G.R. No.

115077 April 18, 1997

PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT, petitioner,
vs.
HON. BIENVENIDO LAGUESMA, in his capacity as Undersecretary of Labor,
and NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-KATIPUNAN,
respondents.

KAPUNAN, J.:
On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan
(respondent Union) filed a petition for certification election with the
Department of Labor (National Capital Region) in behalf of the rank and file
employees of the Progressive Development Corporation (Pizza Hut) docketed
as NCR Case No. NCR-OD-M-9307-020. 1
Petitioner filed on August 20, 1993, a verified Motion to Dismiss the petition
alleging fraud, falsification and misrepresentation in the respondent. Union's
registration making it void and invalid. The motion specifically alleged that: a)
respondent Union's registration was tainted with false, forged, double or
multiple signatures of those who allegedly took part in the ratification of the
respondent Union's constitution and by-laws and in the election of its officers
that there were two sets of supposed attendees to the alleged organizational
meeting that was alleged to have taken place on June 26, 1993; that the
alleged chapter is claimed to have been supported by 318 members when in
fact the persons who actually signed their names were much less; and b)
while the application for registration of the charter was supposed to have
been approved in the organizational meeting held on June 27, 1993, the
charter certification issued by the federation KATIPUNAN was dated June 26,
1993 or one (1) day prior to the formation of the chapter, thus, there were
serious falsities in the dates of the issuance of the charter certification and the
organization meeting of the alleged chapter.
Citing other instances of misrepresentation and fraud, petitioner, on August
29, 1993, filed a Supplement to its Motion to Dismiss, 2 claiming that:
1) Respondent Union alleged that the election of its officers was held on June
27, 1993; however, it appears from the documents submitted by respondent
union to the BIR-DOLE that the Union's constitution and by-laws were
adopted only on July 7, 1993, hence, there was no bases for the supposed
election of officers on June 27, 1993 because as of this date, there existed no
positions to which the officers could be validly elected;
2) Voting was not conducted by secret ballot in violation of Article 241,
section (c) of the Labor Code;
3) The Constitution and by Laws submitted in support of its petition were not
properly acknowledged and notarized. 3
On August 30, 1993, petitioner filed a Petition 4 seeking the cancellation of the
Union's registration on the grounds of fraud and falsification, docketed as BIR
Case No. 8-21-83. 5 Motion was likewise filed by petitioner with the Med-
Arbiter requesting suspension of proceedings in the certification election case
until after the prejudicial question of the Union's legal personality is
determined in the proceedings for cancellation of registration.
However, in an Order dated September 29, 1993, 6 Med-Arbiter Rasidali C.
Abdullah directed the holding of a certification election among petitioner's
rank and file employees. The Order explained:
. . . Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labor
organization in contemplation of law and shall remain as such until its very
charter certificate is canceled or otherwise revoked by competent authority.
The alleged misrepresentation, fraud and false statement in connection with
the issuance of the charter certificate are collateral issues which could be
properly ventilated in the cancellation proceedings. 7
On appeal to the office of the Secretary of Labor, Labor Undersecretary
Bienvenido E. Laguesma in a Resolution dated December 29, 1993 8 denied
the same.
A motion for reconsideration of the public respondent's resolution was denied
in his Order 9 dated January 27, 1994, hence, this special civil action for
certiorari under Rule 65 of the Revised Rules of Court where the principal
issue raised is whether or not the public respondent committed grave abuse
of discretion in affirming the Med-Arbiter's order to conduct a certification
election among petitioner's rank and file employees, considering that: (1)
respondent Union's legal personality was squarely put in issue; (2) allegations
of fraud and falsification, supported by documentary evidence were made;
and (3) a petition to cancel respondent Union's registration is pending with
the regional office of the Department of Labor and Employment. 10
We grant the petition.
In the public respondent's assailed Resolution dated December 29, 1993, the
suggestion is made that once a labor organization has filed the necessary
documents and papers and the same have been certified under oath and
attested to, said organization necessarily becomes clothed with the character
of a legitimate labor organization. The resolution declares:
Records show that at the time of the filing of the subject petition on 9 July
1993 by the petitioner NLM-KATIPUNAN, for and in behalf of its local affiliate
Sumasaklaw sa Manggagawa ng Pizza Hut, the latter has been clothed with
the status and/or character of a legitimate labor organization. This is so,
because on 8 July 1993, petitioner submitted to the Bureau of Labor
Relations (BLR), this Department, the following documents: Charter
Certificate, Minutes of the Organizational Meeting, List of Officers, and their
respective addresses, financial statement, Constitution and By-Laws (CBL,
and the minutes of the ratification of the CBL). Said documents (except the
charter certificate) are certified under oath and attested to by the local union's
Secretary/Treasurer and President, respectively.
As to the contention that the certification election proceedings should be
suspended in view of the pending case for the cancellation of the petitioner's
certificate of registration, let it be stressed that the pendency of a cancellation
case is not a ground for the dismissal or suspension of a representation
proceedings considering that a registered labor organization continues to be
a legitimate one entitled to all the rights appurtenant thereto until a final valid
order is issued canceling such registration. 11
In essence, therefore, the real controversy in this case centers on the
question of whether or not, after the necessary papers and documents have
been filed by a labor organization, recognition by the Bureau of Labor
Relations merely becomes a ministerial function.
We do not agree.
In the first place, the public respondent's views as expressed in his December
29, 1993 Resolution miss the entire point behind the nature and purpose of
proceedings leading to the recognition of unions as legitimate labor
organizations. Article 234 of the Labor Code provides:
Art. 234. Requirements of registration. — Any applicant labor organization,
association or group of unions or workers shall acquire legal personality and
shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the
following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the list of
the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of
all the employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies
of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification, and the list of the members who
participated in it.
A more than cursory reading of the aforecited provisions clearly indicates that
the requirements embodied therein are intended as preventive measures
against the commission of fraud. After a labor organization has filed the
necessary papers and documents for registration, it becomes mandatory for
the Bureau of Labor Relations to check if the requirements under Article 234
have been sedulously complied with. If its application for registration is
vitiated by falsification and serious irregularities, especially those appearing
on the face of the application and the supporting documents, a labor
organization should be denied recognition as a legitimate labor organization.
And if a certificate of recognition has been issued, the propriety of the labor
organization's registration could be assailed directly through cancellation of
registration proceedings in accordance with Articles 238 and 239 of the Labor
Code, or indirectly, by challenging its petition for the issuance of an order for
certification election.
These measures are necessary — and may be undertaken simultaneously —
if the spirit behind the Labor Code's requirements for registration are to be
given flesh and blood. Registration requirements specifically afford a measure
of protection to unsuspecting employees who may be lured into joining
unscrupulous or fly-by-night unions whose sole purpose is to control union
funds or use the labor organization for illegitimate ends. 12 Such requirements
are a valid exercise of the police power, because the activities in which labor
organizations, associations and unions of workers are engaged directly affect
the public interest and should be protected. 13
Thus, in Progressive Development Corporation vs. Secretary of Labor and
Employment, 14 we held:
The controversy in this case centers on the requirements before a local or
chapter of a federation may file a petition for certification election and be
certified as the sole and exclusive bargaining agent of the petitioner's
employees.
xxx xxx xxx
But while Article 257 cited by the Solicitor General directs the automatic
conduct of a certification election in an unorganized establishment, it also
requires that the petition for certification election must be filed by a legitimate
labor organization . . .
xxx xxx xxx
. . . The employer naturally needs assurance that the union it is dealing with is
a bona-fide organization, one which has not submitted false statements or
misrepresentations to the Bureau. The inclusion of the certification and
attestation requirements will in a marked degree allay these apprehensions of
management. Not only is the issuance of any false statement and
misrepresentation or ground for cancellation of registration (see Article 239
(a), (c) and (d)); it is also a ground for a criminal charge of perjury.
The certification and attestation requirements are preventive measures
against the commission of fraud. They likewise afford a measure of protection
to unsuspecting employees who may be lured into joining unscrupulous or fly-
by-night unions whose sole purpose is to control union funds or to use the
union for dubious ends.
xxx xxx xxx
. . . It is not this Court's function to augment the requirements prescribed by
law in order to make them wiser or to allow greater protection to the workers
and even their employer. Our only recourse is, as earlier discussed, to exact
strict compliance with what the law provides as requisites for local or chapter
formation.
xxx xxx xxx
The Court's conclusion should not be misconstrued as impairing the local
union's right to be certified as the employees' bargaining agent in the
petitioner's establishment. We are merely saying that the local union must
first comply with the statutory requirements in order to exercise this right. Big
federations and national unions of workers should take the lead in requiring
their locals and chapters to faithfully comply with the law and the rules instead
of merely snapping union after union into their folds in a furious bid with rival
federations to get the most number of members
Furthermore, the Labor Code itself grants the Bureau of Labor Relations a
period of thirty (30) days within which to review all applications for
registration. Article 235 provides:
Art. 235. Action on application. — The Bureau shall act on all applications for
registration within thirty (30) days from filing.
All requisite documents and papers shall be certified under oath by the
secretary or the treasurer of the organization, as the case may be, and
attested to by its president.
The thirty-day period in the aforecited provision ensures that any action taken
by the Bureau of Labor Relations is made in consonance with the mandate of
the Labor Code, which, it bears emphasis, specifically requires that the basis
for the issuance of a certificate of registration should be compliance with the
requirements for recognition under Article 234. Since, obviously, recognition
of a labor union or labor organization is not merely a ministerial function, the
question now arises as to whether or not the public respondent committed
grave abuse of discretion in affirming the Med-Arbiter's order in spite of the
fact that the question of the Union's legitimacy was squarely put in issue and
that the allegations of fraud and falsification were adequately supported by
documentary evidence.
The Labor Code requires that in organized and unorganized 15
establishments, a petition for certification election must be filed by a
legitimate labor organization. The acquisition of rights by any union or labor
organization, particularly the right to file a petition for certification election, first
and foremost, depends on whether or not the labor organization has attained
the status of a legitimate labor organization.
In the case before us, the Med-Arbiter summarily disregarded the petitioner's
prayer that the former look into the legitimacy of the respondent. Union by a
sweeping declaration that the union was in the possession of a charter
certificate so that "for all intents and purposes, Sumasaklaw sa Manggagawa
sa Pizza Hut (was) a legitimate labor organization." 16 Glossing over the
transcendental issue of fraud and misrepresentation raised by herein
petitioner, Med-Arbiter Rasidali Abdullah held that:
The alleged misrepresentation, fraud and false statement in connection with
the issuance of the charter certificate are collateral issues which could be
ventilated in the cancellation proceedings. 17
It cannot be denied that the grounds invoked by petitioner for the cancellation
of respondent Union's registration fall under paragraph (a) and (c) of Article
239 of the Labor Code, to wit:
(a) Misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, the list of members who took part in the
ratification of the constitution and by-laws or amendments thereto, the
minutes of ratification, the list of members who took part in the ratification;
xxx xxx xxx
(c) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, the list of voters, or
failure to submit these documents together with the list of the newly elected-
appointed officers and their postal addresses within thirty (30) days from
election.
x x x           x x x          x x x
The grounds ventilated in cancellation proceedings in accordance with Article
239 of the Labor Code constitute a grave challenge to the right of respondent
Union to ask for certification election. The Med-Arbiter should have looked
into the merits of the petition for cancellation before issuing an order calling
for certification election. Registration based on false and fraudulent
statements and documents confer no legitimacy upon a labor organization
irregularly recognized, which, at best, holds on to a mere scrap of paper.
Under such circumstances, the labor organization, not being a legitimate
labor organization, acquires no rights, particularly the right to ask for
certification election in a bargaining unit.
As we laid emphasis in Progressive Development Corporation Labor, 18 "[t]he
employer needs the assurance that the union it is dealing with is a bona fide
organization, one which has not submitted false statements or
misrepresentations to the Bureau." Clearly, fraud, falsification and
misrepresentation in obtaining recognition as a legitimate labor organization
are contrary to the Med-Arbiter's conclusion not merely collateral issues. The
invalidity of respondent Union's registration would negate its legal personality
to participate in certification election.
Once a labor organization attains the status of a legitimate labor organization
it begins to possess all of the rights and privileges granted by law to such
organizations. As such rights and privileges ultimately affect areas which are
constitutionally protected, the activities in which labor organizations,
associations and unions are engaged directly affect the public interest and
should be zealously protected. A strict enforcement of the Labor Code's
requirements for the acquisition of the status of a legitimate labor organization
is in order.
Inasmuch as the legal personality of respondent Union had been seriously
challenged, it would have been more prudent for the Med-Arbiter and public
respondent to have granted petitioner's request for the suspension of
proceedings in the certification election case, until the issue of the legality of
the Union's registration shall have been resolved. Failure of the Med-Arbiter
and public respondent to heed the request constituted a grave abuse of
discretion.
WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED
and the Resolution and Order of the public respondent dated December 29,
1993 and January 24, 1994, respectively, are hereby SET ASIDE.
The case is REMANDED to the Med-Arbiter to resolve with reasonable
dispatch petitioner's petition for cancellation of respondent Union's
registration.
G.R. No. 152356. August 16, 2005
SAN MIGUEL CORPORATION (MANDAUE PACKAGING PRODUCTS
PLANTS), Petitioners,
vs.
MANDAUE PACKING PRODUCTS PLANTS-SAN PACKAGING PRODUCTS
–SAN MIGUEL CORPORATION MONTHLIES RANK-AND-FILE UNION –
FFW (MPPP-SMPP-SMAMRFU-FFW), Respondent.
DECISION
TINGA, J.:
The central question in this Petition for Review is on what date did
respondent Mandaue Packing Products Plants-San Miguel Packaging
Products–San Miguel Corporation Monthlies Rank-And-File Union–FFW
acquire legal personality in accordance with the Implementing Rules of the
Labor Code. The matter is crucial since respondent filed a petition for
certification election at a date when, it is argued, it had yet to acquire the
requisite legal personality. The Department of Labor and Employment
(DOLE) and the Court of Appeals both ruled that respondent had acquired
legal personality on the same day it filed the petition for certification election.
The procedure employed by the respondent did not strictly conform with the
relevant provisions of law. But rather than insist on an overly literal reading of
the law that senselessly suffocates the constitutionally guaranteed right to
self-organization, we uphold the assailed decisions and the liberal spirit that
animates them.
Antecedent Facts
The present petition assailed the Decision dated 7 June 2001 rendered by the
Court of Appeals Eighth Division1 which in turn affirmed a Decision dated 22
Feburary 1999 by the DOLE Undersecretary for Labor Relations, Rosalinda
Dimapilis-Baldoz, ordering the immediate conduct of a certification election
