PHILIPPINE-SINGAPORE TRANSPORT SERVICES, INC v.

NLRC
G.R. No. 95449 August 18, 1997
Facts: In Nov. 24 1987 Philippine-Singapore Transport Services, Inc. (PSTS, for brevity), a manning agency, hired
private respondent Estrada as master of the vessel Sea Carrier I for its foreign principal, Intra-Oil. Intra-Oil had a
charter agreement, then, with a company, which was engaged in a project of oil drilling in the high seas of
Bombay, India. Barely two months into his deployment he was informed that he would be relieved from his
employment. He was not given any explanation or reason for his relief. On that same day, someone took over as
captain of Sea Carrier I, which prompted Estrada to relinquish his post. Upon arriving in Manila PSTS informed him
that his employment was terminated because of his incompetence and denied all his claim for money. PSTS
averred that Estrada was incompetent in handling the vessel for any tow or even approaching the oil drilling
platforms and due to his lack of foresight to anticipate the number of mooring ropes to be used

Estrada contends that he was removed because of a justified refusal to obey the order of the charterer's to tow
another of its vessel. He explained that during the voyage from Singapore to Bombay, in the course of
maneuvering the charterer's barge, specifically alongside jetties, quays and in navigational channels, all the ropes
on board the Sea Carrier I suffered extreme wear and tear, that when the charterer ordered him to tow its barge,
he refused to do so since the ropes were worn out and inadequate to maneuver a barge in close water situation
and, in his professional opinion, damage would result from using inadequate ropes. This shortage of ropes was
made known to Mr. Bala of Essar Shipping, who was asked by the private respondent to supply additional mooring
ropes. According to the private respondent, the relationship between him and the charterer degenerated rapidly
following this particular incident.

POEA ruled in favour of Estrada

NLRC affirmed the decision

Issue: Whether the employer’s prerogative right to dismiss was validly exercised in this case.

Held: NO. Petitioner's imputation of incompetence on the part of the private respondent due to his lack of
foresight to anticipate the number of mooring ropes to be used is unworthy of being given credence. As explained
by private respondent, the Sea Carrier I was sufficiently furnished with mooring ropes prior to the voyage. It so
happened that the ropes would later on "suffered extreme wear and tear" during its voyage from Singapore to
Bombay especially along jetties and quays, and in navigational channels. Faced by such problem, he immediately
reported the situation to, and at the same time, requested for new mooring ropes from, Mr. Bala of Essar Shipping,
a person whom the private respondent alleged to be connected with the petitioner and its principal. No new ropes
came, however. So, when the charterer ordered private respondent to tow its barge, he explained that the ropes
were worn out and, in his professional opinion, inadequate for maneuvering a barge in close water situation,
hence, damage would result if towing of tile barge would proceed. Evidently, as called for by the circumstances of
the situation, the private respondent complied with his responsibility as master of the vessel.

To our mind, respondent's charge of incompetence is rather sweeping. Complainant's refusal to carry out the
towing order on the basis of his professional opinion that there was a shortage in towing ropes, a situation which
was known to a certain "Mr. Bala of Essar Shipping", or that they were inadequate and that it might result in an
accident or cause damage certainly does not prove that he was incompetent. On the other hand, it would even
show that he was very professional in his job as Master, regardless of the intrusions of the charterer into his area of
responsibility. It would have been a different story had complainant refused the towing order simply because he
didn't know how to, in which case he could be said to be incompetent in that area of expertise.

Before an employee can be dismissed, the Labor Code, as amended, requires the employer to furnish the
employee a written notice containing a statement of the causes for termination and to afford said employee
ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires. If
the employer decides to terminate the services of the employee, the employer must notify the worker in writing
of the decision to dismiss him, stating clearly the reasons therefor. Estrada was caught by surprise when on
January 21, 1988 he was told by the agent of the principal that he would be replaces as master of the vessel and
would be repatriated to the Philippines. He was not given any explanation or reason for his dismissal. His
replacement as master of the vessel came in the afternoon of the same day he was informed of his repatriation.

The power to dismiss an employee is a recognized prerogative that is inherent in the employer's right to freely
manage and regulate his business. Corollarily, an employer cannot rationally be expected to retain the
employment of a person whose lack of morals, respect and loyalty to his employer, regard for his employer's rules
and appreciation of the dignity and responsibility of his office, has so plainly and completely been bared. 9 He may
not be compelled to continue to employ such person whose continuance in the service will patently be inimical to
his employer's interest. The right of the company to dismiss an employee is a measure of self-protection. Such
right, however, is subject
to regulation by the State, basically in the exercise of its paramount police power. Thus, the dismissal of
employees must be made within the parameters of the law and pursuant to the basic tenets of equity, justice
and fairplay. It must not be done arbitrarily and without just cause.
 PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION v. ALICIA LAPLANA et al.
G.R. No. 76645 July 23, 1991
Facts: Alicia Laplana was the cashier of the Baguio City Branch Office of the Philippine Telegraph and Telephone
Corporation (hereafter, simply PT & T). Sometime in March 1984, PT & T's treasurer, Mrs. Alicia A. Arogo, directed
Laplana to transfer to the company's branch office at Laoag City. Laplana refused the reassignment and proposed
instead that qualified clerks in the Baguio Branch be trained for the purpose. She set out her reasons therefor in
her letter to Mrs. Arogo dated March 27, 1984, wit:

1. I have established Baguio City as my permanent residence. Working in Laoag will involve additional expenses like
for my board and lodgingly, fare, and other miscellaneous expenses. My salary alone will not be enough — there
will be no savings and my family will spend more on account of my transfer.

2. I will be away from my family. A far assignment would be a big sacrifice on my part keeping me away from my
husband and family which might affect my efficiency.

3. Since I have been with PT & T for more than six years already, I have learned to work with my co-employees
here more effectively. Working in another place with entirely different environment will require long adjustment
period, thereby affecting performance of my job.

On April 12, 1984, Mrs. Arogo reiterated her directive for Laplana's transfer to the Laoag Branch effective April 16
and ordering her to turn over her accountabilities to the cashier replacing her. When April 16, 1984 came she was
no longer allowed to resume work in Baguio branch. Mrs. Arogo wrote another telegram to Laplana informing her
of another work assignment in Manila and her refusal to abide by it would constitute abandonment hence
dismissal from employment. In reply, Laplana still refused and replied “RETRENCH ME INSTEAD”

Laplana employment was terminated and on July 4, 1984, Laplana signed the quitclaim and received the check
representing her 13th month and separation pay.

Oct 9, 1984 Laplana filed a complaint against PT&T alleging that “when she insisted on her right of refusing to be
transferred she was forced to be terminated and that there was no ground at all for the retrenchment;" that the
company's "act of transferring is not only without any valid ground but also arbitrary and without any purpose but
to harass and force . . . (her) to eventually resign.”

Labor Arbiter ruled in favour of Laplana

NLRC affirmed the decision

Issue: Whether PT&T validly exercised its prerogative of making transfers and reassignment of employees.

Held: YES. In Philippine Japan Active Carbon Corp. v. NLRC, promulgated on March 8, 1989 this Court made the
following pronouncement, to wit:
It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes,
and competence, to move them around in the various areas of its business operations in order to ascertain where
they will function with maximum benefit to the company. An employee's right to security of tenure does not give
him such a vested right in his position as would deprive the company of its prerogative to change his assignment
or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor
prejudicial to him, and it does not involve a demotion in rank or diminution of his salaries, benefits, and other
privileges, the employee may not complain that it amounts to a constructive dismissal.

In this case, the employee (Laplana) had to all intents and purposes resigned from her position. She had
unequivocally asked that she be considered dismissed, herself suggesting the reason therefor –– retrenchment.
When so dismissed, she accepted separation pay. On the other hand, the employer has not been shown to be
acting otherwise than in good faith, and in the legitimate pursuit of what it considered its best interests, in
deciding to transfer her to another office. There is no showing whatever that the employer was transferring
Laplana to another work place, not because she would be more useful there, but merely "as a subterfuge to rid
(itself) of an undesirable worker," or "to penalize an employee for union activities” The employer was moreover
not unmindful of Laplana's initial plea for reconsideration of the directive for her transfer to Laoag; in fact, in
response to that plea not to be moved to the Laoag Office, the employer opted instead to transfer her to Manila,
the main office, offering at the same time the normal benefits attendant upon transfers from an office to another.

The situation here presented is of an employer transferring an employee to another office in the exercise of what
it took to be sound business judgment and in accordance with pre-determined and established office policy and
practice, and of the latter having what was believed to be legitimate reasons for declining that transfer, rooted in
considerations of personal convenience and difficulties for the family. Under these circumstances, the solution
proposed by the employee herself, of her voluntary termination of her employment and the delivery to her of
corresponding separation pay, would appear to be the most equitable.
 YUCO CHEMICAL INDUSTRIES, INC v. MINISTRY OF LABOR AND EMPLOYMENT
G.R. No. L-75656 May 28, 1990
Facts: In 1978, George Halili and Amado Magno both working students were employed by petitioner company
which is engaged in the manufacture/assembly of ice boxes in Barangay Matatalaib, Tarlac, Tarlac. They were
assigned to make aluminum handles for the ice boxes. On 1981 after getting a favourable opinion from MOLE
Tarlac to transfer its production of aluminum handles from Tarlac to Sta. Cruz, Manila. Petitioner addressed a
memorandum to private respondents directing them to report for work within one week from notice at their
new place of work at Felix Huertas Street, Sta. Cruz, Manila. The memorandum further stated that private
respondents would be paid with a salary of P27.00 and an additional allowance of P2.00 "to meet the higher cost
of living in Manila.

Instead of reporting to work, Halili and Magno filed a complaint with the provincial labor office for illegal dismissal,
13th month pay and service incentive leave pay. Contending among others that “that they were discriminated
against because of their union activities and their refusal to disaffiliate from the union.”

Tarlac Labor office ruled in favour of the workers

MOLE Deputy Minister Leogardo, Jr. upheld the decision

Issue: Whether the company validly exercised its management prerogative in transfering its employees from Tarlac
to Manila.

Held: NO. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion
and putting to mind the basic elements of justice and fair play. Having the right should not be confused with the
manner in which that right must be exercised. Thus it cannot be used as a subterfuge by the employer to rid
himself of an undesirable worker. Nor when the real reason is to penalize an employee for his union activities and
thereby defeat his right to self-organization. But the transfer can be upheld when there is no showing that it is
unnecessary, inconvenient and prejudicial to the displaced employee .

The reassignment of Halili and Magno to Manila is legally indefensible on several grounds. Firstly, it was grossly
inconvenient to private respondents. They are working students. When they received the transfer memorandum
directing their relocation to Manila within seven days from notice, classes had already started. The move from
Tarlac to Manila at such time would mean a disruption of their studies. Secondly, there appears to be no genuine
business urgency that necessitated their transfer. As well pointed out by private respondents' counsel, the
fabrication of aluminum handles for ice boxes does not require special dexterity. Many workers could be
contracted right in Manila to perform that particular line of work.

