees their benefits due, and put the length of
service to zero with a minimum hiring rate. Payment of benefits may
be on a staggered basis or as available.
3) Night premium and holiday pays shall be according to law.
Overtime hours rendered shall be offsetted as practiced.
4) Reduce the sick leaves and vacation leaves to 15 days/15days.
5) Emergency leave and birthday off are hereby waived.
6) Duty meal allowance is fixed at ₱30.00 only. No more midnight
snacks and double meal allowance. The cook drinks be stopped as
practiced.
7) We will shoulder 50% of the group health insurance and family
medical allowance be reduced to 1,500.00 instead of 3,000.00.
8) The practice of bringing home our uniforms for laundry be
continued.
9) Fixed manning shall be implemented, the rest of manpower
requirements maybe sourced thru WAP and casual hiring. Manpower
for fixed manning shall be 145 rank-and-file union members.
10) Union will cooperate fully on strict implementation of house
rules in order to attain desired productivity and discipline. The union
will not tolerate problem members.
11) The union in its desire to be of utmost service would adopt multi-
tasking for the hotel to be more competitive.
It is understood that with the suspension of the CBA renegotiations, the same
existing CBA shall be adopted and that all provisions therein shall remain
enforced except for those mentioned in this proposal.
These proposals shall automatically supersede the affected provisions of the
CBA.11
69
In a handwritten letter12 dated November 25, 2000, Rojas once again
appealed to respondent for it to consider their proposals and to re-open the
hotel. In said letter, Rojas stated that manpower for fixed manning shall be
one hundred (100) rank-and-file Union members instead of the one hundred
forty-five (145) originally proposed.
Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted
to respondent a Manifesto13concretizing their earlier proposals.
After series of negotiations, respondent and DIHFEU-NFL, represented by
its President, Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino
C. Bation, Jr., signed a Memorandum of Agreement14 (MOA) wherein
respondent agreed to re-open the hotel subject to certain concessions offered
by DIHFEU-NFL in its Manifesto.
Accordingly, respondent downsized its manpower structure to 100 rank-and-
file employees as set forth in the terms of the MOA. Moreover, as agreed
upon in the MOA, a new pay scale was also prepared by respondent.
The retained employees individually signed a "Reconfirmation of
Employment"15 which embodied the new terms and conditions of their
continued employment. Each employee was assisted by Rojas who also
signed the document.
On June 15, 2001, respondent resumed its business operations.
On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be
local officers of the National Federation of Labor (NFL), filed a Notice of
Mediation16 before the National Conciliation and Mediation Board (NCMB),
Region XI, Davao City. In said Notice, it was stated that the Union involved
was "DARIUS JOVES/DEBBIE PLANAS ET. AL, National Federation of
Labor." The issue raised in said Notice was the "Diminution of wages and
other benefits through unlawful Memorandum of Agreement."
On August 29, 2002, the NCMB called Joves and respondent to a conference
to explore the possibility of settling the conflict. In the said conference,
respondent and petitioner Insular Hotel Employees Union-NFL (IHEU-NFL),
represented by Joves, signed a Submission Agreement17 wherein they chose
AVA Alfredo C. Olvida (AVA Olvida) to act as voluntary arbitrator.
Submitted for the resolution of AVA Olvida was the determination of
whether or not there was a diminution of wages and other benefits through an
unlawful MOA. In support of his authority to file the complaint, Joves,
assisted by Atty. Danilo Cullo (Cullo), presented several Special Powers of
Attorney (SPA) which were, however, undated and unnotarized.
On September 2, 2002, respondent filed with the NCMB a Manifestation
with Motion for a Second Preliminary Conference,18 raising the following
grounds:
1) The persons who filed the instant complaint in the name of the
Insular Hotel Employees Union-NFL have no authority to represent
the Union;
2) The individuals who executed the special powers of attorney in
favor of the person who filed the instant complaint have no standing
to cause the filing of the instant complaint; and
3) The existence of an intra-union dispute renders the filing of the
instant case premature.19
On September 16, 2002, a second preliminary conference was conducted in
the NCMB, where Cullo denied any existence of an intra-union dispute
among the members of the union. Cullo, however, confirmed that the case
was filed not by the IHEU-NFL but by the NFL. When asked to present his
authority from NFL, Cullo admitted that the case was, in fact, filed by
individual employees named in the SPAs. The hearing officer directed both
parties to elevate the aforementioned issues to AVA Olvida.20
The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred
to AVA Olvida. Respondent again raised its objections, specifically arguing
that the persons who signed the complaint were not the authorized
representatives of the Union indicated in the Submission Agreement nor were
they parties to the MOA. AVA Olvida directed respondent to file a formal
motion to withdraw its submission to voluntary arbitration.
On October 16, 2002, respondent filed its Motion to Withdraw.21 Cullo then
filed an Opposition22 where the same was captioned:
70
NATIONAL FEDERATION OF LABOR
And 79 Individual Employees, Union Members,
Complainants,
-versus-
Waterfront Insular Hotel Davao,
Respondent.
In said Opposition, Cullo reiterated that the complainants were not
representing IHEU-NFL, to wit:
xxxx
2. Respondent must have been lost when it said that the individuals
who executed the SPA have no standing to represent the union nor to
assail the validity of Memorandum of Agreement (MOA). What is
correct is that the individual complainants are not representing
the union but filing the complaint through their appointed attorneys-
in-fact to assert their individual rights as workers who are entitled to
the benefits granted by law and stipulated in the collective bargaining
agreement.23
On November 11, 2002, AVA Olvida issued a Resolution24 denying
respondent's Motion to Withdraw. On December 16, 2002, respondent filed a
Motion for Reconsideration25 where it stressed that the Submission
Agreement was void because the Union did not consent thereto. Respondent
pointed out that the Union had not issued any resolution duly authorizing the
individual employees or NFL to file the notice of mediation with the NCMB.
Cullo filed a Comment/Opposition26 to respondent's Motion for
Reconsideration. Again, Cullo admitted that the case was not initiated by the
IHEU-NFL, to wit:
The case was initiated by complainants by filling up Revised Form No. 1 of
the NCMB duly furnishing respondent, copy of which is hereto attached as
Annex "A" for reference and consideration of the Honorable Voluntary
Arbitrator. There is no mention there of Insular Hotel Employees Union, but
only National Federation of Labor (NFL). The one appearing at the
Submission Agreement was only a matter of filling up the blanks particularly
on the question there of Union; which was filled up with Insular Hotel
Employees Union-NFL. There is nothing there that indicates that it is a
complainant as the case is initiated by the individual workers and National
Federation of Labor, not by the local union. The local union was not included
as party-complainant considering that it was a party to the assailed MOA.27
On March 18, 2003, AVA Olvida issued a Resolution28 denying respondent's
Motion for Reconsideration. He, however, ruled that respondent was correct
when it raised its objection to NFL as proper party-complainant, thus:
Anent to the real complainant in this instant voluntary arbitration case, the
respondent is correct when it raised objection to the National Federation of
Labor (NFL) and as proper party-complainants.
The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-
NFL, the recognized and incumbent bargaining agent of the rank-and-file
employees of the respondent hotel. In the submission agreement of the
parties dated August 29, 2002, the party complainant written is INSULAR
HOTEL EMPLOYEES UNION-NFL and not the NATIONAL
FEDERATION OF LABOR and 79 other members.
However, since the NFL is the mother federation of the local union, and
signatory to the existing CBA, it can represent the union, the officers, the
members or union and officers or members, as the case may be, in all stages
of proceedings in courts or administrative bodies provided that the issue of
the case will involve labor-management relationship like in the case at bar.
The dispositive portion of the March 18, 2003 Resolution of AVA Olvida
reads:
WHEREFORE, premises considered, the motion for reconsideration filed by
respondent is DENIED. The resolution dated November 11, 2002 is modified
in so far as the party-complainant is concerned; thus, instead of "National
Federation of Labor and 79 individual employees, union members," shall be
"Insular Hotel Employees Union-NFL et. al., as stated in the joint submission
agreement dated August 29, 2002. Respondent is directed to comply with the
decision of this Arbitrator dated November 11, 2002,
No further motion of the same nature shall be entertained.29
71
On May 9, 2003, respondent filed its Position Paper Ad Cautelam,30 where it
declared, among others, that the same was without prejudice to its earlier
objections against the jurisdiction of the NCMB and AVA Olvida and the
standing of the persons who filed the notice of mediation.
Cullo, now using the caption "Insular Hotel Employees Union-
NFL, Complainant," filed a Comment31 dated June 5, 2003. On June 23,
2003, respondent filed its Reply.32
Later, respondent filed a Motion for Inhibition33 alleging AVA Olvida's bias
and prejudice towards the cause of the employees. In an Order 34 dated July
25, 2003, AVA Olvida voluntarily inhibited himself out of "delicadeza" and
ordered the remand of the case to the NCMB.
On August 12, 2003, the NCMB issued a Notice requiring the parties to
appear before the conciliator for the selection of a new voluntary arbitrator.
In a letter35 dated August 19, 2003 addressed to the NCMB, respondent
reiterated its position that the individual union members have no standing to
file the notice of mediation before the NCMB. Respondent stressed that the
complaint should have been filed by the Union.
On September 12, 2003, the NCMB sent both parties a Notice36 asking them
to appear before it for the selection of the new voluntary arbitrator.
Respondent, however, maintained its stand that the NCMB had no
jurisdiction over the case. Consequently, at the instance of Cullo, the NCMB
approved ex parte the selection of AVA Montejo as the new voluntary
arbitrator.
On April 5, 2004, AVA Montejo rendered a Decision37 ruling in favor of
Cullo, the dispositive portion of which reads:
WHEREOF, in view of the all the foregoing, judgment is hereby rendered:
1. Declaring the Memorandum of Agreement in question as invalid
as it is contrary to law and public policy;
2. Declaring that there is a diminution of the wages and other
benefits of the Union members and officers under the said invalid
MOA.
3. Ordering respondent management to immediately reinstate the
workers wage rates and other benefits that they were receiving and
enjoying before the signing of the invalid MOA;
4. Ordering the management respondent to pay attorney’s fees in an
amount equivalent to ten percent (10%) of whatever total amount
that the workers union may receive representing individual wage
differentials.
As to the other claims of the Union regarding diminution of other benefits,
this accredited voluntary arbitrator is of the opinion that she has no authority
to entertain, particularly as to the computation thereof.
SO ORDERED.38
Both parties appealed the Decision of AVA Montejo to the CA. Cullo only
assailed the Decision in so far as it did not categorically order respondent to
pay the covered workers their differentials in wages reckoned from the
effectivity of the MOA up to the actual reinstatement of the reduced wages
and benefits. Cullos' petition was docketed as CA-G.R. SP No. 83831.
Respondent, for its part, questioned among others the jurisdiction of the
NCMB. Respondent maintained that the MOA it had entered into with the
officers of the Union was valid. Respondent's petition was docketed as CA-
G.R. SP No. 83657. Both cases were consolidated by the CA.
On October 11, 2005, the CA rendered a Decision39 ruling in favor of
respondent, the dispositive portion of which reads:
WHEREFORE, premises considered, the petition for review in CA-G.R. SP
No. 83657 is hereby GRANTED, while the petition in CA-G.R. SP No.
83831 is DENIED. Consequently, the assailed Decision dated April 5, 2004
rendered by AVA Rosalina L. Montejo is hereby REVERSED and a new one
entered declaring the Memorandum of Agreement dated May 8, 2001
VALID and ENFORCEABLE. Parties are DIRECTED to comply with the
terms and conditions thereof.
SO ORDERED.40
Aggrieved, Cullo filed a Motion for Reconsideration, which was, however,
denied by the CA in a Resolution41 dated July 13, 2006.
72
Hence, herein petition, with Cullo raising the following issues for this Court's
resolution, to wit:
I.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS ERRORS IN FINDING THAT THE
ACCREDITED VOLUNTARY ARBITRATOR HAS NO JURISDICTION
OVER THE CASE SIMPLY BECAUSE THE NOTICE OF MEDIATION
DOES NOT MENTION THE NAME OF THE LOCAL UNION BUT
ONLY THE AFFILIATE FEDERATION THEREBY DISREGARDING
THE SUBMISSION AGREEMENT DULY SIGNED BY THE PARTIES
AND THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF
THE LOCAL UNION.
II.
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS ERROR BY DISREGARDING THE
PROVISIONS OF THE CBA SIMPLY BECAUSE IT BELIEVED THE
UNPROVEN ALLEGATIONS OF RESPONDENT HOTEL THAT IT WAS
SUFFERING FROM FINANCIAL CRISIS.
III.
THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY
ERRED IN CONCLUDING THAT ARTICLE 100 OF THE LABOR CODE
APPLIES ONLY TO BENEFITS ENJOYED PRIOR TO THE ADOPTION
OF THE LABOR CODE WHICH, IN EFFECT, ALLOWS THE
DIMINUTION OF THE BENEFITS ENJOYED BY EMPLOYEES FROM
ITS ADOPTION HENCEFORTH.42
The petition is not meritorious.
Anent the first error raised, Cullo argues that the CA erred when it
overlooked the fact that before the case was submitted to voluntary
arbitration, the parties signed a Submission Agreement which mentioned the
name of the local union and not only NFL. Cullo, thus, contends that the CA
committed error when it ruled that the voluntary arbitrator had no jurisdiction
over the case simply because the Notice of Mediation did not state the name
of the local union thereby disregarding the Submission Agreement which
states the names of local union as Insular Hotel Employees Union-NFL.43
In its Memorandum,44 respondent maintains its position that the NCMB and
Voluntary Arbitrators had no jurisdiction over the complaint. Respondent,
however, now also contends that IHEU-NFL is a non-entity since it is
DIHFEU-NFL which is considered by the DOLE as the only registered union
in Waterfront Davao.45 Respondent argues that the Submission Agreement
does not name the local union DIHFEU-NFL and that it had timely
withdrawn its consent to arbitrate by filing a motion to withdraw.
A review of the development of the case shows that there has been much
confusion as to the identity of the party which filed the case against
respondent. In the Notice of Mediation46 filed before the NCMB, it stated
that the union involved was "DARIUS JOVES/DEBBIE PLANAS ET. AL.,
National Federation of Labor." In the Submission Agreement,47 however, it
stated that the union involved was "INSULAR HOTEL EMPLOYEES
UNION-NFL."
Furthermore, a perusal of the records would reveal that after signing the
Submission Agreement, respondent persistently questioned the authority and
standing of the individual employees to file the complaint. Cullo then
clarified in subsequent documents captioned as "National Federation of
Labor and 79 Individual Employees, Union Members, Complainants" that
the individual complainants are not representing the union, but filing the
complaint through their appointed attorneys-in-fact.48 AVA Olvida, however,
in a Resolution dated March 18, 2003, agreed with respondent that the proper
party-complainant should be INSULAR HOTEL EMPLOYEES UNION-
NFL, to wit:
x x x In the submission agreement of the parties dated August 29, 2002, the
party complainant written is INSULAR HOTEL EMPLOYEES UNION-
NFL and not the NATIONAL FEDERATION OF LABOR and 79 other
members.49
The dispositive portion of the Resolution dated March 18, 2003 of AVA
Olvida reads:
WHEREFORE, premises considered, the motion for reconsideration filed by
respondent is DENIED. The resolution dated November 11, 2002, is
modified in so far as the party complainant is concerned, thus, instead of
73
"National Federation of Labor and 79 individual employees, union
members," shall be "Insular Hotel Employees Union-NFL et. al., as stated in
the joint submission agreement dated August 29, 2002. Respondent is
directed to comply with the decision of this Arbitrator dated November 11,
2002.50
After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted "Insular
Hotel Employees Union-NFL et. al., Complainant" as the caption in all his
subsequent pleadings. Respondent, however, was still adamant that neither
Cullo nor the individual employees had authority to file the case in behalf of
the Union.
While it is undisputed that a submission agreement was signed by respondent
and "IHEU-NFL," then represented by Joves and Cullo, this Court finds that
there are two circumstances which affect its validity: first, the Notice of
Mediation was filed by a party who had no authority to do so; second, that
respondent had persistently voiced out its objection questioning the authority
of Joves, Cullo and the individual members of the Union to file the complaint
before the NCMB.
Procedurally, the first step to submit a case for mediation is to file a notice of
preventive mediation with the NCMB. It is only after this step that a
submission agreement may be entered into by the parties concerned.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file
a notice of preventive mediation, to wit:
Who may file a notice or declare a strike or lockout or request preventive
mediation. -
Any certified or duly recognized bargaining representative may file a
notice or declare a strike or request for preventive mediation in cases of
bargaining deadlocks and unfair labor practices. The employer may file a
notice or declare a lockout or request for preventive mediation in the same
cases. In the absence of a certified or duly recognized bargaining
representative, any legitimate labor organization in the establishment may
file a notice, request preventive mediation or declare a strike, but only on
grounds of unfair labor practice.
From the foregoing, it is clear that only a certified or duly recognized
bargaining agent may file a notice or request for preventive mediation. It is
curious that even Cullo himself admitted, in a number of pleadings, that the
case was filed not by the Union but by individual members thereof. Clearly,
therefore, the NCMB had no jurisdiction to entertain the notice filed before
it.
Even though respondent signed a Submission Agreement, it had, however,
immediately manifested its desire to withdraw from the proceedings after it
became apparent that the Union had no part in the complaint. As a matter of
fact, only four days had lapsed after the signing of the Submission
Agreement when respondent called the attention of AVA Olvida in a
"Manifestation with Motion for a Second Preliminary Conference"51 that the
persons who filed the instant complaint in the name of Insular Hotel
Employees Union-NFL had no authority to represent the Union. Respondent
cannot be estopped in raising the jurisdictional issue, because it is basic that
the issue of jurisdiction may be raised at any stage of the proceedings, even
on appeal, and is not lost by waiver or by estoppel.
In Figueroa v. People,52 this Court explained that estoppel is the exception
rather than the rule, to wit:
Applying the said doctrine to the instant case, the petitioner is in no way
estopped by laches in assailing the jurisdiction of the RTC, considering that
he raised the lack thereof in his appeal before the appellate court. At that
time, no considerable period had yet elapsed for laches to attach. True, delay
alone, though unreasonable, will not sustain the defense of "estoppel by
laches" unless it further appears that the party, knowing his rights, has not
sought to enforce them until the condition of the party pleading laches has in
good faith become so changed that he cannot be restored to his former state,
if the rights be then enforced, due to loss of evidence, change of title,
intervention of equities, and other causes. In applying the principle of
estoppel by laches in the exceptional case of Sibonghanoy, the Court therein
considered the patent and revolting inequity and unfairness of having the
judgment creditors go up their Calvary once more after more or less 15
years.The same, however, does not obtain in the instant case.
We note at this point that estoppel, being in the nature of a forfeiture, is not
favored by law. It is to be applied rarely—only from necessity, and only in
extraordinary circumstances. The doctrine must be applied with great care
and the equity must be strong in its favor.When misapplied, the doctrine of
74
estoppel may be a most effective weapon for the accomplishment of
injustice. x x x (Italics supplied.)53
The question to be resolved then is, do the individual members of the Union
have the requisite standing to question the MOA before the NCMB? On this
note, Tabigue v. International Copra Export Corporation (INTERCO)54 is
instructive:
Respecting petitioners’ thesis that unsettled grievances should be referred to
voluntary arbitration as called for in the CBA, the same does not lie.The
pertinent portion of the CBA reads:
In case of any dispute arising from the interpretation or implementation of
this Agreement or any matter affecting the relations of Labor and
Management, the UNION and the COMPANY agree to exhaust all
possibilities of conciliation through the grievance machinery. The committee
shall resolve all problems submitted to it within fifteen (15) days after the
problems ha[ve] been discussed by the members. If the dispute or grievance
cannot be settled by the Committee, or if the committee failed to act on the
matter within the period of fifteen (15) days herein stipulated,
the UNION and the COMPANY agree to submit the issue to Voluntary
Arbitration. Selection of the arbitrator shall be made within seven (7) days
from the date of notification by the aggrieved party. The Arbitrator shall be
selected by lottery from four (4) qualified individuals nominated by in equal
numbers by both parties taken from the list of Arbitrators prepared by the
National Conciliation and Mediation Board (NCMB). If the Company and
the Union representatives within ten (10) days fail to agree on the Arbitrator,
the NCMB shall name the Arbitrator. The decision of the Arbitrator shall be
final and binding upon the parties. However, the Arbitrator shall not have the
authority to change any provisions of the Agreement.The cost of arbitration
shall be borne equally by the parties.
Petitioners have not, however, been duly authorized to represent the union.
Apropos is this Court’s pronouncement in Atlas Farms, Inc. v. National
Labor Relations Commission, viz:
x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall
name or designate their respective representatives to the grievance machinery
and if the grievance is unsettled in that level, it shall automatically be
referred to the voluntary arbitrators designated in advance by parties to a
CBA. Consequently, only disputes involving the union and the
company shall be referred to the grievance machinery or voluntary
arbitrators. (Emphasis and underscoring supplied.)55
If the individual members of the Union have no authority to file the case,
does the federation to which the local union is affiliated have the standing to
do so? On this note, Coastal Subic Bay Terminal, Inc. v. Department of
Labor and Employment56 is enlightening, thus:
x x x A local union does not owe its existence to the federation with which it
is affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. Mere affiliation does not divest the
local union of its own personality, neither does it give the mother
federation the license to act independently of the local union. It only gives
rise to a contract of agency, where the former acts in representation of the
latter. Hence, local unions are considered principals while the federation is
deemed to be merely their agent. x x x57
Based on the foregoing, this Court agrees with approval with the disquisition
of the CA when it ruled that NFL had no authority to file the complaint in
behalf of the individual employees, to wit:
Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction
over the case. Waterfront contents that the Notice of Mediation does not
mention the name of the Union but merely referred to the National
Federation of Labor (NFL) with which the Union is affiliated. In the
subsequent pleadings, NFL's legal counsel even confirmed that the case was
not filed by the union but by NFL and the individual employees named in the
SPAs which were not even dated nor notarized.
Even granting that petitioner Union was affiliated with NFL, still the
relationship between that of the local union and the labor federation or
national union with which the former was affiliated is generally understood
to be that of agency, where the local is the principal and the federation the
agency. Being merely an agent of the local union, NFL should have
presented its authority to file the Notice of Mediation. While We commend
NFL's zealousness in protecting the rights of lowly workers, We cannot,
however, allow it to go beyond what it is empowered to do.
As provided under the NCMB Manual of Procedures, only a certified or duly
recognized bargaining representative and an employer may file a notice of
mediation, declare a strike or lockout or request preventive mediation. The
75
Collective Bargaining Agreement (CBA), on the other, recognizes that
DIHFEU-NFL is the exclusive bargaining representative of all permanent
employees. The inclusion of the word "NFL" after the name of the local
union merely stresses that the local union is NFL's affiliate. It does not,
however, mean that the local union cannot stand on its own. The local union
owes its creation and continued existence to the will of its members and not
to the federation to which it belongs. The spring cannot rise higher than its
source, so to speak.58
In its Memorandum, respondent contends that IHEU-NFL is a non-entity and
that DIHFEU-NFL is the only recognized bargaining unit in their
establishment. While the resolution of the said argument is already moot and
academic given the discussion above, this Court shall address the same
nevertheless.
While the November 16, 2006 Certification59 of the DOLE clearly states that
"IHEU-NFL" is not a registered labor organization, this Court finds that
respondent is estopped from questioning the same as it did not raise the said
issue in the proceedings before the NCMB and the Voluntary Arbitrators. A
perusal of the records reveals that the main theory posed by respondent was
whether or not the individual employees had the authority to file the
complaint notwithstanding the apparent non-participation of the union.
Respondent never put in issue the fact that DIHFEU-NFL was not the same
as IHEU-NFL. Consequently, it is already too late in the day to assert the
same.
Anent the second issue raised by Cullo, the same is again without merit.
Cullo contends that respondent was not really suffering from serious losses
as found by the CA. Cullo anchors his position on the denial by the Wage
Board of respondent's petition for exemption from Wage Order No. RTWPB-
X1-08 on the ground that it is a distressed establishment.60 In said denial, the
Board ruled:
A careful analysis of applicant's audited financial statements showed that
during the period ending December 31, 1999, it registered retained earnings
amounting to ₱8,661,260.00. Applicant's interim financial statements for
the quarter ending June 30, 2000 cannot be considered, as the same was
not audited. Accordingly, this Board finds that applicant is not qualified for
exemption as a distressed establishment pursuant to the aforecited criteria.61
In its Decision, the CA held that upholding the validity of the MOA would
mean the continuance of the hotel's operation and financial viability, to wit:
x x x We cannot close Our eyes to the impending financial distress that an
employer may suffer should the terms of employment under the said CBA
continue.
If indeed We are to tilt the balance of justice to labor, then We would be
inclined to favor for the nonce petitioner Waterfront. To uphold the validity
of the MOA would mean the continuance of the hotel's operation and
financial viability. Otherwise, the eventual permanent closure of the hotel
would only result to prejudice of the employees, as a consequence thereof,
will necessarily lose their jobs.62
In its petition before the CA, respondent submitted its audited financial
statements63 which show that for the years 1998, 1999, until September 30,
2000, its total operating losses amounted to ₱48,409,385.00. Based on the
foregoing, the CA was not without basis when it declared that respondent
was suffering from impending financial distress. While the Wage Board
denied respondent's petition for exemption, this Court notes that the denial
was partly due to the fact that the June 2000 financial statements then
submitted by respondent were not audited. Cullo did not question nor
discredit the accuracy and authenticity of respondent's audited financial
statements. This Court, therefore, has no reason to question the veracity of
the contents thereof. Moreover, it bears to point out that respondent's audited
financial statements covering the years 2001 to 2005 show that it still
continues to suffer losses.64
Finally, anent the last issue raised by Cullo, the same is without merit.
Cullo argues that the CA must have erred in concluding that Article 100 of
the Labor Code applies only to benefits already enjoyed at the time of the
promulgation of the Labor Code.
Article 100 of the Labor Code provides:
PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF
BENEFITS- Nothing in this Book shall be construed to eliminate or in any
way diminish supplements, or other employee benefits being enjoyed at the
time of the promulgation of this Code.
76
On this note, Apex Mining Company, Inc. v. NLRC65 is instructive, to wit:
Clearly, the prohibition against elimination or diminution of benefits set out
in Article 100 of the Labor Code is specifically concerned with benefits
already enjoyed at the time of the promulgation of the Labor Code. Article
100 does not, in other words, purport to apply to situations arising after the
promulgation date of the Labor Code x x x.66
Even assuming arguendo that Article 100 applies to the case at bar, this
Court agrees with respondent that the same does not prohibit a union from
offering and agreeing to reduce wages and benefits of the employees.
In Rivera v. Espiritu,67 this Court ruled that the right to free collective
bargaining, after all, includes the right to suspend it, thus:
A CBA is "a contract executed upon request of either the employer or the
exclusive bargaining representative incorporating the agreement reached
after negotiations with respect to wages, hours of work and all other terms
and conditions of employment, including proposals for adjusting any
grievances or questions arising under such agreement." The primary purpose
of a CBA is the stabilization of labor-management relations in order to create
a climate of a sound and stable industrial peace. In construing a CBA, the
courts must be practical and realistic and give due consideration to the
context in which it is negotiated and the purpose which it is intended to
serve.
The assailed PAL-PALEA agreement was the result of voluntary
collective bargaining negotiations undertaken in the light of the severe
financial situation faced by the employer, with the peculiar and unique
intention of not merely promoting industrial peace at PAL, but
preventing the latter’s closure. We find no conflict between said agreement
and Article 253-A of the Labor Code. Article 253-A has a two-fold purpose.
One is to promote industrial stability and predictability. Inasmuch as the
agreement sought to promote industrial peace at PAL during its
rehabilitation, said agreement satisfies the first purpose of Article 253-
A.1awphi1 The other is to assign specific timetables wherein negotiations
become a matter of right and requirement. Nothing in Article 253-A,
prohibits the parties from waiving or suspending the mandatory timetables
and agreeing on the remedies to enforce the same.
In the instant case, it was PALEA, as the exclusive bargaining agent of
PAL’s ground employees, that voluntarily entered into the CBA with PAL. It
was also PALEA that voluntarily opted for the 10-year suspension of the
CBA. Either case was the union’s exercise of its right to collective
bargaining. The right to free collective bargaining, after all, includes the
right to suspend it.68
Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's
Constitution and By-Laws specifically provides that "the results of the
collective bargaining negotiations shall be subject to ratification and approval
by majority vote of the Union members at a meeting convened, or by
plebiscite held for such special purpose."69 Accordingly, it is undisputed that
the MOA was not subject to ratification by the general membership of the
Union. The question to be resolved then is, does the non-ratification of the
MOA in accordance with the Union's constitution prove fatal to the validity
thereof?
It must be remembered that after the MOA was signed, the members of the
Union individually signed contracts denominated as "Reconfirmation of
Employment."70 Cullo did not dispute the fact that of the 87 members of the
Union, who signed and accepted the "Reconfirmation of Employment," 71
are the respondent employees in the case at bar. Moreover, it bears to stress
that all the employees were assisted by Rojas, DIHFEU-NFL's president,
who even co-signed each contract.
Stipulated in each Reconfirmation of Employment were the new salary and
benefits scheme. In addition, it bears to stress that specific provisions of the
new contract also made reference to the MOA. Thus, the individual members
of the union cannot feign knowledge of the execution of the MOA. Each
contract was freely entered into and there is no indication that the same was
attended by fraud, misrepresentation or duress. To this Court's mind, the
signing of the individual "Reconfirmation of Employment" should, therefore,
be deemed an implied ratification by the Union members of the MOA.
In Planters Products, Inc. v. NLRC,71 this Court refrained from declaring a
CBA invalid notwithstanding that the same was not ratified in view of the
fact that the employees had enjoyed benefits under it, thus:
Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the
Implementing Rules, the parties to a collective [bargaining] agreement are
required to furnish copies of the appropriate Regional Office with
accompanying proof of ratification by the majority of all the workers in a
bargaining unit. This was not done in the case at bar. But we do not declare
77
the 1984-1987 CBA invalid or void considering that the employees have
enjoyed benefits from it. They cannot receive benefits under provisions
favorable to them and later insist that the CBA is void simply because other
provisions turn out not to the liking of certain employees. x x x. Moreover,
the two CBAs prior to the 1984-1987 CBA were not also formally ratified,
yet the employees are basing their present claims on these CBAs. It is
iniquitous to receive benefits from a CBA and later on disclaim its
validity.72
Applied to the case at bar, while the terms of the MOA undoubtedly reduced
the salaries and certain benefits previously enjoyed by the members of the
Union, it cannot escape this Court's attention that it was the execution of the
MOA which paved the way for the re-opening of the hotel, notwithstanding
its financial distress. More importantly, the execution of the MOA allowed
respondents to keep their jobs. It would certainly be iniquitous for the
members of the Union to sign new contracts prompting the re-opening of the
hotel only to later on renege on their agreement on the fact of the non-
ratification of the MOA.
RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized
to sign any and all documents to implement, and carry into effect, his
foregoing authority.75
Withal, while the scales of justice usually tilt in favor of labor, the peculiar
circumstances herein prevent this Court from applying the same in the instant
petition. Even if our laws endeavor to give life to the constitutional policy on
social justice and on the protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The law also recognizes that
management has rights which are also entitled to respect and enforcement in
the interest of fair play.76
WHEREFORE, premises considered, the petition is DENIED. The
Decision dated October 11, 2005, and the Resolution dated July 13, 2006 of
the Court of Appeals in consolidated labor cases docketed as CA-G.R. SP
No. 83831 and CA-G.R. SP No. 83657, are AFFIRMED.
SO ORDERED.