among the petitioner’s rank-and-file employees, as prayed for by respondent.
The following facts are culled from the records.
On 15 June 1998, respondent, identifying itself as an affiliate of Federation of
Free Workers (FFW), filed a petition for certification election with the DOLE
Regional Office No. VII. In the petition, respondent stated that it sought to be
certified and to represent the permanent rank-and-file monthly paid
employees of the petitioner.2 The following documents were attached to the
petition: (1) a Charter Certificate issued by FFW on 5 June 1998 certifying
that respondent as of that date was duly certified as a local or chapter of
FFW; (2) a copy of the constitution of respondent prepared by its Secretary,
Noel T. Bathan and attested by its President, Wilfred V. Sagun; (3) a list of
respondent’s officers and their respective addresses, again prepared by
Bathan and attested by Sagun; (4) a certification signifying that respondent
had just been organized and no amount had yet been collected from its
members, signed by respondent’s treasurer Chita D. Rodriguez and attested
by Sagun; and (5) a list of all the rank-and-file monthly paid employees of the
Mandaue Packaging Products Plants and Mandaue Glass Plant prepared by
Bathan and attested by Sagun.3
The petition was assigned to Mediator-Arbiter Achilles V. Manit of the DOLE
Regional Office No. VII, and docketed as Case No. R0700-9806-RU-013.4
On 27 July 1998, petitioner filed a motion to dismiss the petition for
certification election on the sole ground that herein respondent is not listed or
included in the roster of legitimate labor organizations based on the
certification issued by the Officer-In-Charge, Regional Director of the DOLE
Regional Office No. VII, Atty. Jesus B. Gabor, on 24 July 1998.
On 29 July 1998, respondent submitted to the Bureau of Labor Relations the
same documents earlier attached to its petition for certification. The
accompanying letter, signed by respondent’s president Sagun, stated that
such documents were submitted in compliance with the requirements for the
creation of a local/chapter pursuant to the Labor Code and its Implementing
Rules; and it was hoped that the submissions would facilitate the listing of
respondent under the roster of legitimate labor organizations.5 On 3 August
1998, the Chief of Labor Relations Division of DOLE Regional Office No. VII
issued a Certificate of Creation of Local/Chapter No. ITD. I-ARFBT-058/98,
certifying that from 30 July 1998, respondent has acquired legal personality
as a labor organization/worker’s association, it having submitted all the
required documents.6
Opting not to file a comment on the Motion to Dismiss,7 respondent instead
filed a Position Paper wherein it asserted that it had complied with all the
necessary requirements for the conduct of a certification election, and that the
ground relied upon in the Motion to Dismiss was a mere technicality.8
In turn, petitioner filed a Comment, wherein it reiterated that respondent was
not a legitimate labor organization at the time of the filing of the petition.
Petitioner also propounded that contrary to respondent’s objectives of
establishing an organization representing rank-and-file employees, two of
respondent’s officers, namely Vice-President Emannuel L. Rosell and
Secretary Bathan, were actually supervisory employees. In support of this
allegation, petitioner attached various documents evidencing the designation
of these two officers in supervisory roles, as well as their exercise of various
supervisory functions.9 Petitioner cited Article 245 of the Labor Code, which
provides that supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees.10
On 20 August 1998, petitioner filed a petition to cancel the union registration
of respondent. However, this petition was denied, and such denial was
subsequently affirmed by the Court of Appeals in a decision that has since
become final.11
In the meantime, on 15 September 1998, Med-Arbiter Manit issued an Order
dismissing respondent’s petition for certification election. The sole ground
relied upon for the dismissal was the Med-Arbiter’s Opinion that as of the date
of filing of the petition on 15 June 1998, respondent did not have the legal
personality to file the said petition for certification election.12 No discussion
was adduced on petitioner’s claims that some of respondent’s officers were
actually supervisory employees.
Respondent promptly appealed the 15 September 1998 Order to the DOLE.
On 22 February 1999, DOLE Undersecretary Rosalinda Dimapilis-Baldoz
rendered a Decision reversing the Order. Undersecretary Baldoz concluded
that respondent acquired legal personality as early as 15 June 1998, the date
it submitted the required documents, citing Section 3, Rule VI of the New
Rules Implementing the Labor Code (Implementing Rules) which deems that
a local/chapter acquires legal personality from the date of filing of the
complete documentary requirements as mandated in the Implementing Rules.
The DOLE also ruled that the contention that two of respondent’s officers
were actually supervisors can be threshed out in the pre-election conferences
where the list of qualified voters is to be determined. The dispositive portion
of the DOLE Decision stated:
WHEREFORE, the appeal is GRANTED. The order dated 15 September
1999 of the Med-Arbiter is REVERSED and SET ASIDE. Accordingly, let the
records of the case be remanded to the office of origin for the immediate
conduct of certification election, subject to the usual pre-election conference,
among the monthly-paid rank-and-file employees of the Mandaue Packaging
Products Plant San Miguel Corporation, with the following choices:
1. MANDAUE PACKAGING PRODUCT PLANT SAN MIGUEL PACKAGING
PRODUCTS SAN MIGUEL CORPORATION MONTHLIES RANK AND FILE
UNION–FFW (MPPP-SMPP-SMCMRFUFFW),
2. NO UNION.
Pursuant to Rule XI, Section 11.1 of the New Implementing Rules, the
company is hereby directed to submit to the office of origin the certified list of
current employees in the bargaining unit, along with the payrolls covering the
members of the bargaining unit for the last three months prior to the issuance
of this decision.
SO DECIDED.13
These two conclusions of the DOLE were affirmed in the assailed Decision of
the Court of Appeals. It is now our task to review whether these conclusions
are warranted under law and jurisprudence. First, we shall discuss the aspect
of respondent’s legal personality in filing the petition for certification election.
First Issue: On the Acquisition of
Legal Personality by Respondent
Statutory Provisions for Registration Of
Local/Chapter of Federation or National Union
Before we proceed to evaluate the particular facts of this case, it would be
useful to review the statutory paradigm that governs the establishment and
acquisition of legal personality by a local/chapter of a labor organization. The
applicable rules have undergone significant amendments in the last decade,
thus a recapitulation of the framework is in order.
The Labor Code defines a labor organization as any union or association of
employees which exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms and conditions of
employment,14 and a "legitimate labor organization" as any labor organization
duly registered with the DOLE, including any branch or local thereof.15 Only
legitimate labor organizations may file a petition for certification election.16
Article 234 of the Labor Code enumerates the requirements for registration of
an applicant labor organization, association, or group of unions or workers in
order that such entity could acquire legal personality and entitlement to the
rights and privileges granted by law to legitimate labor organizations. These
include a registration fee of fifty pesos (₱50.00); a list of the names of the
members and officers, and copies of the constitution and by-laws of the
applicant union.17
However, the Labor Code itself does not lay down the procedure for the
registration of a local or chapter of a labor organization. Such has been
traditionally provided instead in the Implementing Rules, particularly in Book
V thereof. However, in the last decade or so, significant amendments have
been introduced to Book V, first by Department Order No. 9 which took effect
on 21 June 1997, and again by Department Order No. 40 dated 17 February
2003. The differences in the procedures laid down in these various versions
are significant. However, since the instant petition for certification was filed in
1998, the Implementing Rules, as amended by Department Order No. 9,
should govern the resolution of this petition.18
Preliminarily, we should note that a less stringent procedure obtains in the
registration of a local or chapter than that of a labor organization.
Undoubtedly, the intent of the law in imposing lesser requirements in the case
of a branch or local of a registered federation or national union is to
encourage the affiliation of a local union with a federation or national union in
order to increase the local union's bargaining powers respecting terms and
conditions of labor.19 This policy has remained consistent despite the
succeeding amendments to Book V of the Omnibus Implementing Rules, as
contained in Department Orders Nos. 9 and 40.
The case of Progressive Development Corp. v. Secretary of Labor,20 applying
Section 3, Rule II, Book V of the Implementing Rules, in force before 1997,
ruled that "a local or chapter therefore becomes a legitimate labor
organization only upon submission of the following to the BLR: (1) a charter
certificate, within thirty (30) days from its issuance by the labor federation or
national union; and (2) The constitution and by-laws, a statement of 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."21 The submission by the local/chapter of duly
certified books of accounts as a prerequisite for registration of the local/
chapter was dropped in Department Order No. 9,22 a development noted by
the Court in Pagpalain Haulers v. Hon. Trajano,23 wherein it was held that the
previous doctrines requiring the submission of books of accounts as a
prerequisite for the registration of a local/chapter "are already passé and
therefore, no longer applicable."24
Department Order No. 40, now in effect, has eased the requirements by
which a local/chapter may acquire legal personality. Interestingly, Department
Order No. 40 no longer uses the term "local/chapter," utilizing instead
"chartered local," which is defined as a "labor organization in the private
sector operating at the enterprise level that acquired legal personality through
the issuance of a charter certificate by a duly registered federation or national
union, and reported to the Regional Office."25 Clearly under the present rules,
the first step to be undertaken in the creation of a chartered local is the
issuance of a charter certificate by the duly registered federation or national
union. Said federation or national union is then obligated to report to the
Regional Office the creation of such chartered local, attaching thereto the
charter certificate it had earlier issued.26
But as stated earlier, it is Department Order No. 9 that governs in this case.
Section 1, Rule VI thereof prescribes the documentary requirements for the
creation of a local/chapter. It states:
Section 1. Chartering and creation of a local chapter — A duly registered
federation or national union may directly create a local/chapter by submitting
to the Regional Office or to the Bureau two (2) copies of the following:
a) A charter certificate issued by the federation or national union indicating
the creation or establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the
principal office of the local/chapter;
(c) The local/chapter's constitution and by-laws; provided that where the local/
chapter's constitution and by-laws is the same as that of the federation or
national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the
Secretary or Treasurer of the local/chapter and attested by its President.
In contrast, an independent union seeking registration is further required
under Dept. Order No. 90 to submit the number and names of the members,
and annual financial reports.27
Section 3, Rule VI of Department Order No. 9 provides when the local/
chapter acquires legal personality.
Section 3. Acquisition of legal personality by local chapter. – A local/chapter
constituted in accordance with Section 1 of this Rule shall acquire legal
personality from the date of filing of the complete documents enumerated
therein. Upon compliance with all the documentary requirements, the
Regional Office or Bureau shall issue in favor of the local/chapter a certificate
indicating that it is included in the roster of legitimate labor organizations.
It is evident based on this rule that the local/chapter acquires legal personality
from the date of the filing of the complete documentary requirements, and not
from the issuance of a certification to such effect by the Regional Office or
Bureau. On the other hand, a labor organization is deemed to have acquired
legal personality only on the date of issuance of its certificate of registration,28
which takes place only after the Bureau of Labor Relations or its Regional
Offices has undertaken an evaluation process lasting up until thirty (30) days,
within which period it approves or denies the application.29 In contrast, no such
period of evaluation is provided in Department Order No. 9 for the application
of a local/chapter, and more importantly, under it such local/chapter is
deemed to acquire legal personality "from the date of filing" of the documents
enumerated under Section 1, Rule VI, Book V.
Apart from promoting a policy of affiliation of local unions with national unions,
30
there is a practical reason for sanctioning a less onerous procedure for the
registration of a local/chapter, as compared to the national union. The local/
chapter relies in part on the legal personality of the federation or national
union, which in turn, had already undergone evaluation and approval from the
Bureau of Legal Relations or Regional Office. In fact, a federation or national
union is required, upon registration, to establish proof of affiliation of at least
ten (10) locals or chapters which are duly recognized as the collective
bargaining agent in the establishment or industry in which they operate; and
the names and addresses of the companies where the locals or chapters
operate and the list of all the members in each of the companies.31 Once the
national union or federation acquires legal personality upon the issuance of
its certificate or registration,32 its legal personality cannot be subject to
collateral attack.33
The fact that the local/chapter acquires legal personality from the moment the
complete documentary requirements are submitted seems to imply that the
duty of the Bureau or Regional Office to register the local/chapter is merely
ministerial. However, in Progressive Development Corporation v. Laguesma,34
the Court, in ruling against a petition for certification filed by a chapter, held
that the mere submission of the documentary requirements does not render
ministerial the function of the Bureau of Labor Relations in according due
recognition to the labor organization.35 Still, that case was decided before the
enactment of Department Order No. 9, including the aforestated Section 3.
Should we consider the said 1997 amendments as having obviated our
characterization in Progressive of the Bureau’s duty as non-ministerial?
Notwithstanding the amendments, it still is good policy to maintain that per
Department Order No. 9, the duty of the Bureau of Labor Relations to
recognize the local/chapter upon the submission of the documentary
requirements is not ministerial, insofar as the Bureau is obliged to adjudge
the authenticity of the documents required to be submitted. For example, the
Bureau is not mandated to accept just any purported charter certificate matter
how spurious it is in appearance. It is empowered to ascertain whether the
submitted charter certificate is genuine, and if finding that said certificate is
fake, deny recognition to the local/chapter.
However, in ascertaining whether or not to recognize and register the local/
chapter, the Bureau or Regional Office should not look beyond the
authenticity and due execution of the documentary requirements for the
creation of the local/chapter as enumerated under Section 1, Rule VI, Book V
of Department Order No. 9. Since the proper submission of these
documentary requirements is all that is necessary to recognize a local/
chapter, it is beyond the province of the Bureau or Regional Offices to resort
to other grounds as basis for denying legal recognition of the local/chapter.
For example, Department Order No. 9 does not require the local/chapter to
submit the names of its members as a condition precedent to its registration.36
It therefore would be improper to deny legal recognition to a local/chapter
owing to questions pertaining to its individual members since the local/
chapter is not even obliged to submit the names of its individual members
prior to registration.
Certainly, when a local/chapter applies for registration, matters raised against
the personality of the federation or national union itself should not be acted
upon by the Bureau or Regional Office, owing to the preclusion of collateral
attack. Instead, the proper matter for evaluation by the Bureau or Regional
Office should be limited to whether the local/chapter is indeed a duly created
affiliate of the national union or federation.
Parenthetically, under the present Implementing Rules as amended by
Department Order No. 40, it appears that the local/chapter (or now,
"chartered local") acquires legal personality upon the issuance of the charter
certificate by the duly registered federation or national union.37 This might
signify that the creation of the chartered local is within the sole discretion of
the federation or national union and thus beyond the review or interference of
the Bureau of Labor Relations or its Regional Offices. However, Department
Order No. 40 also requires that the federation or national union report the
creation of the chartered local to the Regional Office.
Acquisition by Respondent of Legal Personality
We now proceed to determine if and when the respondent acquired legal
personality under the procedure laid down by the rules then in effect,
Department Order No. 9, that is.
At the onset, the arguments raised by petitioner on this point are plainly
erroneous. Petitioner cites the case of Toyota Motor Philippines v. Toyota
Motor Philippines Corporation Labor Union,38 and the purported holding
therein that "[if] it is true that at the time of the filing of the petition, the said