Altogether, there is a strong basis for public respondent's conclusion that the controversial transfer was not
prompted by legitimate reasons. Petitioner company had indeed discriminated against Magno and Halili when
the duo was selected for reassignment to Manila. The transfer was timed at the height of union concerted
activities in the firm, deliberately calculated to demoralize the other union members. Under such questionable
circumstances, private respondents had a valid reason to refuse the Manila re-assignment. Public respondent did
not err or abuse his discretion in upholding the employees' cause.
FARLE P. ALMODIEL vs NLRC
G.R. No. 100641 June 14, 1993

Doctrine:
It is a well-settled rule that labor laws do not authorize interference with the employer's
judgment in the conduct of his business. The determination of the qualification and fitness of
workers for hiring and firing, promotion or reassignment are exclusive prerogatives of
management. The employer is free to determine, using his own discretion and business
judgment, all elements of employment, "from hiring to firing" except in cases of unlawful
discrimination or those which may be provided by law. There is none in the instant case.

Facts:
Petitioner Farle P. Almodiel is a CPA who was hired in October, 1987 as Cost Accounting
Manager of respondent Raytheon Philippines, Inc. through a reputable placement firm, John
Clements Consultants, Inc. He started as a probationary or temporary employee. As Cost
Accounting Manager, his major duties were: (1) plan, coordinate and carry out year and
physical inventory; (2) formulate and issue out hard copies of Standard Product costing and
other cost/pricing analysis if needed and required and (3) set up the written Cost Accounting
System for the whole company.

In the meantime, the standard cost accounting system was installed and used at the Raytheon
plants and subsidiaries worldwide. It was likewise adopted and installed in the Philippine
operations. As a consequence, the services of a Cost Accounting Manager allegedly entailed
only the submission of periodic reports that would use computerized forms prescribed and
designed by the international head office of the Raytheon Company in California, USA.

On January 27, 1989, petitioner was summoned by his immediate boss and in the presence of
IRD Manager, he was told of the abolition of his position on the ground of redundancy. He
pleaded with management to defer its action or transfer him to another department, but he was
told that the decision of management was final and that the same has been conveyed to the
Department of Labor and Employment. Thus, he was constrained to file the complaint for illegal
dismissal before the Arbitration Branch of the National Capital Region, NLRC, Department of
Labor and Employment.

Issue:
Whether bad faith, malice and irregularity crept in the abolition of petitioner's position of Cost
Accounting Manager on the ground of redundancy.

Held:
An employer has no legal obligation to keep more employees than are necessary for the
operation of its business. Petitioner does not dispute the fact that a cost accounting system was
installed and used at Raytheon subsidiaries and plants worldwide; and that the functions of his
position involve the submission of periodic reports utilizing computerized forms designed and
prescribed by the head office with the installation of said accounting system. Petitioner
attempts to controvert these realities by alleging that some of the functions of his position were
still indispensable and were actually dispersed to another department. What these indispensable
functions that were dispersed, he failed however, to specify and point out. Besides, the fact that
the functions of a position were simply added to the duties of another does not affect the
legitimacy of the employer's right to abolish a position when done in the normal exercise of its
prerogative to adopt sound business practices in the management of its affairs.

Considering further that petitioner herein held a position which was definitely managerial in
character, Raytheon had a broad latitude of discretion in abolishing his position. An employer
has a much wider discretion in terminating employment relationship of managerial personnel
compared to rank and file employees.7 The reason obviously is that officers in such key
positions perform not only functions which by nature require the employer's full trust and
confidence but also functions that spell the success or failure of an enterprise.
CALTEX REFINERY EMPLOYEES ASSOCIATION (CREA) and ARNELIO M. CLARETE vs.
NLRC
G.R. No. 102993 July 14, 1995

Doctrine:
A valid exercise of management prerogative encompasses hiring, work assignments, working
methods, time, place and manner of work, tools to be used, procedure to be followed,
supervision of workers, working regulations, transfer of employees, discipline, dismissal and
recall of workers. This prerogative must, however, be exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating the rights of the
employees granted by law or contract.

Facts:
Petitioner Clarete was hired by respondent Caltex Mechanic C on November 3, 1981. He was
later promoted to the position of Mechanic B and assigned to the Mechanical/Metal Grades
Section of respondent Caltex's refinery in Batangas.

Petitioner’s version:
According to Clarete, at about 4:00 p.m. on April 13, 1989, on his way to the refinery's main
gate after completing a day's work at the Maintenance Area IV, he saw on a pile of rubbish a
bottle of lighter fluid, which mechanics use to remove grease from their hands. He picked up
the bottle and placed it in the basket attached to the handlebar of his bicycle with the intention
of asking the security guard at the gate to allow him to bring it home.

Upon reaching the gate, he took the bottle of lighter fluid from the basket, punched out his
time card at the bundy clock and then asked Juan de Villa, the security guard on duty,
permission to take home the bottle. Replying that he was not authorized to grant the
permission sought, de Villa referred Clarete to Dominador Castillo, the security supervisor.
When so approached, however, Castillo told Clarete to leave the bottle in his office. Clarete
complied and left for home.

Respondent’s Version:
On said date, de Villa noticed a black bag which Clarete did not submit for inspection. When
requested by de Villa to open the same for inspection, Clarete retorted that it was not necessary
to inspect the bag as it contained only dirty clothes. Unconvinced, de Villa opened the bag and
found a one-liter sample bottle filled with lighter fluid surreptitiously hidden inside in the sleeves
of Clarete's working clothes, which, in turn, were covered by other clothes. When asked if he
had a gate pass to bring the bottle out of the premises, Clarete replied that he did not secure a
gate pass as the lighter fluid was for his personal use.xxx

On April 18, 1989, Clarete received a letter from his immediate supervisor, requiring him to
explain in writing why he should not be subjected to disciplinary action for violation of company
rules and regulations. In his written explanation of April 20, 1989, Clarete stated: (1) that he
had no intention of bringing the bottle of lighter fluid out of the company premises without the
guard's permission; (2) that he did seek permission but was denied; and (3) that he left the
bottle behind with the guard when told to do so.

Later that year, he was charge with the crime of theft and was filed in the MTC Batangas.
In the meantime, on April 19, 1990, a decision was rendered in Criminal Case No. 3331,
acquitting Clarete of the crime charged based on the insufficiency of the evidence to establish
his guilt beyond reasonable doubt.

Subsequently, he received a letter Section Head, Mechanical/Metal Section, requiring him to

explain why his services should not be terminated for cause in view of Criminal Case. On August
20, 1990, Clarete was informed that his services were being terminated effective August 24,
1990 for "serious misconduct and loss of trust and confidence resulting from your having
violated a lawful order of the Company.

Issue
Whether his dismissal was without valid cause as there was no violation of company rules

Ruling:
While Clarete may be guilty of violation of company rules, we find the penalty of dismissal
imposed upon him by respondent Caltex too harsh and unreasonable. Such a penalty of
dismissal must be commensurate with the act, conduct or omission imputed to the employee
and imposed in connection with the employer's disciplinary authority. Even when there exist
some rules agreed upon between the employer and employee on the subject of dismissal the
same cannot preclude the State from inquiring on whether its rigid application would work too
harshly on the employee.

Considering that Clarete has no previous record in his eight years of service; that the value of
the lighter fluid, placed at P8.00, is very minimal compared to his salary of P325.00 a day; that
after his dismissal, he has undergone mental torture; that respondent Caltex did not lose
anything as the bottle of lighter fluid was retrieved on time; and that there was no showing that
Clarete's retention in the service would work undue prejudice to the viability of employer's
operations or is patently inimical to its interest, we hold that the penalty of dismissal imposed
on Clarete is unduly harsh and grossly disproportionate to the reason for terminating his
employment. Hence, we find that the preventive suspension imposed upon private respondent
is a sufficient penalty for the misdemeanor committed by petitioner.
FIRESTONE TIRE AND RUBBER COMPANY OF THE PHILIPPINES vs. CARLOS
LARIOSA
G.R. No. 70479 February 27, 1987

Doctrine:
The employer's obligation to give his workers just compensation and treatment carries with it
the corollary right to expect from the workers adequate work, diligence and good conduct.

Facts:
Carlos Lariosa started working with Firestone on January 3, 1972 as a factory worker. At the
time of his dismissal, he was a tire builder.

At around 2:00 o'clock in the afternoon of July 27, 1983, as he was about to leave the company
premises Lariosa submitted himself to a routine check by the security guards at the west gate.
He was frisked by Security Guard Ambrosio Liso [Lizo] while his personal bag was inspected by
Security Guard Virgilio Olvez. In the course of the inspection, sixteen [16] wool flannel swabs,
all belonging to the company, were found inside his bag, tucked underneath his soiled clothes.

As a result of the incident, Firestone terminated Lariosa's services on August 2, 1983, citing as
grounds therefor: "stealing company property and loss of trust.

Lariosa, sued Firestone before the Ministry of Labor and Employment for illegal dismissal. The
Labor Arbiter found Lariosa's dismissal justified. However, on appeal, the National Labor
Relations Commission reversed the decision of the Labor Arbiter and held that the dismissal of
Lariosa was too severe a penalty.

Issue:
Whether NLRC erred in reversing the Labor Arbiter’s decision

Ruling:
Yes. it is likewise clear that Firestone did not act arbitrarily in terminating Lariosa's services. On
the contrary, there are transcripts to prove that an investigation of the incident was promptly
conducted in the presence of the employee concerned, the union president and the security
guards who witnessed the attempted asportation. Records also belie the allegation that Lariosa
was shown his walking papers on the very day of the incident. The letter of Ms. Villavicencio to
Lariosa dated August 1, 1983 informing the latter of his dismissal effective August 2, 1983
conclusively shows that he was discharged only on August 2, 1983, after an investigation was
held to ventilate the truth about the July 27 incident. Thus, we cannot agree with the NLRC's
conclusion that even if Firestone had found substantial proof of Lariosa's misconduct, it did not
observe the statutory requirements of due process.

As a tire builder, Lariosa was entrusted with certain materials for use in his job. On the day in
question, he was given two bundles of wool flannel swabs [ten pieces per bundle] for cleaning
disks. He used four swabs from one pack and kept the rest [sixteen pieces] in his "blue
travelling bag." 10 Why he placed the swabs in his personal bag, which is not the usual
receptacle for company property, has not been satisfactorily explained.
If Lariosa, by his own wrong-doing, could no longer be trusted, it would be an act of oppression
to compel the company to retain him, fully aware that such an employee could, in the long run,
endanger its very viability.

The employer's obligation to give his workers just compensation and treatment carries with it
the corollary right to expect from the workers adequate work, diligence and good conduct.
WENIFREDO FARROLVS. THE HONORABLE COURT OF APPEALS
G.R. No. 133259, February 10, 2000

Doctrine:
Although the employer has the prerogative to discipline or dismiss its employee, such
prerogative cannot be exercised wantonly, but must be controlled by substantive due process
and tempered by the fundamental policy of protection to labor enshrined in the Constitution.