In addition, it bears to point out that Rojas did not act unilaterally when he
negotiated with respondent's management. The Constitution and By-Laws of
DIHFEU-NFL clearly provide that the president is authorized to represent the
union on all occasions and in all matters in which representation of the union
may be agreed or required.73 Furthermore, Rojas was properly authorized
under a Board of Directors Resolution74 to negotiate with respondent, the
pertinent portions of which read:

SECRETARY's CERTIFICATE

I, MA. SOCORRO LISETTE B. IBARRA, x x x, do hereby certify that, at a

meeting of the Board of Directors of the DIHFEU-NFL, on 28 Feb. 2001
with a quorum duly constituted, the following resolutions were unanimously
approved:

RESOLVED, as it is hereby resolved that the Manifesto dated 25 Feb. 2001

be approved ratified and adopted;

RESOLVED, FURTHER, that Mr. Domy R. Rojas, the president of the

DIHFEU-NFL, be hereby authorized to negotiate with Waterfront
Insular Hotel Davao and to work for the latter's acceptance of the
proposals contained in DIHFEU-NFL Manifesto; and
78
G.R. No. L-45824 June 19, 1985
VOLKSCHEL LABOR UNION, petitioner,
vs.
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION
FOR METAL, WORKERS, DMG, INC., PEOPLE'S CAR, INC.,
KARBAYAN INC., and RTC TRADING, INC., respondents.
Ignacio P. Lacsina for petitioner.
William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.
CUEVAS, J.:
Petition for certiorari to review the Resolutions dated January 25, 1977 and
March 14, 1977 of the Bureau of Labor Relations.
On April 25. 1977, however, a Supplemental Petition was filed seeking the
issuance of —
(1) A preliminary mandatory injunction commanding
respondents to return to petitioner the union dues amounting
to about P55,000.00 lawfully pertaining to it but illegally
levied upon, collected and handed over by respondent
Bureau, acting through the NLRC sheriff, to respondent
Associated Labor Union for Metal workers, with the
collusion of respondents DMG, Inc., Karbayan, Inc. and
RTC Machineries, Inc.;
(2) A preliminary restraining order prohibiting respondents
from making further delivery to respondent Associated
Labor Union for Metal workers of Union dues collected or to
be collected through check-off from the wages of petitioner's
members by respondents, DMG, Inc., Karbayan, Inc., RTC
Machineries, Inc., and People's Car, Inc., under or by virtue
of the questioned writ of execution issued by respondent
Bureau, dated April 4, 1977.
Petitioner was once affiliated with the Associated Labor Union for Metal
Workers (ALUMETAL for short). On August 1, 1975, both unions, using the
name Volkschel Labor Union Associated Labor Union for Metal Workers,
jointly entered into a collective bargaining agreement with respondent
companies. One of the subjects dealt with is the payment of union dues
which is provided for in Section 3, Article 1, of the CBA, which reads:
Section 3. CHECK-OFF. — The COMPANY agrees to
make payroll deductions not softener than twice a month of
UNION membership dues and such special assessments fees
or fines as may be duly authorized by the UNION, provided
that the same is covered by the individual check-off
authorization of the UNION members. All said deductions
shall be promptly transmitted within five (5) days by the
COMPANY to the UNION Treasurer. The COMPANY shall
prepare two (2) checks. One (1) check will be under the
name of the local union as their local fund including local
special assessment funds and the other check will be for the
ALU Regional Office regarding the remittance of the
UNION dues deduction.
On March 10, 1976, a majority of petitioner's members decided to disaffiliate
from respondent federation in order to operate on its own as an independent
labor group pursuant to Article 241 (formerly Article 240) of the Labor Code
of the Philippines, the pertinent portion of which reads:
Incumbent affiliates of existing federations or national
unions may disaffiliate only for the purpose of joining a
federation or national union in the industry or region in
which it properly belongs or for the purpose of operating as
an independent labor group.
Accordingly, a resolution was adopted and signed by petitioner's members
revoking their check-off authorization in favor of ALUMETAL and notices
thereof were served on ALUMETAL and respondent companies.
Confronted with the predicament of whether or not to continue deducting
from employees' wages and remitting union dues to respondent,
79
ALUMETAL which wrote respondent companies advising them to continue
deducting union dues and remitting them to said federation, respondent
companies sought the legal opinion of the respondent Bureau as regards the
controversy between the two unions. On November 11, 1976, Med-Arbiter
George A. Eduvalla of respondent Bureau rendered a Resolution which in
effect found the disaffiliation legal but at the same time gave the opinion that,
petitioner's members should continue paying their dues to ALUMETAL in
the concept of agency fees. 1
From the said Resolution, of the Med-Arbiter both petitioner and respondent
ALUMETAL appealed to the Director of respondent Bureau. Petitioner'
contended that the Med-Arbiter's opinion to the effect that petitioner's
members remained obligated to pay dues to respondent ALUMETAL was
inconsistent with the dispositive finding that petitioner's disaffiliation from
ALUMETAL was valid. ALUMETAL, on the other hand, assailed the
Resolution in question asserting that the disaffiliation should have been
declared contrary to law.
On January 25, 1977, respondent Bureau, through its Acting Director,
Francisco L. Estrella, REVERSED the Med-Arbiter's Resolution., and
declared that the Bureau recognized "the continued affiliation of Volkschel
Labor Union with the Associated Labor Union for Metal Workers." 2
Petitioner appealed the Acting Director's Resolution to the Secretary of Labor
know Minister of Labor and Employment) who, treating the appeal as a
Motion for Reconsideration referred the same back to respondent Bureau On
March 14, 1977, the Bureau denied the appeal for lack of merit.
Hence, the instant petition.
Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting
Secretary of Labor, Amado Gat Inciong, issued a of execution commanding
the Sheriff of the National Labor Relations Commission to enforce and
execute the order of January 25, 1977, which has become final and
executory. 3 Pursuant thereto, the NLRC Sheriff enforced and implemented
the Order of January 25, 1977, as a result of which respondent companies
turned over and handed to respondent federation the union dues and other
assessments in accordance with the check-off provision of the CBA,
From the pleadings filed and arguments of counsel, the following issues
present themselves for this Court's resolution.
I
Is petitioner union's disaffiliation from respondent federation
valid?
II
Do respondent companies have the right to effect union dues
collections despite revocation by the employees of the
check-off authorization? and
III
Is respondent federation entitled to union dues payments
from petitioner union's members notwithstanding their
disaffiliation from said federation?
We resolve the first issue in the affirmative.
The right of a local union to disaffiliate from its mother union is well-settled.
In previous cases, it has been repeatedly held that a local union, being a
separate and voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when circumstances
warrant. 4 This right is consistent with the Constitutional guarantee of
freedom of association (Article IV, Section 7, Philippine Constitution).
Petitioner contends that the disaffiliation was not due to any opportunists
motives on its part. Rather it was prompted by the federation's deliberate and
habitual dereliction of duties as mother federation towards petitioner union.
Employees' grievances were allegedly left unattended to by respondent
federation to the detriment of the employees' rights and interests.
In reversing the Med-Arbiter's resolution, respondent Bureau declared: the
Department of Labor is set on a task to restructure the labor movement to the
end that the workers will unite themselves along industry lines. Carried to its
complete fruition, only one union for every industry will remain to bargain
collectively for the workers. The clear policy therefore even now is to
conjoin workers and worker groups, not to dismember them. 5 This policy is
commendable. However, we must not lose sight of the constitutional mandate
of protecting labor and the workers' right to self-organization. In the
80
implementation and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the
primordial and paramount consideration. In the case at bar, it would go
against the spirit of the labor law to restrict petitioner's right to self-
organization due to the existence of the CBA. We agree with the Med-
Arbiter's opinion that "A disaffiliation does not disturb the enforceability and
administration of a collective agreement; it does not occasion a change of
administrators of the contract nor even an amendment of the provisions
thereof." 6 But nowhere in the record does it appear that the contract entered
into by the petitioner and ALUMETAL prohibits the withdrawal of the
former from the latter.
This now brings us to the second issue. Under Section 3, Article I, of the
CBA, the obligation of the respondent companies to deduct and remit dues to
ALUMETAL is conditioned on the individual check-off authorization of
petitioner's members, In other words, ALUMETAL is entitled to receive the
dues from respondent companies as long as petitioner union is affiliated with
it and respondent companies are authorized by their employees (members of
petitioner union) to deduct union dues. Without said affiliation, the employer
has no link to the mother union. The obligation of an employee to pay union
dues is coterminous with his affiliation or membership. "The employees'
check-off authorization, even if declared irrevocable, is good only as long as
they remain members of the union concerned." 7 A contract between an
employer and the parent organization as bargaining agent for the employees
is terminated by the disaffiliation of the local of which the employees are
members. 8 Respondent companies therefore were wrong in continuing the
check-off in favor of respondent federation since they were duly notified of
the disaffiliation and of petitioner's members having already rescinded their
check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling
further on the last issue. Suffice it to state that respondent federation is not
entitled to union dues payments from petitioner's members. "A local union
which has validly withdrawn from its affiliation with the parent association
and which continues to represent the employees of an employer is entitled to
the check-off dues under a collective bargaining contract." 9
WHEREFORE, the Resolutions of the Bureau of Labor Relations of January
25, 1977 and March 14, 1977 are REVERSED and SET ASIDE. Respondent
ALUMETAL is ordered to return to petitioner union all the union dues
enforced and collected through the NLRC Sheriff by virtue of the writ of
execution dated April 4, 1977 issued by respondent Bureau. No costs. SO
ORDERED.
G.R. No. 127374 January 31, 2002
PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and
FRANCISCO DAKILA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR
ARBITER EMERSON TUMANON, PHILIPPINE ASSOCIATION OF
FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED
PAFLU) and SERAFIN AYROSO, respondents.
x---------------------------------------------------------x
G.R. No. 127431 January 31, 2002
PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW,
MACARIO CABANIAS, PEPITO RODILLAS, SHARON CASTILLO,
DANILO CARBONEL, MANUEL EDA, ROLANDO FELIX,
JOCELYN FRONDA, RICARDO LUMBA, JOSEPH MARISOL,
NERISA MORTEL, TEOFILO QUIRONG, LEONARDO REYES,
MANUEL CADIENTE and HERMINIA RIOSA, petitioners,
vs.
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU)
SEPTEMBER (now UNIFIED PAFLU) and NATIONAL LABOR
RELATIONS COMMISSION, SECOND DIVISION, respondents.
BELLOSILLO, J.:
This is a petition for certiorari1 seeking to set aside the 31 July 1996
Decision2 of the National Labor Relations Commission affirming the 30 June
1995 Decision of the Labor Arbiter holding petitioners Philippine
Skylanders, Inc., Mariles C. Romulo3 and Francisco Dakila as well as the
elected officers of the Philippine Skylanders Employees and Workers
Association-PAFLU4 guilty of unfair labor practice and ordering them to pay
private respondent Philippine Association of Free Labor Union (PAFLU)
September5 ₱150,000.00 as damages. Petitioners likewise seek the reversal of
the 31 October 1996 Resolution of the NLRC denying their Motion for
Reconsideration.
81
In November 1993 the Philippine Skylanders Employees Association
(PSEA), a local labor union affiliated with the Philippine Association of Free
Labor Unions (PAFLU) September (PAFLU), won in the certification
election conducted among the rank and file employees of Philippine
Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees
Association-WATU (PSEA-WATU) immediately protested the result of the
election before the Secretary of Labor.
Several months later, pending settlement of the controversy, PSEA sent
PAFLU a notice of disaffiliation citing as reason PAFLU's supposed
deliberate and habitual dereliction of duty toward its members. Attached to
the notice was a copy of the resolution adopted and signed by the officers and
members of PSEA authorizing their local union to disaffiliate from its mother
federation.
PSEA subsequently affiliated itself with the National Congress of Workers
(NCW), changed its name to Philippine Skylanders Employees Association -
National Congress of Workers (PSEA-NCW), and to maintain continuity
within the organization, allowed the former officers of PSEA-PAFLU to
continue occupying their positions as elected officers in the newly-forged
PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining
agreement with PSI which was immediately registered with the Department
of Labor and Employment.
Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU
Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a
copy of PSI's audited financial statement. Ayroso explained that with the
dismissal of PSEA-WATU's election protest the time was ripe for the parties
to enter into a collective bargaining agreement.
On 30 July 1994 PSI through its personnel manager Francisco Dakila denied
the request citing as reason PSEA's disaffiliation from PAFLU and its
subsequent affiliation with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin
Ayroso filed a complaint for unfair labor practice against PSI, its president
Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged
that aside from PSI's refusal to bargain collectively with its workers, the
company through its president and personnel manager, was also liable for
interfering with its employees' union activities.6
Two (2) days later or on 6 October 1994 Ayroso filed another complaint in
behalf of PAFLU for unfair labor practice against Francisco Dakila. Through
Ayroso PAFLU claimed that Dakila was present in PSEA's organizational
meeting thereby confirming his illicit participation in union activities. Ayroso
added that the members of the local union had unwittingly fallen into the
manipulative machinations of PSI and were lured into endorsing a collective
bargaining agreement which was detrimental to their interests.7 The two (2)
complaints were thereafter consolidated.
On 1 February 1995 PAFLU amended its complaint by including the elected
officers of PSEA-PAFLU as additional party respondents. PAFLU averred
that the local officers of PSEA-PAFLU, namely Macario Cabanias, Pepito
Rodillas, Sharon Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix,
Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo
Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa, were
equally guilty of unfair labor practice since they brazenly allowed themselves
to be manipulated and influenced by petitioner Francisco Dakila.8
PSI, its president Mariles C. Romulo, and its personnel manager Dakila
moved for the dismissal of the complaint on the ground that the issue of
disaffiliation was an inter-union conflict which lay beyond the jurisdiction of
the Labor Arbiter. On the other hand, PSEA-NCW took the cudgels for its
officers who were being sued in their capacities as former officers of PSEA-
PAFLU and asserted that since PSEA was no longer affiliated with PAFLU,
Ayroso or PAFLU for that matter had no personality to file the instant
complaint. In support of this assertion, PSEA-NCW submitted in evidence
a Katunayan signed by 111 out of 120 rank and file employees of PSI
disauthorizing Ayroso or PAFLU from instituting any action in their behalf.9
In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's
disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their
respective officers guilty of unfair labor practice. The Decision explained
that despite PSEA-PAFLU's status as the sole and exclusive bargaining agent
of PSI's rank and file employees, the company knowingly sanctioned and
confederated with Dakila in actively assisting a rival union. This, according
to the Labor Arbiter, was a classic case of interference for which PSI could
be held responsible. As PSEA-NCW's personality was not accorded
recognition, its collective bargaining agreement with PSI was struck down
82
for being invalid. Ayroso's legal personality to file the complaint was
sustained on the ratiocination that under the Labor Code no petition
questioning the majority status of the incumbent bargaining agent shall be
entertained outside of the sixty (60)-day period immediately before the
expiry date of such five (5)-year term of the collective bargaining agreement
that the parties may enter into. Accordingly, judgment was rendered ordering
PSI, PSEA-PAFLU and their officers to pay PAFLU ₱150,000.00 in
damages.10
PSI, PSEA and their respective officers appealed to the National Labor
Relations Commission (NLRC). But the NLRC upheld the Decision of the
Labor Arbiter and conjectured that since an election protest questioning
PSEA-PAFLU's certification as the sole and exclusive bargaining agent was
pending resolution before the Secretary of Labor, PSEA could not validly
separate from PAFLU, join another national federation and subsequently
enter into a collective bargaining agreement with its employer-company.11
Petitioners separately moved for reconsideration but both motions were
denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW
together with their respective officers pleading for a reversal of the NLRC's
Decision which they claimed to have been rendered in excess of jurisdiction.
In due time, both petitions were consolidated.
In these petitions, petitioner PSEA together with its officers argued that by
virtue of their disaffiliation PAFLU as a mere agent had no authority to
represent them before any proceedings. They further asserted that being an
independent labor union PSEA may freely serve the interest of all its
members and readily disaffiliate from its mother federation when
circumstances so warrant. This right, they averred, was consistent with the
constitutional guarantee of freedom of association.12
For their part, petitioners PSI, Romulo and Dakila alleged that their decision
to bargain collectively with PSEA-NCW was actuated, to a large extent, by
PAFLU's behavior. Having heard no objections or protestations from PAFLU
relative to PSEA's disaffiliation, they reckoned that PSEA's subsequent
association with NSW was done bona fide.13
The Solicitor General filed a Manifestation in Lieu of
Comment recommending that both petitions be granted. In his Manifestation,
the Solicitor General argued against the Labor Arbiter's assumption of
jurisdiction citing the following as reasons: first, there was no employer-
employee relationship between complainant Ayroso and PSI over which the
Labor Arbiter could rightfully assert his jurisdiction; second, since the case
involved a dispute between PAFLU as mother federation and PSEA as local
union, the controversy fell within the jurisdiction of the Bureau of Labor
Relations; and lastly, the relationship of principal-agent between PAFLU and
PSEA had been severed by the local union through the lawful exercise of its
right of disaffiliation.14
Stripped of non-essentials, the fundamental issue tapers down to the
legitimacy of PSEA's disaffiliation. To be more precise, may PSEA, which is
an independent and separate local union, validly disaffiliate from PAFLU
pending the settlement of an election protest questioning its status as the sole
and exclusive bargaining agent of PSI's rank and file employees?
At the outset, let it be noted that the issue of disaffiliation is an inter-union
conflict the jurisdiction of which properly lies with the Bureau of Labor
Relations (BLR) and not with the Labor Arbiter.15 Nonetheless, with due
recognition of this fact, we deem it proper to settle the controversy at this
instance since to remand the case to the BLR would only mean intolerable
delay for the parties.
The right of a local union to disaffiliate from its mother federation is not a
novel thesis unillumined by case law. In the landmark case of Liberty Cotton
Mills Workers Union vs. Liberty Cotton Mills, Inc.16 we upheld the right of
local unions to separate from their mother federation on the ground that as
separate and voluntary associations, local unions do not owe their creation
and existence to the national federation to which they are affiliated but,
instead, to the will of their members. The sole essence of affiliation is to
increase, by collective action, the common bargaining power of local unions
for the effective enhancement and protection of their interests. Admittedly,
there are times when without succor and support local unions may find it
hard, unaided by other support groups, to secure justice for themselves.
Yet the local unions remain the basic units of association, free to serve their
own interests subject to the restraints imposed by the constitution and by-
laws of the national federation, and free also to renounce the affiliation upon
the terms laid down in the agreement which brought such affiliation into
existence.
Such dictum has been punctiliously followed since then.17
83
Upon an application of the aforecited principle to the issue at hand, the
impropriety of the questioned Decisions becomes clearly apparent. There is
nothing shown in the records nor is it claimed by PAFLU that the local union
was expressly forbidden to disaffiliate from the federation nor were there any
conditions imposed for a valid breakaway. As such, the pendency of an
election protest involving both the mother federation and the local union did
not constitute a bar to a valid disaffiliation. Neither was it disputed by
PAFLU that 111 signatories out of the 120 members of the local union, or an
equivalent of 92.5% of the total union membership supported the claim of
disaffiliation and had in fact disauthorized PAFLU from instituting any
complaint in their behalf. Surely, this is not a case where one (1) or two (2)
members of the local union decided to disaffiliate from the mother
federation, but it is a case where almost all local union members decided to
disaffiliate.
It was entirely reasonable then for PSI to enter into a collective bargaining
agreement with PSEA-NCW. As PSEA had validly severed itself from
PAFLU, there would be no restrictions which could validly hinder it from
subsequently affiliating with NCW and entering into a collective bargaining
agreement in behalf of its members.
otherwise, instead of protection, there would be disregard and neglect of the
lowly workingmen.
WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine
Skylanders and Workers Association-NCW, together with their respective
officers, are GRANTED. The Decision of the National Labor Relations
Commission of 31 July 1996 affirming the Decision of the Labor Arbiter of
30 June 1995 holding petitioners Philippine Skylanders and Workers
Association-NCW, Philippine Skylanders, Inc. and their respective officers,
guilty of unfair labor practice and ordering them to pay damages to private
respondent Philippine Association of Free Labor Unions (PAFLU)
September (now UNIFIED PAFLU) as well as the Resolution of 31 October
1996 denying reconsideration is REVERSED and SET ASIDE. No costs.
SO ORDERED.

There is a further consideration that likewise argues for the granting of the
petitions. It stands unchallenged that PAFLU instituted the complaint for
unfair labor practice against the wishes of workers whose interests it was
supposedly protecting. The mere act of disaffiliation did not divest PSEA of
its own personality; neither did it give PAFLU the license to act
independently of the local union. Recreant to its mission, PAFLU cannot
simply ignore the demands of the local chapter and decide for its welfare.
PAFLU might have forgotten that as an agent it could only act in
representation of and in accordance with the interests of the local union. The
complaint then for unfair labor practice lodged by PAFLU against PSI, PSEA
and their respective officers, having been filed by a party which has no legal
personality to institute the complaint, should have been dismissed at the first
instance for failure to state a cause of action.