registration certificate has not been approved yet, then, petitioner lacks the
legal personality to file the petition."39 However, an examination of the case
actually reveals that the cited portion was lifted from one of the antecedent
rulings of the Med-Arbiter in that case which had not even been affirmed or
reinstated by the Court on review.40 Moreover, such pronouncement made
prior to the enactment of Department Order No. 9 squarely contradicts
Section 3, Rule VI thereof, which provides that legal personality of the local/
chapter is vested upon the submission of the complete documentary
requirements.
It is also worth noting that petitioner union in Toyota was an independent
labor union, and not a local/chapter, and under Department Order No. 9,
independent labor unions, unlike local/chapters, acquire legal personality only
upon issuance of the certificate of registration by the Bureau or Regional
Office. Still, petitioner cites in its favor Section 5, Rule V of Dept. Order No. 9,
which states that "the labor organization or workers’ association shall be
deemed registered and vested with legal personality on the date of issuance
of its certificate of registration." Again, the citation is obviously misplaced, as
respondent herein is a local/chapter, the acquisition of its legal personality
being governed instead by Section 3, Rule VI.
It is thus very clear that the issuance of the certificate of registration by the
Bureau or Regional Office is not the operative act that vests legal personality
upon a local/chapter under Department Order No. 9. Such legal personality is
acquired from the filing of the complete documentary requirements
enumerated in Section 1, Rule VI. Admittedly, the manner by which
respondent was deemed to have acquired legal personality by the DOLE and
the Court of Appeals was not in strict conformity with the provisions of
Department Order No. 9. Nonetheless, are the deviations significant enough
for the Court to achieve a different conclusion from that made by the DOLE
and the Court of Appeals?
In regular order, it is the federation or national union, already in possession of
legal personality, which initiates the creation of the local/chapter. It issues a
charter certificate indicating the creation or establishment of the local/chapter.
It then submits this charter certificate, along with the names of the local/
chapter’s officers, constitution and by-laws to the Regional Office or Bureau.
It is the submission of these documents, certified under oath by the Secretary
or Treasurer of the local/chapter and attested by the President, which vests
legal personality in the local/chapter, which is then free to file on its own a
petition for certification election.
In this case, the federation in question, the FFW, did not submit any of these
documentary requirements to the Regional Office or Bureau. It did however
issue a charter certificate to the putative local/chapter (herein respondent).
Respondent then submitted the charter certificate along with the other
documentary requirements to the Regional Office, but not for the specific
purpose of creating the local/chapter, but for filing the petition for certification
election.
It could be properly said that at the exact moment respondent was filing the
petition for certification, it did not yet possess any legal personality, since the
requisites for acquisition of legal personality under Section 3, Rule VI of
Department Order No. 9 had not yet been complied with. It could also be
discerned that the intention of the Labor Code and its Implementing Rules
that only those labor organizations that have acquired legal personality are
capacitated to file petitions for certification elections. Such is the general rule.
Yet there are peculiar circumstances in this case that allow the Court to rule
that respondent acquired the requisite legal personality at the same time it
filed the petition for certification election. In doing so, the Court acknowledges
that the strict letter of the procedural rule was not complied with. However,
labor laws are generally construed liberally in favor of labor, especially if
doing so affirms the constitutionally guaranteed right to self-organization.
True enough, there was no attempt made by the national federation, or the
local/chapter for that matter, to submit the enumerated documentary
requirements to the Regional Office or Bureau for the specific purpose of
creating the local/chapter. However, these same documents were submitted
by the local/chapter to the Regional Office as attachments to its petition for
certification election. Under Section 3, Rule VI of Department Order No. 9, it
is the submission of these same documents to the Regional Office or Bureau
that operates to vest legal personality on the local/chapter.
Thus, in order to ascertain when respondent acquired legal personality, we
only need to determine on what date the Regional Office or Bureau received
the complete documentary requirements enumerated under Section 1, Rule
VI of Department Order No. 9. There is no doubt that on 15 June 1998, or the
date respondent filed its petition for certification election, attached thereto
were respondent’s constitution, the names and addresses of its officers, and
the charter certificate issued by the national union FFW. The first two of these
documents were duly certified under oath by respondent’s secretary Bathan
and attested to by president Sagun.41
It may be noted though that respondent never submitted a separate by-laws,
nor does it appear that respondent ever intended to prepare a set thereof.
Section 1(c), Rule VI, Book V of Department Order No. 9 provides that the
submission of both a constitution and a set of by-laws is required, or at least
an indication that the local/chapter is adopting the constitution and by-laws of
the federation or national union. A literal reading of the provision might
indicate that the failure to submit a specific set of by-laws is fatal to the
recognition of the local/chapter. A more critical analysis of this requirement
though is in order, especially as it should apply to this petition.
By-laws has traditionally been defined as regulations, ordinances, rules or
laws adopted by an association or corporation or the like for its internal
governance, including rules for routine matters such as calling meetings and
the like.42 The importance of by-laws to a labor organization cannot be
gainsaid. Without such provisions governing the internal governance of the
organization, such as rules on meetings and quorum requirements, there
would be no apparent basis on how the union could operate. Without a set of
by-laws which provides how the local/chapter arrives at its decisions or
otherwise wields its attributes of legal personality, then every action of the
local/chapter may be put into legal controversy.
However, if those key by-law provisions on matters such as quorum
requirements, meetings, or on the internal governance of the local/chapter
are themselves already provided for in the constitution, then it would be
feasible to overlook the requirement for by-laws. Indeed in such an event, to
insist on the submission of a separate document denominated as "By-Laws"
would be an undue technicality, as well as a redundancy.
An examination of respondent’s constitution reveals it sufficiently
comprehensive in establishing the necessary rules for its operation. Article IV
establishes the requisites for membership in the local/chapter. Articles V and
VI name the various officers and what their respective functions are. The
procedure for election of these officers, including the necessary vote
requirements, is provided for in Article IX, while Article XV delineates the
procedure for the impeachment of these officers. Article VII establishes the
standing committees of the local/chapter and how their members are
appointed. Article VIII lays down the rules for meetings of the union, including
the notice and quorum requirements thereof. Article X enumerates with
particularity the rules for union dues, special assessments, fines, and other
payments. Article XII provides the general rule for quorum in meetings of the
Board of Directors and of the members of the local/chapter, and cites the
applicability of the Robert’s Rules of Order43 in its meetings. And finally, Article
XVI governs and institutes the requisites for the amendment of the
constitution.
Indeed, it is difficult to see in this case what a set of by-laws separate from
the constitution for respondent could provide that is not already provided for
by the Constitution. These premises considered, there is clearly no need for a
separate set of by-laws to be submitted by respondent.
The Court likewise sees no impediment in deeming respondent as having
acquired legal personality as of 15 June 1998, the fact that it was the local/
chapter itself, and not the FFW, which submitted the documents required
under Section 1, Rule VI of Department Order No. 9. The evident rationale
why the rule states that it is the federation or national union that submits said
documents to the Bureau or Regional Office is that the creation of the local/
chapter is the sole prerogative of the federation or national union, and not of
any other entity. Certainly, a putative local/chapter cannot, without the
imprimatur of the federation or national union, claim affiliation with the larger
unit or source its legal personality therefrom.
In the ordinary course, it should have been FFW, and not respondent, which
should have submitted the subject documents to the Regional Office.
Nonetheless, there is no good reason to deny legal personality or defer its
conferral to the local/chapter if it is evident at the onset that the federation or
national union itself has already through its own means established the local/
chapter. In this case, such is evidenced by the Charter Certificate dated 9
June 1998, issued by FFW, and attached to the petition for certification
election. The Charter Certificate expressly states that respondent has been
issued the said certificate "to operate as a local or chapter of the [FFW]". The
Charter Certificate expressly acknowledges FFW’s intent to establish
respondent as of 9 June 1998.44 This being the case, we consider it
permissible for respondent to have submitted the required documents itself to
the Regional Office, and proper that respondent’s legal personality be
deemed existent as of 15 June 1998, the date the complete documents were
submitted.
Second Issue: On the Alleged Presence
Of Supervisory Employees as
Officers of the Respondent
The second issue hinges on a point of some controversy and frequent
discussion in recent years. Petitioner claims error in the common
pronouncement in the assailed decisions that the matter concerning the two
officers who are allegedly supervisory employees may be threshed out during
pre-election conferences. Petitioner cites the cases of Toyota Motors and
Progressive Development Corporation-Pizza Hut v. Ledesma45 wherein the
Court ruled that the question of prohibited membership of both supervisory
and rank-and-file employees in the same union must be inquired into anterior
to the granting of an order allowing a certification election; and that a union
composed of both of these kinds of employees does not possess the requisite
personality to file for recognition as a legitimate labor organization. It should
be noted though that in the more recent case of Tagaytay Highlands
International Golf Club v. Tagaytay Highlands Employees Union,46 the Court,
notwithstanding Toyota and Progressive, ruled that after a certificate of
registration is issued to a union, its legal personality cannot be subject to
collateral attack, but questioned only in an independent petition for
cancellation.47
There is no need to apply any of the above cases at present because the
question raised by petitioner on this point is already settled law, as a result of
the denial of the independent petition for cancellation filed by petitioner
against respondent on 20 August 1998. The ground relied upon therein was
the alleged fraud, misrepresentation and false statement in describing itself
as a union of rank and file employees when in fact, two of its officers,
Emmanuel Rosell and Noel Bathan, were occupying supervisory positions.48
Said petition was denied by the Regional Director, this action was affirmed by
the DOLE, the Court of Appeals, and the Supreme Court.49 The denial made
by the Court of Appeals and the Supreme Court may have been based on
procedural grounds,50 but the prior decisions of the Regional Director and the
DOLE ruled squarely on the same issue now raised by the petitioner. We
quote from the Resolution of the DOLE dated 29 December 1998:
. . . . [The] substantive issue that is now before us is whether or not the
inclusion of the two alleged supervisory employees in appellee union’s
membership amounts to fraud, misrepresentation, or false statement within
the meaning of Article 239(a) and (c) of the Labor Code.
We rule in the negative.
Under the law, a managerial employee is "one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, layoff, recall, discharge, assign or discipline employees." A
supervisory employee is "one who, in the interest of the employer, effectively
recommends managerial actions if the exercise of such recommendatory
authority is not merely routinary or clerical in nature but requires the use of
independent judgment.’" Finally, "all employees not falling within the definition
of managerial or supervisory employee are considered rank-and-file
employees". It is also well-settled that the actual functions of an employee,
not merely his job title, are determinative in classifying such employee as
managerial, supervisory or rank and file.
In the case of Emmanuel Rossell, appellant’s evidence shows that he
undertakes the filling out of evaluation reports on the performance of
mechanics, which in turn are used as basis for reclassification. Given a ready
and standard form to accomplish, coupled with the nature of the evaluation, it
would appear that his functions are more routinary than recommendatory and
hardly leave room for independent judgment. In the case of Noel Bathan,
appellant’s evidence does not show his job title although it shows that his
recommendations on disciplinary actions appear to have carried some weight
on higher management. On this limited point, he may qualify as a supervisory
employee within the meaning of the law. This may, however, be outweighed
by his other functions which are not specified in the evidence.
Assuming that Bathan is a supervisory employee, this does not prove the
existence of fraud, false statement or misrepresentation. Because good faith
is presumed in all representations, an essential element of fraud, false
statement and misrepresentation in order for these to be actionable is intent
to mislead by the party making the representation. In this case, there is no
proof to show that Bathan, or appellee union for that matter, intended to
mislead anyone. If this was appellee union’s intention, it would have refrained
from using a more precise description of the organization instead of declaring
that the organization is composed of ‘rank and file monthlies’. Hence, the
charge of fraud, false statement or misrepresentation cannot be sustained.
Appellant’s reliance on the Toyota case must be tempered by the peculiar
circumstances of the case. Even assuming that Bathan, or Rossel for that
matter, are supervisory employees, the Toyota case cannot certainly be given
an interpretation that emasculates the right to self-organization and the
promotion of free trade unionism. We take administrative notice of the
realities in union organizing, during which the organizers must take their
chances, oftentimes unaware of the fine distinctions between managerial,
supervisory and rank and file employees. The grounds for cancellation of
union registration are not meant to be applied automatically, but indeed with
utmost discretion. Where a remedy short of cancellation is available, that
remedy should be preferred. In this case, no party will be prejudiced if Bathan
were to be excluded from membership in the union. The vacancy he will thus
create can then be easily filled up through the succession provision of
appellee union’s constitution and by-laws. What is important is that there is an
unmistakeable intent of the members of appellee union to exercise their right
to organize. We cannot impose rigorous restraints on such right if we are to
give meaning to the protection to labor and social justice clauses of the
Constitution.51
The above-cited pronouncement by Bureau of Labor Relations Director
Benedicto Ernesto R. Bitonio, Jr. in BLR-A-C-41-11-11-98 was affirmed by
the Court of Appeals and the Supreme Court. Hence, its pronouncement
affirming, notwithstanding the questions on the employment status of Rossell
and Bathan, the legitimacy of the respondent, stands as a final ruling beyond
the ambit of review, thus warranting the Court’s respect. There may be a
difference between this case, which involves a petition for certification
election, and the other case, which concerns a petition for cancellation.
However, petitioner opposes the petition for certification election on the
ground of the illegitimacy of respondent, owing to the alleged supervisory
nature of the duties of Rossell and Bathan. That matter has already been
settled in the final disposition of the petition for cancellation, and thus cannot
be unsettled by reason of this present petition.
Effect of Respondent’s Manifestation
Of Subsequent Developments
A final note. In its Memorandum, petitioner alleges that the bargaining unit
that respondent sought to represent is no longer the same because of the
dynamic nature of petitioner’s business, a lot of changes having occurred in
the work environment, and that four of respondent’s officers are no longer
connected with petitioner.52 Assuming that these manifestations are true, they
have no effect on the Court’s ruling that a certification election should be
immediately conducted with respondent as one of the available choices.
Petitioner’s bare manifestations adduce no reason why the certification
election should not be conducted forthwith. If there are matters that have
arisen since the filing of the petition that serve to delay or cancel the election,
these can be threshed out during the pre-election conferences. Neither is the
fact that some of respondent’s officers have since resigned from petitioner of
any moment. The local/chapter retains a separate legal personality from that
of its officers or members that remains viable notwithstanding any turnover in
its officers or members.
WHEREFORE, the Petition is DENIED. Costs against petitioner.