Facts:
Petitioner Wenifredo Farrol was employed as station cashier at respondent RCPI’s Cotabato City
station. On 1993, respondent RCPI’s district manager in Cotabato City informed their main
office that "Peragram funds" from said branch were used for the payment of retirement benefits
of five employees. On the same year, petitioner verified as correct RCPI’s Field Auditor’s report
that there was a shortage of P50,985.37 in their branch’s Peragram, Petty and General Cash
Funds. Consequently, petitioner was required by the Field Auditor to explain the cash shortage
within 24 hours from notice. The next day, petitioner paid to RCPI P25,000.00 of the cash
shortage.

On October 16, 1993, RCPI required petitioner to explain why he should not be dismissed from
employment. Two days thereafter, petitioner wrote a letter to the Field Auditor stating that the
missing funds were used for the payment of the retirement benefits earlier referred to by the
branch manager and that he had already paid P25,000.00 to RCPI. After making two more
payments of the cash shortage to RCPI, petitioner was informed by the district manager that he
is being placed under preventive suspension. Thereafter, he again paid two more sums on
different dates to RCPI leaving a balance of P6,995.37 of the shortage.

Respondent RCPI sent a letter to petitioner on November 22, 1993 informing him of the
termination of his services as of November 20, 1993.

Voluntary Arbitrator ruled that petitioner was illegally dismissed from employment.

CPI filed a petition for certiorari before the Court of Appeals (CA), which reversed the ruling of
the arbitrator and dismissed the complaint for illegal dismissal.

Issue:
Whether the dismissal was done with abuse of discretion

Ruling:
A perusal of RCPI’s dismissal notice reveals that it merely stated a conclusion to the effect that
the withholding was deliberately done to hide alleged malversation or misappropriation without,
however, stating the facts and circumstances in support thereof. It further mentioned that the
position of cashier requires utmost trust and confidence but failed to allege the breach of trust
on the part of petitioner and how the alleged breach was committed. On the assumption that
there was indeed a breach, there is no evidence that petitioner was a managerial employee of
respondent RCPI. It should be noted that the term "trust and confidence" is restricted to
managerial employees. It may not even be presumed that when there is a shortage, there is
also a corresponding breach of trust. Cash shortages in a cashier’s work may happen, and when
there is no proof that the same was deliberately done for a fraudulent or wrongful purpose, it
cannot constitute breach of trust so as to render the dismissal from work invalid.
Assuming further that there was breach of trust and confidence, it appears that this is the first
infraction committed by petitioner. Although the employer has the prerogative to discipline or
dismiss its employee, such prerogative cannot be exercised wantonly, but must be controlled by
substantive due process and tempered by the fundamental policy of protection to labor
enshrined in the Constitution. Infractions committed by an employee should merit only the
corresponding sanction demanded by the circumstances. The penalty must be commensurate
with the act, conduct or omission imputed to the employee and imposed in connection with the
employer’s disciplinary authority.
PHILIPPINE AIRLINES, INC vs. NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 85985 August 13, 1993

Doctrine:
the exercise of managerial prerogatives is not unlimited. It is circumscribed by limitations found
in law, a collective bargaining agreement, or the general principles of fair play and justice.
Moreover, it must be duly established that the prerogative being invoked is clearly a managerial
one.

Facts:
On March 15, 1985, PAL completely revised its 1966 Code of Discipline. The Code was
circulated among the employees and was immediately implemented, and some employees were
forthwith subjected to the disciplinary measures embodied therein.

Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a
complaint before the NLRC for unfair labor practice with the following remarks: "ULP with
arbitrary implementation of PAL's Code of Discipline without notice and prior discussion with
Union by Management". In its position paper, PALEA contended that PAL, by its unilateral
implementation of the Code, was guilty of unfair labor practice. PALEA alleged that copies of the
Code had been circulated in limited numbers; that being penal in nature the Code must conform
with the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and
prejudicial to the rights of the employees. It prayed that implementation of the Code be held in
abeyance; that PAL should discuss the substance of the Code with PALEA; that employees
dismissed under the Code be reinstated and their cases subjected to further hearing; and that
PAL be declared guilty of unfair labor practice and be ordered to pay damages.

PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to
prescribe rules and regulations regarding employees' conduct in carrying out their duties and
functions, and alleging that by implementing the Code, it had not violated the CBA or any
provision of the Labor Code.

LA: rendered finding no bad faith on the part of PAL in adopting the Code and ruling that no
unfair labor practice had been committed.

The NLRC found no evidence of unfair labor practice committed by PAL and affirmed the
dismissal of PALEA's charge.

Issue:
Whether or not the formulation of a Code of Discipline among employees is a shared
responsibility of the employer and the employees.

Ruling:
Industrial peace cannot be achieved if the employees are denied their just participation in the
discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code
(P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the
State, "(d) To promote the enlightenment of workers concerning their rights and obligations . . .
as employees." This was, of course, amplified by Republic Act No 6715 when it decreed the
"participation of workers in decision and policy making processes affecting their rights, duties
and welfare." PAL's position that it cannot be saddled with the "obligation" of sharing
management prerogatives as during the formulation of the Code, Republic Act No. 6715 had not
yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained.
While such "obligation" was not yet founded in law when the Code was formulated, the
attainment of a harmonious labor-management relationship and the then already existing state
policy of enlightening workers concerning their rights as employees demand no less than the
observance of transparency in managerial moves affecting employees' rights.

Petitioner's assertion that it needed the implementation of a new Code of Discipline considering
the nature of its business cannot be overemphasized. In fact, its being a local monopoly in the
business demands the most stringent of measures to attain safe travel for its patrons.
Nonetheless, whatever disciplinary measures are adopted cannot be properly implemented in
the absence of full cooperation of the employees. Such cooperation cannot be attained if the
employees are restive on account, of their being left out in the determination of cardinal and
fundamental matters affecting their employment.
G.R. No. 164774 April 12, 2006
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents.
DECISION
PUNO, J.:
We are called to decide an issue of first impression: whether the policy of the employer banning
spouses from working in the same company violates the rights of the employee under the
Constitution and the Labor Code or is a valid exercise of management prerogative.
Petitioner Star Paper Corporation (the company) is a corporation engaged in trading – principally of
paper products. Josephine Ongsitco is its Manager of the Personnel and Administration Department
while Sebastian Chua is its Managing Director.
The evidence for the petitioners show that respondents Ronaldo D. Simbol (Simbol), Wilfreda N.
Comia (Comia) and Lorna E. Estrella (Estrella) were all regular employees of the company.1
Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an employee
of the company, whom he married on June 27, 1998. Prior to the marriage, Ongsitco advised the
couple that should they decide to get married, one of them should resign pursuant to a company
policy promulgated in 1995.
Simbol resigned on June 20, 1998 pursuant to the company policy.4
Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-employee,
whom she married on June 1, 2000. Ongsitco likewise reminded them that pursuant to company
policy, one must resign should they decide to get married. Comia resigned on June 30, 2000.5
Estrella was hired on July 29, 1994. She met Luisito Zuñiga (Zuñiga), also a co-worker. Petitioners
stated that Zuñiga, a married man, got Estrella pregnant. The company allegedly could have
terminated her services due to immorality but she opted to resign on December 21, 1999.6
The respondents each signed a Release and Confirmation Agreement. They stated therein that they
have no money and property accountabilities in the company and that they release the latter of any
claim or demand of whatever nature.7
Respondents offer a different version of their dismissal. Simbol and Comia allege that they did not
resign voluntarily; they were compelled to resign in view of an illegal company policy. As to
respondent Estrella, she alleges that she had a relationship with co-worker Zuñiga who
misrepresented himself as a married but separated man. After he got her pregnant, she discovered
that he was not separated. Thus, she severed her relationship with him to avoid dismissal due to the
company policy. On November 30, 1999, she met an accident and was advised by the doctor at the
Orthopedic Hospital to recuperate for twenty-one (21) days. She returned to work on December 21,
1999 but she found out that her name was on-hold at the gate. She was denied entry. She was
directed to proceed to the personnel office where one of the staff handed her a memorandum. The
memorandum stated that she was being dismissed for immoral conduct. She refused to sign the
memorandum because she was on leave for twenty-one (21) days and has not been given a chance
to explain. The management asked her to write an explanation. However, after submission of the
explanation, she was nonetheless dismissed by the company. Due to her urgent need for money,
she later submitted a letter of resignation in exchange for her thirteenth month pay.8
Respondents later filed a complaint for unfair labor practice, constructive dismissal, separation pay
and attorney’s fees. They averred that the aforementioned company policy is illegal and contravenes
Article 136 of the Labor Code. They also contended that they were dismissed due to their union
membership.
On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for lack of
merit.
On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter on January 11,
2002. 10
Respondents filed a Motion for Reconsideration but was denied by the NLRC in a Resolution.
In its assailed Decision dated August 3, 2004, the Court of Appeals reversed the NLRC decision.
ISSUE:
WoN the management policy was Valid.

RULE: NO.
The 1987 Constitution15 states our policy towards the protection of labor under the following
provisions, viz.:
Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.
Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared responsibility between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion and growth.
The Civil Code likewise protects labor with the following provisions:
Art. 1700. The relation between capital and labor are not merely contractual. They are so impressed
with public interest that labor contracts must yield to the common good. Therefore, such contracts
are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours of labor and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of
the safety and decent living for the laborer.
The Labor Code is the most comprehensive piece of legislation protecting labor. The case at bar
involves Article 136 of the Labor Code which provides:
Art. 136. It shall be unlawful for an employer to require as a condition of employment or continuation
of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that
upon getting married a woman employee shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her
marriage.
With more women entering the workforce, employers are also enacting employment policies
specifically prohibiting spouses from working for the same company. We note that two types of
employment policies involve spouses: policies banning only spouses from working in the same
company (no-spouse employment policies), and those banning all immediate family members,
including spouses, from working in the same company (anti-nepotism employment policies).18
In challenging the anti-nepotism employment policies in the United States, complainants utilize two
theories of employment discrimination: the disparate treatment and the disparate impact. Under
the disparate treatment analysis, the plaintiff must prove that an employment policy is
discriminatory on its face. No-spouse employment policies requiring an employee of a particular
sex to either quit, transfer, or be fired are facially discriminatory. For example, an employment policy
prohibiting the employer from hiring wives of male employees, but not husbands of female
employees, is discriminatory on its face.22
On the other hand, to establish disparate impact, the complainants must prove that a facially
neutral policy has a disproportionate effect on a particular class. For example, although most
employment policies do not expressly indicate which spouse will be required to transfer or leave the
company, the policy often disproportionately affects one sex.23
We note that since the finding of a bona fide occupational qualification justifies an employer’s no-
spouse rule, the exception is interpreted strictly and narrowly by these state courts. There must be a
compelling business necessity for which no alternative exists other than the discriminatory
practice.32 To justify a bona fide occupational qualification, the employer must prove two factors: (1)
that the employment qualification is reasonably related to the essential operation of the job involved;
and, (2) that there is a factual basis for believing that all or substantially all persons meeting the
qualification would be unable to properly perform the duties of the job.33
The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We employ the
standard of reasonableness of the company policy which is parallel to the bona fide occupational
qualification requirement.
The requirement that a company policy must be reasonable under the circumstances to qualify as a
valid exercise of management prerogative was also at issue in the 1997 case of Philippine
Telegraph and Telephone Company v. NLRC.
We do not find a reasonable business necessity in the case at bar.
It is significant to note that in the case at bar, respondents were hired after they were found fit for the
job, but were asked to resign when they married a co-employee. Petitioners failed to show how the
marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the
Repacking Section, could be detrimental to its business operations. Neither did petitioners explain
how this detriment will happen in the case of Wilfreda Comia, then a Production Helper in the
Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The policy
is premised on the mere fear that employees married to each other will be less efficient. If we uphold
the questioned rule without valid justification, the employer can create policies based on an
unproven presumption of a perceived danger at the expense of an employee’s right to security of
tenure.
As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on the singular fact that
her resignation letter was written in her own handwriting. Both ruled that her resignation was
voluntary and thus valid.
IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No. 73477 dated August
3, 2004 is AFFIRMED. 1avvphil.n et