Policy considerations dictate that in weighing the claims of a local union as

against those of a national federation, those of the former must be preferred.
Parenthetically though, the desires of the mother federation to protect its
locals are not altogether to be shunned. It will however be to err greatly
against the Constitution if the desires of the federation would be favored over
those of its members. That, at any rate, is the policy of the law. For if it were
84
G.R. No. 113907 February 28, 2000
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M.
GREENFIELD (MSMG-UWP), ITS PRESIDENT BEDA
MAGDALENA VILLANUEVA, MARIO DAGANIO, DONATO
GUERRERO, BELLA P. SANCHEZ, ELENA TOBIS, RHODA
TAMAYO, LIWAYWAY MALLILIN, ELOISA SANTOS,
DOMINADOR REBULLO, JOSE IRLAND, TEOFILA QUEJADA,
VICENTE SAMONTINA, FELICITAS DURIAN, ANTONIO POLDO,
ANGELINA TUGNA, SALVADOR PENALOSA, LUZVIMINDA
TUBIG, ILUMINADA RIVERA, ROMULO SUMILANG, NENITA
BARBELONIA, LEVI BASILIA, RICARDO PALAGA, MERCY
ROBLES, LEODEGARIO GARIN, DOMINGO ECLARINAL,
MELCHOR GALLARDO, MARCELO GARIN, ROSALINA
BAUTISTA, MARY ANN TALIGATOS, ALEJANDRO SANTOS,
ANTONIO FRAGA, LUZ GAPULTOS, MAGDALENA URSUA,
EUGENIO ORDAN, LIGAYA MANALO, PEPITO DELA PAZ,
PERLITA DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA
SAMPAGA, ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA
TAN, OLIGARIO LOMO, PRECILA EUSEBIO, SUSAN ABOGANO,
CAROLINA MANINANG, GINA GLIFONIA, OSCAR SOTTO,
CELEDONA MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER,
JOSEPHINE TALIMORO, MAGDALENA TABOR, NARCISA
SARMIENTO, SUSAN MACASIEB, FELICIDAD SISON, PRICELA
CARTA, MILA MACAHILIG, CORAZON NUNALA, VISITACION
ELAMBRE, ELIZABETH INOFRE, VIOLETA BARTE,
LUZVIMINDA VILLOSA, NORMA SALVADOR, ELIZABETH
BOGATE, MERLYN BALBOA, EUFRECINA SARMIENTO,
SIMPLICIA SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA
JOP, POTENCIANA CULALA, LUCIVITA NAVARRO, ROLANDO
BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI BARTOLAY,
DANTE AQUINO, HERMINIA RILLON, CANDIDA APARIJADO,
LYDIA JIMENEZ, ELIZABETH ANOCHE, ALDA MURO, TERESA
VILLANUEVA, TERESITA RECUENCO, ELIZA SERRANO,
ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE BADIOLA,
ROSLYN FERNANDEZ, OSCAR PAGUTA, NATIVIDAD BALIWAS,
ELIZABETH BARCIBAL, CYNTHIA ESTELLER, TEODORA
SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA
MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA
ESPIRITU, NUMERIANO CABRERA, CONCEPSION ARRIOLA,
PAULINA DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS,
ZENAIDA NUNES, EDITHA IGNACIO, ROSA GUIRON, TERESITA
CANETA, ALICIA ARRO, TEOFILO RUWETAS, CARLING
AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO
DIRAS, LETICIA ALBOS, AURORA ALUBOG, LOLITA ACALEN,
GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE
ANDRADA, SUSAN ANGELES, ISABELITA AURIN, MANUELA
AVELINA, CARLING AGCAOILI, TERESITA ALANO, LOLITA
AURIN, EMMABETH ARCIAGA, CRESENCIA ACUNA,
LUZVIMINDA ABINES, FLORENCIA ADALID, OLIVIA AGUSTIN,
EVANGELINE ALCORAN, ROSALINA ALFERES, LORNA
AMANTE, FLORENTINA AMBITO, JULIETA AMANONCO,
CARMEN AMARILLO, JOSEFINA AMBAGAN, ZENAIDA ANAYA,
MARIA ANGLO, EDITHA ANTA ZO, MARY JANE ANTE, ANDREA
AQUINO, ROWENA ARABIT, MARIETA ARAGON, REBECCA
ARCENA, LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO
ARGUELLES, EDITHA ARRIOLA, EMMA ATIENZA, EMMA
ATIENZA, TEODY ATIENZA, ELIZABETH AUSTRIA, DIOSA
AZARES, SOLIDA AZAINA, MILAGROS BUAG, MARIA
BANADERA, EDNALYN BRAGA, OFELIA BITANGA,
FREDISMINDA BUGUIS, VIOLETA BALLESTEROS, ROSARIO
BALLADJAY, BETTY BORIO, ROMANA BAUTISTA, SUSARA
BRAVO, LILIA BAHINGTING, ENIETA BALDOZA, DAMIANA
BANGCORE, HERMINIA BARIL, PETRONA BARRIOS,
MILAGROS BARRAMEDA, PERLA BAUTISTA, CLARITA
BAUTISTA, ROSALINA BAUTISTA, ADELINA BELGA,
CONSOLACION BENAS, MARIA BEREZO, MERCEDES BEREBER,
VIOLETA BISCOCHO, ERNESTO BRIONES, ALVINA BROSOTO,
AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA BUENAFLOR,
LITA BAQUIN, CONSEJO BABOL, CRISANTA BACOLOD, CELIA
DE BACTAT, MAZIMA BAGA, ELENA BALADAD, ROSARIO
BALADJAY, AMALIA BALAGTAS, ANITA BALAGTAS, MARIA
BALAKIT, RUFINA BALATAN, REBECCA BALDERAMA, AMELIA
BALLESTER, BELEN BARQUIO, BERNANDITA BASILIDES,
HELEN BATO, HELEN BAUTISTA, ROMANA BAUTISTA,
ALMEDA BAYTA, AVELINA BELAYON, NORMA DE BELEN,
THELMA DE BELEN, JOCELYN BELTRAN, ELENA BENITEZ,
VIRGINIA BERNARDINO, MERLINA BINUYAG, LINA BINUYA,
BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION
MEDLO, JOCELYN BONIFACIO, AMELIA BORBE, AMALIA
BOROMEO, ZENAIDA BRAVO, RODRIGO BEULDA, TERESITA
MENDEZ, ELENA CAMAN, LALIANE CANDELARIA, MARRY
85
CARUJANO, REVELINA CORANES, MARITESS CABRERA,
JUSTINA CLAZADA, APOLONIA DELA CRUZ, VICTORIA CRUZ,
JOSEFINA DELA CRUZ, MARITESS CATANGHAL, EDNA CRUZ,
LUCIA DE CASTRO, JOSIE CARIASO, OFELIA CERVANTES,
MEDITA CORTADO, AMALIA CASAJEROS, LUCINA CASTILIO,
EMMA CARPIO, ANACORITA CABALES, YOLANDA CAMO,
MILA CAMAZUELA, ANITA CANTO, ESTELA CANCERAN,
FEMENCIA CANCIO, CYNTHIA CAPALAD, MERLE CASTILLO,
JESUSA CASTRO, CECILIA CASTILLO, SILVERITA CASTRODES,
VIVIAN CELLANO, NORMA CELINO, TERESITA CELSO,
GLORIA COLINA, EFIPANIA CONSTANTINO, SALVACION
CONSULTA, MEDITA CORTADO, AIDA CRUZ, MARISSA DELA
CRUZ, EDITO CORCILLES, JELYNE CRUZ, ROSA CORPOS,
ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT, VICTORIA
CALANZA, BARBARA CALATA, IMELDA CALDERON, CRISTINA
CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO,
CARMENCITA CAMPO, CONNIE CANEZO, LOURDES
CAPANANG, MA. MILAGROS CAPILI, MYRNA T. CAPIRAL,
FLOR SAMPAGA, SUSAN B. CARINO, ROSARIO CARIZON,
VIRGINIA DEL CARMEN, EMMA CARPIO, PRESCILA CARTA, FE
CASERO, LUZ DE CASTRO, ANNA CATARONGAN, JOSEFINA
CASTISIMO, JOY MANALO, EMMIE CAWALING, JOVITA CARA,
MARINA CERBITO, MARY CAREJANO, ESTELA R. CHAVEZ,
CONCEPCION PARAJA, GINA CLAUDIO, FLORDELIZA
CORALES, EDITO CORCIELER, ROSA C. CORROS, AMELIA
CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS,
MARILOU DEJECES, JOSEPHINE DESACULA, EDITHA DEE,
EDITHA DIAZ, VIRGIE DOMONDON, CELSA DOROPAW,
VIOLETA DUMELINA, MARIBEL DIMATATAC, ELBERTO
DAGANIO, LETECIA DAGOHOY, DINDO DALUZ, ANGELITA
DANTES, GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE
GUZMAN, CARMEN DELA CRUZ, MERCY DE LEON, MARY
DELOS REYES, MARIETA DEPILO, MATILDE DIBLAS, JULIETA
DIMAYUGA, TEODORA DIMAYUGA, YOLANDA DOMDOM,
LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN
DUNTON, HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA
EUSOYA, ERNESTO ESCOBIN, EVELYN ESCUREL, LYDIA
ESCOBIN, VICENTE E. ELOIDA. ELENA EGAR, GLORIA ERENO,
NORMA ESPIRIDION, ARSENIA ESPIRITU, AURORA ESTACIO,
DEMETRIA ESTONELO, MILAGROS FONSEGA, LYDIA
FLORENTINO, JULIA FARABIER, TRINIDAD FATALLA, IMELDA
FLORES, JESSINA FRANCO, MA. CRISTINA FRIJAS,
ESPECTACION FERRER, BERDENA FLORES, LEONILA
FRANCISCO, BERNARDA FAUSTINO, DOLORES FACUNDO,
CRETITA FAMILARAN, EMELITA FIGUERAS, MA. VIRGINIA
FLORENDO, AURORA FRANCISCO, MA. JESUSA FRANCISCO,
NENITA FUENTES, MARILOU GOLINGAN, JUANITA
GUERRERO, LYDIA GUEVARRA, SOCORRO GONZAGA,
PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA
GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ,
THERESA GALUA, JOSEFINA GELUA, BRENDA GONZAGA,
FLORA GALLARDO, LUCINDA GRACILLA, VICTORIA GOZUM,
NENITA GAMAO, EDNA GARCIA, DANILO GARCIA, ROSARIO
GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA
GONZAGA, MARY GRANCE GOZON, CARMEN GONZALES,
MERLITA GREGORIO, HERMINIA GONZALES, CARLITA DE
GUZMAN, MODESTA GABRENTINA, EDITHA GADDI, SALVACIO
GALIAS, MERLINDA GALIDO, MELINDA GAMIT, JULIETA
GARCIA, EMELITA GAVINO, CHARITO GILLIA, GENERA
GONEDA, CRESTITA GONZALES, FRANCISCA GUILING, JULIAN
HERNANDEZ, HERRADURA, SUSANA HIPOLITO, NERISSA HAZ,
SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA, LUDIVINA
IGNACIO, CHOLITA INFANTE, JULIETA ITURRIOS, ANITA IBO,
MIRASOL INGALLA, JULIO JARDINIANO, MERLITA JULAO,
JULIETA JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER,
IMELDA JATAP, JULIETA JAVIER, SALOME JAVIER, VICTORIA
JAVIER, SALVACION JOMOLO, EDNA JARNE, LYDIA JIMENEZ,
TERESITA DE JUAN, MARILYN LUARCA, ROSITA LOSITO,
ROSALINA LUMAYAG, LORNA LARGA, CRESTETA DE LEON,
ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE LEON,
MELITINA LUMABI, LYDIA LUMABI, ASUNCION LUMACANG,
REGINA LAPIADRIO, MELANIA LUBUGUAN, EVANGELINE
LACAP, PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN,
VIRGINIA LEE, CRESTELITA DE LEON, FELICISIMA LEONERO,
DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA, JUANITA
MENDIETA, JUANITA MARANQUEZ, JANET MALIFERO, INAS
MORADOS, MELANIE MANING, LUCENA MABANGLO, CLARITA
MEJIA, IRENE MENDOZA, LILIA MORTA, VIGINIA MARAY,
CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA,
VIRGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA,
LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA
DEL MUNDO, EDITHA MUYCO, NARCISA MABEZA, MA. FE
86
MACATANGAY, CONCEPCION MAGDARAOG, IMELDA
MAHIYA, ELSA MALLARI, LIGAYA MANAHAN, SOLEDA
MANLAPAS, VIRGINIA MAPA, JOSEI MARCOS, LIBRADA
MARQUEZ, VIRGINIA MAZA, JULIANITA MENDIETA,
EDILBERTA MENDOZA, IRENE MERCADO, HELEN MEROY,
CRISTINA MEJARES, CECILIA MILLET, EMELITA MINON,
JOSEPHINE MIRANA, PERLITA MIRANO, EVANGELINE
MISBAL, ELEANOR MORALES, TERESITA MORILLA, LYDIA
NUDO, MYRIAM NAVAL, CAROLINA NOLIA, ALICIA NUNEZ,
MAGDALENA NAGUIDA, ELSA NICOL, LILIA NACIONALES, MA.
LIZA MABO, REMEDIOS NIEVES, MARGARITA NUYLAN,
TERESITA NIEVES, PORFERIA NARAG, RHODORA NUCASA,
CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA,
FERMIN OSENA, FLORENCIA OLIVAROS, SOLEDAD OBEAS,
NARISSA OLIVEROS, PELAGIA ORTEGA, SUSAN ORTEGA,
CRISTINA PRENCIPE, PURITA PENGSON, REBECCA PACERAN,
EDNA PARINA, MARIETA PINAT, EPIFANIA PAJERLAN,
ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA,
APOLONIA PALCONIT, FRANCISCO PAGUIO, LYDIA
PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA, MYRNA
PINEDA, MERCEIDTA PEREZ, NOVENA PORLUCAS, TERESITA
PODPOD, ADORACION PORNOBI, ALICIA PERILLO, HELEN JOY
PENDAL, LOURDES PACHECO, LUZVIMINDA PAGALA, LORETA
PAGAPULAN, FRANCISCO PAGUIO, PRISCO PALACA, FLORA
PAMINTUAN, NOEMI PARISALES, JOSEPHINE PATRICIO,
CRISTINA PE BENITO, ANGELA PECO, ANGELITA PENA, ESTER
PENONES, NORMA PEREZ, MAURA PERSEVERANCIA, MARINA
PETILLA, JOSIE PIA, ZULVILITA PIODO, REBECCA PACERAN,
CLARITA POLICARPIO, MAXIMO POTENTO, PORFIRIO
POTENTO, FLORDELIZA PUMARAS, FERNANDO QUEVEDO,
JULIANA QUINDOZA, CHARITO QUIROZ, CARMELITA ROSINO,
RODELIA RAYONDOYON, FLORENCIA RAGOS, REBECCA
ROSALES, ROSALYN RIVERO, FRANCISCO RUIZ, FRANCIA
ROSERO, EMELY RUBIO, EDILBERTO RUIO, JUANA RUBY,
RAQUEL REYES, MERCY ROBLES, ESTELA RELANO, ROSITA
REYES NIMFA RENDON, EPIFANIO RAMIRO, MURIEL REALCO,
BERNARDITA RED, LEONITA RODIL, BENITA REBOLA, DELMA
REGALARIO, LENY REDILLAS, JULIETA DELA ROSA,
FELICITAS DELA ROSA, SUSAN RAFALLO, ELENA RONDINA,
NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA RAMIREZ,
LUZVIMINDA RANADA, CRISTINA RAPINSAN, JOCELYN RED,
ORLANDO REYES, TERESITA REYES, ANGELITA ROBERTO,
DELIA ROCHA, EDLTRUDES ROMERO, MELECIA ROSALES,
ZENAIDA ROTAO, BELEN RUBIS, FE RUEDA, SYLVIA
SONGCAYAWON, CRISTINA SANANO, NERCISA SARMIENTO,
HELEN SIBAL, ESTELITA SANTOS, NORMA SILVESTRE,
DARLITA SINGSON, EUFROCINA SARMIENTO, MYRNA
SAMSON, EMERLINA SADIA, LORNA SALAZAR, AVELINA
SALVADOR, NACIFORA SALAZAR, TITA SEUS, MARIFE
SANTOS, GRACIA SARMIENTO, ANGELITA SUMANGIL,
ELIZABETH SICAT, MA. VICTORIA SIDELA, ANALITA
SALVADOR, MARITES SANTOS, VIRGINIA SANTOS, THELMA
SARONG, NILDA SAYAT, FANCITA SEGUNDO, FYNAIDA SAGUI,
EDITHA SALAZAR, EDNA SALZAR, EMMA SALENDARIO,
SOLEDAD SAMSON, EDNA SAN DIEGO, TERESITA SAN
GABRIEL, GERTRUDES SAN JOSE, EGLECERIA OSANCHEZ,
ESTRELLA SANCHEZ, CECILIA DELOS SANTOS, LUISA
SEGOVIA, JOCELYN SENDING, ELENA SONGALIA, FELICITAS
SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA, MONICA
TIBAYAN, CRISTETA TAMBARAN, GLORIA TACDA, NENVINA,
FELINA TEVES, ANTONINA DELA TORRE, MAXIMA TANILON,
NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO, IMELDA
TANIO, LUZ TANIO, EVANGELINE TAYO, JOSEFINA TINGTING,
ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA UBALDE,
GINA UMALI, IRMA VALENZUELA, FELY VALDEZ, PAULINA
VALEZ, ROSELITA VALLENTE, LOURDES VELASCO, AIDA
VILLA, FRANCISCA VILLARITO, ZENAIDA VISMONTE, DELIA
VILLAMIEL, NENITA VASQUEZ, JOCELYN VILLASIS,
FERMARGARITA VARGAS, CELIA VALLE, MILA CONCEPCION
VIRAY, DOMINGA VALDEZ, LUZVIMINDA VOCINA, MADELINE
VIVERO, RUFINA VELASCO, AUREA VIDALEON, GLORIA DEL
VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA, ADELA
VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA VITAN, GLORIA
VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ,
ILUMINADA VALENCI, MYRNA VASQUEZ, EVELNYN
VEJERAMO, TEODORA VELASQUEZ, EDAN VILLANUEVA,
PURITA VILLASENOR, SALVADOR WILSON, EMELINA YU,
ADELFA YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA
ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN CASTRO,
CREMENIA DELA CRUZ, JOSEPHINE IGNACIO, MELITA
ILILANGOS, LIGAYA LUMAYAT, DELIA LUMBES, ROSITA
LIBRADO, DELIA LAGRAMADA, GEMMA MAGPANTAY, EMILY
87
MENDOZA, FIDELA PANGANIBAN, LEONOR RIZALDO,
ILUMINDA RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO,
NANCY SAMALA, JOSIE SUMARAN, LUZVIMINDA ABINES,
ALMA ACOL, ROBERTO ADRIATICO, GLORIA AGUINALDO,
ROSARIO ALEYO, CRISTETA ALEJANDRO, LILIA ALMOGUERA,
CARMEN AMARILLO, TRINIDAD ARDANIEL, CERINA
AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA
ARSENIA, SOFIA AGUINALDO, SALVE ABAD, JOSEFINA
AMBANGAN EMILIA AQUINO, JOSEFINA AQUINO, JULIANA
AUSAN, AMERCIANA ACOSTA, CONCEPCION ALEROZA, DIANA
ADOVOS, FELY ADVINCULA, SEOMINTA ARIAS, JOSEPHINE
ARCEDE, NORMA AMISTOSO, PRESENTACION ALONOS, EMMA
ATIENZA, LEONIDA AQUINO, ANITA ARILLON, ADELAIDA
ARELLANO, NORMA AMISTOSO, JOSEPHINE ARCEDE,
SEMIONITA ARIAS, JOSEFINA BANTUG, LOLITA BARTE,
HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT,
LOLITA BUSTILLO, ISABEL BALAKIT, ROSARIO BARRERO,
TESSIE BALBOS, NORMA BENISANO, GUILLERMA BRUGES,
BERNADETTE BARTOLOME, SHIRLEY BELMONTE, MERONA
BELZA, AZUCENA BERNALES, JOSE BASCO, NIMPHA BANTOG,
BENILDA BUBAN, REGINA BUBAN, SALOME BARRAMEDA,
IRENE BISCO, FELICITAS BAUTISTA, VIOLETA BURA, LINA
BINUYA, BIBIANA BAARDE, ELSA BAES, ANASTACIA BELONZO,
SONIA BENOYO, ELIZABETH BACUNGAN, PATRICIA
BARRAMEDA, ERLINDA BARCELONA, EMMA BANICO,
APOLONIA BUNAO, LUCITA BOLEA, PACIFICA BARCELONA,
EDITHA BASIJAN, RENITA BADAMA, ELENA BALADAD,
CRESENCIA BAJO, BERNADITA BASILID, MELINDA BEATO,
YOLANDA BATANES, EDITHA BORILLA, ANITA BAS, ELSA
CALIPUNDAN, MARIA CAMERINO,VIRGINIA CAMPOSANO,
MILAGROS CAPILI, CARINA CARINO, EUFEMIA CASIHAN,
NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE CENTENO,
MARIANITA CHIQUITO, IMELDA DELA CRUZ, TEODOSIA
GONG, TEOFILA CARACOL, TERESITA CANTA, IRENEA
CUNANAN, JULITA CANDILOSAS, VIOLETA CIERES,
MILAGROS DELA CRUZ, FLOREPES CAPULONG, CARMENCITA
CAMPO, MARILYN CARILLO, RUTH DELA CRUZ, RITA CIJAS,
LYDIA CASTOR, VIRGIE CALUBAD, EMELITA CABERA,
CRISTETA CRUZ, ERLINDA COGADAS, IMELDA CALDERON,
SUSIE LUZ CEZAR, ESTELA CHAVEZ, NORMA CABRERA, ELDA
DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG,
FLORDELISA DIGMA, VIRGILIO DADIOS, LOLITA DAGTA,
ADELAIDA DORADO, CELSA DATUMANONG, VIRGINIA
DOCTOLERO, EDNA SAN DIEGO, JULIETA DANG, JULIETA
DORANTINAO, LOLITA DAGANO, JUDITH DIAZ, MARIA
ENICANE, MARITA ESCARDE, ENRIMITA ESMAYOR, ROSARIO
EPIRITU, REMEDIOS EMBOLTORIO, IRENE ESTUITA,
TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA,
MERLITA ESQUERRA, YOLANDA FELICITAS, FRUTO FRANCIA,
MARTHA FRUTO, LILIA FLORES, SALVACION FORTALESA,
JUDITH FAJARDO, SUSANA FERNANDO, EDWIN FRANCISCO,
NENITA GREGORY, ROSA CAMILO, MARIVIC GERRARDO,
CHARITA GOREMBALEM, NORMA GRANDE, DOLORES
GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ, ADELAIDA
GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA, HELEN
GARCIA, ERLINDA GAUDIA, FRANCISCA GUILING, MINTA
HERRERA, ASUNCION HONOA, JUAN HERNANDEZ, LUCERIA
ANNA MAE HERNANDEZ, JULIANA HERNANDEZ, EDITHA
IGNACIO, ANITA INOCENCIO, EULALIA INSORIO, ESTELITA
IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO, ADELIMA
JAEL, ROWENA JARABJO, ROBERT JAVILINAR, CLARITA
JOSE, CARMENCITA JUNDEZ, SOFIA LALUCIS, GLORIA
LABITORIA, ANGELITA LODES, ERLINDA LATOGA, EVELYN
LEGASPI, ROMEO LIMCHOCO, JESUS LARA, ESTRELLA DE
LUNA, LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE LEON,
CONSOLACION LIBAO, MARILYN LIWAG, TERESITA LIZAZO,
LILIA MACAPAGAL, SALVACION MACAREZA, AMALIA MADO,
TERESITA MADRIAGA, JOVITA MAGNAYE, JEAN MALABAD,
FRANCISCA MENDOZA, NELCITA MANGANTANG, TERESITA
NELLA, GENEROZA MERCADO, CRISTETA MOJANA,
BERNARDA MONGADO, LYDIA MIRANDA, ELISA MADRILEJOS,
LOIDA MAGSINO, AMELIA MALTO, JULITA MAHIBA, MYRNA
MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA
MONZON, IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI
MANGUILLO, BASILIZA MEDINA, VICTORIO MERCADO,
ESTELA MAYPA, EMILIA MENDOZA, LINA MAGPANTAY,
FELICIANA MANLOLO, ELENA MANACOP, WILMA MORENO,
JUANA MENDOZA, EVELYN DEL MUNDO, ROSIE MATUTINA,
MATILDE MANALO, TERESITA MENDEZ, FELIPINA
MAGONCIA, MARIA MANZANO, LIGAYA MANALO, LETICIA
MARCHA, MARINA MANDIGMA, LETICIA MANDASOC,
PRESCILLA MARTINEZ, JULIA MENDOZA, PACITA
88
MAGALLANES, ANGELINA MARJES, SHIRLEY MELIGRITO,
IRENE MERCADO, ELISA MAATUBANG, MARCELINA NICOLAS,
AGUSTINA NICOLAS, ROSA NOLASCO, WILMA NILAYE,
VIOLETA ORACION, ANGELA OSTAYA, JUANITA OSAYOS,
MAGDALENA OCAMPO, MARDIANA OCTA, ROSELA OPAO,
LIBRADA OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA,
PAGDUNAN, RITA PABILONA, MYRA PALACA, BETHLEHEM
PALINES, GINA PALIGAR, NORMA PALIGAR, DELMA PEREZ,
CLAUDIA PRADO, JULIE PUTONG, LUDIVINA PAGSALINGAN,
MERLYN PANALIGAN, VIOLETA PANAMBITAN, NOREN PAR,
ERLINDA PARAGAS, MILA PARINO, REBECCA PENAFLOR,
IMELDA PENAMORA, JERMICILLIN PERALTA, REBECCA
PIAPES, EDITHA PILAR, MAROBETH PILLADO, DIOSCORO
PIMENTEL, AURORA LAS PINAS, EVANGELINA PINON, MA.
NITA PONDOC, MA. MERCEDES PODPOD, ANGELITO PANDEZ,
LIGAYA PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO,
MARITESS QUIJANO, CHOLITA REBUENO, LOLITA REYES,
JOCELYN RAMOS, ROSITA RAMIREZ, ELINORA RAMOS,
ISABEL RAMOS, ANNABELLE RESURRECCION, EMMA REYES,
ALILY ROXAS, MARY GRACE DELOS REYES, JOCELYN DEL
ROSARIO, JOSEFINA RABUSA, ANGELITA ROTAIRO, SAMCETA
ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA
REBOLA, ROSITA REVILLA, ROSITA SANTOS, ROWENA
SALAZAR, EMILYN SARMIENTO, ANA SENIS, ELOISA SANTOS,
NARCISA SONGLIAD, ELMA SONGALIA, AMPARA SABIO,
JESSIE SANCHEZ, VIVIAN SAMILO, GLORIA SUMALINOG,
ROSALINA DELOS SANTOS, MARIETA SOMBRERO, HELEN
SERRETARIO, TEODORO SULIT, BELLA SONGUINES, LINDA
SARANTAN, ESTELLA SALABAR, MILAGROS SISON, GLORIA
TALIDAGA, CECILIA TEODORO, ROMILLA TUAZON, AMELITA
TABULAO, MACARIA TORRES, LUTGARDA TUSI, ESTELLA
TORREJOS, VICTORIA TAN, MERLITA DELA VEGA, WEVINA
ORENCIA, REMEDIOS BALECHA, TERESITA TIBAR, LACHICA
LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE
ZALDARIAGA, BENHUR ANTENERO, MARCELINA ANTENERO,
ANTONINA ALAPAN, EDITHA ANTOZO, ROWENA ARABIT,
ANDRA AQUINO, TERESITA ANGULO, MARIA ANGLO, MYRNA
ALBOS, ELENITA AUSTRIA, ANNA ABRIGUE, VIRGINIA
ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS BOLECHE,
MACARIA BARRIOS, THELMA BELEN, ESTELLA BARRETTO,
JOCELYN CHAVEZ, VIRGINIA CAPISTRANO, BENEDICTA
CINCO, YOLLY CATPANG, REINA CUEVAS, VICTORIA
CALANZA, FE CASERO, ROBERTA CATALBAS, LOURDES
CAPANANG, CLEMENCIA CRUZ, JOCELYN COSTO,
MERCEDITA CASTILLO, EDITHA DEE, LUCITA DONATO
NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA
FRANCISCO, VILMA FAJARDO, MODESTA GABRENTINA,
TERESITA GABRIEL, SALVACION GAMBOA, JOSEPHINE
IGNACIO, SUSAN IBARRA, ESPERANZA JABSON, OSCAR
JAMBARO, ROSANNA JARDIN, CORAZON JALOCON, ZENAIDA
LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA
LUMAYOT, DELIA LUMBIS, LEONORA LANCHICA, RELAGIA
LACSI, JOSEFINA LUMBO, VIOLETA DE LUNA, EVELYN
MADRID, TERESITA MORILLA, GEMMA MAGPANTAY, EMILY
MENDOZA, IRENEA MEDINA, NARCISA MABEZA, ROSANNA
MEDINA, DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA
MENDOZA, EDILBERTA MENDOZA, FIDELA PANGANIBAN,
OFELIA PANGANIBAN, AZUCENA POSTGO, LOURDES
PACHECO, LILIA PADILLA, MARISSA PEREZ, FLORDELIZA
PUMARES, LUZ REYES, NORMA RACELIS, LEONOR RIZALDO,
JOSIE SUMASAR, NANCY SAMALA, EMERLITA SOLAYAO,
MERCEDITA SAMANIEGO, BLANDINA SIMBULAN, JOCELYN
SENDING, LUISITA TABERRERO, TERESITA TIBAR, ESTERLINA
VALDEZ, GLORIA VEJERANO, ILUMINADA VALENCIA,
MERLITA DELA VEGA, VIRGIE LAITAN, JULIET VILLARAMA,
LUISISTA OCAMPO, NARIO ANDRES, ANSELMA TULFO,
GLORIA MATEO, FLANIA MENDOZA, CONNIE CANGO, EDITHA
SALAZAR, MYRNA DELOS SANTOS, TERESITA SERGIO,
CHARITO GILLA, FLORENTINA HERNAEZ, BERNARDINO
VIRGINIA, AMPO ANACORITA, SYLVIA POASADAS, ESTRELLA
ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO,
EMMA REYES, NOEMI PENISALES, CLARITA POLICARPIO,
BELEN BANGUIO, HERMINIA ADVINCULA, LILIA MORTA,
REGINA LAPIDARIO, LORNA LARGA, TERESITA VINLUAN,
MARITA TENOSO, NILDS SAYAT, THELMA SARONG, DELMA
REGALIS, SUSAN RAFAULO, ELENA RONDINA, MYRNA PIENDA,
VIOLETA DUMELINA, FLORENCIA ADALID, FILMA MELAYA,
ERLINDA DE BAUTISTA, MATILDE DE BLAS, DOLORES
FACUNDO, REBECCA LEDAMA, MA. FE MACATANGAY,
EMELITA MINON, NORMA PAGUIO, ELIZA VASQUEZ, GLORIA
VILLARINO, MA. JESUS FRANCISCO, TERESITA GURPIDO,
LIGAYA MANALO, FE PINEDA, MIRIAM OCMAR, LUISA
89
SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE, CARMEN DELA
CRUZ, DMETRIA ESTONELO, MA. FLORIDA LOAZNO, IMELDA
MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS, SUSANA
ORTEGA, JOSEPHINE D. TALIMORO, TERESITA LORECA,
ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO, FE
PINEDA, and MARIA JESUS FRANCISCO, petitioners,
vs.
HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS
COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS
T. JAVELOSA, RENATO C. PUANGCO, WINCEL LIGOT,
MARCIANO HALOG, GODOFREDO PACENO, SR., GERVACIO
CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO,
JR., MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO
IBANEZ, AND RODRIGO AGUILING, respondents.
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of
Court to annul the decision of the National Labor Relations Commission in
an unfair labor practice case instituted by a local union against its employer
company and the officers of its national federation.
The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield,
Inc., (B) (MSMG), hereinafter referred to as the "local union", is an affiliate
of the private respondent, United Lumber and General Workers of the
Philippines (ULGWP), referred to as the "federation". The collective
bargaining agreement between MSMG and M. Greenfield, Inc., names the
parties as follows:
This agreement made and entered into by and between:
M. GREENFIELD, INC. (B) a corporation duly organized in
accordance with the laws of the Republic of the Philippines with
office address at Km. 14, Merville Road, Parañaque, Metro Manila,
represented in this act by its General manager, Mr. Carlos T.
Javelosa, hereinafter referred to as the Company;
-and-
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M.
GREENFIELD (B) (MSMG)/UNITED LUMBER AND GENERAL
WORKERS OF THE PHILIPPINES (ULGWP), a legitimate labor
organization with address at Suite 404, Trinity Building, T. M.
Kalaw Street, Manila, represented in this act by a Negotiating
Committee headed by its National President, Mr. Godofredo Paceno,
Sr., referred to in this Agreement as the UNION.1
The CBA includes, among others, the following pertinent provisions:
Art. II-Union Security
Sec. 1. Coverage and Scope. All employees who are covered by this
Agreement and presently members of the UNION shall remain
members of the UNION for the duration of this Agreement as a
condition precedent to continued employment with the COMPANY.
xxx xxx xxx
Sec. 4. Dismissal. Any such employee mentioned in Section 2
hereof, who fails to maintain his membership in the UNION for non-
payment of UNION dues, for resignation and for violation of
UNION's Constitution and By-Laws and any new employee as
defined in Section 2 of this Article shall upon written notice of such
failure to join or to maintain membership in the UNION and upon
written recommendation to the COMPANY by the UNION, be
dismissed from the employment by the
COMPANY; provided, however, that the UNION shall hold the
COMPANY free and blameless from any and all liabilities that may
arise should the dismissed employee question, in any manner, his
dismissal; provided, further that the matter of the employee's
dismissal under this Article may be submitted as a grievance under
Article XIII and, provided, finally, that no such written
recommendation shall be made upon the COMPANY nor shall
COMPANY be compelled to act upon any such recommendation
within the period of sixty (60) days prior to the expiry date of this
Agreement conformably to law.
Art. IX
90
 Sec. 4. Program Fund — The Company shall provide the amount of
P10,000.00 a month for a continuing labor education program which
shall be remitted to the Federation . . .2
On September 12, 1986, a local union election was held under the auspices of
the ULGWP wherein the herein petitioner, Beda Magdalena Villanueva, and
the other union officers were proclaimed as winners. Minutes of the said
election were duly filed with the Bureau of Labor Relations on September
29, 1986.
On March 21, 1987, a Petition for Impeachment was filed with the national
federation ULGWP by the defeated candidates in the aforementioned
election.
On June 16, 1987, the federation conducted an audit of the local union funds.
The investigation did not yield any unfavorable result and the local union
officers were cleared of the charges of anomaly in the custody, handling and
disposition of the union funds.1âwphi1.nêt
The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the
local union officers with the DOLE NCR on November 5, 1987, docketed as
NCR-OD-M-11-780-87. However, the same was dismissed on March 2,
1988, by Med-Arbiter Renato Parungo for failure to substantiate the charges
and to present evidence in support of the allegations.
On April 17, 1988, the local union held a general membership meeting at the
Caruncho Complex in Pasig. Several union members failed to attend the
meeting, prompting the Executive Board to create a committee tasked to
investigate the non-attendance of several union members in the said
assembly, pursuant to Sections 4 and 5, Article V of the Constitution and By-
Laws of the union, which read:
Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa
lahat ng hakbangin ng unyon ng sinumang kasapi o pinuno ay
maaaring maging sanhi ng pagtitiwalag o pagpapataw ng multa ng
hindi hihigit sa P50.00 sa bawat araw na nagkulang.
Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang
pulong ay ituturing na pagliban at maparusahan itong alinsunod sa
Article V, Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o
pisyales na mahuli and dating sa takdang oras ng di lalampas sa isang
oras ay magmumulta ng P25.00 at babawasin sa sahod sa
pamamagitan ng salary deduction at higit sa isang oras ng pagdating
ng huli ay ituturing na pagliban.3
On June 27, 1988, the local union wrote respondent company a letter
requesting it to deduct the union fines from the wages/salaries of those union
members who failed to attend the general membership meeting. A portion of
the said letter stated:
xxx xxx xxx
In connection with Section 4 Article II of our existing Collective
Bargaining Agreement, please deduct the amount of P50.00 from
each of the union members named in said annexes on the payroll of
July 2-8, 1988 as fine for their failure to attend said general
membership meeting.4
In a Memorandum dated July 3, 1988, the Secretary General of the national
federation, Godofredo Paceño, Jr. disapproved the resolution of the local
union imposing the P50.00 fine. The union officers protested such action by
the Federation in a Reply dated July 4, 1988.
On July 11, 1988, the Federation wrote respondent company a letter advising
the latter not to deduct the fifty-peso fine from the salaries of the union
members requesting that:
. . . any and all future representations by MSMG affecting a number
of members be first cleared from the federation before corresponding
action by the Company.5
The following day, respondent company sent a reply to petitioner union's
request in a letter, stating that it cannot deduct fines from the employees'
salary without going against certain laws. The company suggested that the
union refer the matter to the proper government office for resolution in order
to avoid placing the company in the middle of the issue.
The imposition of P50.00 fine became the subject of bitter disagreement
between the Federation and the local union culminating in the latter's
declaration of general autonomy from the former through Resolution No. 10
91
passed by the local executive board and ratified by the general membership
on July 16, 1988.
In retaliation, the national federation asked respondent company to stop the
remittance of the local union's share in the education funds effective August
1988. This was objected to by the local union which demanded that the
education fund be remitted to it in full.
The company was thus constrained to file a Complaint for Interpleader with a
Petition for Declaratory Relief with the Med-Arbitration Branch of the
Department of Labor and Employment, docketed as Case No. OD-M-8-435-
88. This was resolved on October 28, 1988, by Med-Arbiter Anastacio Bactin
in an Order, disposing thus:
WHEREFORE, premises considered, it is hereby ordered:
1. That the United Lumber and General Workers of the Philippines
(ULGWP) through its local union officers shall administer the
collective bargaining agreement (CBA).
2. That petitioner company shall remit the P10,000.00 monthly labor
education program fund to the ULGWP subject to the condition that
it shall use the said amount for its intended purpose.
3. That the Treasurer of the MSMG shall be authorized to collect
from the 356 union members the amount of P50.00 as penalty for
their failure to attend the general membership assembly on April 17,
1988.
However, if the MSMG Officers could present the individual written
authorizations of the 356 union members, then the company is
obliged to deduct from the salaries of the 356 union members the
P50.00 fine.6
On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February
7, 1989, which modified in part the earlier disposition, to wit:
WHEREFORE, premises considered, the appealed portion is hereby
modified to the extent that the company should remit the amount of
five thousand pesos (P5,000.00) of the P10,000.00 monthly labor
education program fund to ULGWP and the other P5,000.00 to
MSMG, both unions to use the same for its intended purpose.7
Meanwhile, on September 2, 1988, several local unions (Top Form, M.
Greenfield, Grosby, Triumph International, General Milling, and Vander
Hons chapters) filed a Petition for Audit and Examination of the federation
and education funds of ULGWP which was granted by Med-Arbiter Rasidali
Abdullah on December 25, 1988 in an Order which directed the audit and
examination of the books of account of ULGWP.
On September 30, 1988, the officials of ULGWP called a Special National
Executive Board Meeting at Nasipit, Agusan del Norte where a Resolution
was passed placing the MSMG under trusteeship and appointing respondent
Cesar Clarete as administrator.
On October 27, 1988, the said administrator wrote the respondent company
informing the latter of its designation of a certain Alfredo Kalingking as local
union president and "disauthorizing" the incumbent union officers from
representing the employees. This action by the national federation was
protested by the petitioners in a letter to respondent company dated
November 11, 1988.
On November 13, 1988, the petitioner union officers received identical letters
from the administrator requiring them to explain within 72 hours why they
should not be removed from their office and expelled from union
membership.
On November 26, 1988, petitioners replied:
(a) Questioning the validity of the alleged National Executive Board
Resolution placing their union under trusteeship;
(b) Justifying the action of their union in declaring a general
autonomy from ULGWP due to the latter's inability to give proper
educational, organizational and legal services to its affiliates and the
pendency of the audit of the federation funds;
(c) Advising that their union did not commit any act of disloyalty as
it has remained an affiliate of ULGWP;
92
 (d) Giving ULGWP a period of five (5) days to cease and desist from
further committing acts of coercion, intimidation and harassment.8
However, as early as November 21, 1988, the officers were expelled from the
ULGWP. The termination letter read:
Effective today, November 21, 1988, you are hereby expelled from
UNITED LUMBER AND GENERAL WORKERS OF THE
PHILIPPINES (ULGWP) for committing acts of disloyalty and/or
acts inimical to the interest and violative to the Constitution and by-
laws of your federation.
You failed and/or refused to offer an explanation inspite of the time
granted to you.
Since you are no longer a member of good standing, ULGWP is
constrained to recommend for your termination from your
employment, and provided in Article II Section 4, known as UNION
SECURITY, in the Collective Bargaining agreement.9
On the same day, the federation advised respondent company of the
expulsion of the 30 union officers and demanded their separation from
employment pursuant to the Union Security Clause in their collective
bargaining agreement. This demand was reiterated twice, through letters
dated February 21 and March 4, 1989, respectively, to respondent company.
Thereafter, the Federation filed a Notice of Strike with the National
Conciliation and Mediation Board to compel the company to effect the
immediate termination of the expelled union officers.
On March 7, 1989, under the pressure of a threatened strike, respondent
company terminated the 30 union officers from employment, serving them
identical copies of the termination letter reproduced below:
We received a demand letter dated 21 November 1988 from the
United Lumber and General Workers of the Philippines (ULGWP)
demanding for your dismissal from employment pursuant to the
provisions of Article II, Section 4 of the existing Collective
Bargaining Agreement (CBA). In the said demand letter, ULGWP
informed us that as of November 21, 1988, you were expelled from
the said federation "for committing acts of disloyalty and/or acts
inimical to the interest of ULGWP and violative to its Constitution
and By-laws particularly Article V, Section 6, 9, and 12, Article XIII,
Section 8.
In subsequent letters dated 21 February and 4 March 1989, the
ULGWP reiterated its demand for your dismissal, pointing out that
notwithstanding your expulsion from the federation, you have
continued in your employment with the company in violation of Sec.
1 and 4 of Article II of our CBA, and of existing provisions of law.
In view thereof, we are left with no alternative but to comply with
the provisions of the Union Security Clause of our CBA.
Accordingly, we hereby serve notice upon you that we are
dismissing you from your employment with M. Greenfield, Inc.,
pursuant to Sections 1 and 4, Article II of the CBA effective
immediately.10
On that same day, the expelled union officers assigned in the first shift were
physically or bodily brought out of the company premises by the company's
security guards. Likewise, those assigned to the second shift were not
allowed to report for work. This provoked some of the members of the local
union to demonstrate their protest for the dismissal of the said union officers.
Some union members left their work posts and walked out of the company
premises.
On the other hand, the Federation, having achieved its objective, withdrew
the Notice of Strike filed with the NCMB.
On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB,
DOLE, Manila, docketed as Case No. NCMB-NCR-NS-03-216-89, alleging
the following grounds for the strike:
(a) Discrimination
(b) Interference in union activities
(c) Mass dismissal of union officers and shop stewards
(d) Threats, coercion and intimidation
93
 (e) Union busting and April 31, 1989, respectively. However, respondent company admitted
that only 261 employees were eventually accepted back to work. Those who
The following day, March 9, 1989, a strike vote referendum was conducted did not respond to the return-to-work notice were sent termination letters
and out of 2, 103 union members who cast their votes, 2,086 members voted dated May 17, 1989, reproduced below:
to declare a strike.
M. Greenfield Inc., (B)
On March 10, 1989, the thirty (30) dismissed union officers filed an urgent
petition, docketed as Case No. NCMB-NCR-NS-03-216-89, with the Office Km. 14, Merville Rd., Parañaque, M.M.
of the Secretary of the Department of Labor and Employment praying for the
suspension of the effects of their termination from employment. However, May 17, 1989
the petition was dismissed by then Secretary Franklin Drilon on April 11,
1989, the pertinent portion of which stated as follows: xxx xxx xxx