PAGPALAIN HAULERS, INC., petitioner,

vs.
The HONORABLE CRESENCIANO B. TRAJANO, in his official as Secretary
of Labor and Employment, the HONORABLE RENATO D. PARUNGO, in his
official capacity as the Med-Arbiter in DOLE Case No. NCR-OD-M-9705-006,
and the INTEGRATED LABOR ORGANIZATION (ILO-PHILS) PAGPALAIN
WORKERS UNION-ILO-PHILS., respondent.
 
ROMERO, J.:
On May 14, 1997, respondent Integrated Labor Organization-Pagpalain
Haulers Worker's Union (hereafter referred to as ILO-PHILS), in a bid to
represent the rank-and-file drivers and helpers of petitioner Pagpalain
Haulers, Inc. (herafter referred to as Pagpalain), filed a petition for
certification election with the Department of Labor and Employment. 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
addresses.
On July 10, 1997, Pagpalain filed a motion to dismiss the petition, alleging
that ILO-PHILS was not a legitimate labor organization due to its failure to
comply with the requirements for registration under the Labor Code.
Specifically, it claimed that the books of account submitted by ILO-PHILS
were not verified under oath by its treasurer and attested to by its president,
as required by Rule II, Book V of the Omnibus Rules Implementing the Labor
Code.
In a reply dated August 4, 1997, ILO-PHILS dismissed Pagpalain's claims,
saying that Department Order No. 9, Series of 1997 had dispensed with the
requirement that a local or chapter of a national union submit books of
account in order to be registered with the Department of Labor and
Employment.
Finding in favor of ILO-PHILS, the Med-Arbiter, on August 27, 1997, ordered
the holding of certification elections among the rank-and-file of Pagpalain
Haulers. Pagpalain promptly appealed the decision to the Secretary of Labor
and Employment. It claimed that the Med-Arbiter had gravely abused his
discretion in allowing Department Order No. 9 to take precedence over a
ruling of the Supreme Court. Pagpalain cited Protection Technology v.
Secretary, Department of labor and Employment 1 and Progressive Development
Corporation v. Secretary of Labor2 in support of its contention.
Declaring Protection and Progressive to be inapplicable to the case before
him, the Secretary, on February 27, 1998, issued a resolution dismissing
Pagpalain's appeal. In his own words, "[i]n these aforementioned cases, the
Supreme Court premised its ruling on the previous rules implementing the
Labor Code, particularly Book V, that provides the requirements for
registration of a local for chapter of a federation or national union. With the
issuance of Department Order No. 09 amending the rules implementing Book
V of the Code, the requirement on books of account no longer exists."3
Aggrieved by said resolution, Pagpalain now comes to this Court for relief
claiming that the Secretary of Labor acted without jurisdiction in issuing the
questioned resolution. In support of its proposition, it claims that:
1. DEPARTMENT ORDER NO. 9, SERIES OF 1997, ISSUED BY PUBLIC
RESPONDENT SECRETARY OF LABOR IS NULL AND VOID FOR BEING
CONTRARY TO PUBLIC POLICY LAID DOWN BY THE SUPREME COURT
IN PROTECTION TECHNOLOGY, INC. V. SECRETARY OF LABOR (G.R.
NO. 117211, 1 MARCH 1995) AND PROGRESSIVE DEVELOPMENT
CORP. V. SECRETARY OF LABOR (G.R. NO. 96425, 4 FEBRUARY 1992);
2. DEPARTMENT ORDER NO. 9, SERIES OF 1997, OF PUBLIC
RESPONDENT SECRETARY OF LABOR CANNOT ALTER THE
REQUIREMENTS OF ARTICLES 241(H) AND (J) OF THE LABOR CODE
OF THE PHILIPPINES, NOR CAN IT PREVAIL OVER THE RULINGS OF
THE SUPREME COURT, WHICH FORM PART OF THE LAW OF THE
LAND.
Pagpalain's contentions are without merit.
Under Article 234 of the Labor Code, the requirements for registration of a
labor organization is as follows:
Art. 234. Requirements of registration. — Any applicant labor organization,
association or group of unions or workers shall acquire legal personality and
shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration based on the
following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the list of
the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of
all the employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies
of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification, and the list of the members who
participated in it.
As can be gleaned from the above, the Labor Code does not require the
submission of books of account in order for a lobor organization to be
registered as a legitimate labor organization. The requirement that books of
account be submitted as a requisite can be found only in Book V of the
Omnibus Rules Implementing the Labor Code, prior to its amendment by
Department Order No. 9, Series of 1997. Specifically, the old Section 3(e),
Rule II, of Book V provided that "[t]he local or chapter of a labor federation or
national union shall have and maintain a constitution and by-laws, set of
officers and books of accounts. For reporting purposes, the procedure
governing the reporting of independently registered unions, federations or
national unions shall be observed."
In Progressive Development Corporation, cited by Pagpalain, this Court held
that the above-mentioned "'procedure governing the reporting of indepedently
registered unions' refers to the certification and attestation requirements
contained in Article 235, paragraph 2." Article 235, paragraph 2 provides that
"[a]ll requisite documents and papers shall be certified under oath by the
secretary or the treasurer of the organizations, as the case may be, and
attested to by its president;" hence, in the above-mentioned case, we ruled
that in applications for registration by a local or chapter of a federation or
national union, the constitution and by-laws, set of officers and books of
account submitted by said local or chapter must be certified under oath by the
secretary or treasurer and attested to by its president.1âwphi1.nêt