SO ORDERED.
REYNATO S. PUNO

G.R. No. 162994 September 17, 2004

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
RESOLUTION
TINGA, J.:
Confronting the Court in this petition is a novel question, with constitutional overtones, involving the
validity of the policy of a pharmaceutical company prohibiting its employees from marrying
employees of any competitor company.
Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome Philippines, Inc.
(Glaxo) as medical representative on October 24, 1995, after Tecson had undergone training and
orientation.
Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees
to study and abide by existing company rules; to disclose to management any existing or future
relationship by consanguinity or affinity with co-employees or employees of competing drug
companies and should management find that such relationship poses a possible conflict of interest,
to resign from the company.
The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform
management of any existing or future relationship by consanguinity or affinity with co-employees or
employees of competing drug companies. If management perceives a conflict of interest or a
potential conflict between such relationship and the employee’s employment with the company, the
management and the employee will explore the possibility of a "transfer to another department in a
non-counterchecking position" or preparation for employment outside the company after six months.
Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-Camarines Norte
sales area.
Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra
Pharmaceuticals3(Astra), a competitor of Glaxo. Bettsy was Astra’s Branch Coordinator in Albay.
She supervised the district managers and medical representatives of her company and prepared
marketing strategies for Astra in that area.
Even before they got married, Tecson received several reminders from his District Manager
regarding the conflict of interest which his relationship with Bettsy might engender. Still, love
prevailed, and Tecson married Bettsy in September 1998.
In January 1999, Tecson’s superiors informed him that his marriage to Bettsy gave rise to a conflict
of interest. Tecson’s superiors reminded him that he and Bettsy should decide which one of them
would resign from their jobs, although they told him that they wanted to retain him as much as
possible because he was performing his job well.
In August 1999, Tecson again requested for more time resolve the problem. In September 1999,
Tecson applied for a transfer in Glaxo’s milk division, thinking that since Astra did not have a milk
division, the potential conflict of interest would be eliminated. His application was denied in view of
Glaxo’s "least-movement-possible" policy.
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales
area. Tecson asked Glaxo to reconsider its decision, but his request was denied.
Tecson sought Glaxo’s reconsideration regarding his transfer and brought the matter to Glaxo’s
Grievance Committee. Glaxo, however, remained firm in its decision and gave Tescon until February
7, 2000 to comply with the transfer order. Tecson defied the transfer order and continued acting as
medical representative in the Camarines Sur-Camarines Norte sales area.
During the pendency of the grievance proceedings, Tecson was paid his salary, but was not issued
samples of products which were competing with similar products manufactured by Astra. He was
also not included in product conferences regarding such products.
Because the parties failed to resolve the issue at the grievance machinery level, they submitted the
matter for voluntary arbitration. Glaxo offered Tecson a separation pay of one-half (½) month pay for
every year of service, or a total of ₱50,000.00 but he declined the offer. On November 15, 2000, the
National Conciliation and Mediation Board (NCMB) rendered its Decision declaring as valid
Glaxo’s policy on relationships between its employees and persons employed with
competitor companies, and affirming Glaxo’s right to transfer Tecson to another sales
territory.
Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing the
NCMB Decision.
On May 19, 2003, the Court of Appeals promulgated its Decision denying the Petition for
Review on the ground that the NCMB did not err in rendering its Decision.
ISSUE:
WoN the Management Policy was Valid.
RULE: YES
According to Glaxo, Tecson’s marriage to Bettsy, an employee of Astra, posed a real and potential
conflict of interest. Astra’s products were in direct competition with 67% of the products sold by
Glaxo. Hence, Glaxo’s enforcement of the foregoing policy in Tecson’s case was a valid exercise of
its management prerogatives.12 In any case, Tecson was given several months to remedy the
No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxo’s policy
prohibiting an employee from having a relationship with an employee of a competitor company is a
valid exercise of management prerogative.
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information from competitors, especially so that it and Astra are rival
companies in the highly competitive pharmaceutical industry.
The prohibition against personal or marital relationships with employees of competitor companies
upon Glaxo’s employees is reasonable under the circumstances because relationships of that nature
might compromise the interests of the company. In laying down the assailed company policy, Glaxo
only aims to protect its interests against the possibility that a competitor company will gain access to
its secrets and procedures.
That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the
Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right
to reasonable returns on investments and to expansion and growth.20 Indeed, while our laws
endeavor to give life to the constitutional policy on social justice and 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.21
WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners.
SO ORDERED.
G.R. No. 148303 October 17, 2002
UNION OF NESTLE WORKERS CAGAYAN DE ORO FACTORY (UNWCF for brevity),
represented by its President YURI P. BERTULFO and officers, namely,
DEXTER E. AGUSTIN, DANTE S. SEÑAREZ, EDDIE P. OGNIR, JEFFREY C. RELLIQUETE,
ENRIQUITO B. BUAGAS, EDWIN P. SALVAÑA, RAMIL B. MONSANTO, JERRY A. TABILIRAN,
ARNOLD A. TADLAS,
REYQUE A. FACTURA, NAPOLEON S. GALERINA, JR., TOLENTINO T. MICABALO and EDDIE
O. MACASOCOL, petitioners,
vs.
NESTLE PHILPPINES, INC.,
represented by its President JUAN B. SANTOS, RUDY P. TRILLANES, Factory Manager,
Cagayan de Oro City Branch
and FRANCIS L. LACSON, Cagayan de Oro City Human Resources Manager, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
On August 1, 1999, Nestle Philippines, Inc. (Nestle) adopted Policy No. HRM 1.8, otherwise known
as the "Drug Abuse Policy." Pursuant to this policy, the management shall conduct simultaneous
drug tests on all employees from different factories and plants. Thus, on August 17, 1999, drug
testing commenced at the Lipa City factory, then followed by the other factories and plants.
However, there was resistance to the policy in the Nestle Cagayan de Oro factory. Out of 496
employees, only 141 or 28.43% submitted themselves to drug testing. On August 20, 1999, the
Union of Nestle Workers Cagayan de Oro Factory and its officers, petitioners, wrote Nestle
challenging the implementation of the policy and branding it as a mere subterfuge to defeat the
employees’ constitutional rights. Nestle claimed that the policy is in keeping with the government’s
thrust to eradicate the proliferation of drug abuse, explaining that the company has the right: (a) to
ensure that its employees are of sound physical and mental health and (b) to terminate the services
of an employee who refuses to undergo the drug test.
ToR was promulgated by the RTC but was later invalidated for it lacked jurisdiction according to
RTC itself via MR.
Appeal was taken under Rule 65 to the CA.
On December 28, 2000, the Appellate Court rendered its Decision3 dismissing the petition.
ISSUE:
WoN the RTC has jurisdiction over issues relating to management policy.