At this point in time, it is clear that the dispute at M. Greenfield is
purely an intra-union matter. No mass lay-off is evident as the
terminations have been limited to those allegedly leading the
secessionist group leaving MSMG-ULGWP to form a union under
the KMU. . . .
xxx xxx xxx
WHEREFORE, finding no sufficient jurisdiction to warrant the
exercise of our extraordinary authority under Article 277 (b) of the
Labor Code, as amended, the instant Petition is hereby DISMISSED
for lack of merit.
SO ORDERED.11
On March 13 and 14, 1989, a total of 78 union shop stewards were placed
under preventive suspension by respondent company. This prompted the
union members to again stage a walk-out and resulted in the official
declaration of strike at around 3:30 in the afternoon of March 14, 1989. The
strike was attended with violence, force and intimidation on both sides
resulting to physical injuries to several employees, both striking and non-
striking, and damage to company properties.
The employees who participated in the strike and allegedly figured in the
violent incident were placed under preventive suspension by respondent
company. The company also sent return-to-work notices to the home
addresses of the striking employees thrice successively, on March 27, April 8
On March 14, 1989, without justifiable cause and without
due notice, you left your work assignment at the prejudice of
the Company's operations. On March 27, April 11, and April
21, 1989, we sent you notices to report to the Company.
Inspite of your receipt of said notices, we have not heard
from you up to this date.
Accordingly, for your failure to report, it is construed that
you have effectively abandoned your employment and the
Company is, therefore, constrained to dismiss you for said
cause.
Very truly yours,
M. GREENFIELD, INC., (B)
By:
WENZEL STEPHEN LIGOT
Asst. HRD Manager 12
On August 7, 1989, the petitioners filed a verified complaint with the
Arbitration Branch, National Capital Region, DOLE, Manila, docketed as
Case No. NCR-00-09-04199-89, charging private respondents of unfair labor
practice which consists of union busting, illegal dismissal, illegal suspension,
interference in union activities, discrimination, threats, intimidation,
coercion, violence, and oppression.
94
After the filing of the complaint, the lease contracts on the respondent
company's office and factory at Merville Subdivision, Parañaque expired and
were not renewed. Upon demand of the owners of the premises, the company
was compelled to vacate its office and factory.
Thereafter, the company transferred its administration and account/client
servicing department at AFP-RSBS Industrial Park in Taguig, Metro Manila.
For failure to find a suitable place in Metro Manila for relocation of its
factory and manufacturing operations, the company was constrained to move
the said departments to Tacloban, Leyte. Hence, on April 16, 1990,
respondent company accordingly notified its employees of a temporary
shutdown in operations. Employees who were interested in relocating to
Tacloban were advised to enlist on or before April 23, 1990.
The complaint for unfair labor practice was assigned to Labor Arbiter
Manuel Asuncion but was thereafter reassigned to Labor Arbiter Cresencio
Ramos when respondents moved to inhibit him from acting on the case.
On December 15, 1992, finding the termination to be valid in compliance
with the union security clause of the collective bargaining agreement, Labor
Arbiter Cresencio Ramos dismissed the complaint.
Petitioners then appealed to the NLRC. During its pendency, Commissioner
Romeo Putong retired from the service, leaving only two commissioners,
Commissioner Vicente Veloso III and Hon. Chairman Bartolome Carale in
the First Division. When Commissioner Veloso inhibited himself from the
case, Commissioner Joaquin Tanodra of the Third Division was temporarily
designated to sit in the First Division for the proper disposition of the case.
The First Division affirmed the Labor Arbiter's disposition. With the denial
of their motion for reconsideration on January 28, 1994, petitioners elevated
the case to this Court, attributing grave abuse of discretion to public
respondent NLRC in:
I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS
BY RESPONDENT COMPANY AS VALID;
II. HOLDING THAT THE STRIKE STAGED BY THE
PETITIONERS AS ILLEGAL;
III. HOLDING THAT THE PETITIONER EMPLOYEES WERE
DEEMED TO HAVE ABANDONED THEIR WORK AND
HENCE, VALIDLY DISMISSED BY RESPONDENT COMPANY;
AND
IV. NOT FINDING RESPONDENT COMPANY AND
RESPONDENT FEDERATION OFFICERS GUILTY OF ACTS OF
UNFAIR LABOR PRACTICE.
Notwithstanding the several issues raised by the petitioners and respondents
in the voluminous pleadings presented before the NLRC and this Court, they
revolve around and proceed from the issue of whether or not respondent
company was justified in dismissing petitioner employees merely upon the
labor federation's demand for the enforcement of the union security clause
embodied in their collective bargaining agreement.
Before delving into the main issue, the procedural flaw pointed out by the
petitioners should first be resolved.
Petitioners contend that the decision rendered by the First Division of the
NLRC is not valid because Commissioner Tanodra, who is from the Third
Division, did not have any lawful authority to sit, much less write
the ponencia, on a case pending before the First Division. It is claimed that a
commissioner from one division of the NLRC cannot be assigned or
temporarily designated to another division because each division is assigned
a particular territorial jurisdiction. Thus, the decision rendered did not have
any legal effect at all for being irregularly issued.
Petitioners' argument is misplaced. Article 213 of the Labor Code in
enumerating the powers of the Chairman of the National Labor Relations
Commission provides that:
The concurrence of two (2) Commissioners of a division shall be
necessary for the pronouncement of a judgment or resolution.
Whenever the required membership in a division is not complete and
the concurrence of two (2) commissioners to arrive at a judgment or
resolution cannot be obtained, the Chairman shall designate such
number of additional Commissioners from the other divisions as may
be necessary.
95
It must be remembered that during the pendency of the case in the First
Division of the NLRC, one of the three commissioners, Commissioner
Romeo Putong, retired, leaving Chairman Bartolome Carale and
Commissioner Vicente Veloso III. Subsequently, Commissioner Veloso
inhibited himself from the case because the counsel for the petitioners was
his former classmate in law school. The First Division was thus left with only
one commissioner. Since the law requires the concurrence of two
commissioners to arrive at a judgment or resolution, the Commission was
constrained to temporarily designate a commissioner from another division to
complete the First Division. There is nothing irregular at all in such a
temporary designation for the law empowers the Chairman to make
temporary assignments whenever the required concurrence is not met. The
law does not say that a commissioner from the first division cannot be
temporarily assigned to the second or third division to fill the gap or vice
versa. The territorial divisions do not confer exclusive jurisdiction to each
division and are merely designed for administrative efficiency.
Going into the merits of the case, the court finds that the Complaint for unfair
labor practice filed by the petitioners against respondent company which
charges union busting, illegal dismissal, illegal suspension, interference in
union activities, discrimination, threats, intimidation, coercion, violence, and
oppression actually proceeds from one main issue which is the termination of
several employees by respondent company upon the demand of the labor
federation pursuant to the union security clause embodied in their collective
bargaining agreement.
Petitioners contend that their dismissal from work was effected in an
arbitrary, hasty, capricious and illegal manner because it was undertaken by
the respondent company without any prior administrative investigation; that,
had respondent company conducted prior independent investigation it would
have found that their expulsion from the union was unlawful similarly for
lack of prior administrative investigation; that the federation cannot
recommend the dismissal of the union officers because it was not a principal
party to the collective bargaining agreement between the company and the
union; that public respondents acted with grave abuse of discretion when
they declared petitioners' dismissals as valid and the union strike as illegal
and in not declaring that respondents were guilty of unfair labor practice.
Private respondents, on the other hand, maintain that the thirty dismissed
employees who were former officers of the federation have no cause of
action against the company, the termination of their employment having been
made upon the demand of the federation pursuant to the union security clause
of the CBA; the expelled officers of the local union were accorded due
process of law prior to their expulsion from their federation; that the strike
conducted by the petitioners was illegal for noncompliance with the
requirements; that the employees who participated in the illegal strike and in
the commission of violence thereof were validly terminated from work; that
petitioners were deemed to have abandoned their employment when they did
not respond to the three return to work notices sent to them; that petitioner
labor union has no legal personality to file and prosecute the case for and on
behalf of the individual employees as the right to do so is personal to the
latter; and that, the officers of respondent company cannot be liable because
as mere corporate officers, they acted within the scope of their authority.
Public respondent, through the Labor Arbiter, ruled that the dismissed union
officers were validly and legally terminated because the dismissal was
effected in compliance with the union security clause of the CBA which is
the law between the parties. And this was affirmed by the Commission on
appeal. Moreover, the Labor Arbiter declared that notwithstanding the lack of
a prior administrative investigation by respondent company, under the union
security clause provision in the CBA, the company cannot look into the
legality or illegality of the recommendation to dismiss by the union nd the
obligation to dismiss is ministerial on the part of the company.13
This ruling of the NLRC is erroneous. Although this Court has ruled that
union security clauses embodied in the collective bargaining agreement may
be validly enforced and that dismissals pursuant thereto may likewise be
valid, this does not erode the fundamental requirement of due process. The
reason behind the enforcement of union security clauses which is the sanctity
and inviolability of contracts14 cannot override one's right to due process.
In the case of Cariño vs. National Labor Relations Commission,15 this Court
pronounced that while the company, under a maintenance of membership
provision of the collective bargaining agreement, is bound to dismiss any
employee expelled by the union for disloyalty upon its written request, this
undertaking should not be done hastily and summarily. The company acts in
bad faith in dismissing a worker without giving him the benefit of a hearing.
The power to dismiss is a normal prerogative of the employer.
However, this is not without limitation. The employer is bound to
exercise caution in terminating the services of his employees
especially so when it is made upon the request of a labor union
96
 pursuant to the Collective Bargaining Agreement, . . . Dismissals
must not be arbitrary and capricious. Due process must be observed
in dismissing an employee because it affects not only his position but
also his means of livelihood. Employers should respect and protect
the rights of their employees, which include the right to labor.
In the case under scrutiny, petitioner union officers were expelled by the
federation for allegedly committing acts of disloyalty and/or inimical to the
interest of ULGWP and in violation of its Constitution and By-laws. Upon
demand of the federation, the company terminated the petitioners without
conducting a separate and independent investigation. Respondent company
did not inquire into the cause of the expulsion and whether or not the
federation had sufficient grounds to effect the same. Relying merely upon the
federation's allegations, respondent company terminated petitioners from
employment when a separate inquiry could have revealed if the federation
had acted arbitrarily and capriciously in expelling the union officers.
Respondent company's allegation that petitioners were accorded due process
is belied by the termination letters received by the petitioners which state that
the dismissal shall be immediately effective.
As held in the aforecited case of Cariño, "the right of an employee to be
informed of the charges against him and to reasonable opportunity to present
his side in a controversy with either the company or his own union is not
wiped away by a union security clause or a union shop clause in a collective
bargaining agreement. An employee is entitled to be protected not only from
a company which disregards his rights but also from his own union the
leadership of which could yield to the temptation of swift and arbitrary
expulsion from membership and mere dismissal from his job.
While respondent company may validly dismiss the employees expelled by
the union for disloyalty under the union security clause of the collective
bargaining agreement upon the recommendation by the union, this dismissal
should not be done hastily and summarily thereby eroding the employees'
right to due process, self-organization and security of tenure. The
enforcement of union security clauses is authorized by law provided such
enforcement is not characterized by arbitrariness, and always with due
process.16 Even on the assumption that the federation had valid grounds to
expel the union officers, due process requires that these union officers be
accorded a separate hearing by respondent company.
In its decision, public respondent also declared that if complainants (herein
petitioners) have any recourse in law, their right of action is against the
federation and not against the company or its officers, relying on the findings
of the Labor Secretary that the issue of expulsion of petitioner union officers
by the federation is a purely intra-union matter.
Again, such a contention is untenable. While it is true that the issue of
expulsion of the local union officers is originally between the local union and
the federation, hence, intra-union in character, the issue was later on
converted into a termination dispute when the company dismissed the
petitioners from work without the benefit of a separate notice and hearing. As
a matter of fact, the records reveal that the termination was effective on the
same day that the termination notice was served on the petitioners.
In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills,
Inc.17, the Court held the company liable for the payment of backwages for
having acted in bad faith in effecting the dismissal of the employees.
. . . Bad faith on the part of the respondent company may be gleaned
from the fact that the petitioner workers were dismissed hastily and
summarily. At best, it was guilty of a tortious act, for which it must
assume solidary liability, since it apparently chose to summarily
dismiss the workers at the union's instance secure in the union's
contractual undertaking that the union would hold it "free from any
liability" arising from such dismissal.
Thus, notwithstanding the fact that the dismissal was at the instance of the
federation and that it undertook to hold the company free from any liability
resulting from such a dismissal, the company may still be held liable if it was
remiss in its duty to accord the would-be dismissed employees their right to
be heard on the matter.
Anent petitioners contention that the federation was not a principal party to
the collective bargaining agreement between the company and the union,
suffice it to say that the matter was already ruled upon in the Interpleader
case filed by respondent company. Med-Arbiter Anastacio Bactin thus ruled:
After a careful examination of the facts and evidences presented by
the parties, this Officer hereby renders its decision as follows:
97
 1.) It appears on record that in Collective Bargaining Agreement
(CBA) which took effect on July 1, 1986, the contracting parties are
M. Greenfield, Inc. (B) and Malayang Samahan ng Mga
Manggagawa sa M. Greenfield, Inc. (B) (MSMG)/United Lumber
and General Workers of the Philippines (ULGWP). However,
MSMG was not yet registered labor organization at the time of the
signing of the CBA. Hence, the union referred to in the CBA is the
ULGWP.18
Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as
follows:
It is undisputed that ULGWP is the certified sole and exclusive
collective bargaining agent of all the regular rank-and-file workers of
the company, M. Greenfield, Inc. (pages 31-32 of the records).
It has been established also that the company and ULGWP signed a
3-year collective bargaining agreement effective July 1, 1986 up to
June 30, 1989.19
Although the issue of whether or not the federation had reasonable grounds
to expel the petitioner union officers is properly within the original and
exclusive jurisdiction of the Bureau of Labor Relations, being an intra-union
conflict, this Court deems it justifiable that such issue be nonetheless ruled
upon, as the Labor Arbiter did, for to remand the same to the Bureau of
Labor Relations would be to intolerably delay the case.
The Labor Arbiter found that petitioner union officers were justifiably
expelled from the federation for committing acts of disloyalty when it
"undertook to disaffiliate from the federation by charging ULGWP with
failure to provide any legal, educational or organizational support to the
local. . . . and declared autonomy, wherein they prohibit the federation from
interfering in any internal and external affairs of the local union."20
It is well-settled that findings of facts of the NLRC are entitled to great
respect and are generally binding on this Court, but it is equally well-settled
that the Court will not uphold erroneous conclusions of the NLRC as when
the Court finds insufficient or insubstantial evidence on record to support
those factual findings. The same holds true when it is perceived that far too
much is concluded, inferred or deduced from the bare or incomplete facts
appearing of record.21
In its decision, the Labor Arbiter declared that the act of disaffiliation and
declaration of autonomy by the local union was part of its "plan to take over
the respondent federation." This is purely conjecture and speculation on the
part of public respondent, totally unsupported by the evidence.
A local union has the right to disaffiliate from its mother union or declare its
autonomy. A local union, being a separate and voluntary association, is free
to serve the interests of all its members including the freedom to disaffiliate
or declare its autonomy from the federation to which it belongs when
circumstances warrant, in accordance with the constitutional guarantee of
freedom of association.22
The purpose of affiliation by a local union with a mother union or a
federation.
. . . is to increase by collective action the bargaining power in respect
of the terms and conditions of labor. Yet the locals remained the
basic units of association, free to serve their own and the common
interest of all, subject to the restraints imposed by the Constitution
and By-Laws of the Association, and free also to renounce the
affiliation for mutual welfare upon the terms laid down in the
agreement which brought it into existence.23
Thus, a local union which has affiliated itself with a federation is free to
sever such affiliation anytime and such disaffiliation cannot be considered
disloyalty. In the absence of specific provisions in the federation's
constitution prohibiting disaffiliation or the declaration of autonomy of a
local union, a local may dissociate with its parent union.24
The evidence on hand does not show that there is such a provision in
ULGWP's constitution. Respondents' reliance upon Article V, Section 6, of
the federation's constitution is not right because said section, in fact, bolsters
the petitioner union's claim of its right to declare autonomy:
Sec. 6. The autonomy of a local union affiliated with ULGWP shall
be respected insofar as it pertains to its internal affairs, except as
provided elsewhere in this Constitution.
There is no disloyalty to speak of, neither is there any violation of the
federation's constitution because there is nothing in the said constitution
98
which specifically prohibits disaffiliation or declaration of autonomy. Hence,
there cannot be any valid dismissal because Article II, Section 4 of the union
security clause in the CBA limits the dismissal to only three (3) grounds, to
wit: failure to maintain membership in the union (1) for non-payment of
union dues, (2) for resignation; and (3) for violation of the union's
Constitution and By-Laws.
To support the finding of disloyalty, the Labor Arbiter gave weight to the fact
that on February 26, 1989, the petitioners declared as vacant all the
responsible positions of ULGWP, filled these vacancies through an election
and filed a petition for the registration of UWP as a national federation. It
should be pointed out, however, that these occurred after the federation had
already expelled the union officers. The expulsion was effective November
21, 1988. Therefore, the act of establishing a different federation, entirely
separate from the federation which expelled them, is but a normal retaliatory
reaction to their expulsion.
With regard to the issue of the legality or illegality of the strike, the Labor
Arbiter held that the strike was illegal for the following reasons: (1) it was
based on an intra-union dispute which cannot properly be the subject of a
strike, the right to strike being limited to cases of bargaining deadlocks and
unfair labor practice (2) it was made in violation of the "no strike, no lock-
out" clause in the CBA, and (3) it was attended with violence, force and
intimidation upon the persons of the company officials, other employees
reporting for work and third persons having legitimate business with the
company, resulting to serious physical injuries to several employees and
damage to company property.
On the submission that the strike was illegal for being grounded on a non-
strikeable issue, that is, the intra-union conflict between the federation and
the local union, it bears reiterating that when respondent company dismissed
the union officers, the issue was transformed into a termination dispute and
brought respondent company into the picture. Petitioners believed in good
faith that in dismissing them upon request by the federation, respondent
company was guilty of unfair labor practice in that it violated the petitioner's
right to self-organization. The strike was staged to protest respondent
company's act of dismissing the union officers. Even if the allegations of
unfair labor practice are subsequently found out to be untrue, the
presumption of legality of the strike prevails.25
Another reason why the Labor Arbiter declared the strike illegal is due to the
existence of a no strike no lockout provision in the CBA. Again, such a
ruling is erroneous. A no strike, no lock out provision can only be invoked
when the strike is economic in nature, i.e. to force wage or other concessions
from the employer which he is not required by law to grant.26 Such a
provision cannot be used to assail the legality of a strike which is grounded
on unfair labor practice, as was the honest belief of herein petitioners. Again,
whether or not there was indeed unfair labor practice does not affect the
strike.
On the allegation of violence committed in the course of the strike, it must be
remembered that the Labor Arbiter and the Commission found that "the
parties are agreed that there were violent incidents . . . resulting to injuries to
both sides, the union and management."27 The evidence on record show that
the violence cannot be attributed to the striking employees alone for the
company itself employed hired men to pacify the strikers. With violence
committed on both sides, the management and the employees, such violence
cannot be a ground for declaring the strike as illegal.
With respect to the dismissal of individual petitioners, the Labor Arbiter
declared that their refusal to heed respondent's recall to work notice is a clear
indication that they were no longer interested in continuing their employment
and is deemed abandonment. It is admitted that three return to work notices
were sent by respondent company to the striking employees on March 27,
April 11, and April 21, 1989 and that 261 employees who responded to the
notice were admitted back to work.
However, jurisprudence holds that for abandonment of work to exist, it is
essential (1) that the employee must have failed to report for work or must
have been absent without valid or justifiable reason; and (2) that there must
have been a clear intention to sever the employer-employee relationship
manifested by some overt acts.28 Deliberate and unjustified refusal on the
part of the employee to go back to his work post amd resume his employment
must be established. Absence must be accompanied by overt acts unerringly
pointing to the fact that the employee simply does not want to work
anymore.29 And the burden of proof to show that there was unjustified refusal
to go back to work rests on the employer.
In the present case, respondents failed to prove that there was a clear
intention on the part of the striking employees to sever their employer-
employee relationship. Although admittedly the company sent three return to
99
work notices to them, it has not been substantially proven that these notices
were actually sent and received by the employees. As a matter of fact, some
employees deny that they ever received such notices. Others alleged that they
were refused entry to the company premises by the security guards and were
advised to secure a clearance from ULGWP and to sign a waiver. Some
employees who responded to the notice were allegedly told to wait for further
notice from respondent company as there was lack of work.
Furthermore, this Court has ruled that an employee who took steps to protest
his lay-off cannot be said to have abandoned his work.30 The filing of a
complaint for illegal dismissal is inconsistent with the allegation of
abandonment. In the case under consideration, the petitioners did, in fact, file
a complaint when they were refused reinstatement by respondent company.
Anent public respondent's finding that there was no unfair labor practice on
the part of respondent company and federation officers, the Court sustains the
same. As earlier discussed, union security clauses in collective bargaining
agreements, if freely and voluntarily entered into, are valid and binding.
Corollary, dismissals pursuant to union security clauses are valid and legal
subject only to the requirement of due process, that is, notice and hearing
prior to dismissal. Thus, the dismissal of an employee by the company
pursuant to a labor union's demand in accordance with a union security
agreement does not constitute unfair labor practice.31
However, the dismissal was invalidated in this case because of respondent
company's failure to accord petitioners with due process, that is, notice and
hearing prior to their termination. Also, said dismissal was invalidated
because the reason relied upon by respondent Federation was not valid.
Nonetheless, the dismissal still does not constitute unfair labor practice.
Lastly, the Court is of the opinion, and so holds, that respondent company
officials cannot be held personally liable for damages on account of the
employees' dismissal because the employer corporation has a personality
separate and distinct from its officers who merely acted as its agents.
It has come to the attention of this Court that the 30-day prior notice
requirement for the dismissal of employees has been repeatedly violated and
the sanction imposed for such violation enunciated in Wenphil Corporation
vs. NLRC32 has become an ineffective deterrent. Thus, the Court recently
promulgated a decision to reinforce and make more effective the requirement
of notice and hearing, a procedure that must be observed before termination
of employment can be legally effected.
In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No.
117040, January 27, 2000), the Court ruled that an employee who is
dismissed, whether or not for just or authorized cause but without prior
notice of his termination, is entitled to full backwages from the time he was
terminated until the decision in his case becomes final, when the dismissal
was for cause; and in case the dismissal was without just or valid cause, the
backwages shall be computed from the time of his dismissal until his actual
reinstatement. In the case at bar, where the requirement of notice and hearing
was not complied with, the aforecited doctrine laid down in the Serrano case
applies.
WHEREFORE, the Petition is GRANTED; the decision of the National
Labor Relations Commission in Case No. NCR-00-09-04199-89 is
REVERSED and SET ASIDE; and the respondent company is hereby
ordered to immediately reinstate the petitioners to their respective positions.
Should reinstatement be not feasible, respondent company shall pay
separation pay of one month salary for every year of service. Since
petitioners were terminated without the requisite written notice at least 30
days prior to their termination, following the recent ruling in the case
of Ruben Serrano vs. National Labor Relations Commission and Isetann
Department Store, the respondent company is hereby ordered to pay full
backwages to petitioner-employees while the Federation is also ordered to
pay full backwages to petitioner-union officers who were dismissed upon its
instigation. Since the dismissal of petitioners was without cause, backwages
shall be computed from the time the herein petitioner employees and union
officers were dismissed until their actual reinstatement. Should reinstatement
be not feasible, their backwages shall be computed from the time petitioners
were terminated until the finality of this decision. Costs against the
respondent company.1âwphi1.nêt
SO ORDERED.
100
G.R. No. L-43495-99 January 20, 1990
TROPICAL HUT EMPLOYEES' UNION-CGW, JOSE ENCINAS,
JOSE LUIS TRIBINO, FELIPE DURAN, MANUEL MANGYAO,
MAMERTO CAHUCOM, NEMESIO BARRO, TEODULFO
CAPAGNGAN, VICTORINO ABORRO, VIDAL MANTOS,
DALMACIO DALDE, LUCIO PIASAN, CANUTO LABADAN,
TERESO ROMERDE, CONRADO ENGALAN, SALVADOR NERVA,
BERNARDO ENGALAN, BONIFACIO CAGATIN, BENEDICTO
VALDEZ, EUSEBIO SUPILANAS, ALFREDO HAMAYAN, ASUERO
BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING,
PRUDENCIO LADION, FULGENCIO BERSALUNA, ALBERTO
PERALES, ROMEO MAGRAMO, GODOFREDO CAMINOS,
GILDARDO DUMAS, JORGE SALDIVAR, GENARO MADRIO,
SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR JAPAY,
ROGELIO CUIZON, RENATO ANTIPADO, GREGORIO CUEVO,
MARTIN BALAZUELA, CONSTANCIO CHU, CRISPIN TUBLE,
FLORENCIO CHIU, FABIAN CAHUCOM, EMILIANO VILLAMOR,
RESTITUTO HANDAYAN, VICTORINO ESPEDILLA, NOEL CHUA,
ARMANDO ALCORANO, ELEUTERIO TAGUIK, SAMSON CRUDA,
DANILO CASTRO, CENON VALLENAS, DANILO CAWALING,
SIMPLICIO GALLEROS, PERFECTO CUIZON, PROCESO
LAUROS, ANICETO BAYLON, EDISON ANDRES, REYNALDO
BAGOHIN, IRENEO SUPANGAN, RODRIGO CAGATIN, TEODORO
ORENCIO, ARMANDO LUAYON, JAIME NERVA, NARCISO
CUIZON, ALFREDO DEL ROSARIO, EDUARDO LORENZO,
PEDRO ARANGO, VICENTE SUPANGAN, JACINTO BANAL AND
BONIFACIO PUERTO, petitioners,
vs.
TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE,
ARTURO DILAG, MARCELINO LONTOK JR., NATIONAL
ASSOCIATION OF TRADE UNIONS (NATU), NATIONAL LABOR
RELATIONS COMMISSION (NLRC), HON. DIEGO P. ATIENZA,
GERONIMO Q. QUADRA, FEDERICO C. BORROMEO, AND HON.
BLAS F. OPLE, respondents.
Pacifico C. Rosal for
Marcelino Lontok, Jr. for private respondents.
Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and
Que.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 seeking to set aside the
decisions of the public respondents Secretary of Labor and National Labor
Relations Commission which reversed the Arbitrators rulings in favor of
petitioners herein.
The following factual background of this case appears from the record:
On January 2, 1968, the rank and file workers of the Tropical Hut Food
Market Incorporated, referred to herein as respondent company, organized a
local union called the Tropical Hut Employees Union, known for short as the
THEU, elected their officers, adopted their constitution and by-laws and
immediately sought affiliation with the National Association of Trade Unions
(NATU). On January 3, 1968, the NATU accepted the THEU application for
affiliation. Following such affiliation with NATU, Registration Certificate
No. 5544-IP was issued by the Department of Labor in the name of the
Tropical Hut Employees Union — NATU. It appears, however, that NATU
itself as a labor federation, was not registered with the Department of Labor.
After several negotiations were conducted between THEU-NATU,
represented by its local president and the national officers of the NATU,
particularly Ignacio Lacsina, President, Pacifico Rosal, Executive Vice-
President and Marcelino Lontok, Jr., Vice President, and respondent Tropical
Hut Food Market, Incorporated, thru its President and General Manager,
Cesar Azcona, Sr., a Collective Bargaining Agreement was concluded
between the parties on April 1, 1968, the term of which expired on March 31,
1971. Said agreement' contained these clear and unequivocal terms:
This Agreement made and entered into this __________ day of
___________, 1968, by and between:
The Tropical Hut Food Market, Inc., a corporation duly organized
petitioners.
and existing under and by virtue of the laws of the Republic of the
Philippines, with principal office at Quezon City, represented in this
Act by its President, Cesar B. Azcona (hereinafter referred to as the
Company)
101
—and—
Form, the terms of which are as follows:
The Tropical Hut Employees Union — NATU, a legitimate labor
organization duly organized and existing in accordance with the laws
of the Republic of the Philippines, and affiliated with the National
Association of Trade Unions, with offices at San Luis Terraces,
Ermita, Manila, and represented in this Act by its undersigned
officers (hereinafter referred to as the UNION)
Witnesseth:
xxx xxx xxx
And attached to the Agreement as Appendix "A" is a check-off Authorization
We, the undersigned, hereby designate the NATIONAL Association
of Trade Unions, of which the TROPICAL HUT EMPLOYEES
UNION is an affiliate as sole collective bargaining agent in all
matters relating to salary rates, hours of work and other terms and
conditions of employment in the Tropical Hut Food Market, Inc. and
we hereby authorize the said company to deduct the amount of Four
(P 4.00) Pesos each every month as our monthly dues and to deliver
the amount to the Treasurer of the Union or his duly authorized
representatives. (Rollo, pp. 680-684)