Three years, later, in Protection Technology v. Secretary of Labor, we

amplified our ruling in Progressive, saying that the non-submission of books
of acocunt certified by and attested to by the appropriate officer is a ground
for an employer to legitimately oppose a petition for certification election filed
by a local or chapter of a national union.
By virtue of Department Order No. 9, Series of 1997, however, the
documents needed to be submitted by a local or chapter have been reduced
to the following:
(a) A charter certificate issued by the federation or national union indicating
the creation or establishment of the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the
principal office of the local/chapter;
(c) The local/chapter's constitution and by-laws; provided that where the local/
chapter's constitution and by-laws is the same as that of the federation or
national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the
Secretary or Treasurer of the local/chapter and attested by its President.4
Since Department Order No. 9 has done away with the submission of books
of account as a requisite for registration, Pagpalain's only recourse now is to
have said order declared null and void. It premises its case on the principles
laid down in Progressive and Protection Technology. First, Pagpalain
maintains that Department Order No. 9 is illegal, allegedly because it
contravenes the above-mentioned rulings of this Court. Citing Article 8 of the
Civil Code, which provides that [j]udicial decisions applying or interpreting the
laws or the Constitution shall form a part of the legal system of the
Philippines," Pagpalain declares the two cases part of the law of the land
which, under the third paragraph of Article 7 of the Civil Code,5 may not be
supplanted by mere regulation.
Second, it claims that dispensing with books of account contravenes public
policy, citing Protection Technology, as follows:
It is immaterial that the Union, having been organized for less than a year
before the application for registration with the BLR, would have had no real
opportunity to levy and collect dues and fees from its members which need to
be recorded in the books of account. Such accounting books can and must
be submitted to the BLR, even if they contain no detailed or extensive entries
as yet. The point to be stressed is that the applicant local or chapter must
demonstrate to the BLR that it is entitled to registered status because it has in
place a system for accounting for members' contributions to its fund even
before it actually receives dues and fees from its members. The controlling
intention is to minimize the risk of fraud and diversion in the course of the
subsequent formation and growth of the Union fund. [Emphasis petitioner's]
To buttress its argument, Pagpalain also cites Progressive, thus:
The employer naturally needs assurance that the union it is dealing with is a
bona fide organization, one which has not submitted false statements or
misrepresentations to the Bureau. The inclusion of the certification and
attestation requirements will in a marked degree allay these apprehensions of
management. Not only is the issuance of any false statement and
misrepresentation a ground for cancellation of registration (See Artide 239
(a), (c) and (d)); it is also a ground for a criminal charge of perjury.
The certification and attestation requirements are preventive measures
against the commission of fraud. They likewise afford a measure of protection
to unsuspecting employees who may be lured into joining unscrupulous or fly-
by-night unions whose sole purpose is to control union funds or to use the
union for dubious ends. [Emphasis petitioner's]
Finally, Pagpalain cites as indicative of public policy, the following sections of
Article 241 of the Labor Code:
The following are the rights and conditions of membership in a labor
organization:
xxx xxx xxx
(h) Every payment of fees, dues, or other contributions by a member shall be
evidenced by a receipt signed by the officer or agent making the collection
and entered into the record of the organization to be kept and maintained for
the that purpose;
xxx xxx xxx
(j) Every income or revenue of the organization shall be evidenced by a
record showing its source, and every expenditure of its funds shall be
evidenced by a receipt from the person to whom the payment is made, which
shall state the date, place and purpose of such payment. Such record or
receipt shall form part of the financial records of the organizations. [Emphasis
petitioner's]
Under Article 8 of the Civil Code, "[j]udicial decisions applying or interpreting
the laws or the Constitution shall form a part of the legal system of the
Philippines." This does not mean, however, that courts can create law. The
courts exist for interpreting the law, not for enacting it. To allow otherwise
would be violative of the principle of separation of powers, inasmuch as the
sole function of our courts is to apply or interpret the laws, particularly where
gaps or lacunae exist or where ambiguities becloud issues, but it will not
arrogate unto itself the task of legislating.
Consequently, Progressive and Protection Technology are not to be deemed
as laws on the registration of unions. They merely interpret and apply the
implementing rules of the Labor Code as to registration of unions. It is this
interpretation that forms part of the legal system of the Philippines, for the
inperpretation placed upon the written law by a competent court has the force
of law.6 Progressive and Protection Technology, however, applied and
interpreted the then existing Book V of the Omnibus Rules Implementing the
Labor Code. Since Book V of the Omnibus Rules, as amended by
Department Order No. 9, no longer requires a local or chapter to submit
books of accounts as a prerequisites for registration, the doctrines enunciated
in the above-mentioned cases, with respect to books of account, are already
passé and therefore, no longer applicable. Hence, Pagpalain cannot insist
that ILO-PHILS comply with the requirements prescribed in said rulings, for
the current implementing rules have deleted the same.
Neither can Pagpalain contend that Department Order No. 9 is an invalid
exercise of rule-making power by the Secretary of Labor. For an
administrative order to be valid, it must i) be issued on the authority of law
and (ii) it must not be contrary to the law and the Constitution.7
Department Order No. 9 has been issued on authority of law. Under the law,
the Secretary is authorized to promulgate rules and regulations to implement
the Labor Code. Specifically, Article 5 of the Labor Code provides that "[t]he
Department of Labor and other government agencies charged with the
administration and enforcement of this Code or any of its parts shall
promulgate the necessary implementing rules and regulations." Consonant
with this article, the Secretary of Labor and Employment promulgated the
Omnibus Rules Implementing the Labor Code. By virtue of this self-same
authority, the Secretary amended the above-mentioned omnibus rules by
issuing Department Order No. 9, Series of 1997.
Moreover, Pagpalain has failed to show that Department Order No. 9 is
contrary to the law or the Constitution. At the risk of being repetitious, the
Labor Code does not require a local or chapter to submit books of account in
order for it to be registered as a legitimate labor organization. There is, thus,
no inconsistency between the Labor Code and Department Order No. 9.
Neither has Pagpalain shown that said order contravenes any provision of the
Constitution.
Pagpalain cannot also allege that Department Order No. 9 is violative of
public policy. As adverted to earlier, the sole function of our courts is to apply
or interpret the laws. 8 It does not formulate public policy, which is the
province of the legislative and executive branches of government. It cannot,
thus, be said that the principles laid down by the court in Progressive and
Protection Technology constitute public policy on the matter. They do,
however, constitute the Court's interpretation of public policy, as formulated
by the executive department through its promulgation of rules implementing
the Labor Code. However, this public policy has itself been changed by the
executive department, through the amendments introduced in Book V of the
Omnibus Rules by Department Order No. 9. It is not for us to question this
change in policy, it being a well-established principle beyond question that it
is not within the province of the courts to pass judgment upon the policy of
legislative or executive action.9 Notwithstanding the expanded judicial power
under Section 1, Article VIII of the Constitution, an inquiry on the above-
stated policy would delve into matters of wisdom not within the powers of this
Court.
Furthermore, the controlling intention in requiring the submission of books of
account is the protection of labor through the minimization of the risk of fraud
and diversion in the handling of union funds. As correctly pointed out by the
Solicitor General, this intention can still be realized through other provisions
of the Labor Code. Article 241 of the Labor Code, for instance:
Art. 241. Rights and conditions of membership in a labor organization — The
following are the rights and conditions of membership in a labor organization:
x x x           x x x          x x x
(b) The members shall be entitled to full and detailed reports from their
officers and representatives of all financial transactions as provided for in the
constitution and by-laws of the organization;
x x x           x x x          x x x
(g) No officer, agent or member of a labor organization shall collect any fees,
dues, or other contributions in its behalf or make any disbursement of its
funds unless he is duly authorized pursuant to its constitution and by-laws;
(h) Every payment of fees, dues, or other contributions by a member shall be
evidenced by a receipt signed by the officer or agent making the collection
and entered into the record of the organization to be kept and maintained for
the that purpose;
(i) The funds of the organization shall not be applied for any purpose or object
other than those expressly provided by its constitution or by-laws or those
expressly authorized by written resolution adopted by the majority of the
members at a general meeting duly called for the purpose;
(j) Every income or revenue of the organization shall be evidenced by a
record showing its source, and every expenditure of its funds shall be
evidenced by a receipt from the person to whom the payment is made, which
shall state the date, place and purpose of such payment. Such record or
receipt shall form part of the financial records of the organization.
x x x           x x x          x x x
(l) The treasurer of any labor organization and every officer thereof who is
responsible for the account of such organization or for the collection,
management, disbursement, custody or control of the fund, moneys and other
properties of the organization, shall render to the organization and to its
members a true and correct account of all the moneys received and paid by
him since he assumed office or since the last day on which he rendered such
account, and of all bonds, securities and other properties of the organization
entrusted to his custody or under his control. The rendering of such account
shall be made:
(1) At least once a year within 30 days after the close of its fiscal year;
(2) At such other times as may be required by a resolution of the majority of
the members of the organization;
(3) Upon vacating his office.
The account shall be duly audited and verified by affidavit and a copy thereof
shall be furnished the Secretary of Labor.
(m) The books of account and other records of the financial activities of any
labor organization shall be open to inspection by any officer or member
thereof during office hours;
x x x           x x x          x x x
Furthermore, Article 274 of the Labor Code empowers the Secretary of Labor
or his duly authorized representative to inquire into the financial activities of
legitimate labor organizations upon the filing of a complaint under oath duly
supported by the written consent of 20% of the total membership of the labor
organization concerned, as well as to examine their books of accounts and
other records to determine compliance or non-compliance with the law. All of
these provisions are designed to safeguard the funds of a labor organization
that they may not be squandered or frittered away by its officers or by third
persons to the detriment of its members.
Lastly, Department Order No. 9 only dispenses with books of account as a
requirement for registration of a local or chapter of a national union or
federation. As provided by Article 241 (h) and (j), a labor organization must
still maintain books of account, but it need not submit the same as a
requirement for registration. Given the foregoing disquisition, we find no
cogent reason to declare Departmet Order No. 9 null and void, as well as to
reverse the assailed resolution of the Secretary of Labor. 1âwphi1.nêt
WHEREFORE, premises considered, the instant petition is hereby
DISMISSED for lack of merit and the resolution of the Secretary of Labor
dated February 27, 1998 AFFIRMED. Costs against petitioner.
SO ORDERED.