RULE: NO
The fact that the complaint was denominated as one for injunction does not necessarily mean that
the RTC has jurisdiction. Well-settled is the rule that jurisdiction is determined by the allegations in
the complaint.4
The pertinent allegations of petitioners’ amended complaint read:
"x x x x x x x x x
5. Plaintiffs are aggrieved employees of the Nestle Philippines, Inc. who are subjected to the new
policy of the management for compulsory Drug Test, without their consent and approval;
xxxxxxxxx
8. That the said policy was implemented last August 1, 1999, and the Union was only informed last
August 20, 1999, during a meeting held on that day, that all employees who are assigned at the
CDO Factory will be compulsorily compelled to undergo drug test, whether they like it or not, without
even informing the Union on this new policy adopted by the Management and no guidelines was set
pertaining to this drug test policy.
9. That there was no consultation made by the management or even consultation from the
employees of this particular policy, as the nature of the policy is punitive in character, as refusal to
submit yourself to drug test would mean suspension from work for four (4) to seven (7) days, for the
first refusal to undergo drug test and dismissal for second refusal to undergo drug test, hence, they
were not afforded due process x x x;
xxxxxxxxx
12. That it is not the question of whether or not the person will undergo the drug test but it is the
manner how the drug test policy is being implemented by the management which is arbitrary in
character.
xxxxxxxxx
16. That the exercise of management prerogative to implement the said drug test, even against the
will of the employees, is not absolute but subject to the limitation imposed by law x x x;"5
It is indubitable from the foregoing allegations that petitioners are not per se questioning "whether or
not the person will undergo the drug test" or the constitutionality or legality of the Drug Abuse Policy.
They are assailing the manner by which respondents are implementing the policy. According to
them, it is "arbitrary in character" because: (1) the employees were not consulted prior to its
implementation; (2) the policy is punitive inasmuch as an employee who refuses to abide with the
policy may be dismissed from the service; and (3) such implementation is subject to limitations
provided by law which were disregarded by the management.
Is the complaint, on the basis of its allegations, cognizable by the RTC?
Respondent Nestle’s Drug Abuse Policy states that "(i)llegal drugs and use of regulated drugs
beyond the medically prescribed limits are prohibited in the workplace. Illegal drug use puts at risk
the integrity of Nestle operations and the safety of our products. It is detrimental to the health, safety
and work-performance of employees and is harmful to the welfare of families and the surrounding
community."6 This pronouncement is a guiding principle adopted by Nestle to safeguard its
employees’ welfare and ensure their efficiency and well-being. To our minds, this is a company
personnel policy. In San Miguel Corp. vs. NLRC,7 this Court held:
"Company personnel policies are guiding principles stated in broad, long-range terms that express
the philosophy or beliefs of an organization’s top authority regarding personnel matters. They deal
with matter affecting efficiency and well-being of employees and include, among others, the
procedure in the administration of wages, benefits, promotions, transfer and other personnel
movements which are usually not spelled out in the collective agreement."
Considering that the Drug Abuse Policy is a company personnel policy, it is the Voluntary Arbitrators
or Panel of Voluntary Arbitrators, not the RTC, which exercises jurisdiction over this case. Article 261
of the Labor Code, as amended, pertinently provides:
Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators. – The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company
personnel policies x x x." (Emphasis supplied)
WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision of the Court of
Appeals dated December 28, 2000 and its Resolution dated April 19, 2001 in CA GR-SP No. 56656
are affirmed.
SO ORDERED.
G.R. No. 76219 May 27, 1991
GTE DIRECTORIES CORPORATION, petitioner,
vs.
HON. AUGUSTO S. SANCHEZ and GTE DIRECTORIES CORPORATION EMPLOYEES
UNION, respondents.
Siguion Reyna, Montecillo & Ongsiako for petitioner.
Ignacio P. Lacsina for respondent Union.
NARVASA, J.:
GTE Directories Corporation (hereafter, simply GTE) is a foreign corporation engaged in the
Philippines in the business of publishing the PLDT (Philippine Long Distance Telephone Company)
telephone directories for Metro Manila and several provinces.
The record shows that initially, the practice was for its sales representatives to be given work
assignments within specific territories by the so-called "draw method." These sales territories were
so plotted or mapped out as to have "an equal number of advertisers as well as . . . revenue. . ."
Within these territories, the sales representatives therein assigned were given quotas; i.e., they had
to "achieve a certain amount of revenue or advertisements sold, decreased, increased or cancelled
within a given period of time."
A territory was not fully released to the salesperson for handling at one time, but assigned in
increments or partial releases of account. Now, increments were given by the so-called "Grid
System," grids (divisions or sections) within each territory usually numbering five (i.e., Grids I to V).
Each grid was assigned a fixed closing dated. At such closing date, a salesperson should have
achieved a certain amount of the revenue target designated for his grid; otherwise, he loses the
forthcoming grid or forfeits the remaining grids not yet received. The Grid System was installed for
the following reasons: (1) to give all salespersons an opportunity to contact advertisers within a
reasonable period; (2) to assure GTE that it will get its share of advertising budget from clients as
early as possible; and (3) to ensure an even flow of work throughout the company.
This practice was observed from 1980 until sometime in June, 1984 when GTE realized that
competition among media for a share of the advertising revenue had become so keen as to require
quick reaction. GTE therefore launched an aggressive campaign to get what it considered to be its
rightful share of the advertising budget of its clientele before it could be allocated to other media
(newspaper, television, radio, etc.) It adopted a new strategy by which:
(1) all its sales representatives were required, as in the past, to achieve specified revenue
targets (advertisements sold) within pre-determined periods;
(2) in cases of cancelled revenue accounts or advertisements, it required all its salespersons
to re-establish contact and renew the same within a fixed period;
(3) if the cancelled revenue accounts were not renewed within the assigned period, said
accounts were declared, for a set period, OPEN TERRITORY to all sales representatives
including the one who reported the cancellation;
 (4) if not renewed during said open territory period, said cancelled accounts were deemed no
longer "open territory," and the same could be referred for handling to contractual
salespersons and/or outside agencies.
A new "Sales Evaluation and Production Policy" was thereafter drawn up. GTE informed all its sales
representatives of the new policy in a Memorandum dated October 12, 1984. The new policy was
regarded as an improvement over the previous Sales Production Policy, which solely considered
quota attainment and handling in the Sales Report for the purpose of evaluating performance.
It appears that the new policy did not sit well with the union.
GTE next formulated a new set of "Sales Administrative Practices," pursuant to which it issued on
July 9, 1985, a memorandum requiring all Premise Sales Representatives (PSRs) to submit
individual reports reflecting target revenues as of deadlines, set at August 2, 1985. This was
superseded by another memorandum dated July 16, 1985, revising the previous schedules on the
basis of "the consensus reached after several discussions with your DSMs, as well as, most of you,"
and pointing out that "the amount required on the 1st deadline (P30,000) . . . has been reduced
further (to P20,000) having taken into consideration that most of your accounts you have already on
hand are with your respective "prep artists""
GTE’s sales personnel failed to submit the report regarding the 20k quota.
The union instead sent a letter that such new approach is whimsical and discriminatory.
The following day, on August 6, 1985, the union filed in behalf of the sales representatives, a notice
of strike grounded on alleged unfair labor practices of GTE consisting of the following:
1. Refusal to bargain on unjust sales policies particularly on the failure to meet the 75% of
the average sales production for two consecutive years;
2. Open territory of accounts;
3. Illegal suspension of Brian Pineda, a union officer; and
4. Non-payment of eight days' suspension pay increase.
In due course, the Bureau of Labor Relations undertook to conciliate the dispute.
On the same day, August 6, 1985, GTE sent still another memorandum to sixteen (16) of its premise
sales representatives, this time through its Director for Marketing & Sales, requiring submission of
"individual reports reflecting target revenues as of grid deadlines . . . not later than 4:00 P.M. . .
."2 No compliance was made. GTE thereupon suspended its sales representatives "without pay
effective August 12, 1985 for five (5) working days" and warned them that their failure to submit the
requisite reports by August 19, 1985 would merit "more drastic disciplinary actions." Still, no sales
representative complied with the requirement to submit the reports ("list of accounts to be
cancelled"). So, by memorandum of the Marketing Director dated August 19, 1985, all the sales
representatives concerned were suspended anew "effective August 20, 1985 until you submit the . . .
(report)."
Finally, GTE gave its sales representatives an ultimatum. By memorandum dated August 23, 1985,
individually addressed to its sales representatives, GTE required them, for the last time, to submit
the required reports ("list of accounts to be cancelled") within twenty-four (24) hours from receipt of
the memorandum; otherwise, they would be terminated "for cause." Again not one sales
representatives submitted a report and the union citing unfair labor practice.
GTE in turn after the ultimatum removed thesales representatives who refused to comlpy.
Bureau of Labor Relations, including attempts to prevent the imposition of sanctions by GTE on its
employees, and the strike itself proved futile. The acting secretary therefor assumed jurisdiction.
GTE however reiterated its previously declared "position that with or without the order now being
questioned, it will accept all striking employees back to work except the fourteen (14) premise sales
representatives who were dismissed for cause prior to the strike."
In a clarificatory Order dated January 21, 1986, Minister Ople reiterated the proposition that
"promulgations of company policies and regulations are basic management prerogatives,"
and that "unless shown to be grossly oppressive or contrary to law," they are "generally
binding and valid on the parties and must be complied with until finally revised or amended
unilaterally or preferably, through negotiations or by competent authorities."
ISSUE:
The basic question then is whether or not the effectivity of an employer's regulations and policies is
dependent upon the acceptance and consent of the employees thereby sought to be bound; or
otherwise stated, whether or not the union's objections to, or request for reconsideration of those
regulations or policies automatically suspend enforcement thereof and excuse the employees'
refusal to comply with the same.
RULE: NO
The Labor Minister found nothing to suggest that the employer's unilateral action of inaugurating a
new sales scheme "was designed to discourage union organization or diminish its influence;" that on
the contrary, it was "part of its overall plan to improve efficiency and economy and at the same time
gain profit to the highest;" that the union's "conjecture that the new plan will sow dissatisfaction from
its rank is already a prejudgment of the plan's viability and effectiveness, . . . like saying that the plan
will not work out to the workers' (benefit) and therefore management must adopt a new system of
marketing." The Minister accordingly dismissed the strike notice, although he ordered a slight
revision of the CDS which the employer evidently found acceptable.
So long as a company's management prerogatives are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements, this
Court will uphold them (LVN, Pictures Workers vs. LVN, 35 SCRA 147; Phil. American
Embroideries vs. Embroidery and Garments Workers, 26 SCRA 634; Phil. Refining Co. vs.
Garcia, 18 SCRA 110). . . .
In the case at bar, it must thus be conceded that its adoption of a new "Sales Evaluation and
Production Policy" was within its management prerogative to regulate, according to its own
discretion and judgment, all aspects of employment, including the manner, procedure and processes
by which particular work activities should be done.
This Court fails to see, however, how these objections and accusations of unfair labor practice, that
is whimsical and arbitrary justify, the deliberate and obdurate refusal of the sales representatives to
obey the management's simple requirement for submission by all Premise Sales Representatives
(PSRs) of individual reports or memoranda requiring reflecting target revenues—which is all that
GTE basically required — and which it addressed to the employees concerned no less than six (6)
times. The Court fails to see how the existence of objections made by the union justify the studied
disregard, or wilful disobedience by the sales representatives of direct orders of their superior
officers to submit reports. Surely, compliance with their superiors' directives could not have
foreclosed their demands for the revocation or revision of the new sales policies or rules; there was
nothing to prevent them from submitting the requisite reports with the reservation to seek such
revocation or revision.
To sanction disregard or disobedience by employees of a rule or order laid down by management,
on the pleaded theory that the rule or order is unreasonable, illegal, or otherwise irregular for one
reason or another, would be disastrous to the discipline and order that it is in the interest of both the
employer and his employees to preserve and maintain in the working establishment and without
which no meaningful operation and progress is possible. Deliberate disregard or disobedience of
rules, defiance of management authority cannot be countenanced. This is not to say that the
employees have no remedy against rules or orders they regard as unjust or illegal. They may object
thereto, ask to negotiate thereon, bring proceedings for redress against the employer before the
Ministry of Labor. But until and Unless the rules or orders are declared to be illegal or improper by
competent authority, the employees ignore or disobey them at their peril. It is impermissible to
reverse the process: suspend enforcement of the orders or rules until their legality or propriety shall
WHEREFORE, the petition is GRANTED, and as prayed for, the Order dated October 1, 1986 of the
public respondent is NULLIFIED and SET ASIDE.
SO ORDERED.

G.R. No. 131235 November 16, 1999

UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA
POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO,
CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA
GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS,
CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and
LEONCIO CASAL, petitioners,
vs.
Dir. BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor Relations, Med-Arbiter
TOMAS F. FALCONITIN of The National Capital Region, Department of Labor and
Employment (DOLE), EDUARDO J. MARIÑO JR., MA. MELVYN ALAMIS, NORMA COLLANTES,
URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY CURA, FULVIO
M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA
REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents.