Article I On May 21, 1971, respondent company and THEU-NATU entered into a
new Collective Bargaining Agreement which ended on March 31, 1974. This
Coverage and Effectivity new CBA incorporated the previous union-shop security clause and the
attached check-off authorization form.
Sec. 1. The COMPANY recognizes the UNION as the sole and
exclusive collective bargaining agent for all its workers and Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-
employees in all matters concerning wages, hours of work, and other NATU, was appointed by the respondent company as Assistant Unit
terms and conditions of employment. Manager. On July 24, 1973, he wrote the general membership of his union
that for reason of his present position, he was resigning as President of the
xxx xxx xxx THEU-NATU effective that date. As a consequence thereof, his Vice-
President, Jose Encinas, assumed and discharged the duties of the presidency
of the THEU-NATU.
Article III
On December 19,1973, NATU received a letter dated December 15, 1973,
Union Membership and Union Check-off
jointly signed by the incumbent officers of the local union informing the
NATU that THEU was disaffiliating from the NATU federation. On
Sec. 1 —. . . Employees who are already members of the UNION at December 20, 1973, the Secretary of the THEU, Nemesio Barro, made an
the time of the signing of this Agreement or who become so announcement in an open letter to the general membership of the THEU,
thereafter shall be required to maintain their membership therein as a concerning the latter's disaffiliation from the NATU and its affiliation with
condition of continued employment. the Confederation of General Workers (CGW). The letter was passed around
among the members of the THEU-NATU, to which around one hundred and
xxx xxx xxx thirty-seven (137) signatures appeared as having given their consent to and
acknowledgment of the decision to disaffiliate the THEU from the NATU.
Sec. 3—Any employee who is expelled from the UNION for joining
another federation or forming another union, or who fails or refuses On January 1, 1974, the general membership of the so-called THEU-CGW
to maintain his membership therein as required, . . . shall, upon held its annual election of officers, with Jose Encinas elected as President.
written request of the UNION be discharged by the COMPANY. On January 3, 1974, Encinas, in his capacity as THEU-CGW President,
(Rollo, pp. 667-670) informed the respondent company of the result of the elections. On January
102
9, 1974, Pacifico Rosal, President of the Confederation of General Workers
(CGW), wrote a letter in behalf of complainant THEU-CGW to the
respondent company demanding the remittance of the union dues collected
by the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this
was refused by the respondent company.
On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok,
Jr., wrote Vidal Mantos, requiring the latter to assume immediately the
position of President of the THEU-NATU in place of Jose Encinas, but the
position was declined by Mantos. On the same day, Lontok, Jr., informed
Encinas in a letter, concerning the request made by the NATU federation to
the respondent company to dismiss him (Encinas) in view of his violation of
Section 3 of Article III of the Collective Bargaining Agreement. Encinas was
also advised in the letter that NATU was returning the letter of disaffiliation
on the ground that:
1. Under the restructuring program NOT of the Bureau of Labor but
of the Philippine National Trade Union Center in conjunction with
the NATU and other established national labor centers, retail clerks
and employees such as our members in the Tropical Hut pertain to
Industry II which by consensus, has been assigned already to the
jurisdiction of the NATU;
2. The right to disaffiliate belongs to the union membership who —
on the basis of verified reports received by — have not even been
consulted by you regarding the matter;
3. Assuming that the disaffiliation decision was properly reached;
your letter nevertheless is unacceptable in view of Article V, Section
1, of the NATU Constitution which provides that "withdrawal from
the organization shall he valid provided three (3) months notice of
intention to withdraw is served upon the National Executive
Council." (p. 281, Rollo)
In view of NATU's request, the respondent company, on the same day, which
was January 11, 1974, suspended Encinas pending the application for
clearance with the Department of Labor to dismiss him. On January 12,
1974, members of the THEU-CGW passed a resolution protesting the
suspension of Encinas and reiterated their ratification and approval of their
union's disaffiliation from NATU and their affiliation with the Confederation
of General Workers (CGW). It was Encinas' suspension that caused the filing
of NLRC Case No. LR-2511 on January 11, 1974 against private respondents
herein, charging them of unfair labor practice.
On January 15,1974, upon the request of NATU, respondent company
applied for clearance with the Secretary of Labor to dismiss the other officers
and members of THEU-CGW. The company also suspended them effective
that day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual
complainants against private respondents for unfair labor practices.
On January 19, 1974, Lontok, acting as temporary chairman, presided over
the election of officers of the remaining THEU-NATU in an emergency
meeting pending the holding of a special election to be called at a later date.
In the alleged election, Arturo Dilag was elected acting THEU-NATU
President together with the other union officers. On February 14, 1974, these
temporary officers were considered as having been elected as regular officers
for the year 1974.
On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce
Enrile, Secretary of National Defense, complaining of the unfair labor
practices committed by respondent company against its members and
requesting assistance on the matter. The aforementioned letter contained the
signatures of one hundred forty-three (143) members.
On February 24,1974, the secretary of THEU-NATU, notified the entire rank
and file employees of the company that they will be given forty-eight (48)
hours upon receipt of the notice within which to answer and affirm their
membership with THEU-NATU. When the petitioner employees failed to
reply, Arturo Dilag advised them thru letters dated February 26, March 2 and
5, 1974, that the THEU-NATU shall enforce the union security clause set
forth in the CBA, and that he had requested respondent company to dismiss
them.
Respondent company, thereafter, wrote the petitioner employees demanding
the latter's comment on Dilag's charges before action was taken thereon.
However, no comment or reply was received from petitioners. In view of
this, Estelita Que, President/General Manager of respondent company, upon
Dilag's request, suspended twenty four (24) workers on March 5, 1974,
another thirty seven (37) on March 8, 1974 and two (2) more on March 11,
1974, pending approval by the Secretary of Labor of the application for their
dismissal.
103
As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an
unnumbered case were filed by petitioners against Tropical Hut Food
Market, Incorporated, Estelita Que, Hernando Sarmiento and Arturo Dilag.
It is significant to note that the joint letter petition signed by sixty-seven (67)
employees was filed with the Secretary of Labor, the NLRC Chairman and
Director of Labor Relations to cancel the words NATU after the name of
Tropical Hut Employee Union under Registration Certificate No. 5544 IP.
Another letter signed by one hundred forty-six (146) members of THEU-
CGW was sent to the President of the Philippines informing him of the unfair
labor practices committed by private respondents against THEU-CGW
members.
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed
with the Labor Arbiter, Arbitrator Daniel Lucas issued an order dated March
21, 1974, holding that the issues raised by the parties became moot and
academic with the issuance of NLRC Order dated February 25, 1974 in
NLRC Case No. LR-2670, which directed the holding of a certification
election among the rank and file workers of the respondent company between
the THEU-NATU and THEU-CGW. He also ordered: a) the reinstatement of
all complainants; b) for the respondent company to cease and desist from
committing further acts of dismissals without previous order from the NLRC
and for the complainant Tropical Hut Employees UNION-CGW to file
representation cases on a case to case basis during the freedom period
provided for by the existing CBA between the parties (pp. 91-93, Rollo).
With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered
case, Arbitrator Cleto T. Villatuya rendered a decision dated October 14,
1974, the dispositive portion of which states:
Premises considered, a DECISION is hereby rendered ordering
respondent company to reinstate immediately the sixty three (63)
complainants to their former positions with back wages from the
time they were illegally suspended up to their actual reinstatement
without loss of seniority and other employment rights and privileges,
and ordering the respondents to desist from further committing acts
of unfair labor practice. The respondent company's application for
clearance filed with the Secretary of Labor to terminate the subject
complainants' services effective March 20 and 23, 1974, should be
denied.
SO ORDERED. (pp. 147-148, Rollo)
From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases
No. LR-2511 and LR-2521 and by Arbitrator Cleto Villatuya in NLRC Cases
Nos. LR-2971, LR-3015, and the unnumbered case, all parties thereto,
namely, petitioners herein, respondent company, NATU and Dilag appealed
to the National Labor Relations Commission.
In a decision rendered on August 1, 1975, the National Labor Relations
Commission found the private respondents' appeals meritorious, and
stated, inter alia:
WHEREFORE, in view of the foregoing premises, the Order of
Arbitrator Lucas in NLRC CASE NOS. LR-2511, 2521 and the
decision of Arbitrator Villatuya in NLRC CASE NOS. LR-2971,
3015 and the unnumbered Case are hereby REVERSED.
Accordingly, the individual complainants are deemed to have lost
their status as employees of the respondent company. However,
considering that the individual complainants are not presumed to be
familiar with nor to have anticipated the legal mesh they would find
themselves in, after their "disaffiliation" from National Association
of Trade Unions and the THEU-NATU, much less the legal
consequences of the said action which we presume they have taken
in all good faith; considering, further, that the thrust of the new
orientation in labor relations is not towards the punishment of acts
violative of contractual relations but rather towards fair adjustments
of the resulting complications; and considering, finally, the
consequent economic hardships that would be visited on the
individual complainants, if the law were to be strictly enforced
against them, this Commission is constrained to be magnanimous in
this instant, notwithstanding its obligation to give full force and
effect to the majesty of the law, and hereby orders the respondent
company, under pain of being cited for contempt for failure to do so,
to give the individual complainants a second chance by reemploying
them upon their voluntary reaffirmation of membership and loyalty
to the Tropical Hut Employees Union-NATU and the National
Association of Trade Unions in the event it hires additional
personnel.
SO ORDERED. (pp. 312-313, Rollo)
104
The petitioner employees appealed the decision of the respondent National
Labor Relations Commission to the Secretary of Labor. On February 23,
1976, the Secretary of Labor rendered a decision affirming the findings of the
Commission, which provided inter alia:
We find, after a careful review of the record, no sufficient
justification to alter the decision appealed from except that portion of
the dispositive part which states:
. . . this Commission . . . hereby orders respondent company
under pain of being cited for contempt for failure to do so, to
give the individual complainants a second chance by
reemploying them upon their voluntary reaffirmation of
membership and loyalty to the Tropical Hut Employees
UNION-NATU and the National Association of Trade
Union in the event it hires additional personnel.
Compliance by respondent of the above undertaking is not
immediately feasible considering that the same is based on an
uncertain event, i.e., reemployment of individual complainants "in
the event that management hires additional personnel," after they
shall have reaffirmed their loyalty to THEU-NATU, which is
unlikely.
In lieu of the foregoing, and to give complainants positive relief
pursuant to Section 9, Implementing Instruction No. 1. dated
November 9, 1972, respondent is hereby ordered to grant to all the
individual complainants financial assistance equivalent to one (1)
month salary for every year of service.
WHEREFORE, with the modification as above indicated, the
Decision of the National Labor Relations Commission is hereby
affirmed.
SO ORDERED.(pp. 317-318, Rollo)
From the various pleadings filed and arguments adduced by petitioners and
respondents, the following issues appear to be those presented for resolution
in this petition to wit: 1) whether or not the petitioners failed to exhaust
administrative remedies when they immediately elevated the case to this
Court without an appeal having been made to the Office of the President; 2)
whether or not the disaffiliation of the local union from the national
federation was valid; and 3) whether or not the dismissal of petitioner
employees resulting from their unions disaffiliation for the mother federation
was illegal and constituted unfair labor practice on the part of respondent
company and federation.
We find the petition highly meritorious.
The applicable law then is the Labor Code, PD 442, as amended by PD 643
on January 21, 1975, which states:
Art. 222. Appeal — . . .
xxx xxx xxx
Decisions of the Secretary of Labor may be appealed to the President
of the Philippines subject to such conditions or limitations as the
President may direct. (Emphasis ours)
The remedy of appeal from the Secretary of Labor to the Office of the
President is not a mandatory requirement before resort to courts can be had,
but an optional relief provided by law to parties seeking expeditious
disposition of their labor disputes. Failure to avail of such relief shall not in
any way served as an impediment to judicial intervention. And where the
issue is lack of power or arbitrary or improvident exercise thereof, decisions
of the Secretary of Labor may be questioned in a certiorari proceeding
without prior appeal to the President (Arrastre Security Association —
TUPAS v. Ople, No. L-45344, February 20, 1984, 127 SCRA 580). Since the
instant petition raises the same issue of grave abuse of discretion of the
Secretary of Labor amounting to lack of or in excess of jurisdiction in
deciding the controversy, this Court can properly take cognizance of and
resolve the issues raised herein.
This brings Us to the question of the legality of the dismissal meted to
petitioner employees. In the celebrated case of Liberty Cotton Mills Workers
Union v. Liberty Cotton Mills, L-33187, September 4, 1975, 66 SCRA 512,
We held that the validity of the dismissals pursuant to the union security
clause in the collective bargaining agreement hinges on the validity of the
disaffiliation of the local union from the federation.
105
The right of a local union to disaffiliate from its mother federation is well-
settled. A local union, being a separate and voluntary association, is free to
serve the interest of all its members including the freedom to disaffiliate
when circumstances warrant. This right is consistent with the constitutional
guarantee of freedom of association (Volkschel Labor Union v. Bureau of
Labor Relations, No. L-45824, June 19, 1985, 137 SCRA 42).
All employees enjoy the right to self organization and to form and join labor
organizations of their own choosing for the purpose of collective bargaining
and to engage in concerted activities for their mutual aid or protection. This
is a fundamental right of labor that derives its existence from the
Constitution. In interpreting the protection to labor and social justice
provisions of the Constitution and the labor laws or rules or regulations, We
have always adopted the liberal approach which favors the exercise of labor
rights.
Relevant on this point is the basic principle We have repeatedly in affirmed
in many rulings:
. . . The locals are separate and distinct units primarily designed to
secure and maintain an equality of bargaining power between the
employer and their employee-members in the economic struggle for
the fruits of the joint productive effort of labor and capital; and the
association of the locals into the national union (PAFLU) was in
furtherance of the same end. These associations are consensual
entities capable of entering into such legal relations with their
member. The essential purpose was the affiliation of the local unions
into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association, free to
serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws of the
Association, and free also to renounce the affiliation for mutual
welfare upon the terms laid down in the agreement which brought it
into existence. (Adamson & Adamson, Inc. v. CIR, No. L-35120,
January 31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union
(NAFLU) v. Noriel, No. L-41955, December 29, 1977, 80 SCRA
681; Liberty Cotton Mills Workers Union v. Liberty Cotton Mills,
Inc., supra).
The inclusion of the word NATU after the name of the local union THEU in
the registration with the Department of Labor is merely to stress that the
THEU is NATU's affiliate at the time of the registration. It does not mean
that the said local union cannot stand on its own. Neither can it be interpreted
to mean that it cannot pursue its own interests independently of the
federation. A local union owes its creation and continued existence to the
will of its members and not to the federation to which it belongs.
When the local union withdrew from the old federation to join a new
federation, it was merely exercising its primary right to labor organization for
the effective enhancement and protection of common interests. In the
absence of enforceable provisions in the federation's constitution preventing
disaffiliation of a local union a local may sever its relationship with its parent
(People's Industrial and Commercial Employees and Workers Organization
(FFW) v. People's Industrial and Commercial Corporation, No. 37687,
March 15, 1982, 112 SCRA 440).
There is nothing in the constitution of the NATU or in the constitution of the
THEU-NATU that the THEU was expressly forbidden to disaffiliate from the
federation (pp. 62, 281, Rollo), The alleged non-compliance of the local
union with the provision in the NATU Constitution requiring the service of
three months notice of intention to withdraw did not produce the effect of
nullifying the disaffiliation for the following grounds: firstly, NATU was not
even a legitimate labor organization, it appearing that it was not registered at
that time with the Department of Labor, and therefore did not possess and
acquire, in the first place, the legal personality to enforce its constitution and
laws, much less the right and privilege under the Labor Code to organize and
affiliate chapters or locals within its group, and secondly, the act of non-
compliance with the procedure on withdrawal is premised on purely technical
grounds which cannot rise above the fundamental right of self-organization.
Respondent Secretary of Labor, in affirming the decision of the respondent
Commission, concluded that the supposed decision to disaffiliate was not the
subject of a free and open discussion and decision on the part of the THEU-
NATU general membership (p. 305, Rollo). This, however, is contradicted by
the evidence on record. Moreover, We are inclined to believe Arbitrator
Villatuya's findings to the contrary, as follows:
. . . . However, the complainants refute this allegation by submitting
the following: a) Letter dated December 20, 1.973 signed by 142
members (Exhs. "B to B-5") resolution dated January 12, 1974,
106
 signed by 140 members (Exhs. "H to H-6") letter dated February 26,
1974 to the Department of Labor signed by 165 members (Exhs. "I to
I-10"); d) letter dated January 30, 1974 to the Secretary of the
National Defense signed by 144 members (Exhs. "0 to 0-5") and; e)
letter dated March 6, 1974 signed by 146 members addressed to the
President of the Philippines (Exhs. "HH to HH-5"), to show that in
several instances, the members of the THEU-NATU have
acknowledged their disaffiliation from NATU. The letters of the
complainants also indicate that an overwhelming majority have
freely and voluntarily signed their union's disaffiliation from NATU,
otherwise, if there was really deception employed in securing their
signatures as claimed by NATU/ Dilag, it could not be possible to
get their signatures in five different documents. (p. 144, Rollo)
We are aware of the time-honored doctrine that the findings of the NLRC
and the Secretary of Labor are binding on this Court if supported by
substantial evidence. However, in the same way that the findings of facts
unsupported by substantial and credible evidence do not bind this Court,
neither will We uphold erroneous conclusions of the NLRC and the Secretary
of Labor when We find that the latter committed grave abuse of discretion in
reversing the decision of the labor arbiter (San Miguel Corporation v. NLRC,
L-50321, March 13, 1984, 128 SCRA 180). In the instant case, the factual
findings of the arbitrator were correct against that of public respondents.
Further, there is no merit in the contention of the respondents that the act of
disaffiliation violated the union security clause of the CBA and that their
dismissal as a consequence thereof is valid. A perusal of the collective
bargaining agreements shows that the THEU-NATU, and not the NATU
federation, was recognized as the sole and exclusive collective bargaining
agent for all its workers and employees in all matters concerning wages,
hours of work and other terms and conditions of employment (pp. 667-
706, Rollo). Although NATU was designated as the sole bargaining agent in
the check-off authorization form attached to the CBA, this simply means it
was acting only for and in behalf of its affiliate. The NATU possessed the
status of an agent while the local union remained the basic principal union
which entered into contract with the respondent company. When the THEU
disaffiliated from its mother federation, the former did not lose its legal
personality as the bargaining union under the CBA. Moreover, the union
security clause embodied in the agreements cannot be used to justify the
dismissals meted to petitioners since it is not applicable to the circumstances
obtaining in this case. The CBA imposes dismissal only in case an employee
is expelled from the union for joining another federation or for forming
another union or who fails or refuses to maintain membership therein. The
case at bar does not involve the withdrawal of merely some employees from
the union but of the whole THEU itself from its federation. Clearly, since
there is no violation of the union security provision in the CBA, there was no
sufficient ground to terminate the employment of petitioners.
Public respondents considered the existence of Arturo Dilag's group as the
remaining true and valid union. We, however, are inclined to agree instead
with the Arbitrator's findings when he declared:
. . . . Much more, the so-called THEU-NATU under Dilag's group
which assumes to be the original THEU-NATU has a very doubtful
and questionable existence not to mention that the alleged president
is performing supervisory functions and not qualified to be a bona
fide member of the rank and file union. (p. 146, Rollo)
Records show that Arturo Dilag had resigned in the past as President of
THEU-NATU because of his promotion to a managerial or supervisory
position as Assistant Unit Manager of respondent Company. Petitioner Jose
Encinas replaced Dilag as President and continued to hold such position at
the time of the disaffiliation of the union from the federation. It is therefore
improper and contrary to law for Dilag to reassume the leadership of the
remaining group which was alleged to be the true union since he belonged to
the managerial personnel who could not be expected to work for the
betterment of the rank and file employees. Besides, managers and supervisors
are prohibited from joining a rank and file union (Binalbagan Isabela Sugar
Co., Inc. (BISCOM) v. Philippine Association of Free Labor Unions
(PAFLU), et al., L-18782, August 29, 1963, 8 SCRA 700). Correspondingly,
if a manager or supervisor organizes or joins a rank and file union, he will be
required to resign therefrom (Magalit, et al. v. Court of Industrial Relations,
et al., L-20448, May 25, 1965,14 SCRA 72).
Public respondents further submit that several employees who disaffiliate
their union from the NATU subsequently retracted and reaffirmed their
membership with the THEU-NATU. In the decision which was affirmed by
respondent Secretary of Labor, the respondent Commission stated that:
. . . out of the alleged one hundred and seventy-one (171) members
of the THEU-CGW whose signatures appeared in the "Analysis of
Various Documents Signed by Majority Members of the THEU-
107
 CGW, (Annex "T", Complainants), which incidentally was relied
upon by Arbitrator Villatuya in holding that complainant THEU-
CGW commanded the majority of employees in respondent
company, ninety-three (93) of the alleged signatories reaffirmed their
membership with the THEU-NATU and renounced whatever
connection they may have had with other labor unions, (meaning the
complainant THEU-CGW) either through resolution or membership
application forms they have unwittingly signed." (p. 306, Rollo)
Granting arguendo, that the fact of retraction is true, the evidence on record
shows that the letters of retraction were executed on various dates beginning
January 11, 1974 to March 8, 1974 (pp. 278-280, Rollo). This shows that the
retractions were made more or less after the suspension pending dismissal on
January 11, 1974 of Jose Encinas, formerly THEU-NATU President, who
became THEU-CGW President, and the suspension pending their dismissal
of the other elected officers and members of the THEU-CGW on January 15,
1974. It is also clear that some of the retractions occurred after the
suspension of the first set of workers numbering about twenty-four (24) on
March 5, 1974. There is no use in saying that the retractions obliterated the
act of disaffiliation as there are doubts that they were freely and voluntarily
done especially during such time when their own union officers and co-
workers were already suspended pending their dismissal.
Finally, with regard to the process by which the workers were suspended or
dismissed, this Court finds that it was hastily and summarily done without
the necessary due process. The respondent company sent a letter to
petitioners herein, advising them of NATU/Dilag's recommendation of their
dismissal and at the same time giving them forty-eight (48) hours within
which to comment (p. 637, Rollo). When petitioners failed to do so,
respondent company immediately suspended them and thereafter effected
their dismissal. This is certainly not in fulfillment of the mandate of due
process, which is to afford the employee to be dismissed an opportunity to be
heard.
adjudged guilty of unfair labor practice for having dismissed its employees in
line with a closed shop provision if they were not given a proper hearing
(Binalbagan-Isabela Sugar Co., Inc.,(BISCOM) v. Philippine Association of
Free Labor Unions (PAFLU) et al., L-18782, August 29, 1963, 8 SCRA 700).
In view of the fact that the dispute revolved around the mother federation and
its local, with the company suspending and dismissing the workers at the
instance of the mother federation then, the company's liability should be
limited to the immediate reinstatement of the workers. And since their
dismissals were effected without previous hearing and at the instance of
NATU, this federation should be held liable to the petitioners for the
payment of their backwages, as what We have ruled in the Liberty Cotton
Mills Case (supra).
ACCORDINGLY, the petition is hereby GRANTED and the assailed
decision of respondent Secretary of Labor is REVERSED and SET ASIDE,
and the respondent company is hereby ordered to immediately reinstate all
the petitioner employees within thirty (30) days from notice of this decision.
If reinstatement is no longer feasible, the respondent company is ordered to
pay petitioners separation pay equivalent to one (1) month pay for every year
of service. The respondent NATU federation is directed to pay petitioners the
amount of three (3) years backwages without deduction or qualification. This
decision shall be immediately executory upon promulgation and notice to the
parties.