G.R. No. 76427 February 21, 1989

JOHNSON AND JOHNSON LABOR UNION-FFW, DANTE JOHNSON
MORANTE, MYRNA OLOVEJA AND ITS OTHER INDIVIDUAL UNION
MEMBERS, petitioners
vs.
DIRECTOR OF LABOR RELATIONS, AND OSCAR PILI, respondents.
Rogelio R. Udarbe for petitioners.
The Solicitor General for public respondent.
Manuel V. Nepomuceno for private respondent.

GUTIERREZ, JR., J.:

The sole issue in this petition for review on certiorari is whether or not the
public respondent committed grave abuse of discretion in ruling that the
private respondent is entitled to the financial aid from the compulsory
contributions of the petitioner-union afforded to its members who have been
suspended or terminated from work without reasonable cause.
The provision for the grant of financial aid in favor of a union member is
embodied in the petitioner-union's Constitution and By-laws, Article XIII,
Section 5, of which reads:
A member who have (sic) been suspended or terminated without reasonable
cause shall be extended a financial aid from the compulsory contributions in
the amount of SEVENTY FIVE CENTAVOS (P0. 75) from each member
weekly. (p. 18, Rollo)
On May 6, 1985, the private respondent, a member of the petitioner-union
was dismissed from his employment by employer Johnson & Johnson (Phil.)
Inc., for non-disclosure in his job application form of the fact that he had a
relative in the company in violation of company policies.
On July 1985, a complaint was filed by the private respondent against the
officers of the petitioner-union docketed as NRC- LRD-M-7-271-85 alleging,
among others, that the union officers had refused to provide the private
respondent the financial aid as provided in the union constitution despite
demands for payment thereof The petitioner-union and its officers counter-
alleged, in their answer, that the said financial aid was to be given only in
cases of termination or suspension without any reasonable cause; that the
union's executive board had the prerogative to determine whether the
suspension or termination was for a reasonable cause or not; and that the
union, in a general membership meeting, had resolved not to extend financial
aid to the private respondent.
While the grievance procedure as contained in the union's collective
bargaining agreement was being undertaken, the private respondent, on
August 26, 1985, filed a case for unfair labor practice and illegal dismissal
against his employer docketed as NLRC-NCR Case No. 6-1912-85.
On September 27, 1985, Med-Arbiter Anastacio L. Bactin issued an order
dismissing for lack of merit the complaint of the private respondent against
the petitioners for alleged violation of the union constitution and by-laws.
On appeal, the then public respondent Director Cresenciano B. Trajano, on
April 17, 1986, rendered the decision assailed in this petition. The dispositive
portion of the said decision reads:
WHEREFORE, premises considered, the appeal of complainant Oscar Pili is
hereby granted and the Order appealed from is hereby set aside. Appellees,
therefore, are hereby ordered to pay the complainant the sum of P0.75/week
per union member to be computed from the time of the complainant's
termination from employment to the time he acquired another employment
should his complaint for illegal dismissal against the company be resolved in
his favor; provided, that if his complaint against the company be dismissed,
appellees are absolved from paying the complainant anything. (p. 115,
Records)
Both parties moved for reconsideration. The petitioners reiterated that since
the private respondent's termination was for a reasonable cause, it would be
unjust and unfair if financial aid were to be given in the event that the latter's
case for illegal dismissal is decided against him. The private respondent, on
the other hand, prayed for the amendment of the dispositive portion in order
that the grant of financial aid be made without any qualifications.
On June 16, 1986, a Manifestation and/or Opposition to the Motion for
Reconsideration filed by the petitioners was filed by the private respondent
stating that he was being discriminated against considering that one Jerwin
Taguba, another union member, was terminated for dishonesty and loss of
confidence but was granted financial aid by the petitioners while Taguba's
complaint against the company was still pending with the National Labor
Relation Commission.
The public respondent separately resolved the above motions. On June 26,
1986, an order was issued denying the petitioners' motion for reconsideration.
On August 19, 1986, the public respondent modified its decision dated April
17, 1986 and its aforestated order as follows:
Considering that complainant Pili is similarly situated as Jerwin Taguba
coupled with the need to obviate any discriminating treatment to the former, it
is only just and appropriate that our Decision dated 17 April 1986 be modified
in such a manner that respondents immediately pay the complainant the sum
of P0.75/ week per union member to be computed from the time of his
dismissal from the company, without prejudice to refund of the amount that
shall be paid to Pili in the event the pending case is finally resolved against
him.
WHEREFORE, and as above qualified, this Bureau's Decision dated 17 April
1986 and the Order dated 26 June 1986 are hereby modified to the extent
that the respondents are directed to immediately pay complainant the sum of
P0.75/week per union member to be computed from the time of his
termination from his employment until his case against the employer
company shall have been finally resolved and/or disposed. (p. 53, Rollo)
Meanwhile, on July 25, 1986, a motion for issuance of a writ of execution was
filed by the private respondent in order to collect from the petitioners the
amount of financial aid to which the former was entitled.
On September 1, 1986, the petitioners moved for a reconsideration of the
public respondent's resolution dated August 19, 1986 on the grounds that
Taguba's affidavit cannot support the private respondent's claim that he is
also entitled to the financial aid provided in the union's constitution and that
the union cannot be compelled to grant the said aid in the absence of a
special fund for the purpose.
On October 28, 1986, the public respondent through Director Pura Ferrer-
Calleja denied the petitioners' motion for reconsideration stating that Article
XIII, Section 5 of the union's constitution and by-laws does not require a
special fund so that all union members similarly situated as the private
respondent must be entitled to the same right and privilege regarding the
grant of financial aid as therein provided.
On December 18, 1986, a writ of execution was issued by the public
respondent in the following tenor:
NOW THEREFORE, you are hereby directed to proceed to the premises of
Johnson and Johnson (FFW) located at Edison Road, Bo. Ibayo, Paranaque,
Metro Manila to collect from the said union through its Treasurer, Myrna
Oloveja or to any responsible officer of the union the amount of Twenty
Thousand Five Hundred Twenty Pesos (P20,520.00), more or less
representing financial assistance to complainant under the union's
constitution and by-laws. In case you fail to collect said amount in cash, you
are to cause the satisfaction of the same on the union's movable or
immovable properties not exempt from execution. You are to return this writ
within fifteen (15) days from your compliance hereby together with your report
thereon. You may collect your legal fees from the respondent union. (p. 55,
Rollo)
On December 24, 1986, the instant petition was filed with prayer for a
preliminary injunction. The temporary restraining order issued by the Chief
Justice on December 24, 1986 was confirmed in our resolution dated January
7, 1987.
The grounds relied upon by the petitioners are as follows:
A. THAT THE DECISION/ORDER IN QUESTION IS CONTRARY TO LAW.
B. THAT RESPONDENT OFFICIAL ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION.
C. THAT WITH RESPECT TO PETITIONING MEMBERS, THEY HAVE
BEEN DEPRIVED OF THEIR CONSTITUTIONAL RIGHT TO DUE
PROCESS OF LAW. (P. 13, Rollo)
We find unmeritorious the contention of the petitioners that the questioned
decision and order are contrary to law for being tantamount to compelling the
union to disburse it funds without the authority of the general membership
and to collect from its members without the benefit of individual payroll
authorization.
Section 5, Article XIII of the petitioner-union's constitution and by-laws earlier
aforequoted is self-executory. The financial aid extended to any suspended or
terminated union member is realized from the contributions declared to be
compulsory under the said provision in the amount of seventy-five centavos
due weekly from each union member. The nature of the said contributions
being compulsory and the fact that the purpose as stated is for financial aid
clearly indicate that individual payroll authorizations of the union members are
not necessary. The petitioner-union's constitution and by-laws govern the
relationship between and among its members. As in the interpretation of
contracts, if the terms are clear and leave no doubt as to the intention of the
parties, the literal meaning of the stipulations shall control. (See Government
Service Insurance System v. Court of Appeals, 145 SCRA 311 [1986]).
Section 5, Article XIII of the said constitution and by-laws is in line with the
petitioner- union's aims and purposes which under Sec. 2, Article II include
To promote, establish and devise schemes of mutual assistance among the
members in labor disputes.
Thus, there is no doubt that the petitioner-union can be ordered to release its
funds intended for the promotion of mutual assistance in favor of the private
respondent.
We likewise find untenable the argument of the petitioners that the public
respondent, in granting financial aid to the private respondent, in effect,
substituted the decision of the petitioner-union to do otherwise and that in so
doing, the public respondent gravely abused its discretion amounting to lack
of jurisdiction. The union constitution is a covenant between the union and its
members and among the members. There is nothing in their constitution
which leaves the legal interpretation of its terms unilaterally to the union or its
officers or even the general membership. It is noteworthy to quote the ruling
made by the public respondent in this respect, to wit:
The union constitution and by-laws clearly show that any member who is
suspended or terminated from employment without reasonable cause is
entitled to financial assistance from the union and its members. The problem,
however, is that the constitution does not indicate which body has the power
to determine whether a suspension or dismissal is for reasonable cause or
not. To our mind, the constitution's silence on this matter is a clear
recognition of the labor arbiter's exclusive jurisdiction over dismissal cases.
After all, the union's constitution and by-laws is valid only insofar as it is not
inconsistent with existing laws. ... . (BLR decision, p. 2; p. 115, Records)
An aggrieved member has to resort to a government agency or tribunal.
Considering that quasi-judicial agencies like the public respondent's office
have acquired expertise since their jurisdiction is confined to specific matter,
their findings of fact in connection with their rulings are generally accorded
not only respect but at times even finality if supported by substantial
evidence. (See Manila Mandarin Employees Union v. National Labor
Relations Commission, 154 SCRA 368 [1987]) Riker v. Ople, 155 SCRA 85
[1987]; and Palencia v. National Labor Relations Commission, 153 SCRA 247
[1987]. We note from the records that the petitioners have conflicting
interpretations of the same disputed provision one in favor of Jerwin Taguba
and another against the private respondent.
On the ancillary issue presented by the petitioners whether or not the
petitioning union members have been deprived of their right to due process of
law because they were never made parties to the case under consideration,
we rule that the fact that the union officers impleaded since the inception of
the case acted in a representative capacity on behalf of the entire union's
membership substantially meets the requirements of due process with
respect to the said union members. Moreover, the complaint filed against the
union involves the interpretation of its constitution favoring an aggrieved
member. The members are bound by the terms of their own constitution. A
suit to enforce a union constitution does not have to be brought against each
individual member, especially where several thousand members form the
membership. If there is any violation of the right to due process in the case at
bar it is as regards the private respondent since the petitioners-union has
dispensed with due process in deciding not to extend financial aid to the
private respondent in the absence yet of a ruling by the labor arbiter on
whether his dismissal was for a reasonable cause or not.
The remedy of the petitioners is to strike out or amend the objectionable
features of their constitution. They cannot expect the public respondent to
assist them in its non- enforcement or violation.
WHEREFORE, PREMISES CONSIDERED, the instant petition is hereby
DISMISSED in the absence of a showing of grave abuse of discretion on the
part of the public respondent. The decision of the public respondent dated
April 17, 1986 as modified in a resolution dated August 17, 1986 is
AFFIRMED. The temporary restraining order issued by the Court on
December 24,1986 is SET ASIDE.
SO ORDERED.

G.R. No. 83190 August 4, 1992

CEBU SEAMEN'S ASSOCIATION, INC., petitioner,
vs.
HON. PURA FERRER-CALLEJA, SEAMEN'S ASSOCIATION OF THE
PHILS./DOMINICA C. NACUA, respondent.
Paterno P. Natinga for petitioner.
Romero S. Occena for Seamen's Association of the Philippines.