PANGANIBAN, J.:
The Facts
The factual antecedents of the case are summarized in the assailed Resolution as follows:
Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are
duly elected officers of the UST Faculty Union (USTFU). The union has a subsisting
five-year Collective Bargaining Agreement with its employer, the University of Santo
Tomas (UST). The CBA was registered with the Industrial Relations Division, DOLE-
NCR, on 20 February 1995. It is set to expire on 31 May 1998.
On 21 September 1996, appellee Collantes, in her capacity as Secretary General of
USTFU, posted a notice addressed to all USTFU members announcing a general
assembly to be held on 05 October 1996. Among others, the general assembly was
called to elect USTFU's next set of officers. Through the notice, the members were
also informed of the constitution of a Committee on Elections (COMELEC) to
oversee the elections. (Annex "B", petition)
On 01 October 1996, some of herein appellants filed a separate petition with the
Med-Arbiter, DOLE-NCR, directed against herein appellees and the members of the
COMELEC. The petition alleged that the COMELEC was not constituted in
accordance with USTFU's constitution and by-laws (CBL) and that no rules had been
issued to govern the conduct of the 05 October 1996 election.
On 02 October 1996, the secretary general of UST, upon the request of the various
UST faculty club presidents (See paragraph VI, Respondents' Comment and Motion
to Dismiss), issued notices allowing all faculty members to hold a convocation on 04
October 1996. Denominated as [a] general faculty assembly, the convocation was
supposed to discuss the "state of the unratified UST-USTFU CBA" and "status and
election of USTFU officers" (Annex "11", Appeal)
On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001 issued a
temporary restraining order against herein appellees enjoining them from
conducting the election scheduled on 05 October 1996.
Also on 04 October 1996, and as earlier announced by the UST secretary general,
the general faculty assembly was held as scheduled. The general assembly was
attended by members of the USTFU and, as admitted by the appellants, also by
"non-USTFU members [who] are members in good standing of the UST Academic
Community Collective Bargaining Unit. On this occasion, appellants were elected as
USTFU's new set of officers by acclamation and clapping of hands.
The election of the appellants came about upon a motion of one Atty. Lopez,
admittedly not a member of USTFU, that the USTFU CBL and "the rules of the
election be suspended and that the election be held [on] that day"
On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and
the nullification of the results of the 04 October 1996 election. Appellees alleged that
 the holding of the same violated the temporary restraining order issued in Case No.
NCR-OD-M-9610-001. Accusing appellants of usurpation, appellees
characterized the election as spurious for being violative of USTFU's CBL,
specifically because the general assembly resulting in the election of
appellants was not called by the Board of Officers of the USTFU; there was no
compliance with the ten-day notice rule required by Section 1, Article VIII of the
CBL; the supposed elections were conducted without a COMELEC being
constituted by the Board of Officers in accordance with Section 1, Article IX of
the CBL; the elections were not by secret balloting as required by Section 1,
Article V and Section 6, Article IX of the CBL, and, the general assembly was
convened by faculty members some of whom were not members of USTFU, so
much so that non-USTFU members were allowed to vote in violation of Section
1, Article V of the CBL.
On 24 October 1996, appellees filed another urgent ex-parte motion for a temporary
restraining order, this time alleging that appellants had served the former a notice to
vacate the union office. Finally, appellants contended that the holding of the general
faculty assembly on 04 October 1996 was under the control of the Council of
College/Faculty Club Presidents in cooperation with the USTFU Reformist Alliance
and that they received the Temporary Restraining Order issued in Case No. NCR-
OD-M-9610-001 only on 07 October 1996 and were not aware of the same on 04
October 1996.
On 03 December 1996, appellants and UST allegedly entered into another CBA
covering the period from 01 June 1996 to 31 May 2001.
In the meantime, appellants claimed that the new CBA was purportedly ratified by an
overwhelming majority of UST's academic community on 12 December 1996
(Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what
it denominated as appellees' petition for prohibition on the ground that this had
become moot and academic. 5
Petitioners appealed the med-arbiter's Decision to the labor secretary, 6 who transmitted the records
of the case to the Bureau of Labor Relations which, under Department Order No. 9, was authorized
to resolve appeals of intra-union cases, consistent with the last paragraph of Article 241 of the Labor
Code. 7
The Assailed Ruling
Agreeing with the med-arbiter that the USTFU officers' purported election held on October 4,
1994 was void for having been conducted in violation of the union's Constitution and Bylaws
(CBL), Public Respondent Bitonio rejected petitioners' contention that it was a legitimate
exercise of their right to self-organization.
Director Bitonio likewise held that the October 4, 1996 election could not be legitimized by the
recognition of the newly "elected" set of officers by UST or by the alleged ratification of the
new CBA by the general membership of the USTFU.

Hence, this Petition.

ISSUES:
 (1) Whether the Collective Bargaining Unit of all the faculty members in that General
Faculty Assembly had the right in that General Faculty Assembly to suspend the
provisions of the Constitution and By-Laws of the USTFU regarding the elections of
officers of the union.

RULE:
The Court’s Ruling
The petition is not meritorious. Petitioners fail to convince this Court that Director Bitonio gravely
abused his discretion in affirming the med-arbiter and in refusing to recognize the binding effect of
the October 4, 1996 general assembly called by the UST administration.
First Issue:
Right to Self-Organization
and Union Membership
Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor
Code. Employees have the right to form, join or assist labor organizations for the purpose of
collective bargaining or for their mutual aid and protection. 12 Whether employed for a definite period
or not, any employee shall be considered as such, beginning on his first day of service, for purposes
of membership in a labor union. 13
Corollary to this right is the prerogative not to join, affiliate with or assist a labor union. 14 Therefore,
to become a union member, an employee must, as a rule, not only signify the intent to become one,
but also take some positive steps to realize that intent. The procedure for union membership is
usually embodied in the union's constitution and bylaws. 15 An employee who becomes a union
member acquires the rights and the concomitant obligations that go with this new status and
becomes bound by the union's rules and regulations.
Petitioners claim that the numerous anomalies allegedly committed by the private respondents
during the latter's incumbency impelled the October 4, 1996 election of the new set of USTFU
officers. They assert that such exercise was pursuant to their right to self-organization.
Petitioners' frustration over the performance of private respondents, as well as their fears of a
"fraudulent" election to be held under the latter's supervision, could not justify the method they chose
to impose their will on the union.
Union Election vs.
Certification Election
A union election is held pursuant to the union's constitution and bylaws, and the right to vote in it is
enjoyed only by union members. A union election should be distinguished from a certification
election, which is the process of determining, through secret ballot, the sole and exclusive
bargaining agent of the employees in the appropriate bargaining unit, for purposes of collective
bargaining. 18 Specifically, the purpose of a certification election is to ascertain whether or not a
majority of the employees wish to be represented by a labor organization and, in the affirmative
case, by which particular labor organization. 19
In a certification election, all employees belonging to the appropriate bargaining unit can
vote. 20 Therefore, a union member who likewise belongs to the appropriate bargaining unit is entitled
to vote in said election. However, the reverse is not always true; an employee belonging to the
appropriate bargaining unit but who is not a member of the union cannot vote in the union election,
unless otherwise authorized by the constitution and bylaws of the union. Verily, union affairs and
elections cannot be decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot
properly be called a union election, because the procedure laid down in the USTFU's CBL for the
election of officers was not followed. It could not have been a certification election either, because
representation was not the issue, and the proper procedure for such election was not followed. The
participation of non-union members in the election aggravated its irregularity.
Second Issue:
USTFU's Constitution and
By Laws Violated
The importance of a union's constitution and bylaws cannot be overemphasized. They embody a
covenant between a union and its members and constitute the fundamental law governing the
members' rights and obligations. 21 As such, the union's constitution and bylaws should be upheld, as
long as they are not contrary to law, good morals or public policy.
We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the October 4, 1996
election was tainted with irregularities because of the following reasons.
First, the October 4, 1996 assembly was not called by the USTFU. It was merely a convocation of
faculty clubs, as indicated in the memorandum sent to all faculty members by Fr. Rodel Aligan, OP,
the secretary general of the University of Santo Tomas. 22 It was not convened in accordance with
the provision on general membership meetings as found in the USTFU's CBL, which reads:
ARTICLE VIII-MEETINGS OF THE UNION
Sec. 1. The Union shall hold regular general membership meetings at least once
every three (3) months. Notices of the meeting shall be sent out by the Secretary-
General at least ten (10) days prior to such meetings by posting in conspicuous
places, preferably inside Company premises, said notices. The date, time and place
for the meetings shall be determined by the Board of Officers. 23
Unquestionably, the assembly was not a union meeting. It was in fact a gathering that was called
and participated in by management and non-union members. By no legal fiat was such assembly
transformed into a union activity by the participation of some union members.
Second, there was no commission on elections to oversee the election, as mandated by Sections 1
and 2 of Article IX of the USTFU's CBL, which provide:
ARTICLE IX - UNION ELECTION
Sec. 1. There shall be a Committee on Election (COMELEC) to be
created by the Board of Officers at least thirty (30) days before any
regular or special election. The functions of the COMELEC include
the following:
a) Adopt and promulgate rules and regulations that will ensure a free,
clean, honest and orderly election, whether regular or special;
b) Pass upon qualifications of candidates;
 c) Rule on any question or protest regarding the conduct of the
election subject to the procedure that may be promulgated by the
Board of Officers; and
d) Proclaim duly elected officers.
Sec. 2. The COMELEC shall be composed of a chairman and two
members all of whom shall be appointed by the Board of Officers.
xxx xxx xxx 24
Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX of
the USTFU's CBL, as well as Article 241 (c) of the Labor Code.
The foregoing infirmities considered, we cannot attribute grave abuse of discretion to Director
Bitonio's finding and conclusion. In Rodriguez v. Director, Bureau of Labor Relations, 25 we
invalidated the local union elections held at the wrong date without prior notice to members and
conducted without regard for duly prescribed ground rules. We held that the proceedings were
rendered void by the lack of due process — undue haste, lack of adequate safeguards to ensure
integrity of the voting, and the absence of the notice of the dates of balloting.
WHEREFORE, the Petition is hereby DISMISSED and the assailed Resolutions AFFIRMED. Costs
against petitioners.
SO ORDERED.
Reyes v. Trajano

Facts: Public Respondent Trajano as OIC of the Bureau of Labor Relations sustained the denial by the Med Arbiter
of the right to vote of one hundred forty-one members of the “Iglesia ni Kristo” (INK), all employed in the same
company, at a certification election at which two labor organizations were contesting the right to be the exclusive
representative of the employees in the bargaining unit.

The certification election was authorized to be conducted by the Bureau of Labor Relations among the employees
of Tri-Union Industries Corporation. The competing unions were Tri-Union Employees Union-Organized Labor
Association in Line Industries and Agriculture (TUEU-OLALIA), and Trade Union of the Philippines and Allied
Services (TUPAS).

The final tally of the votes showed the following results: TUPAS 1, TUEU-OLALIA 95, NO UNION 1, SPOILED 1,
CHALLENGED 141

The challenged votes were those cast by the 141 INK members. They were segregated and excluded from the final
count in virtue of an agreement between the competing unions, reached at the pre-election conference, that the
INK members should not be allowed to vote “because they are not members of any union and refused to
participate in the previous certification elections.”

The INK employees promptly filed a petition to cancel the election alleging that it “was not fair” and the result
thereof did “not reflect the true sentiments of the majority of the employees.” TUEU-OLALIA opposed the petition
contending that the petitioners “do not have legal personality to protest the results of the election,” because “they
are not members of either contending unit, but . . . of the INK” which prohibits its followers, on religious grounds,
from joining or forming any labor organization . . . .”

Issue: W/N employees who are not part of any union may validly exercise their right to vote in a certification
election

Held: Yes, Guaranteed to all employees or workers is the “right to self-organization and to form, join, or assist
labor organizations of their own choosing for purposes of collective bargaining.” This is made plain by no less than
three provisions of the Labor Code of the Philippines.