The prerogative of the employer to dismiss or lay-off an employee should be

done without abuse of discretion or arbitrainess, for what is at stake is not
only the employee's name or position but also his means of livelihood. Thus,
the discharge of an employee from his employment is null and void where
the employee was not formally investigated and given the opportunity to
refute the alleged findings made by the company (De Leon v. NLRC, L-
52056, October 30, 1980, 100 SCRA 691). Likewise, an employer can be
108
G.R. No. 87266-69 July 30, 1990
ASSOCIATED WORKERS UNION-PTGWO, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISION (EN BANC),
METRO PORT SERVICE, INC., MARINA PORT SERVICES, INC.,
ADRIANO S. YUMUL and 10 OTHER INDIVIDUAL RESPONDENTS
REPRESENTED BY ATTY. EPIFANIO JACOSALEM, respondents.
G.R. Nos. 91223-26 JULY 30, 1990
MANILA PORT SERVICES, INC., petitioner,
vs.
HON. ARTHUR G. AMANSEC AND ADRIANO YUMUL, PABLITO
REANDELAR, MACARIO DE LUNA, JR., ADAN MENDOAZA,
SMITH CARLOTA, EMERECIANO VERGARA, ROMEO ABACAN,
LEONARDO ROMULO, ELINO JOSE, and CATINDIANO
CALAUAG (COLLECTIVELY CALLED AWUM), respondents.
D.T. Dagum, Jr. and P.T. De Quiroz for petitioner in G.R. Nos. 87266-69.
Ramon N. Nalipay, Jr. for petitioner in G.R. Nos. 91223-26.
Cruz, Durian, Agabin, Atienza, Alday & Tuason for respondent MPSI.
Udarbe & Jacosalem for private respondents in G.R. Nos. 91223-26.
FELICIANO, J.:
These cases have been usually difficult for the Court, not because the issues
posed are in themselves intellectually demanding, but because of problems
generated by the procedure adopted by the parties in coming before this
Court. The incidents subject of these cases spawned multiple cases and
petitions before the National Labor Relations Commission ("NLRC"). After
the NLRC rendered a consolidated decision, the parties, in turn, filed
multiple separate certioraripetitions to the Court — on a staggered and
piecemeal basis. This situation resulted in a number of discrete discussions of
issues actually inter-related, since the Court, at any one time, could only see a
small part of the whole picture and decide only on the basis of what it could
see. In what follows, we have tried to put the whole picture together and to
render comprehensive and substantial justice to all the parties.
On 26 October 1984, petitioner Associated Workers Union ("AWU")—
PTGWO, the then bargaining representative of the dockworkers at South
Harbor, Port Area, Manila, filed a Notice of Strike against respondent Metro
Port Service, Inc. ("Metro"), the then arrastre contractor in the South Harbor,
on the issues, among others, of unfilled vacancies and union busting. This
was docketed as NLRC Case No. NCR-NS-10-288-84.
On 3 April 1985, the abovementioned case was certified in an Order by the
then Minister of Labor and Employment to the NLRC for compulsory
arbitration; the Order also forbade the holding of strikes or lock-outs. 1 The
case was docketed as Certified NLRC Case No. 0403-85. In the latter case,
one of the demands raised by AWU was that Metro terminate the
employment of respondents Adriano Yumul and ten (10) others (individual
respondents), for having organized, on 26 October 1984, the Associated
Workers Union in Metroport ("AWUM") among the rank-and-file employees
of Metro, ostensibly as a local or chapter of AWU. AWU had earlier expelled
individual respondents from membership in AUW for disloyalty and,
pursuant to the closed-shop provision of the existing AWU-Metro collective
bargaining agreement ("CBA"), sought the termination of their employment.
Metro initially resisted AWU's request to terminate the employment of
individual respondents, contending that the termination would be premature
as individual respondents had not been afforded due process, and that the
termination would be violative of the status quo agreement in NLRC Case
No. NCR-NS-10-288-84. 2 Metro, however, eventually relented and
suspended individual respondents after AWU—despite the express
prohibition in the Order dated 3 April 1985—staged a strike against it. On 18
April 1985, Metro executed a Compromise Agreement ("Agreement") with
AWU to end the strike, item No. 2 of which stipulated:
At the instance of the union, [Metro] agrees to preventively
suspend [individual respondents] effective immediately. 3
The Agreement was attested to by then Deputy Labor Minister Carmelo
Noriel.
109
As a result of Metro's implementation of the Agreement, individual
respondents on 30 April 1985 filed a complaint against Metro, docketed as
NLRC Case No. NCR-4-1372-85. Metro in that case filed in turn a third-
party complaint against AWU and its officers.
Metro in April 1985 also filed a complaint for illegal strike with damages
against AWU and its officers, docketed as NLRC Case No. NCR-4-1341-85.
On 21 June 1985, Labor Arbiter Ceferina Diosana in an Order directed Metro
provisionally to reinstate individual respondents pending resolution of the
issues raised therein, with which Order Metro complied.
On 15 July 1985, AWU filed a petition for injunction against Metro,
docketed as NLRC Injunction Case No. 993, praying for issuance of a
temporary restraining order stopping the implementation of the Order of
provisional reinstatement, and for Metro's compliance with the Agreement
providing for the suspension of individual respondents. On 1 August 1985,
the NLRC in an En Banc Resolution directed Metro to comply with the
Agreement, and Metro complied and re-suspended individual respondents.
Individual respondents' petition before the NLRC for preliminary mandatory
injunction on 30 August 1985, praying "that pursuant to the Implementing
Rules of Batas Pambansa Blg. 130, [Metro] be ordered to pay their salaries
and allowances from and after their initial preventive suspension of thirty
(30) days and until their actual reinstatement," was not acted upon.
All the above-mentioned cases, to wit: (a) Certified NLRC Case No. 0403-85
(NCR No. NS-10-288-84); (b) NLRC Case No. NCR-4-1341-85; (c) NLRC
Case No. NCR-4-1372-85; and (d) NLRC Injunction Case No. 993, were
ordered consolidated before the NLRC en banc.
On 4 September 1986, the NLRC rendered a consolidated Decision. In
Certified NLRC Case No. 0403-85, the NLRC ruled that: (a) respondent
Metro cannot be compelled to fill up vacancies with AWU's recommendees;
(b) respondent Metro cannot be held liable for union busting, the issue of the
medically impaired workers having become moot and academic; and (c) the
compulsory retirement of AWUs members who have reached the age of 60
years is a valid exercise of management prerogative.
In NLRC Case No. NCR-4-1372-85, the NLRC, finding that AWU was a
national union, and that individual respondents have the right to organize
themselves into a local chapter thereof, the formation of which was a
protected activity and could not be considered as disloyalty, held the
suspension or dismissal of individual respondents as illegal and, in relation to
NLRC Injuction Case No. 993, ordered their reinstatement with backwages,
to be paid solidarily by AWU and respondent Metro.
In NLRC Case No. NCR-4-1341-85, the NLRC found the strike staged by
AWU not illegal, holding that AWU was of the belief, although erroneously,
that it could validly stage a strike during the pendency of its motion for
reconsideration of the Minister's Order dated 3 April 1985 enjoining a strike
or lockout.
Both AWU and Metro filed separate motions for reconsideration of the
consolidated Decision.
Meanwhile, on 21 July 1986, petitioner Marina Port Services, Inc.
("Marina"), by virtue of a Special Permit issued by the Philippine Ports
Authority, started operations as the arrastre operator at the Manila South
Harbor vice Metro. On November 1986, individual respondents in a
Motion/Manifestation prayed that Marina be included as party-respondent.
On 27 July 1987, the NLRC in a Resolution denied AWU's and Metro's
motions for reconsideration of the consolidated Decision dated 4 September
1986, but (acting on individual respondents' Motion/Manifestation) with the
modification limiting Metro's liability for backwages to wages accruing up to
July 20, 1986 and ordering Marina to reinstate individual respondents with
backwages and allowances starting from 21 July 1986. Marina complied with
the Resolution by reinstating individual respondents through its payroll
retroactive to 21 July 1986.
AWU thereafter in G.R. Nos. 87266-69 filed with the Court a Petition
for certiorari on 14 March 1989 praying for the reversal of the decision of
the NLRC in NLRC Case No. NCR-NS-10-288-84 and NLRC Injunction
Case No. 993 (praying principally for reversal of the order holding that
respondent Metro could not be compelled to fill up vacancies with AWUs
recommendees) and in NLRC Case No. NCR-4-1372-85 (praying chiefly for
reversal of the order reinstating the eleven [11] private respondents to their
former positions with backwages payable solidarily by AWU and respondent
Metro). These cases (G.R. Nos. 87266-69) were assigned to the Third
Division of the Court.
Marina, meantime, had gone to the Court on certiorari on 14 June 1988 in
G.R. Nos. 81256-59 entitled "Marina Port Services, Inc. v. National Labor
110
Relations Commission, Metro Port Service, Inc, Associated Workers
Union ["AWU"-PTGWO], and Associated Workers Union in Metro Port
[AWUM]" protesting, on grounds of alleged denial of due process, its
inclusion by the NLRC as a party in NLRC Case No. NCR-4-1372-85 and its
being required to reinstate individual respondents with backwages. In
dismissing these cases (G.R. Nos. 81256-59) on 3 August 1988, the Court
held that:
. . . [t]he decision to include Marina in the questioned
[NLRC Resolution dated 17 July 1987] is based on Par. "7"
of the Special Permit granted to Marina which states that
"Labor and personnel of previous operator, except those
positions of trust and confidence, shall be absorbed by the
grantee." Besides, the petitioner was able to file not only a
Motion for Reconsideration of the Questioned Resolution
but also a Motion to Set Aside Motion/Manifestation and
Remarks on the Comment of Metro Port. The lack of due
process at the beginning, if any, was cured by the above
motions that the petitioner was able to file.4
On 13 April 1988, Metro in G.R. No. 82705 (entitled "Metro Port Services,
Inc. v. National Labor Relations Commission, Associated Workers Union-
PTGWO, Marina Port Services, Inc., and Adriano Yumul [and 10 others]")
went to this court again and assailed the NLRC ruling in NLRC Case No.
NCR-4-1372-85 and NLRC Injunction Case No. 993. Metro claimed that it
should not have been held solidary liable with AWU because it had merely
suspended individual respondents pursuant to the Agreement dated 18 April
1985 it had executed with AWU and, later, had merely obeyed the Resolution
of the NLRC dated 1 August 1985 ordering Metro to re-suspend individual
respondents. In similarly dismissing Metro's petition, the Court in G.R. No.
82705, held:
. . . Considering that the petitioner was a party to the
compromise agreement with AWU which provided that "at
the instance of the union, the company agrees to preventively
suspend Adriano S. Yumul and eleven associates effective
immediately" and accordingly suspended the private
respondents despite the suspension being contrary to law, the
petitioner should be made solidarity liable with AWU for the
backwages and allowances that the private respondents may
have been entitled to during their suspension. The
petitioner's liability, however, should not extend to the time
that respondent NLRC ordered it to re-suspend the private
respondents. 5 (Emphasis supplied)
Judgment was entered in G.R. Nos. 81256-59 and G.R. No. 82705 on 23
September 1988 and 4 July 1989, respectively, and the cases were remanded
to the Labor Arbiter of origin for execution.
On 18 September 1989, the Labor Arbiter issued a writ of execution against
Marina to reinstate individual respondents and to pay them the amount of
P154,357.00 representing salary adjustments. Marina moved to quash the
writ of execution questioning the award of P154,357.00, but without success.
Marina thereafter appealed to the NLRC assailing the Labor Arbiter's refusal
to quash the writ of execution.
On 23 November 1989, Marina received an Order from the Executive Labor
Arbiter dated 15 November 1989, requiring the release of any garnished
deposit from its bank, holding that no seasonable appeal from the 7
November 1989 Order denying Marina's motion to quash had been taken.
Marina filed a Manifestation dated 23 November 1989, arguing that it had
filed an appeal with the NLRC within the 10-day reglementary period.
On 6 December 1989, the Executive Labor Arbiter issued a writ of execution
requiring Marina: (a) to reinstate individual respondents and to pay them the
amount of P154,357.00 representing salary adjustments; and (b) to
implement and honor the legality of the organization and registration of
AWUM as the local chapter of AWU. Marina then once more went to the
Court in G.R. Nos. 91223-26 and filed a Petition for certiorari to invalidate
the writ of execution, pleading that: (a) execution had been ordered without
due regard for its right of appeal from the Labor Arbiter's Order; and (b)
execution would result in its being made to pay more than what is called for
by the ruling of the Court in G.R. No. 82705, where the Court affirmed the
NLRC ruling that Marina "should be made solidarily liable with AWU for
the backwages and allowances that the private respondents may have been
entitled to during their suspension [although liability] should not extend to
the time that respondent NLRC ordered it to re-suspend the private
respondents." These cases (G.R. Nos. 91223-26) were assigned to the First
Division of the Court. On 20 December 1989, a temporary restraining order
was issued by the First Division of the Court to enjoin the implementation of
the Executive Labor Arbiter's Order of 6 December 1989.
111
On 16 April 1990, G.R. Nos. 91223-26 were consolidated with G.R. Nos.
87266-69.
I individual respondents were finally able to register an independent
1. Deliberating on the instant Petition for Certiorari, the Court in G.R. Nos.
87266-69 considers that petitioner AWU has failed to show grave abuse of
discretion or any act without or in excess of jurisdiction on the part of the
NLRC in Certified NLRC Case No. 0403-85 (NCR No. NS-10-288-84). The
NLRC was correct there in holding that respondent Metro cannot be
compelled to fill up vacancies with AWU's recommendees, as the CBA
between AWU and respondent Metro granted the latter the right to "fill or not
to fill-up vacancies"; that the issue of the medically impaired employees had
already been raised in another Notice of Strike filed by AWU against
respondent Metro on 16 September 1985, and both parties had agreed to
abide by the recommendation and decision of an examining physician
selected by them; and that the existing CBA grants respondent Metro the
right to compulsorily retire any member of AWU who had reached 60 years
of age, which right has been exercised by Metro.
2. The NLRC, however, misappreciated the relevant facts in NLRC Case No.
NCR-4-1372-85 and NLRC Injunction Case No. 993. While it is true that
AWUM as a local union, being an entity separate and distinct from AWU, is
free to serve the interest of all its members and enjoys the freedom to
disaffiliate, such right to disaffiliate may be exercised, and is thus considered
a protected labor activity, only when warranted by circumstances. Generally,
a labor union may disaffiliate from the mother union to form a local or
independent union only during the 60-day freedom period immediately
preceding the expiration of the CBA.6 Even before the onset of the freedom
period (and despite the closed-shop provision in the CBA between the
mother union and management) disaffiliation may still be carried out,
but such disaffiliation must be effected by a majority of the members in the
bargaining unit. 7 This happens when there is a substantial shift in allegiance
on the part of the majority of the members of the union. In such a case,
however, the CBA continues to bind the members of the new or disaffiliated
and independent union up to the CBA's expiration date.8
The record does not show that individual respondents had disaffiliated during
the freedom period. The record does, however, show that only eleven (11)
members of AWU (individual respondents) had decided to disaffiliate from
AWU and form AWUM. Respondent Metro had about 4,000 employees, and
around 2,000 of these were members of AWU 9 It is evident that individual
respondents had failed to muster the necessary majority in order to
justify their disaffiliation. (In fact, it was only on 5 December 1985 that
union called Metroport Workers Union [MWU]. 10 Even then, in the
absence of allegation by AWUM [MWU] of the exact number of its
members, the Court presumes that only twenty percent [20%] of the
employees of Metro had joined MWU) 11 Thus, in the referendum held
on 7 January 1985 at the PTGWO compound (where representatives of
the Ministry of Labor and Employment were present) to determine
whether individual respondents should be expelled from AWU, 1,229
members (out of 1,695 members present) voted for expulsion of
individual respondents. 12
The individual respondents here have failed to present proof of their
allegation that the 1,695 members of AWU were not employees of
respondent Metro alone; the Court therefore presumes that those who voted
for their expulsion were bona fide employees of respondent Metro.
Moreover, individual respondents failed to allege that their expulsion for
disloyalty violated AWU's constitution and by-laws. 13 In sum, the attempted
disaffiliation of the eleven (11) private respondents from the petitioner
mother union and the effort to organize either a new local of the mother
union or an entirely new and separate union, did not, under the circumstances
of this case, constitute protected activities of the eleven (11) individual
respondents.
II
In view of the conclusion reached above in G.R. Nos. 87266-69, i.e., that
AWU was justified in expelling from its membership the eleven (11)
individual respondents, the question now arises: how and to what extent does
such conclusion affect the liability of Metro, and Marina (as successor-
employer)? It will be recalled that the Resolutions of this Court in G.R. Nos.
81256-59 and 82705 dismissing the Petitions for certiorari of both Metro and
Marina assailing the NLRC consolidated Decision of 4 September 1986
insofar as their (Metro's and Marina's) liability for reinstatement and
backwages of the individual respondents thereunder is concerned, became
final and judgment entered therein, sometime ago.
1. So far as concerns AWU's liability under the NLRC consolidated
Decision, it should in the first place be pointed out that the Court did not
112
make any pronouncement either in G.R. Nos. 81256-59 or in G.R. No. 82705
concerning AWU's liability. In G.R. No. 82705, the Court merely acted on
the issue raised by petitioner Metro: that Metro should not be liable at all for
reinstatement and backwages considering that Metro was only pressed into
suspending individual respondents because of AWUs threat to strike. In
dismissing Metro's Petition, the Court in G.R. No. 82705 in effect merely
held that Metro, whatever the liability of AWU might be in respect of the
expulsion of individual respondents, could not escape liability by throwing
all responsibility upon AWU; and that Metro could not validly plead that it
was under duress when it executed the Agreement with AWU providing for,
among other things, the preventive suspension of individual respondents.
The Court is, of course, aware that AWU was a party-respondent in both
G.R. Nos. 81256-59 and 82705, and that AWU had in fact filed a Comment
in both G.R. Nos. 81256-59 and 82705. Nonetheless, the Court did not either
in G.R. Nos. 82156-59 or in G.R. No. 82705 in fact make a determination of
the legality of AWU's expulsion of individual respondents from its
membership. The Court in G.R. No. 82705 held only that the liability of
Metro was solidary in nature, i.e., solidary with AWU, whatever AWU's
liability might be; and it may be well to recall that solidary liability is
different from secondary liability. In G.R. Nos. 81256-59, the Court simply
held that Marina was properly impleaded in the underlying cases and could
not be absolved from responsibility for reinstatement and backwages upon
the ground of denial of due process.
2. Thus, so far as concerns the liability of Metro and Marina for
reinstatement with backwages of individual respondents under the
consolidated NLRC Decision, the pre-eminent fact is that the Court's
Resolutions in G.R. Nos. 81256-59 and 82705 dismissing their Petitions are
already final. The liabilities of Metro and Marina for reinstatement and
backwages under the consolidated NLRC Decision have become fixed and
definite, with the modification decreed by the Court in G.R. No. 82705 in so
far as backwages were concerned. Thus, the conclusion we today have
reached in G.R. Nos. 87266-69 cannot benefit Metro and Marina and will not
dissolve their already fixed and definite liabilities.
3. Turning to the question of the backwages due to the eleven (11) individual
respondents, three (3) different time periods are relevant here and must be
distinguished from one another:
First Period: From 18 April 1985 to 21 June 1985: the
Compromise Agreement between Metro and AWU to end
the strike, in which Metro agreed to preventively suspend the
eleven (11) individual respondents, was effected on 18 April
1985 and implemented immediately. The Labor Arbiter on
21 June 1985 ordered Metro to reinstate provisionally the
eleven (11) individual respondents and Metro complied.
Second Period: From 1 August 1985 up to 27 July 1987: the
NLRC, pursuant to the urging of AWU, ordered Metro to re-
suspend the individual respondents on 1 August 1985 and
Metro again complied with this Order. Approximately two
(2) years later, on 27 July 1987, NLRC ordered
Metro/Marina to reinstate the individual respondents and
Marina complied by reinstating the individual respondents
on the payroll, i.e., paying their salaries although they were
not allowed to work on their jobs.
Third Period: From 28 July 1987 to 18 September 1989: on
18 September 1989, the Labor Arbiter issued the questioned
writ of execution ordering, among other things, Marina to
reinstate formally the individual respondents.
Under the consolidated NLRC Decision, Metro/Marina are liable for the
backwages accruing during the First and Third Periods above indicated. In
respect of the Second Period, however, the Court in G.R. No. 82705, as
already pointed out earlier, held that Metro/Marina should not be held liable
for backwages accruing during that period. Strictly speaking, in view of our
conclusion above that AWU was justified in expelling individual respondents
from its membership, neither AWU nor Metro/Marina would be liable to
individual respondents for the backwages accruing during this Second
Period.
4. In the interest of substantial and expeditious justice, however, we believe
that the backwages accruing during the Second Period should be paid and
shared by AWU and by Metro Marina, on a 50-50 basis. We here establish
this equitable allocation of ultimate responsibility in order to forestall further
litigation between AWU and Metro/Marina and individual respondents in
respect of claims and countering claims for payment or reimbursement or
contribution and to put a definite end to this prolonged and costly
confrontation among the several parties.
113
The equitable considerations which impel us to hold AWU liable for one-half
(½) of the backwages during the Second Period include:
(a) the fact that Metro had been reluctant to comply with the
demand of AWU to terminate the services of individual
respondents and had wanted to give the latter procedural due
process, but gave in to the demands of AWU;
(b) that AWU had pressed Metro very hard and indeed went
on strike against Metro when Metro refused simply to
terminate the services of the individual respondents;
(c) that AWU, instead of waiting for final judicial
determination of the legality of its expulsion of individual
respondents, chose to importune the NLRC to issue the order
requiring the re-suspension of the individual respondents on
1 August 1985, with which order Metro eventually complied.
5. Turning to Metro/Marina we note that, apart from the finality of the
Court's Resolutions in G.R. Nos. 81256-59 and 82705, there is independent
basis for holding Metro/Marina responsible for reinstatement with backwages
accruing throughout the three (3) periods above indicated. The equitable
considerations which lead us to hold Metro/Marina responsible for one-half
(½) of the backwages accruing during the above Second Period relate to the
failure of Metro to accord individual respondents procedural due process by
giving them reasonable opportunity to explain their side before suspending or
dismissing them. Such dismissal was accordingly in violation of the Labor
Code.14Notwithstanding AWU's closed-shop clause in the CBA, Metro was
bound to conduct its own inquiry to determine the existence of substantial
basis for terminating the employment of individual respondents. 15 That
AWU, disregarding the Minister of Labor and Employment's express order,
had threatened to go on strike, and indeed actually went on strike, if Metro
had continued with the services of individual respondents, did not relieve
Metro from the duty to accord procedural due process to individual
respondents. 16
6. The portion of the Writ of Execution issued by the Executive Labor
Arbiter requiring Marina to pay salary differentials in the total amount of
P154,357.00 accruing during the period from 20 July 1986 up to October
1989, should be modified to conform with the above legal and equitable
allocation of liability for the backwages which had accrued during the three
(3) Periods above mentioned during which the individual respondents were
suspended. The salary differentials, as we understands it, refer to increases in
the prevailing wages accruing partly during the Second Period and partly
during the Third Period as above indicated. In other words, the salary
differentials accruing from 20 July 1986 up to 27 July 1987 should be borne
on a 50-50 basis by AWU on the one hand and Metro/Marina on the other.
The salary differentials accruing from 28 July 1987 up to 18 September 1989
shall be borne exclusively by Marina.
7. The portion of the Writ of Execution issued by the Executive Labor
Arbiter which requires Marina to recognize the legality of the organization
and registration of AWUM (now MWU) as a local chapter of AWU, is
inconsistent with the conclusions we have set forth in Part I above, and must
be deleted. What was in fact eventually established by individual respondents
was a separate, independent union called Metro Port Workers Union (MWU)
which was not entitled, during the time periods here relevant, to recognition
as the bargaining unit in CBA negotiations.
ACCORDINGLY, the Court Resolved:
In G.R. Nos. 87266-69:
(a) to DISMISS the Petition for Certiorari in respect of
Certified NLRC Case No. 0403-855 (NCR-NS-10-288-84)
for lack of merit; and
(b) to GRANT partially the Petition for Certiorari in respect
of NLRC Case No. NCR-4-1372-85 and NLRC Injunction
Case No. 993. The consolidated Decision of the NLRC dated
4 September 1986 ordering AWU and Marina to pay
solidarily the backwages of individual respondents, as well
as the NLRC Resolution of 27 July 1987 denying AWUs and
Metro's Motions for Reconsideration, are hereby
MODIFIED so as to require AWU and Metro/Marina to pay,
on a 50-50 basis, to individual respondents the backwages
which accrued during the Second Period, i.e., from 1 August
1985 up to 27 July 1987.
In G.R. Nos. 91223-26:
114
 to GRANT partially the Petition. The Order of the Executive
Labor Arbiter dated 6 December 1989 is hereby MODIFIED
so as (a) to require AWU and Metro/Marina on a 50-50 basis
to pay the salary differentials accruing during the period
from 20 July 1986 up to 27 July 1987, and Marina alone to
pay the salary differentials accruing from 28 July 1987 up to
31 October 1989, and so as (b) to delete the portion requiring
Marina to recognize AWU. (MWU) as the local chapter of
AWU. The Temporary Restraining Order issued by the
Court on 20 December 1989 is hereby LIFTED so as to
permit enforcement of the Order of the Executive Labor
Arbiter as herein modified.

No pronouncement as to costs.

SO ORDERED.

115
G.R. No. L-50283-84 April 20, 1983
DOLORES VILLAR, ROMEO PEQUITO, DIONISIO RAMOS,
BENIGNO MAMARALDO, ORLANDO ACOSTA, RECITACION
BERNUS, ANSELMA ANDAN, ROLANDO DE GUZMAN and RITA
LLAGAS, petitioners,
vs.
THE HON. AMADO G. INCIONG, as Deputy Minister of the Ministry
of Labor, AMIGO MANUFACTURING INCORPORATED and
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS
(PAFLU), respondents.
Aniceto Haber for petitioners.
Roberto T. Neri for respondents.
GUERRERO, J.:
Petition for review by certiorari to set aside the Order dated February 15,
1979 of respondent Deputy Minister Amado G. Inciong affirming the
Decision of the OIC of Regional Office No. 4 dated October 14, 1978 which
jointly resolved RO4-Case No. T-IV-3549-T and RO4-Case No. RD 4-4088-
77-T.
The facts are as follows:
Petitioners were members of the Amigo Employees Union-PAFLU, a duly
registered labor organization which, at the time of the present dispute, was
the existing bargaining agent of the employees in private respondent Amigo
Manufacturing, Inc. (hereinafter referred to as Company). The Company and
the Amigo Employees Union-PAFLU had a collective bargaining agreement
governing their labor relations, which agreement was then about to expire on
February 28, 1977. Within the last sixty (60) days of the CBA, events
transpired giving rise to the present dispute.
On January 5, 1977, upon written authority of at least 30% of the employees
in the company, including the petitioners, the Federation of Unions of Rizal
(hereinafter referred to as FUR) filed a petition for certification election with
the Med-Arbiter's Office, Regional Office No. 4 of the Ministry of Labor and
Employment. The petition was, however, opposed by the Philippine
Association of Free Labor Unions (hereinafter referred to as PAFLU) with
whom, as stated earlier, the Amigo Employees Union was at that time
affiliated. PAFLU's opposition cited the "Code of Ethics" governing inter-
federation disputes among and between members of the Trade Unions
Congress of the Philippines (hereinafter referred to as TUCP). Consequently,
the Med-Arbiter indorsed the case to TUCP for appropriate action but before
any such action could be taken thereon, the petitioners disauthorized FUR
from continuing the petition for certification election for which reason FUR
withdrew the petition.
On February 7, 1977, the same employees who had signed the petition filed
by FUR signed a joint resolution reading in toto as follows:
Sama-Samang Kapasiyahan
1. TUMIWALAG bilang kasaping Unyon ng Philippine
Association of Free Labor Unions (PAFLU) at kaalinsabay
nito, inaalisan namin ang PAFLU ng kapangyarihan na
katawanin kami sa anumang pakikipagkasundo (CBA) sa
Pangasiwaan ng aming pinapasukan at kung sila man ay
nagkasundo o magkakasundo sa kabila ng pagtitiwalag na
ito, ang nasabing kasunduan ay hindi namin pinagtitibay at
tahasang aming itinatakwil/tinatanggihan;
2. BINABAWI namin ang aming pahintulot sa Federation of
Unions of Rizal (FUR) na katawanin kami sa Petition for
Certification Election (RO4-MED Case No. 743-77) at/o sa
sama-samang pakikipagkasundo sa aming patrons;
3. PANATILIHIN na nagsasarili (independent) ang aming
samahan, AMIGO EMPLOYEES' UNION, alinsunod sa
Artikulo 240 ng Labor Code;
4. MAGHAIN KAAGAD ang aming Unyong nagsasarili, sa
pamumuno ng aming pangsamantalang Opisyal na
kinatawan, si Ginang DOLORES VILLAR, ng Petition for
Certification Election sa Department of Labor, para kilalanin
ang aming Unyong nagsasarili bilang Tanging kinatawan ng
116
 mga manggagawa sa sama-samang pakikipagkasundo
(CBA);
5. BIGYAN ng kopya nito ang bawa't kinauukulan at ang
mga kapasiyahang ito ay magkakabisa sa oras na matanggap
ng mga kinauukulan ang kani-kanilang sipi nito.1
Immediately thereafter or on February 9, 1977, petitioner Dolores Villar,
representing herself to be the authorized representative of the Amigo
Employees Union, filed a petition for certification election in the Company
before Regional Office No. 4, with the Amigo Employees Union as the
petitioner. The Amigo Employees Union-PAFLU intervened and moved for
the dismissal of the petition for certification election filed by Dolores Villar,
citing as grounds therefor, viz: (a) the petition lacked the mandatory requisite
of at least 30% of the employees in the bargaining unit; (2) Dolores Villar
had no legal personality to sign the petition since she was not an officer of
the union nor is there factual or legal basis for her claim that she was the
authorized representative of the local union; (3) there was a pending case for
the same subject matter filed by the same individuals; (4) the petition was
barred by the new CBA concluded on February 15, 1977; (5) there was no
valid disaffiliation from PAFLU; and (6) the supporting signatures were
procured through false pretenses.
Finding that the petition involved the same parties and causes of action as the
case previously indorsed to the TUCP, the Med-Arbiter dismiss the petition
filed by herein petitioner Villar, which dismissal is still pending appeal
before the Bureau of Labor Relations.
In the meantime, on February 14, 1977, the Amigo Employees Union-
PAFLU called a special meeting of its general membership. A Resolution
was thereby unanimously approved which called for the investigation by the
PAFLU national president, pursuant to the constitution and by-laws of the
Federation, of all of the petitioners and one Felipe Manlapao, for
"continuously maligning, libelling and slandering not only the incumbent
officers but even the union itself and the federation;" spreading 'false
propaganda' that the union officers were 'merely appointees of the
management', and for causing divisiveness in the union.
Pursuant to the Resolution approved by the Amigo Employees Union-
PAFLU, the PAFLU, through its national President, formed a Trial
Committee to investigate the local union's charges against the petitioners for
acts of disloyalty inimical to the interest of the local union, as well as
directing the Trial Committee to subpoena the complainants (Amigo
Employees Union-PAFLU) and the respondents (herein petitioners) for
investigation, to conduct the said investigation and to submit its findings and
recommendations for appropriate action.
And on the same date of February 15, 1977, the Amigo Employees Union-
PAFLU and the Company concluded a new CBA which, besides granting
additional benefits to the workers, also reincorporated the same provisions of
the existing CBA, including the union security clause reading, to wit:
ARTICLE III
UNION SECURITY WITH RESPECT TO PRESENT
MEMBERS
All members of the UNION as of the signing of this
Agreement shall remain members thereof in good standing.
Therefore, any members who shall resign, be expelled, or
shall in any manner cease to be a member of the UNION,
shall be dismissed from his employment upon written
request of the UNION to the Company. 2
Subsequently, petitioners were summoned to appear before
the PAFLU Trial Committee for the aforestated investigation
of the charges filed against them by the Amigo Employees
Union-PAFLU. Petitioners, however, did not attend but
requested for a "Bill of Particulars" of the charges, which
charges were stated by the Chairman of the committee as
follows:
1. Disaffiliating from PAFLU and affiliating with the
Federation of Unions of Rizal (FUR).
2. Filling petition for certification election with the Bureau
of Labor Relations and docketed as Case No. R04-MED-
830-77 and authorizing a certain Dolores Villar as your
authorized representative without the official sanction of the
mother Federation- PAFLU.
117
 3. Maligning, libelling and slandering the incumbent officers
of the union as well as of the PAFLU Federation.
4. By spreading false propaganda among members of the
Amigo Employees Union-PAFLU that the incumbent union
officers are 'merely appointees' of the management.
5. By sowing divisiveness instead of togetherness among
members of the Amigo Employees Union-PAFLU.
6. By conduct unbecoming as members of the Amigo
Employees Union- PAFLU which is highly prejudicial to the
union as well as to the PAFLU Federation.
All these charges were formalized in a resolution of the
incumbent officers of the Amigo Employees Union-PAFLU
dated February 14, 1977. 3
Not recognizing PAFLU's jurisdiction over their case, petitioners again
refused to participate in the investigation rescheduled and conducted on
March 9, 1979. Instead, petitioners merely appeared to file their Answer to
the charges and moved for a dismissal.
Petitioners contend in their Answer that neither the disaffiliation of the
Amigo Employees Union from PAFLU nor the act of filing the petition for
certification election constitute disloyalty as these are in the exercise of their
constitutional right to self-organization. They further contended that PAFLU
was without jurisdiction to investigate their case since the charges, being
intra-union problems within the Amigo Employees Union-PAFLU, should be
conducted pursuant to the provisions of Article XI, Sections 2, 3, 4 and 5 of
the local union's constitution and by-laws.
The complainants, all of whom were the then incumbent officers of the
Amigo Employees Union-PAFLU, however, appeared and adduced their
evidence supporting the charges against herein petitioners.
Based on the findings and recommendations of the PAFLU trial committee,
the PAFLU President, on March 15, 1977, rendered a decision finding the
petitioners guilty of the charges and disposing in the last paragraph thereof,
to wit,
Excepting Felipe Manlapao, the expulsion from the AMIGO
EMPLOYEES UNION of all the other nine (9) respondents,
Dionisio Ramos, Recitation Bernus, Dolores Villar, Romeo
Dequito, Rolando de Guzman, Anselma Andan, Rita Llagas,
Benigno Mamaradlo and Orlando Acosta is hereby ordered,
and as a consequence the Management of the employer,
AMIGO MANUFACTURING, INC. is hereby requested to
terminate them from their employment in conformity with
the security clause in the collective bargaining agreement.
Further, the Trial Committee is directed to investigate Felipe
Manlapao when he shall have reported back for duty. 4
Petitioners appealed the Decision to the PAFLU, citing the same grounds as
before, and in addition thereto, argued that the PAFLU decision cannot
legally invoke a CBA which was unratified, not certified, and entered into
without authority from the union general membership, in asking the
Company to terminate them from their employment. The appeal was,
likewise, denied by PAFLU in a Resolution dated March 28, 1977.
After denying petitioner's appeal, PAFLU on March 28, 1977 sent a letter to
the Company stating, to wit,
We are furnishing you a copy of our Resolution on the
Appeal of the respondent in Administrative Case No. 2,
Series of 1977, Amigo Employees Union-PAFLU vs.
Dionisio Ramos, et al.
In view of the denial of their appeal and the Decision of
March 15, 1977 having become final and executory we
would appreciate full cooperation on your part by
implementing the provision of our CBA on security clause
by terminating the respondents concerned from their
employment.5
This was followed by another letter from PAFLU to the Company dated
April 25, 1977, reiterating the demand to terminate the employment of the
petitioners pursuant to the security clause of the CBA, with a statement
absolving the Company from any liability or damage that may arise from
petitioner's termination.
118
Acting on PAFLU's demand, the Company informed PAFLU that it will first
secure the necessary clearances to terminate petitioners. By letter dated April
28, 1977, PAFLU requested the Company to put petitioners under preventive
suspension pending the application for said clearances to terminate the
petitioners, upon a declaration that petitioners' continued stay within the
work premises will "result in the threat to the life and limb of the other
employees of the company."6
Hence, on April 29, 1977, the Company filed the request for clearance to
terminate the petitioners before the Department of Labor, Regional Office
No. 4. The application, docketed as RO4-Case No. 7-IV-3549-T, stated as
cause therefor, "Demand by the Union Pursuant to the Union Security
Clause," and further, as effectivity date, "Termination-upon issuance of
clearance; Suspension-upon receipt of notice of workers
7
concerned." Petitioners were then informed by memorandum dated April
29, 1977 that the Company has applied for clearance to terminate them upon
demand of PAFLU, and that each of them were placed under preventive
suspension pending the resolution of the said applications. The security guard
was, likewise, notified to refuse petitioners entry into the work premises. 8
In an earlier development, on April 25, 1977, or five days before petitioners
were placed under preventive suspension, they filed a complaint with
application for preliminary injunction before the same Regional Office No. 4,
docketed as RO4-Case No. RD-4-4088-77-T, praying that after due notice
and hearing, "(1) A preliminary injunction be issued forthwith to restrain the
respondents from doing the act herein complained of, namely: the dismissal
of the individual complainants from their employment; (2) After due hearing
on the merits of the case, an Order be entered denying and/or setting aside
the Decision dated March 15, 1977 and the Resolution dated March 28, 1977,
issued by respondent Onofre P. Guevara, National President of respondent
PAFLU; (3) The Appeal of the individual complainants to the General
Membership of the complainant AMIGO EMPLOYEES UNION, dated
March 22, 1977, pursuant to Sections 2, 3, 4 & 5, Article XI in relation of
Section 1, Article XII of the Union Constitution and By-Laws, be given due
course; and (4) Thereafter, the said preliminary injunction be made
permanent, with costs, and with such further orders/reliefs that are just and
equitable in the premises."9
In these two cases filed before the Regional Office No. 4, the parties adopted
their previous positions when they were still arguing before the PAFLU trial
committee.
On October 14, 1977, Vicente Leogardo, Jr., Officer-in-Charge of Regional
Office No. 4, rendered a decision jointly resolving said two cases, the
dispositive portion of which states, to wit,
IN VIEW OF THE FOREGOING, judgment is hereby
rendered granting the application of the Amigo
Manufacturing, Inc., for clearance to terminate the
employment of Dolores D. Villar, Dionisio Ramos, Benigno
Mamaraldo, Orlando Acosta, Recitacion Bernus, Anselma
Andan, Rolando de Guzman, and Rita Llagas. The
application of oppositors, under RO4-Case No. RD-4-4088-
77, for a preliminary injunction to restrain the Amigo
Manufacturing, Inc. from terminating their employment and
from placing them under preventive suspension, is hereby
DISMISSED. 10
Not satisfied with the decision, petitioners appealed to the Office of the
Secretary of Labor. By Order dated February 15, 1979, the respondent
Amado G. Inciong, Deputy Minister of Labor, dismissed their appeal for lack
of merit. 11
Hence, the instant petition for review, raising the following issues:
A. Is it not error in both constitutional and statutory law by
the respondent Minister when he affirmed the decision of the
RO4-Officer-in-Charge allowing the preventive suspension
and subsequent dismissal of petitioners by reason of the
exercise of their right to freedom of association?
B. Is it not error in law by the respondent Minister when he
upheld the decision of the RO4 OIC which sustained the
availment of the respondent PAFLU's constitution over that
of the local union constitution in the settlement of intra-
union dispute?
C. Is it not error in law amounting to grave abuse of
discretion by the Minister in affirming the conclusion made
by the RO4 OIC, upholding the legal applicability of the
security clause of a CBA over alleged offenses committed
earlier than its conclusion, and within the 60-day freedom
period of an old CBA? 12
119
The main thrust of the petition is the alleged illegality of the dismiss of the
petitioners by private respondent Company upon demand of PAFLU which
invoked the security clause of the collective bargaining agreement between
the Company and the local union, Amigo Employees Union-PAFLU.
Petitioners contend that the respondent Deputy Minister acted in grave abuse
of discretion when he affirmed the decision granting the clearance to
terminate the petitioners and dismissed petitioners' complaint, and in support
thereof, allege that their constitutional right to self-organization had been
impaired. Petitioner's contention lacks merit.
It is true that disaffiliation from a labor union is not open to legal objection. It
is implicit in the freedom of association ordained by the Constitution. 13 But
this Court has laid down the ruling that a closed shop is a valid form of union
security, and such provision in a collective bargaining agreement is not a
restriction of the right of freedom of association guaranteed by the
Constitution. 14
In the case at bar, it appears as an undisputed fact that on February 15, 1977,
the Company and the Amigo Employees Union-PAFLU entered into a
Collective Bargaining Agreement with a union security clause provided for
in Article XII thereof which is a reiteration of the same clause in the old
CBA. The quoted stipulation for closed-shop is clear and unequivocal and it
leaves no room for doubt that the employer is bound, under the collective
bargaining agreement, to dismiss the employees, herein petitioners, for non-
union membership. Petitioners became non-union members upon their
expulsion from the general membership of the Amigo Employees Union-
PAFLU on March 15, 1977 pursuant to the Decision of the PAFLU national
president.
We reject petitioners' theory that their expulsion was not valid upon the
grounds adverted to earlier in this Decision. That PAFLU had the authority to
investigate petitioners on the charges filed by their co-employees in the local
union and after finding them guilty as charged, to expel them from the roll of
membership of the Amigo Employees Union-PAFLU is clear under the
constitution of the PAFLU to which the local union was affiliated. And
pursuant to the security clause of the new CBA, reiterating the same clause in
the old CBA, PAFLU was justified in applying said security clause. We find
no abuse of discretion on the part of the OIC of Regional Office No. 4 in
upholding the validity of the expulsion and on the part of the respondent
Deputy Minister of Labor in sustaining the same. We agree with the OIC's
decision, pertinent portion of which reads:
Stripped of non-essentials, the basic and fundamental issue
in this case tapers down to the determination of WHETHER
OR NOT PAFLU HAD THE AUTHORITY TO
INVESTIGATE OPPOSITORS AND, THEREAFTER,
EXPEL THEM FROM THE ROLL OF MEMBERSHIP OF
THE AMIGO EMPLOYEES UNION-PAFLU.
Recognized and salutary is the principle that when a labor
union affiliates with a mother union, it becomes bound by
the laws and regulations of the parent organization. Thus, the
Honorable Secretary of Labor, in the case of Amador
Bolivar, et al. vs. PAFLU, et al., NLRC Case No. LR-133 &
MC-476, promulgated on December 3, 1973, declared-
When a labor union affiliates with a parent organization or
mother union, or accepts a charter from a superior body, it
becomes subject to the laws of the superior body under
whose authority the local union functions. The constitution,
by-laws and rules of the parent body, together with the
charter it issues pursuant thereto to the subordinate union,
constitute an enforceable contract between the parent body
and the subordinate union, and between the members of the
subordinate union inter se. (Citing Labor Unions, Dangel
and Shriber, pp. 279-280).
It is undisputable that oppositors were members of the
Amigo Employees Union at the time that said union
affiliated with PAFLU; hence, under the afore-quoted
principle, oppositors are bound by the laws and regulations
of PAFLU.
Likewise, it is undeniable that in the investigation of the
charges against them, oppositors were accorded 'due
process', because in this jurisdiction, the doctrine is deeply
entrenched that the term 'due process' simply means that the
parties were given the opportunity to be heard. In the instant
case, ample and unmistakable evidence exists to show that
the oppositors were afforded the opportunity to present their
evidence, but they themselves disdained or spurned the said
opportunity given to them.
120
 PAFLU, therefore, correctly and legally acted when,
pursuant to its Constitution and By-Laws, it conducted and
proceeded with the investigation of the charges against the
oppositors and found them guilty of acts prejudicial and
inimical to the interests of the Amigo Employees Union-
PAFLU, to wit: that of falsely and maliciously slandering the
officers of the union; spreading false propaganda among the
members of the Amigo Employees Union-PAFLU; calling
the incumbent officers as mere appointees and robots of
management; calling the union company-dominated or
assisted union; committing acts unbecoming of the members
of the union and destructive of the union and its members.
Inherent in every labor union, or any organization for that
matter, is the right of self-preservation. When members of a
labor union, therefore, sow the seeds of dissension and strife
within the union; when they seek the disintegration and
destruction of the very union to which they belong, they
thereby forfeit their rights to remain as members of the union
which they seek to destroy. Prudence and equity, as well as
the dictates of law and justice, therefore, compelling
mandate the adoption by the labor union of such corrective
and remedial measures in keeping with its laws and
regulations, for its preservation and continued existence; lest
by its folly and inaction, the labor union crumble and fall.
Correctly and legally, therefore, the PAFLU acted when,
after proper investigation and finding of guilt, it decided to
remove the oppositors from the list of members of the
Amigo Employees Union-PAFLU, and thereafter,
recommended to the Amigo Manufacturing, Inc.; the
termination of the employment of the oppositors. 15
We see no reason to disturb the same.
The contention of petitioners that the charges against them being intra-union
problems, should have been investigated in accordance with the constitution
and by-laws of the Amigo Employees Union-PAFLU and not of the PAFLU,
is not impressed with merit. It is true that under the Implementing Rules and
Regulations of the Labor Code, in case of intra-union disputes, redress must
first be sought within the organization itself in accordance with its
constitution and by-laws. However, it has been held that this requirement is
not absolute but yields to exception under varying circumstances. Thus,
in Kapisanan ng mga Manggagawa sa MRR vs. Hernandez, 20 SCRA 109,
We held:
In the case at bar, noteworthy is the fact that the complaint
was filed against the union and its incumbent officers, some
of whom were members of the board of directors. The
constitution and by-laws of the union provide that charges
for any violations thereof shall be filed before the said board.
But as explained by the lower court, if the complainants had
done so the board of directors would in effect be acting as
respondent investigator and judge at the same time. To
follow the procedure indicated would be a farce under the
circumstances, where exhaustion of remedies within the
union itself would practically amount to a denial of justice or
would be illusory or vain, it will not be insisted upon,
particularly where property rights of the members are
involved, as a condition to the right to invoke the aid of a
court.
The facts of the instant petition stand on all fours with the aforecited case that
the principle therein enunciated applies here as well. In the case at bar, the
petitioners were charged by the officers of the Amigo Employees Union-
PAFLU themselves who were also members of the Board of Directors of the
Amigo Employees Union-PAFLU. Thus, were the petitioners to be charged
and investigated according to the local union's constitution, they would have
been tried by a trial committee of three (3) elected from among the members
of the Board who are themselves the accusers. (Section 2, Article 11,
Constitution of the Local Union). Petitioners would be in a far worse position
had this procedure been followed. Nonetheless, petitioners admit in their
petition that two (2) of the six (6) charges, i.e. disaffiliation and filing a
petition for certification election, are not intra-union matters and, therefore,
are cognizable by PAFLU.
Petitioners insist that their disaffiliation from PAFLU and filing a petition for
certification election are not acts of disloyalty but an exercise of their right to
self-organization. They contend that these acts were done within the 60-day
freedom period when questions of representation may freely be raised. Under
the peculiar facts of the case, We find petitioners' insistence untenable.
121
In the first place, had petitioners merely disaffiliated from the. Amigo
Employees Union-PAFLU, there could be no legal objections thereto for it
was their right to do so. But what petitioners did by the very clear terms of
their "Sama-Samang Kapasiyahan" was to disaffiliate the Amigo Employees
Union-PAFLU from PAFLU, an act which they could not have done with
any effective consequence because they constituted the minority in the
Amigo Employees Union-PAFLU.
Extant from the records is the fact that petitioners numbering ten (10), were
among the ninety-six (96) who signed the "Sama-Samang Kapasiyahan"
whereas there are two hundred thirty four (234) union members in the Amigo
Employees Union-PAFLU. Hence, petitioners constituted a small minority
for which reason they could not have successfully disaffiliated the local
union from PAFLU. Since only 96 wanted disaffiliation, it can be inferred
that the majority wanted the union to remain an affiliate of PAFLU and this
is not denied or disputed by petitioners. The action of the majority must,
therefore, prevail over that of the minority members. 16
Neither is there merit to petitioners' contention that they had the right to
present representation issues within the 60-day freedom period. It is true, as
contended by petitioners, that under Article 257 of the Labor Code and
Section 3, Rule 2, Book 2 of its Implementing Rules, questions of exclusive
bargaining representation are entertainable within the sixty (60) days prior to
the expiry date of an existing CBA, and that they did file a petition for
certification election within that period. But the petition was filed in the
name of the Amigo Employees Union which had not disaffiliated from
PAFLU, the mother union. Petitioners being a mere minority of the local
union may not bind the majority members of the local union.
Moreover, the Amigo Employees Union, as an independent union, is not duly
registered as such with the Bureau of Labor Relations. The appealed decision
of OIC Leogardo of Regional Office No. 4 states as a fact that there is no
record in the Bureau of Labor Relations that the Amigo Employees Union
(Independent) is registered, and this is not disputed by petitioners,
notwithstanding their allegation that the Amigo Employees Union is a duly
registered labor organization bearing Ministry of Labor Registration
Certification No. 5290-IP dated March 27, 1967. But the independent union
organized after the "Sama-Samang Kapasiyahan" executed February 7, 1977
could not have been registered earlier, much less March 27, 1967 under
Registration Certificate No. 5290-IP. As such unregistered union, it acquires
no legal personality and is not entitled to the rights and privileges granted by
law to legitimate labor organizations upon issuance of the certificate of