The right of self-organization includes the right to organize or affiliate with a labor union or determine which of
two or more unions in an establishment to join, and to engage in concerted activities with co-workers for purposes
of collective bargaining through representatives of their own choosing, or for their mutual aid and protection, i.e.,
the protection, promotion, or enhancement of their rights and interests.

The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising said
right. It is self-evident that just as no one should be denied the exercise of a right granted by law, so also, no one
should be compelled to exercise such a conferred right. The fact that a person has opted to acquire membership in
a labor union does not preclude his subsequently opting to renounce such membership.

The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the
employees in the appropriate bargaining unit: to be or not to be represented by a labor organization, and in the
affirmative case, by which particular labor organization. If the results of the election should disclose that the
majority of the workers do not wish to be represented by any union, then their wishes must be respected, and no
union may properly be certified as the exclusive representative of the workers in the bargaining unit in dealing
with the employer regarding wages, hours and other terms and conditions of employment. The minority
employees — who wish to have a union represent them in collective bargaining — can do nothing but wait for
another suitable occasion to petition for a certification election and hope that the results will be different. They
may not and should not be permitted, however, to impose their will on the majority — who do not desire to have
a union certified as the exclusive workers’ benefit in the bargaining unit — upon the plea that they, the minority
workers, are being denied the right of self-organization and collective bargaining.

The respondents’ argument that the petitioners are disqualified to vote because they “are not constituted into a
duly organized labor union” — “but members of the INK which prohibits its followers, on religious grounds, from
joining or forming any labor organization” — and “hence, not one of the unions which vied for certification as sole
and exclusive bargaining representative,” is specious. Neither law, administrative rule nor jurisprudence requires
that only employees affiliated with any labor organization may take part in a certification election. On the contrary,
the plainly discernible intendment of the law is to grant the right to vote to all bona fide employees in the
bargaining unit, whether they are members of a labor organization or not.

Neither does the contention that petitioners should be denied the right to vote because they “did not participate
in previous certification elections in the company for the reason that their religious beliefs do not allow them to
form, join or assist labor organizations,” persuade acceptance. No law, administrative rule or precedent prescribes
forfeiture of the right to vote by reason of neglect to exercise the right in past certification elections.

NATIVIDAD SAMPANG in her capacity as President of Gabay ng Manggagawa sa Insular Yebana-FOITAF,

petitioner, vs.HONORABLE AMADO G. INCIONG in his capacity as Deputy Minister of Ministry of Labor and
INSULAR YEBANA TOBACCO CORPORATION, respondents.

Facts: The Constitutional guarantee of security of tenure accorded labor under the present Constitution points the
way to the disposition of this certiorari proceeding resulting from the dismissal of petitioner, Natividad Sampang.
She was the president of the labor union of the employees of private respondent Insular Yebana Tobacco
Corporation.

She seeks the reversal of an order of the then Deputy Minister of Labor, Amado G. Inciong, who sustained the
Regional Director in his decision to grant clearance for her dismissal, presumably for initiating "a concerted action
among the rank and file workers not to perform overtime work [amounting] to gross insubordination" That charge
she denied, her version being that she made "several representations with management, upon request of the
members of the union, to cut-off overtime work, as this would mean more days of work and additional living
allowance for the workers, but to no avail, that the overtime work was a device of management to avoid
compliance with P.D. 112; that there is no exigency for the rendering of overtime work, hence, the concerted
refusal to work overtime cannot be recalled a strike."

In the Comment submitted by private respondent La Yebana Tobacco Corporation, there was admission that "the
Gabay ng Manggagawa thru petitioner Natividad Sampang [requested] for the cancellation of overtime work and
limit the work to eight (8) hours only." It was, however, alleged that the strike on "January 12, 1978, [was
unexpected, having come] without awaiting the results of the study program being prepared and undertaken by its
management's staff so that work schedule could finally be set to mutual satisfaction of both parties and upon
petitioner's investigation the rank-and-file workers of the company [went on a strike after the eight hours working
period, despite pleadings of the company supervisors to finish their unfinished work.

Issue: Whether or not the petition must be granted?

Ruling : The Court holds that the petition must be granted and the decision of Deputy Minister Amado G. Inciong,
acting by authority of the then Minister of Labor and Employment, set aside.
1. The basis for the dismissal of petitioner Sampang as previously noted, citing the Comment of private
respondent. was the "unexpected" character of the strike on the evening of June 12, 1978, lasting until the next
day a strike the blame for which was attributed to petitioner, who allegedly instigated it. It was further stated that
the pleas made by the company supervisor for the employees to do overtime work was disregarded. As a result,
according to an Annex to the Comment of private respondent "the company lost an estimated amount of
P2,716.00 worth of unpacked cigarettes which were spoiled." The same amount was mentioned in its
memorandum to the Regional Office IV of the then Department of Labor, in well-nigh Identical language: "As a
result of this concerted action, the Corporation suffered irreparable losses in the amount of P2,761.00, more or
less, worth of unfinished products in the form of unpacked and spoiled cigarettes. What is undeniable, therefore, is
that for an unexpected strike lasting for two days resulting in the loss of P2,761.00 more or less, an employee who
has worked for thirty-one years was dismissed. The length of service of petitioner Sampang is found in an affidavit
attached as one of the annexes of her memorandum. It reads thus: "That I am working for Insular Yebana Tobacco
Corporation, employed as cajista or cigar packer since 1948 or for more than 30 years." There is here a case,
therefore, of an employee, with more than thirty years service, having been dismissed for instigating a strike that
lasted for two days and caused the loss in the amount of P2,716.00. It is quite obvious then that the constitutional
mandate on security of tenure was violated. For even if her denial that she did not instigate such two-day strike be
disregarded, still the penalty imposed was grossly disproportionate to the offense imputed to her.

4. In the recent case of Bustillos v. Inciong, it was held that petitioner, who had been employed by private
respondent for eighteen years ought not to have been dismissed and that a two-year suspension would suffice.
The opinion likewise noted: "The length of service was accorded due consideration in decisions of this Tribunal
ordering reinstatement, twenty years in De Leon v. National Labor Relations Commission and Reyes v. Philippine
Duplicators and twenty-two years in Union of Supervisors v. Secretary of labor." How then justify a dismissal in
this case. Considering all the circumstances, even a two-year period of suspension might be considered excessive.

5. It is thus evident that the case could be decided without considering the points raised by counsel for petitioner.
It suffices to state that the competence of the Deputy Minister of Labor to pass upon the appeal cannot be
disputed. He acted by "authority of" the Minister of Labor. A more extended inquiry into the factual aspects could
have shed more light on the environmental circumstances. Nonetheless, since the appealed decision could be set
aside, there being a violation of the security of tenure provision, the claim that; procedural due process was not
observed does not call for any further discussion, Suffice it to state that the motion for reconsideration. not to
mention the appeal, was curative in character as held by this Court in a number of cases.

WHEREFORE, the petition for certiorari is granted and the order of the then Deputy Minister of Labor, Amado
Inciong, set aside and nullified. The Court hereby orders the reinstatement of petitioner Natividad Sampang to the
last position she occupied or any other similar position of the same category and the same compensation, if
another employee has in the meanwhile. been appointed in her place. Private respondent is likewise ordered to
pay her backwages, the amount being for a three-year period. This decision is immediately executory. No costs.

SAN MIGUEL CORP V. LAGUESMA

Facts: On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a
Petition for District Certification or Certification Election among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.

Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification among the supervisors and
exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one
bargaining unit.
San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the
Med-Arbiters error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one
bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.

Respondent, Undersecretary Laguesma, granted respondent companys Appeal and ordered the remand of the
case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be
included in the appropriate bargaining unit and directed the conduct of separate certification elections among the
supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at
Cabuyao, San Fernando and Otis.

Issues:

1.WON Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential
employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single
bargaining unit?

Ruling:

1. NO, the said employees do not fall within the term confidential employees who may be prohibited from joining
a union.

There is no question that the said employees, supervisors and the exempt employees, are not vested with the
powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff,
recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees
who, under Article 245 of the Labor Code, are not eligible to join, assist or form any labor organization. In the very
same provision, they are not allowed membership in a labor organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their own. The only question that need be addressed is whether
these employees are properly classified as confidential employees or not.

Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate,
determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and
both must be met if an employee is to be considered a confidential employee that is, the confidential relationship
must exist between the employees and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations.

Access to information which is regarded by the employer to be confidential from the business standpoint, such as
financial information or technical trade secrets, will not render an employee a confidential employee.

Herein listed are the functions of supervisors 3 and higher:

1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.

2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other
products.

3. To administer efficient system of evaluation of products in the outlets.

4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials.

5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant.
It is evident that whatever confidential data the questioned employees may handle will have to relate to their
functions. From the foregoing functions, it can be gleaned that the confidential information said employees have
access to concern the employers internal business operations.

The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective sought to be accomplished by the
confidential employee rule. The broad rationale behind this rule is that employees should not be placed in a
position involving a potential conflict of interests. Management should not be required to handle labor relations
matters through employees who are represented by the union with the company is required to deal and who in
the normal performance of their duties may obtain advance information of the company’s position with regard to
contract negotiations, the disposition of grievances, or other labor relations matters

2. Yes, it can be a single bargaining unit. An appropriate bargaining unit may be defined as a group of employees of
a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of
all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the law.

A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages,
hours, working conditions and other subjects of collective bargaining.

It is readily seen that the employees in the instant case have community or mutuality of interest, which is the
standard in determining the proper constituency of a collective bargaining unit. It is undisputed that they all
belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three
different plants, they perform work of the same nature, receive the same wages and compensation, and most
importantly, share a common stake in concerted activities.
57. BENGUET ELECTRIC COOPERATIVE, INC., petitioner,

vs. HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, and BENECO EMPLOYEES
LABOR UNION, respondents.

FACTS

Beneco Worker's Labor Union-Association of Democratic Labor Organizations (hereinafter referred to as

BWLU- ADLO) filed a petition for direct certification as the sole and exclusive bargaining representative
of all the rank and file employees of Benguet Electric Cooperative, Inc. (hereinafter referred to as
BENECO) at La Trinidad, Benguet alleging: BENECO has in its employ (214) rank and file employees;
that(198) or 92.5% of these employees have supported the filing of the petition; that no certification
election has been conducted for the last 12 months; that there is no existing collective bargaining
representative of the rank and file employees sought to represented by BWLU- ADLO; and, that there is
no collective bargaining agreement in the cooperative.

Beneco Employees Labor Union (hereinafter referred to as BELU) opposed on the ground that it was
certified as the sole and exclusive bargaining representative of the subject workers pursuant to an order
issued by the med-arbiter; that pending resolution by the NLRC are two cases it filed against BENECO
involving bargaining deadlock and unfair labor practice; and, that the pendency of these cases bars any
representation question.

BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a non-profit electric
cooperative engaged in providing electric services to its members and patron-consumers in the City of
Baguio and Benguet Province; and, that the employees sought to be represented by BWLU-ADLO are not
eligible to form, join or assist labor organizations of their own choosing because they are members and
joint owners of the cooperative.

med-arbiter: gave due course to the petition for certification election between BWLU-ALDO and BELU,
limiting the election among the rank and file employees of petitioner who are non-members; BELU won
the election.
BENECO however protested that 4 employees were the only ones who were non-members, hence only
they should be allowed to vote, but the med-arbiter dismissed the protest. Bureau of Labor Relations
(BLR) affirmed the med-arbiter's order and certified BELU as the sole and exclusive bargaining agent of
all the rank and file employees of BENECO.

Issue

WON members-employees of petitioner cooperative are eligible to form and join a labor union, and
consequently has the right to participate in the certification elections.

RULING

NO. The right to collective bargaining is not available to an employee of a cooperative who at the same
time is a member and co-owner thereof. With respect, however, to employees who are neither
members nor co-owners of the cooperative they are entitled to exercise the rights to self-organization,
collective bargaining and negotiation as mandated by the 1987 Constitution and applicable statutes.

The fact that the members-employees of petitioner do not participate in the actual management of the
cooperative still does not make them eligible to form, assist or join a labor organization for the purpose
of collective bargaining with petitioner. Members of cooperative cannot join a labor union for purposes
of collective bargaining was based on the fact that as members of the cooperative they are co-owners
thereof. As such, they cannot invoke the right to collective bargaining for "certainly an owner cannot
bargain with himself or his co-owners.". It is the fact of ownership of the cooperative, and not
involvement in the management thereof, which disqualifies a member from joining any labor
organization within the cooperative. Thus, irrespective of the degree of their participation in the actual
management of the cooperative, all members thereof cannot form, assist or join a labor organization for
the purpose of collective bargaining.

A cooperative ... 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 number of shares
owned by each member they are entitled to cast one vote each in deciding upon the affairs of the
cooperative. Their share capital earn limited interest. 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 the 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.
58. INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, vs HON. PURA CALLEJA IN HER
CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE
PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.

Facts

Two consolidated cases, due to similarity of issues.

International Catholic Migration Commission (ICMC) Case.

ICMC was one of those accredited by the Philippine Government to operate the refugee processing
center in Morong, Bataan in the advent of the Vietnam War. 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).
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.

Med-Arbiter: dismissed the petition for lack of jurisdiction.

BLR: reversed the Med-Arbiter's Decision.

Subsequently, however, the Philippine Government, granted ICMC the status of a specialized agency
with corresponding diplomatic privileges and immunities, prompting ICMC to seek the immediate
dismissal of the TUPAS Petition for Certification Election invoking the immunity expressly granted but
the same was denied by respondent BLR Director.

The International Rice Research Institute [IRRI] Case

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”. By virtue of Pres.
Decree No. 1620, 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. The Kapisanan filed a Petition for Direct Certification Election with 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.

Med-Arbiter: dismissed.

BLR Director: authorized the calling of a certification election among the rank-and-file employees of IRRI.

Secretary of Labor: dismissed the Petition for Certification Election,

Issue

Won the grant of diplomatic privileges and immunites to ICMC/ IRRI extends to immunity from the
application of Philippine labor laws.

Ruling

YES.

There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI. There
constitutes 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. 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.

However, ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic
rights, which are guaranteed by the 1987 Constitution; as well as in each international organization’s
internal rules:

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.
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, privileges and immunities of
an international organization, deprives its employees of the right to self-organization.

Moreover, 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.

59. GOLDEN FARMS, INC., petitioner, vs. THE HONORABLE SECRETARY OF LABOR and THE
PROGRESSIVE FEDERATION OF LABOR,

FACTS

Progressive Federation of Labor (PFL) filed a petition before the Med-Arbiter praying for the holding of a
certification election among the monthly paid office and technical rank-and-file employees of petitioner
Golden Farms(Banana farm). Petitioner moved to dismiss the petition on (3) grounds: First, respondent
PFL failed to show that it was organized as a chapter within petitioner's establishment; Second, there
was already an existing collective bargaining agreement between the rank-and-file employees
represented by the National Federation of Labor (NFL) and petitioner; and third, employees represented
by PFL had allegedly been disqualified by this Court from bargaining with management in Golden Farms,
Inc., vs. Honorable Director Pura Ferrer-Calleja.PFL opposed as the monthly paid office and technical
employees should be allowed to form a separate bargaining unit because they were expressly excluded
from coverage in the Collecting Bargaining Agreement (CBA) between petitioner and NFL.

Med-Arbiter: granted the petition and ordered that a certification election be conducted. Secretary of
Labor affirmed.

Issue

WON petitioner's monthly paid rank-and file employees can constitute a bargaining unit separate from
the existing bargaining unit of its daily paid rank-and-file employees.
Ruling

Yes. The monthly paid office and technical rank-and-file employees of petitioner Golden Farms enjoy the
constitutional right to self-organization and collective bargaining. 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.

In the case at bench, the evidence established that the monthly paid rank-and-file employees of
petitioner primarily perform administrative or clerical work. In contradistinction, the petitioner's daily
paid rank-and-file employees mainly work in the cultivation of bananas in the fields. It is crystal clear the
monthly paid rank-and-file employees of petitioner have very little in common with its daily paid rank-
and-file employees in terms of duties and obligations, working conditions, salary rates, and skills. To be
sure, the said monthly paid rank-and-file employees have even been excluded from the bargaining unit
of the daily paid rank-and-file employees. This dissimilarity of interests warrants the formation of a
separate and distinct bargaining unit for the monthly paid rank-and-file employees of the petitioner. To
rule otherwise would deny this distinct class of employees the right to self-organization for purposes of
collective bargaining. Without the shield of an organization, it will also expose them to the exploitations
of management.

Finally, we note that it was petitioner company that filed the motion to dismiss the petition for election.
The general rule is that an employer has no standing to question a certification election since this is the
sole concern of the workers. Law and policy demand that employers take a strick, hands-off stance in
certification elections. The bargaining representative of employees should be chosen free from any
extraneous influence of management. A labor bargaining representative, to be effective, must owe its
loyalty to the employees alone and to no other.
PAFLU v. Secretary of Labor

G.R. No. 22228, 1969

FACTS:

Registration of Labor Organization issued a notice of hearing for the cancellation of the registration
SSSEA because of failure to furnish the Bureau of Labor Relations with copies of the the report on the
finances and failure to submit the names, postal address and non-subersive affidavits of the officers of
the union within 60 days of their election. The Registrar rendered decision canceling the SSSEA’s
Registation certificate. Fajardo, the president of SSSEA moved for reconsideration of the said decision.
Registrar issued an order declaring the SSSEA had failed to submit the requirements and granted SSSEA
15 days from notice to comply with the requirements. Pending such resolution, PAFLU, the SSSEA,
Fajardo and all the officers and members of SSSEA commenced the present action on the ground that
Sec. 23 of R.A. No. 875 violates their freedom of assembly and association, and is inconsistent with the
Universal Declaration of Human Rights.

ISSUE:

Whether Sec. 23 of R.A. No. 875 violates the right of SSSEA and PAFLU to self-organization.

RULING:

No. The registration prescribed in paragraph (B) of the said section is not a limitation to the right of
assembly or association, which may be exercised with or without said registration. The latter merely a
condition sine qua non for thee 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
merely statutory creations, for the possession and exercise of which organizers, although not truly
accredited agents of the union they purport to represent. Such requirements is a valid exercise of police
power, because the activities in which labor organizations, associations an union of workers are engaged
affect public interest which should be protected. Furthermore, the obligation to submit financial
statement, as a condition for the non-cancellation of a certificate of registration, is a reasonable
regulation for the benefit of the members of the organization, considering that the same generally
solicits funds or membership, as well as oftentimes collects, on behalf of its members, huge amounts of
money due to them or to the organization.

Progressive Development v. Secretary of Labor

G.R. No. 96425, 1992

FACTS:

Pambansang Kilusan ng Paggawa (KILUSAN) filed with DOLE a petition for certification election
among the rank-and-file employees of the petitioner alleging that it is a legitimate labor federation and
its local chapter , Progressive Development was issued a charter certificate. Kilusan claimed that there
was no existing collective bargaining agreement and that no other legitimate labor organization existed
in the bargaining unit. Petitioner filed its motion to dismiss contending that the local union failed to
comply with Rule II Sec. 3, Book V of the Rules Implementing Labor Code which requires the constitution
and by-laws; names, addresses and list of officers and/or members; and books of accounts. Kilusan
alleged that it already submitted the requirements and averred that no books of account could be
submitted as the local union was only recently organized. Med Arbiter held that there was substantial
compliance stating that mere issuance of the charter certificate by the federation was sufficient
compliance with the rules. PDC appealed to the Office of the Secretary which dismissed the appeal.

ISSUE:

Whether Kilusan a legitimate labor federation.

RULING:

No. In one case, the court held that the theory to the effect that Section 23 of Republic Act No. 875
unduly curtails the freedom of assembly and association guaranteed in the Bill of Rights is devoid of
factual basis. The registration prescribed in Paragraph (b) of said section is not a limitation to the right of
assembly or association, which may be exercised with or without said registration. The latter is merely a
condition sine qua non for the acquisition of legal personality by the 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 the 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 unions of workers are
engaged affect public interest, which should be protected. Furthermore, the obligation to submit
financial statements, as a condition for the non-cancellation of a certificate of registration, is a
reasonable regulation for the benefit of the members of the organization, considering that the same
generally solicits funds or membership, as well as oftentimes collects, on behalf of its members, huge
amounts of money due to them or to the organization.
A local or chapter therefore becomes a legitimate labor organization only upon submission of the following to the
BLR:

1) A charter certificate, within 30 days from its issuance by the labor federation or national union, and

2) The constitution and by-laws, a statement on the set of officers, and the books of accounts all of which are
certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by
its president.

Absent compliance with these mandatory requirements, the local or chapter does not become a legitimate labor
organization.

the failure of the secretary of PDEU-Kilusan to certify the required documents under oath is fatal to
its acquisition of a legitimate status.

Pagpalain Haulers Inc. V. Trajano

G. R. No. 133215, 1999

FACTS:

Respondent in this case, Integrated Labor Organization - Pagpalain Haulers Workers Union filed a
petition for certification election with the DOLE. ILO-PHILS attached to the petition copies of its charter
certificate, its constitution and by-laws; its books of account, and a list of its officers and their respective
addresses. Pagpalain filed a motion to dismiss the petition on the ground that the books of account
submitted by ILO-PHILS were not verified under oath.

ISSUE:

Whether respondent union a legitimate union federation.

RULING:

Yes, under the Labor Code, the requirement for registration of a labor organization are as follows:

A. ) P 50.00 registration fee;

B. ) Names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meeting and the list of the workers who participated in such meeting;

C. ) The names of all its members comprising at least 20% of all the employees in the bargaining
unit where it seeks to operate;

D. ) If the application union has been in existence for one or more years, copies of its annual
financial reports; and

E. ) 4 copies of its constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it.

The Labor Code does not require the submission of books of account in order to be registered as a
legitimate labor organization.