registration. Article 234 of the New Labor Code specifically provides:
Art. 234. Requirements of Registration.—Any applicant
labor organization, association, or group of unions or
workers shall acquire legal personality and shall be entitled
to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration.
....
In Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40,
We had occasion to interpret Section 23 of R.A. No. 875 (Industrial Peace
Act) requiring of labor unions registration by the Department of Labor in
order to qualify as "legitimate labor organization," and We said:
The theory to the effect that Section 23 of Republic Act No.
875 unduly curtails the freedom of assembly and association
guaranteed in the Bill of Rights is devoid of factual basis.
The registration prescribed in paragraph (b) of said
section 17 is not a limitation to the right of assembly or
association, which may be exercised with or without said
registration. The latter is merely a condition sine qua non for
the acquisition of legal personality by labor organizations,
associations or unions and the possession of the 'rights and
privileges granted by law to legitimate labor organizations.'
The Constitution does not guarantee these rights and
privileges, much less said personality, which are mere
statutory creations, for the possession and exercise of which
registration is required to protect both labor and the public
against abuses, fraud, or impostors who pose as organizers,
although not truly accredited agents of the union they
purport to represent. Such requirement is a valid exercise of
the police power, because the activities in which labor
organizations, associations and union or workers are engaged
affect public interest, which should be protected.
Simply put, the Amigo Employees Union (Independent) Which petitioners
claim to represent, not being a legitimate labor organization, may not validly
present representation issues. Therefore, the act of petitioners cannot be
considered a legitimate exercise of their right to self-organization. Hence, We
affirm and reiterate the rationale explained in Phil Association of Free Labor
122
Unions vs. Sec. of Labor case, supra, in order to protect legitimate labor and
at the same time maintain discipline and responsibility within its ranks.
The contention of petitioners that the new CBA concluded between Amigo
Employees Union-PAFLU and the Company on February 15, 1977
containing the union security clause cannot be invoked as against the
petitioners for offenses committed earlier than its conclusion, deserves scant
consideration. We find it to be the fact that the union security clause provided
in the new CBA merely reproduced the union security clause provided in the
old CBA about to expire. And since petitioners were expelled from Amigo
Employees Union-PAFLU on March 28, 1982 upon denial of their Motion
for Reconsideration of the decision expelling them, the CBA of February 15,
1977 was already applicable to their case. The "closed-shop provision" in the
CBA provides:
All members of the UNION as of the signing of this
Agreement shall remain members thereof in good standing.
Therefore, any members who shall resign, be expelled, or
shall in any manner cease to be a member of the UNION,
shall be dismissed from his employment upon written
request of the UNION to the Company. (Art. III)
A closed-shop is a valid form of union security, and a provision therefor in a
collective bargaining agreement is not a restriction of the right of freedom of
association guaranteed by the Constitution. (Manalang, et al. vs. Artex
Development Co., Inc., et al., L-20432, October 30, 1967, 21 SCRA 561).
Where in a closed-shop agreement it is stipulated that union members who
cease to be in good standing shall immediately be dismissed, such dismissal
does not constitute an unfair labor practice exclusively cognizable by the
Court of Industrial Relations. (Seno vs. Mendoza, 21 SCRA 1124).
Finally, We reject petitioners' contention that respondent Minister committed
error in law amounting to grave abuse of discretion when he affirmed the
conclusion made by the RO4 OIC, upholding the legal applicability of the
security clause of a CBA over alleged offenses committed earlier than its
conclusion and within the 60-day freedom period of an old CBA. In the first
place, as We stated earlier, the security clause of the new CBA is a
reproduction or reiteration of the same clause in the old CBA. While
petitioners were charged for alleged commission of acts of disloyalty
inimical to the interests of the Amigo Employees Union-PAFLU in the
Resolution of February 14, 1977 of the Amigo Employees Union- PAFLU
and on February 15, 1977 PAFLU and the Company entered into and
concluded a new collective bargaining agreement, petitioners may not escape
the effects of the security clause under either the old CBA or the new CBA
by claiming that the old CBA had expired and that the new CBA cannot be
given retroactive enforcement. To do so would be to create a gap during
which no agreement would govern, from the time the old contract expired to
the time a new agreement shall have been entered into with the union. As this
Court said in Seno vs. Mendoza, 21 SCRA 1124, "without any agreement to
govern the relations between labor and management in the interim, the
situation would well be productive of confusion and result in breaches of the
law by either party. "
The case of Seno vs. Mendoza, 21 SCRA 1124 mentioned previously needs
further citation of the facts and the opinion of the Court, speaking through
Justice Makalintal who later became Chief Justice, and We quote:
It appears that petitioners other than Januario T. Seno who is
their counsel, were members of the United Seamen's Union
of the Philippines. Pursuant to a letter-request of the Union
stating that they 'had ceased to be members in good standing'
and citing a closed shop clause in its bargaining agreement
with respondent Carlos A. Go Thong & Co., the latter
dismissed said petitioners. Through counsel, petitioners
requested that they be reinstated to their former positions and
paid their backwages, otherwise they would picket
respondents' offices and vessels. The request was denied on
the ground that the dismissal was unavoidable under the
terms of the collective bargaining agreement. ...
We, therefore, hold and rule that petitioners, although entitled to disaffiliate
from their union and form a new organization of their own, must, however,
suffer the consequences of their separation from the union under the security
clause of the CBA.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed
from affirming the joint decision of the OIC of Regional Office No. 4 in
RO4-Case No. T-IV-3549-T and RO4 Case No. RD-4-4088-77-T granting
clearance to terminate petitioners as well as dismissing their complaint with
application for preliminary injunction, is hereby AFFIRMED. No costs.
SO ORDERED.
123
124
G.R. No. L-24189 August 30, 1968
ITOGON-SUYOC MINES, INC., petitioner,
vs.
SANGILO-ITOGON WORKERS' UNION in behalf of BARTOLOME
MAYO, BERNARDO AQUINO, ET AL.,respondents.
Reyes and Cabato for petitioner.
Benjamin C. Rillera for respondents.
SANCHEZ, J.:
Petitioner's appeal seeks reversal of the judgment of the Court of Industrial
Relations (CIR) directing reinstatement of the fifteen individual respondents
"to their former positions or substantially equivalent employment in the
company, with full back wages from the time of their dismissal to their actual
reinstatement, without loss of seniority and other privileges."
The controversy arose because prior to May 28, 1958, Itogon-Suyoc Mines,
Inc., through its general superintendent Claude Fertig, had been dismissing
from its employ members of respondent Sañgilo-Itogon Workers' Union
(Sañgilo, for short). Fifty-four members of Sañgilo were already fired when
Department of Labor conciliators conferred with petitioner's representative to
explore the possibility of their reinstatement. Petitioner refused
reinstatement, alleged that dismissal of the 54 was for cause.
On May 28, 1958, sensing that its members were being eased out of
employment one by one, Sañgilo called a strike, accompanied by picketing
carried out at or near petitioner's mine premises in Itogon. Work was
paralyzed. On the fourth or fifth day of the strike, company policemen drove
the strikers out of petitioner's premises. The strike lasted until about June 2,
1958.
On that day, June 2, 1958, petitioner filed an injunction suit against some
strikers in the Court of First Instance of Baguio (Civil Case No. 774).
Nothing clear appears of record as to the present status of this suit.
On the same day, too, petitioner's officials conferred with the officers of the
other labor union in the company, the Itogon Labor Union. They hammered
out an agreement whereby all strikers were given fifteen (15) days from said
date to return to work. Thru a public address system, strikers were then urged
to go back to their jobs. Notices addressed to the strikers which read — "All
of you are required to report immediately to your respective work otherwise
you will be considered AWOL [absent without leave] and will be dropped
from the rolls"1 were posted on the Itogon Labor Union bulletin board, the
Itogon store, and at 1300 checkpoint — the main entrance to the company's
mining premises. These notices did rot contain the fifteen (15) days' grace
period aforesaid.
On November 18, 1958, a CIR prosecutor in behalf of Sañgilo charged
petitioner and Claude Fertig, its general superintendent, with unfair labor
practice for the dismissal of two company employees A. Manaois and Jose
Baldo on June 9, 1957 and March 5, 1958, respectively, allegedly because of
their affiliation with Sañgilo and for having testified against petitioner in
Certification Case No. 3-MC-Pang.2 The complaint prayed for reinstatement
and back wages. Petitioner asserted just cause in defense.
On October 5, 1960, CIR adjudged that the dismissal of A. Manaois was just
and legal, but that petitioner was guilty of unfair labor practice in dismissing
Jose Baldo. CIR thus ordered Baldo's reinstatement with back wages. The
CIR judgment for Jose Baldo was elevated by petitioner to this Court.3 On
December 24, 1964, we affirmed.
Meanwhile, on March 3, 1961, CIR's prosecutor — on Sañgilo's charge filed
with CIR on July 12, 1960, — lodged an unfair labor practice complaint
against herein petitioner, its general superintendent Claude Fertig, and the
Itogon Labor Union.4 Averment was there made of the arbitrary dismissal of
107 of Sañgilo's members because of membership and/or affiliation with said
union and for having testified or about to testify in Certification Case G.R.
No. 3-MC-Pang.; that Sañgilo's president, Bartolome Mayo, was dismissed
also because of his refusal to dissolve the union; and that said company and
its general superintendent Claude Fertig "had given aid and support to ...
Itogon Labor Union, another labor organization" existing in said company
"by allowing the officers and members thereof, to hold meetings inside the
mine premises and the theatre building owned" by the company and also
allowing them to use the company's light facilities — privileges which were
denied Sañgilo. The prayer was for judgment declaring respondents therein
guilty of unfair labor practice; enjoining them from further committing unfair
labor practice acts; ordering the dissolution of Itogon Labor Union, "it being
a company dominated union"; and directing reinstatement of the dismissed
125
107 employees mentioned in the complaint, with full back wages from the
time of dismissal up to actual reinstatement.
The mining company and Claude Fertig in their answer aver that the May 27,
1958 strike was illegal; that thereafter "many of respondent company's
workers left for their respective home towns, abandoning their jobs, and
never reported for work until the present; that some of the persons listed in
the complaint are still working; and some of them left respondent company's
employ even earlier than May 27, 1958 voluntarily or were discharged for
cause." The company's principal defense is that the action for reinstatement
with back wages is barred by laches.
Itogon Labor Union's defense is that the concessions it enjoyed were in
pursuance of a collective bargaining contract between said union and the
company.
Of the 107 dismissed employees, 10 manifested in writing that they had
never been members of Sañgilo, were actually working with the company
and not interested at all in the prosecution of the suit.5 One of the named
dismissed employees, Graciano Mejia, died on October 26, 1957.6 Of the
remaining individual complainants, only 15 appeared and testified in court.
They were amongst the strikers.
Came the CIR decision of May 20, 1964. Associate Judge Jose S. Bautista
there observed that "the picketing was conducted peacefully, as the strikers
did not commit acts of violence or cause injuries to persons or damage to
property" and that "the union members staged the strike for the reason that
their fellow members were being eased out of employment little by little by
respondent company." .
On the charge that the Itogon Labor Union was company dominated, CIR
declared that "the privilege of respondent union in holding meetings inside
the company's mine premises and theater building, and in using the
company's light facilities, is one of the concessions obtained by said union in
accordance with the collective bargaining agreement entered into by the
respondent Company and the Itogon Labor Union." .
CIR's judgment thus directed "respondent Itogon-Suyoc Mines, Inc. to
reinstate (1) Bartolome Mayo, (2) Bernardo Aquino, (3) Florentino Ceralde,
(4) Marcelo Datuin, (5) Antonio Deogracias, (6) Domingo Deray, (7) Pedro
Espiritu, (8) Mariano Idos, (9) Antonio Laop, (10) Gregorio Laureta, (11)
Chayon Pogay, (12) Roman Quinto, (13) Jose Santos, (14) Simplicio
Tambaoan, and (15) Tomas Valerio, to their former positions or substantially
equivalent employment in the company, with full backwages from the time
of their dismissal to their actual reinstatement, without loss of seniority and
other privileges. The complaint with respect to the remaining members of
complainant Sañgilo-Itogon Workers' Union and with respect to the company
domination charge against respondent Itogon Labor Union is hereby
DISMISSED."
Its motion to reconsider having been denied by CIR en banc, petitioner
appealed to this Court.
1. Petitioner's brief 7 challenges Sañgilo's capacity to sue. Sañgilo, so
petitioner says, ceased to be a legitimate labor union on March 31, 1960
when the Department of Labor cancelled the former's registration permit for
failure to comply with statutory requirements. Contrariwise Sañgilo avers
that at the time the complaint below was filed it was a legitimate labor
organization, and continues to be so. 1äwphï1.ñët
Judicial inquiry was made by CIR on this issue. A subpoena duces tecum was
issued to the registrar of labor organizations of the Department of Labor
requiring him or his duly authorized representative "[t]o bring with [him] the
following: (1) the list of membership of the Sañgilo-Itogon Workers' Union;
(2) the revocation, if any, of the registration permit of the Sañgilo-Itogon
Workers' Union dated March 22, 1960; and (3) the cancellation proceedings
of the Sañgilo-Itogon Workers' Union which took place sometime in 1960."8
Atty. Narciso Fabella, the duly authorized representative, answered the
subpoena. With the record of the cancellation proceedings of Sañgilo with
him, he testified before the CIR hearing officer that on March 31, 1960,
Sañgilo's registration permit [No. 2141-IP issued on May 21, 1957] was
cancelled by the Department of Labor under Cancellation Proceedings
1722;9 that his office then received a motion for reconsideration of said
cancellation; that on April 27, 1960, an order was issued advising Sañgilo to
comply with the requirement it failed to satisfy and which was the cause of
the cancellation of Sañgilo's permit; that on March 9, 1962, Sañgilo filed a
manifestation and motion to lift resolution with the request that it be given
fifteen days within which to present evidence of compliance; that on March
23, 1962, an order was issued directing the union to submit, within fifteen
days from notice, a copy of its financial report for the period from May 12,
1957 to May 11, 1958, sworn to by its treasurer, Ernesto Aragon, pursuant to
126
Sangilo's constitution and by-laws and Section 17(k) of Republic Act 875;
and that no financial report had been submitted to the Department of Labor.
And then, the witness testified as follows:
ATTY. RILLERA [Counsel for Sañgilo]:
Q Now, Mr. Fabella, per your records, do you have the final order
cancelling the permit of the complainant union, or is the proceeding
still going on?
WITNESS
A As far as the record is concerned, it seems that the proceeding
is still going on because there is no other order pertaining [to] the
non-submittal of the union of the financial report required within
fifteen (15) days.10
So it is, that there is no order final in character cancelling Sañgilo's
registration permit and dropping its name from the roster of legitimate labor
unions. Sangilo's status does not appear in the record to have changed.
Therefore, Sañgilo still enjoys all the rights accorded by law to a legitimate
labor union. One of those rights is the right to sue. 1äwphï1.ñët
Even assuming that Sañgilo later lost its registration permit in the course of
the present proceedings, still Sañgilo may continue as a party without need
of substitution of parties, "subject however to the understanding that
whatever decision may be rendered therein will only be binding upon those
members of the union who have not signified their desire to withdraw from
the case before its trial and decision on the merits." 11
Really, we perceive of no reason why the judgment in favor of the fifteen
individual respondent laborers should be overturned simply because the
union of which they were members ceased to be a legitimate labor union. It
cannot be disputed that CIR's prosecutor brought this case not merely for
Sañgilo; it was also on behalf of the 107 employees enumerated therein. This
accounts for the fact that CIR's judgment for reinstatement and backpay was
rendered in favor of the fifteen respondent laborers. To accept petitioner's
argument as valid is to shunt aside substance to give way to form. Error, if
any, was harmless. It does not affect the substantial rights of the parties in
interest. It is no ground for reversal. 12 At this stage this Court may even
strike out Sañgilo-Itogon Workers' Union and leave the fifteen individual
respondents alone. 13
2. Next to be considered is petitioner's claim that respondents were guilty of
splitting their cause of action.
Petitioner argues that the first unfair labor practice suit (CIR Case 50-ULP-
Pang.) heretofore mentioned covers the second unfair labor practice suit - the
case at hand. And this, because "[a]ll acts of unfair labor practice allegedly
committed by the herein petitioner [the company] prior to November 18,
1958 [when CIR Case 50-ULP-Pang. was filed] against the members of
respondent union [Sañgilo] constituted one single cause of action." Petitioner
continues onto say that since CIR Case 50-ULP-Pang, has been finally
decided by this Court in a decision promulgated on December 24, 1964, said
case is a bar to the present action.
We do not go along with petitioner.
The rule against splitting of a cause of action applies only where the actions
are between the same parties. 14 Here, the parties in the two cases aforecited
are different. The first case involves only two (2) laborers, namely, Jose
Baldo and A. Manaois the second refers to the claim of other laborers
numbering 107 in all. These two cases, it is true, were brought in the name of
Sañgilo. However, the real parties in interest in both cases are the dismissed
employees. Sañgilo merely represented its members before CIR. 15 CIR
found that the members "are not situated under similar circumstances", and
that their alleged dismissal "took pace on different dates". 16 Each one of
these employees has a cause of action arising from his particular dismissal.
And the cause of action of one is separate and distinct from the
others. 17 Although, of course, they may be joined and brought in the name of
the union. Res judicata has not attached.
3. Petitioner's averment that it gave out notices for a return to work would not
be of help to its cause. On this point, the court said: "The Court is aware of
the offer of the company to the strikers to return to work, but it is even more
cognizant of the fact that passions and emotions among the striking
employees were running high at the heat of the strike." 18 The validity of this
reasoning we do not find cause to dispute.
127
And then, evidence there is that the individual respondents were driven out of
and denied admission into the company's mine premises because they staged
a strike. They were turned out of the bunkhouses they rented in the premises
as living quarters. They were virtually locked out. Evidence there is, too, that
because of the strike the laborers were not allowed to go back to their jobs. 19
4. Petitioner seeks to nullify individual respondents' right to reinstatement
and backpay upon the ground that they are guilty of laches. Really the
present case was started after the lapse of almost two years and two months
after the strike. 1äwphï1.ñët
Laches has been defined as "such delay in enforcing one's rights as works
disadvantage to another" and "in a general sense is the neglect, for an
unreasonable and unexplained length of time, under circumstances permitting
diligence, to do what in law should have been done." 20 As we go into the
core of this problem, we are reminded that for the doctrine of stale demand to
apply, four essential requisites must be present, viz: "(1) conduct on the part
of the defendant, or of one under whom he claims, giving rise to the situation
of which complaint is made and for which the complaint seeks a remedy; (2)
delay in asserting the complainant's rights, the complainant having had
knowledge or notice of the defendant's conduct and having been afforded an
opportunity to institute a suit; (3) lack of knowledge or notice on the part of
the defendant that the complainant would assert the right on which he bases
his suit; and (4) injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held barred." 21
With these as guideposts, let us look at the facts.
It is true that CIR declared Sañgilo and its members who did not come to
court and testify guilty of laches. 22 But as to the 15 individual respondents,
the question of laches was passed by — sub silentio. Clearly implicit in this
is that CIR is of the opinion that laches is not a bar to reinstatement and
recovery of back wages for these 15 individual respondents who actually
testified in court. For CIR, despite a categorical finding of laches on the part
of the union and some of its complaining members, proceeded to order
reinstatement and back wages for the 15 respondents. By and large,
appreciation of laches rests mainly with the trial court. Absent a clear abuse,
we are not to disturb its ruling thereon.
Indeed, these fifteen respondents showed sufficient interest in their case.
They went to court and supported their cause by their own testimony. Delay
in the filing of suit should not hamper their suit. We must not for a moment
forget that these fifteen laborers' belong to the lower economic stratum of our
society. They are not expected to possess the intelligence or foresight of
those who have been favored by high formal education. 23 Individually, they
may not be in a position to file suit; they may not have the means. Thrown
out of job, driven off, and refused entrance to, the company's premises, each
has to go his own way. They had to return — as most of them did — to their
families in the lowlands, far from the mine site. And yet they were not remiss
in their duty to report the matter to their president. But the president,
respondent Bartolome Mayo, was then in the Baguio General Hospital. Mayo
lost no time in reporting the laborers' plight to the union counsel. The
laborers had every right to assume that their union was doing something for
them. They had done their part. They had to depend on the action taken by
their union leaders. A labor union certainly would not be of much use if it
does not act for the welfare of its members.
As to respondent Mayo himself, evidence appears on record that from the
time of his dismissal, he had personally and by telephone asked
Superintendent Fertig for his reinstatement. He was brushed off with the
reply: "Your union went on strike". 24 On one occasion after the strike, when
Mayo met Fertig in Baguio, the former repeated his request for reinstatement,
but received the same answer: "You are still on strike". 25
Laches, if any, we must say, is not solely to be laid at the door of
respondents. The company contributed too in the delay of the filing of the
present suit. And this because, as testified to by the union president in court,
such delay in filing the present ULP case was due to the fact that the legality
of their strike precisely was being litigated in the Court of First Instance of
Baguio in Injunction Case 774 filed on June 2, 1958 by the very company
itself against some of the strikers. Naturally, if the strike is there declared
illegal, the strikers including the herein fifteen respondents would lose their
right to reinstatement and backpay. But as said suit became apparently
dormant, the union, on behalf of respondents, decided to lodge their present
complaint with the CIR.
Thus it is, that the taint of laches cannot attach to individual respondents. For
the second element required for the defense of laches to prosper is here
absent.
128
5. The judgment below directs petitioner to pay individual respondents back
wages from the time of their dismissal to their actual reinstatement without
loss of seniority and privileges.

Since the dismissal of respondents in 1958, more than ten years had elapsed.
It would not seem out of place to restate the guidelines to be observed in the
ascertainment of the total back wages payable under the judgment below.
These are:.1äwphï1.ñët

First. To be deducted from the back wages accruing to each of the

laborers to be reinstated is the total amount of earnings obtained by
him from other employment(s) from the date of dismissal to the date
of reinstatement. Should the laborer decide that it is preferable not to
return to work, the deduction should be made up to the time
judgment becomes final. And these, for the reason that employees
should not be permitted to enrich themselves at the expense of their
employer. 26 Besides, there is the "law's abhorrence for double
compensation." 27

Second. Likewise, in mitigation of the damages that the dismissed

respondents are entitled to, account should be taken of whether in the
exercise of due diligence respondents might have obtained income
from suitable remunerative employment. 28 We are prompted to give
out this last reminder because it is really unjust that a discharged
employee should, with folded arms, remain inactive in the
expectation that a windfall would come to him. A contrary view
would breed idleness; it is conducive to lack of initiative on the part
of a laborer. Both bear the stamp of undesirability.

For the reasons given, the judgment under review is hereby affirmed.

Let the record of this case be returned to the Court of Industrial Relations
with instructions to forthwith ascertain the amount of back wages due
individual respondents in accordance with the guidelines herein set forth.
Costs against petitioner. So ordered. 1äwphï1.ñët

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro,

Angeles and Fernando, JJ., concur.

129