MEDIALDEA, J.:
This petition seeks the reversal of the resolution of the Bureau of Labor
Relations 1 which affirmed the decision of the Med-Arbiter holding that the set
of officers of Seamen's Association of the Philippines headed by Dominica C.
Nacua, as president, was the lawful set of officers entitled to the release and
custody of the union dues as well as agency fees of said association. The
dispositive portion of the resolution reads:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 13
July 1987 is hereby affirmed and the appeal therefrom DISMISSED for lack of
merit. (p. 39, Rollo)
The facts surrounding the controversy in this case, as stated in the
questioned resolution, is as follows:
The records show that sometime on 23 October 1950, a group of deck
officers and marine engineers on board vessels plying Cebu and other ports
of the Philippines organized themselves into an association and registered
the same as a non-stock corporation known as Cebu Seamen's Association,
Inc. (CSAI), with the Securities and Exchange Commission (SEC). Later, on
23 June 1969, the same group registered its association with this Bureau as a
labor union known as the Seamen's Association of the Philippines,
Incorporated (SAPI).
SAPI has an existing collective bargaining agreement (CBA) with the Aboitiz
Shipping Corporation which will expire on 31 December 1988. In consonance
with the CBA said company has been remitting checked-off union dues to
said union until February, 1987 when a group composed of members of said
union, introducing itself to be its new set of officers, went to the company and
claimed that they are entitled to the remittance and custody of such union
dues. This group, headed by Manuel Gabayoyo claims that they were elected
as such on January 20, 1987 under the supervision of the SEC.
On 26 May 1987, another group headed by Dominica C. Nacua, claiming as
the duly elected set of officers of the union in an election held on 20
December 1986, filed a complaint, for and in behalf of the union, against the
Cebu Seamen's Association, Inc. (CSAI) as represented by Manuel
Gabayoyo for the security of the aforementioned CBA, seeking such relief,
among others, as an order restraining the respondent from acting on behalf of
the union and directing the Aboitiz Shipping Corp. to remit the checked-off
union dues for the months of March and April 1987.
On 10 June 1987, respondent CSAI filed its Answer/Position Paper alleging
that the complainant union and CSAI are one and the same union; that
Dominica C. Nacua and Atty. Prospero Paradilla who represented the union
had been expelled as members/officers as of November 1984 for lawful
causes; and, that its set of officers headed by Manuel Gabayoyo has the
lawful right to the remittance and custody of the corporate funds (otherwise
known as union does) in question pursuant to the resolution of the SEC dated
22 April 1987.
To bolster further its posture, on the following day, 11 June 1987, the
respondent also filed a Motion to Dismiss the Complaint on the grounds,
among others, that the SEC, not the Med-Arbiter, has jurisdiction over the
dispute as provided under P.D. No. 902-A; that there can neither be a
complainant no respondent in the instant case as the parties involved are one
and the same labor union, and that Mrs. Dominica C. Nacua and Atty.
Prospero Paradilla have no personality to represent the union as they had
already been expelled as members/officers thereof in two resolutions of the
Board of Directors dated November 1984 and January 17, 1987.
On 19 June 1987, the Med-Arbiter issued an Order denying said motion but
directing the Aboitiz Shipping Corporation to remit the already checked-off
union dues to the complainant union through its officers end to continue
remitting any checked-off union dues until further notice. The Med-Arbiter
also set further hearing of the complaint on July 1, 1987.
On 19 June 1987, the respondent filed a motion for reconsideration of said
order of 19 June 1987, reiterating its previous position. Thereafter, the Med-
Arbiter issued the assailed Order. . . . (pp. 34 -35, Rollo)
From the decision of the Med-Arbiter, Cebu Seamen's Association headed by
Capt. Gabayoyo filed an appeal with the Bureau of Labor Relations (BLR).
The BLR, as already stated, affirmed the decision of the Med-Arbiter in a
resolution dated February 19, 1988. The Gabayoyo group appealed to the
Office of the Secretary, Department of Labor, which appeal was considered
as a motion for reconsideration of the BLR's decision. The said appeal/motion
for consideration was denied for lack of merit on April 11, 1988 (p. 42, Rollo)
by the BLR.
Hence, this petition.
There are three issues presented for resolution in this petition, to wit:
1 WHETHER OR NOT THE MED-ARBITER OF REGION VII HAS
JURISDICTION OVER THE CASE AT BAR.
2. WHETHER OR NOT THE COMPLAINANT-APPELLEE THE SEAMEN'S
ASSOCIATION OF THE PHILIPPINES WAS REGISTERED AS A LABOR
FEDERATION WITH THE BUREAU OF LABOR RELATIONS.
3 WHETHER OR NOT DOMINICA C. NACUA AND PROSPERO
PARADIL(L)A HAVE (THE) PERSONALITY TO REPRESENT THE HEREIN
COMPLAINANT-APPELLEE, CONSIDERING THAT BOTH OF THEM HAVE
BEEN EXPELLED FROM THE ASSOCIATION "SEAMEN'S ASSOCIATION
OF THE PHILIPPINES, INC." (FORMERLY THE CEBU SEAMEN'S
ASSOCIATION, INC.).
There is no doubt that the controversy between the aforesaid two sets of
officers is an intra-union dispute. Both sets of officers claim to be entitled to
the release of the union dues collected by the company with whom it had an
existing CBA. The controversy involves claims of different members/officers
to certain rights granted under the labor code.
Article 226 of the Labor Code vests upon the Bureau of Labor Relations and
Labor Relations Division the original and exclusive authority and jurisdiction
to act on all inter-union and intra-union disputes. Therefore, the Med-Arbiter
originally, and the Director on appeal, correctly assumed jurisdiction over the
controversy.
The determinative issue in this case is who is entitled to the collection and
custody of the union dues? Cebu Seamen's Association headed by
Gabayoyo or Seamen's Association of the Philippines headed by Nacua.
As stated in the findings of fact in the questioned resolution of Director Pura
Ferrer-Calleja, on October 23, 1950, a group of deck officers organized the
Cebu Seamen's Association, Inc., (CSAI), a non-stock corporation and
registered it with the Securities and Exchange Commission (SEC). The same
group registered the organization with the Bureau of Labor Relations (BLR)
as Seamen's Association of the Philippines (SAPI). It is the registration of the
organization with the BLR are not with the SEC which made it a legitimate
labor organization with rights and privileges granted under the Labor Code.
We gathered from the records that CSAI, the corporation was already
inoperational before the controversy in this case arose. In fact, on August 24,
1984 the SEC ordered the CSAI to show cause why its certificate of
registration should not be revoked for continuous inoperation (p. 343, Rollo).
There is nothing in the records which would show that CSAI answered said
show-cause order.
Also, before the controversy, private respondent Dominica Nacua was
elected president of the labor union, SAPI. It had an existing CBA with Aboitiz
Shipping Corporation. Before the end of the term of private respondent
Nacua, some members of the union which included Domingo Machacon and
petitioner Manuel Gabayoyo showed signs of discontentment with the
leadership of Nacua. This break-away group revived the moribund
corporation and issued an undated resolution expelling Nacua from
association (pp. 58-59, Rollo). Sometime in February, 1987, it held its own
election of officers supervised by the Securities and Exchange Commission. It
also filed a case of estafa against Nacua sometime in May, 1986 (p. 52,
Rollo).
The expulsion of Nacua from the corporation, of which she denied being a
member, has however, not affected her membership with the labor union. In
fact, in the elections of officers for 1987-1989, she was re-elected as the
president of the labor union. In this connections, We cannot agree with the
contention of Gabayoyo that Nacua was already expelled from the union.
Whatever acts their group had done in the corporation do not bind the labor
union. Moreover, Gabayoyo cannot claim leadership of the labor group by
virtue of his having been elected as a president of the dormant corporation
CSAI.
Under the principles of administrative law in force in this jurisdiction, decisions
of administrative officers shall not be disturbed by courts, except when the
former acted without or in excess of their jurisdiction or with grave abuse of
discretion.
Public respondent Bureau of Labor Relations correctly ruled on the basis of
the evidence presented by the parties that SAPI, the legitimate labor union,
registered with its office, is not the same association as CSAI, the
corporation, insofar as their rights under the Labor Code are concerned.
Hence, the former and not the latter association is entitled to the release and
custody of union fees with Aboitiz Shipping and other shipping companies
with whom it had an existing CBA. As correctly held by public respondent:
It is undisputed from the records that the election of the so-called set of
officers headed by Manuel Gabayoyo was conducted under the supervision
of the SEC, presumably in accordance with its constitution and by-laws as
well as the articles of incorporation of respondent CSAI, and the Corporation
Code. That had been so precisely on the honest belief of the participants
therein that they were acting in their capacity as members of the said
corporation. That being the case, the aforementioned set of officers is of the
respondent corporation and not of the complainant union. It follows, then, that
any proceedings, and actions taken by said set of officers can not, in any
manner, affect the union and its members.
On the other hand, we rule and so hold that the other set of officers headed
by Dominica C. Nacua is the lawful set of officers of SAPI and therefore, is
entitled to the release and custody of the union dues as well as the agency
fees, if any, there be. A record check with the Labor Organizations (LOD), this
Bureau, shows that SAPI has submitted to it for file the list of this new set of
officers, in compliance with the second paragraph of Article 242 (c) of the
Labor Code. This list sufficiently sustains the view that said officers were
lawfully elected, in the absence of clear and convincing proof to the contrary.
(pp. 9-10, Rollo)
ACCORDINGLY, the petition is DISMISSED. The questioned resolution of the
Bureau of Labor Relations is AFFIRMED.
SO ORDERED

G.R. No. L-35120 January 31, 1984

ADAMSON & ADAMSON, INC., petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS and ADAMSON & ADAMSON
SUPERVISORY UNION (FFW), respondents.
Sycip, Salazar, Luna & Feliciano for petitioner.
Jaime D. Lauron for respondents.

GUTIERREZ, JR., J.:

Adamson and Adamson, Inc., filed this petition to set aside orders of the
respondent Court of Industrial Relations (CIR) holding that the Adamson and
Adamson, Inc. supervisory Union (FFW) can legally represent supervisors of
the petitioner corporation notwithstanding the affiliation of the lank and file
union of the same company with the same labor federation, the Federation of
Free Workers.
The Adamson and Adamson, Inc. Supervisory Union (FFW) informed the
petitioner about its having organized on the same date that the Adamson and
Adamson, Inc. Salesmen Association (FFW) advised the petitioner that the
rank and file salesmen had formed their own union.
The CIR dismissed the petition in CIR Case No. 3267-MC entitled "In the
Matter of Representation of the Supervisory Employees of Adamson and
Adamson, Inc., Petitioner " thus prompting the filing of this petition for review
on certiorari.
Subsequently and during the pendency of the present petition, the rank and
file employees formed their own union, naming it Adamson and Adamson
Independent Workers (FFW).
The petitioner made a lone assignment of error, to wit:
THE RESPONDENT COURT OF INDUSTRIAL RELATIONS ERRED IN
SUSTAINING THE ELIGIBILITY OF THE RESPONDENT UNION TO
REPRESENT THE PETITIONER'S SUPERVISORY EMPLOYEES NOT-
WITHSTANDING THE AFFILIATION OF THE SAID UNION WITH THE
SAME NATIONAL FEDERATION WITH WHICH THE UNIONS OF NON-
SUPERVISORS IN THE PETITIONER COMPANY ARE ALSO AFFILIATED.
The petitioner argues that the affiliation of the respondent union of
supervisors, the salesmen's association, and the Adamson and Adamson
independent Workers Union of rank and file personnel with the same national
federation (FFW) violates Section 3 of the Industrial Peace Act, as amended,
because — (1) it results in the indirect affiliation Of supervisors and rank-and-
file employees with one labor organization; (2) since respondent union and
the unions of non-supervisors in the same company are governed by the
same constitution and by-laws of the national federation, in practical effect,
there is but one union; and (3) it would result in the respondent union's losing
its independence because it becomes the alter ego of the federation.
The petitioner also submits that should affiliation be allowed, this would
violate the requirement of separateness of bar units under Section 12 of the
Act because only one union will in fact represent both supervisors and rank-
and-file employees of the petitioner.
The respondents on the other hand argue that the supervisory employees of
an employer may validly join an organization of the rank-and-file employees
so long as the said rank and file employees are not under their supervision.
They submit that Adamson and Adamson Supervisory Union (FFW) is not
composed of sales supervisors and, therefore, the salesmen of the company
are not under the supervision of the supervisory employees forming the
union. Respondents also argue that even if the salesmen of the petitioner
company are under the supervision of the members of the supervisory union,
the prohibition would not apply because the salesmen and the supervisory
employees of the company have their separate and distinct labor
organizations, and, as a matter of fact, their respective unions sent separate
proposal for collective bargaining agreements. They contend that their
respective labor organizations, not the FFW, will represent their members in
the negotiations as well as in the signing of their respective contracts.
Respondents further argue that the Federation of Free Workers has, as its
affiliates, supervisory as well as rank-and-file employees, and should both the
supervisory and the rank-and-file employees of a certain employer who have
separate certificates of registration affiliate with the same federation, the
prohibition does not apply as the federation is not the organization of the
supervisory employees contemplated in the law.
The issue presented involves the correct interpretation of Section 3 of
Republic Act No. 875, the Industrial Peace Act, as amended, which states:
Employees shall have the right to self-organization and to form join or assist
labor organizations of their own choosing for the purpose 6f collective
bargaining through representatives of their own and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or
protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision but
may form separate organizations of their own.
The right of employees to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining
and to engage in concerted activities for mutual aid or protection is a
fundamental right of labor that derives its existence from the Constitution. It is
recognized and implemented through the abovecited Section 3 of the
Industrial Peace Act as amended.
In interpreting the protection to labor and social justice provisions of the
Constitution and the labor laws or rules and regulations implementing the
constitutional mandates, we have always adopted the liberal approach which
favors the exercise of labor rights.
In deciding this case, we start with the recognized rule that the right of
supervisory employees to organize under the Industrial Peace Act carries
certain restrictions but the right itself may not be denied or unduly abridged.
The supervisory employees of an employer cannot join any labor organization
of employees under their supervision but may validly form a separate
organization of their own. As stated in Caltex Filipino Managers and
Supervisors Association v. Court of Industrial Relations (47 SCRA 112), it
would be to attach unorthodoxy to, not to say an emasculation of, the concept
of law if managers as such were precluded from organization. Thus, if
Republic Act 875, in its Section 3, recognizes the right of supervisors to form
a separate organization of their own, albeit they cannot be members of a
labor organization of employees under their supervision, that authority of
supervisors to form a separate labor union carries with it the right to bargain
collectively with the employer. (Government Service Insurance System v.
Government Service Insurance System Supervisors' Union, 68 SCRA 418).
The specific issue before us is whether or not a supervisor's union may
affiliate with a federation with which unions of rank and-file employees of the
same employer are also affiliated. We find without merit the contentions of
petitioner that if affilation will be allowed, only one union will in fact represent
both supervisors and rank-and-file employees of the petitioner; that there
would be an indirect affiliation of supervisors and rank-and-file employees
with one labor organization; that there would be emerging of two bargaining
units ; and that the respondent union will loose its independence because it
becomes an alter ego of the federation.
In Elisco-Elirol Labor Union (NAFLU) v. Noriel (80 SCRA 681) and Liberty
Cotton Mills Workers Union v. Liberty Cotton Mills, Inc. (66 SCRA 512), we
held :
xxx xxx xxx
... the court expressly cited and affirmed the basic principle that '(T)he locals
are separate and distinct units primarily designed to secure and maintain the
equality of bargaining power between the employer and their employee-
member in the economic struggle for the fruits of the joint productive effort of
labor and capital; and the association of the locals into the national union (as
PAFLU) was in the furtherance of the same end. These association are
concensual entities capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the local unions into a
common enterprise to increase by collective action the common bargaining
power in respect of the terms and conditions of labor. Yet the locals remained
the basic units of association; free to serve their own and the common-
interest of all, subject to the restraints imposed by the Constitution and By-
laws of the Association; and free also to renounce the affiliation for mutual
welfare upon the terms laid down in the agreement which brought it into
existence.
We agree with the Court of Industrial Relations when it ruled that:
xxx xxx xxx
The confusion seems to have stemmed from the prefix of FFW after the name
of the local unions in the registration of both. Nonetheless, the inclusion of
FWW in the registration is merely to stress that they are its affiliates at the
time of registrations. It does not mean that said local unions cannot stand on
their own Neither can it be construed that their personalities are so merged
with the mother federation that for one difference or another they cannot
pursue their own ways, independently of the federation. This is borne by the
fact that FFW, like other federation is a legitimate labor organization separate
and distinct from its locals and affiliates and to construe the registration
certificates of the aforecited unions, along the line of the Company's
argument. would tie up any affiliates to the shoe string of the federation. ...
The Adamson and Adamson Supervisory Union and the Adamson and
Adamson, Inc., Salesmen Association (FFW), have their own respective
constitutions and by-laws. They are separately and independently registered
of each other. Both sent their separate proposals for collective bar
agreements with their employer. There could be no employer influence on
rank-and-file organizational activities nor their could be any rank and file
influence on the supervisory function of the supervisors because of the
representation sought to be proscribed.
WHEREFORE, the instant petition is DISMISSED for lack of merit. The
questioned order and the resolution en banc of the respondent Court of
Industrial Relations are AFFIRMED.
SO ORDERED

G.R. No. L-45824 June 19, 1985

VOLKSCHEL LABOR UNION, petitioner,
vs.
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION FOR
METAL, WORKERS, DMG, INC., PEOPLE'S CAR, INC., KARBAYAN INC.,
and RTC TRADING, INC., respondents.
Ignacio P. Lacsina for petitioner.
William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.

CUEVAS, J.:
Petition for certiorari to review the Resolutions dated January 25, 1977 and
March 14, 1977 of the Bureau of Labor Relations.
On April 25. 1977, however, a Supplemental Petition was filed seeking the
issuance of —
(1) A preliminary mandatory injunction commanding respondents to return to
petitioner the union dues amounting to about P55,000.00 lawfully pertaining
to it but illegally levied upon, collected and handed over by respondent
Bureau, acting through the NLRC sheriff, to respondent Associated Labor
Union for Metal workers, with the collusion of respondents DMG, Inc.,
Karbayan, Inc. and RTC Machineries, Inc.;
(2) A preliminary restraining order prohibiting respondents from making
further delivery to respondent Associated Labor Union for Metal workers of
Union dues collected or to be collected through check-off from the wages of
petitioner's members by respondents, DMG, Inc., Karbayan, Inc., RTC
Machineries, Inc., and People's Car, Inc., under or by virtue of the questioned
writ of execution issued by respondent Bureau, dated April 4, 1977.
Petitioner was once affiliated with the Associated Labor Union for Metal
Workers (ALUMETAL for short). On August 1, 1975, both unions, using the
name Volkschel Labor Union Associated Labor Union for Metal Workers,
jointly entered into a collective bargaining agreement with respondent
companies. One of the subjects dealt with is the payment of union dues which
is provided for in Section 3, Article 1, of the CBA, which reads:
Section 3. CHECK-OFF. — The COMPANY agrees to make payroll
deductions not softener than twice a month of UNION membership dues and
such special assessments fees or fines as may be duly authorized by the
UNION, provided that the same is covered by the individual check-off
authorization of the UNION members. All said deductions shall be promptly
transmitted within five (5) days by the COMPANY to the UNION Treasurer.
The COMPANY shall prepare two (2) checks. One (1) check will be under the
name of the local union as their local fund including local special assessment
funds and the other check will be for the ALU Regional Office regarding the
remittance of the UNION dues deduction.
On March 10, 1976, a majority of petitioner's members decided to disaffiliate
from respondent federation in order to operate on its own as an independent
labor group pursuant to Article 241 (formerly Article 240) of the Labor Code of
the Philippines, the pertinent portion of which reads:
Incumbent affiliates of existing federations or national unions may disaffiliate
only for the purpose of joining a federation or national union in the industry or
region in which it properly belongs or for the purpose of operating as an
independent labor group.
Accordingly, a resolution was adopted and signed by petitioner's members
revoking their check-off authorization in favor of ALUMETAL and notices
thereof were served on ALUMETAL and respondent companies.
Confronted with the predicament of whether or not to continue deducting from
employees' wages and remitting union dues to respondent, ALUMETAL
which wrote respondent companies advising them to continue deducting
union dues and remitting them to said federation, respondent companies
sought the legal opinion of the respondent Bureau as regards the controversy
between the two unions. On November 11, 1976, Med-Arbiter George A.
Eduvalla of respondent Bureau rendered a Resolution which in effect found
the disaffiliation legal but at the same time gave the opinion that, petitioner's
members should continue paying their dues to ALUMETAL in the concept of
agency fees. 1
From the said Resolution, of the Med-Arbiter both petitioner and respondent
ALUMETAL appealed to the Director of respondent Bureau. Petitioner'
contended that the Med-Arbiter's opinion to the effect that petitioner's
members remained obligated to pay dues to respondent ALUMETAL was
inconsistent with the dispositive finding that petitioner's disaffiliation from
ALUMETAL was valid. ALUMETAL, on the other hand, assailed the
Resolution in question asserting that the disaffiliation should have been
declared contrary to law.
On January 25, 1977, respondent Bureau, through its Acting Director,
Francisco L. Estrella, REVERSED the Med-Arbiter's Resolution., and
declared that the Bureau recognized "the continued affiliation of Volkschel
Labor Union with the Associated Labor Union for Metal Workers." 2
Petitioner appealed the Acting Director's Resolution to the Secretary of Labor
know Minister of Labor and Employment) who, treating the appeal as a
Motion for Reconsideration referred the same back to respondent Bureau On
March 14, 1977, the Bureau denied the appeal for lack of merit.
Hence, the instant petition.
Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting
Secretary of Labor, Amado Gat Inciong, issued a of execution commanding
the Sheriff of the National Labor Relations Commission to enforce and
execute the order of January 25, 1977, which has become final and
executory. 3 Pursuant thereto, the NLRC Sheriff enforced and implemented
the Order of January 25, 1977, as a result of which respondent companies
turned over and handed to respondent federation the union dues and other
assessments in accordance with the check-off provision of the CBA,
From the pleadings filed and arguments of counsel, the following issues
present themselves for this Court's resolution.
I
Is petitioner union's disaffiliation from respondent federation valid?
II
Do respondent companies have the right to effect union dues collections
despite revocation by the employees of the check-off authorization? and
III
Is respondent federation entitled to union dues payments from petitioner
union's members notwithstanding their disaffiliation from said federation?
We resolve the first issue in the affirmative.
The right of a local union to disaffiliate from its mother union is well-settled. In
previous cases, it has been repeatedly held that a local union, being a
separate and voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when circumstances warrant. 4
This right is consistent with the Constitutional guarantee of freedom of
association (Article IV, Section 7, Philippine Constitution).
Petitioner contends that the disaffiliation was not due to any opportunists
motives on its part. Rather it was prompted by the federation's deliberate and
habitual dereliction of duties as mother federation towards petitioner union.
Employees' grievances were allegedly left unattended to by respondent
federation to the detriment of the employees' rights and interests.
In reversing the Med-Arbiter's resolution, respondent Bureau declared: the
Department of Labor is set on a task to restructure the labor movement to the
end that the workers will unite themselves along industry lines. Carried to its
complete fruition, only one union for every industry will remain to bargain
collectively for the workers. The clear policy therefore even now is to conjoin
workers and worker groups, not to dismember them. 5 This policy is
commendable. However, we must not lose sight of the constitutional mandate
of protecting labor and the workers' right to self-organization. In the
implementation and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the primordial
and paramount consideration. In the case at bar, it would go against the spirit
of the labor law to restrict petitioner's right to self-organization due to the
existence of the CBA. We agree with the Med-Arbiter's opinion that "A
disaffiliation does not disturb the enforceability and administration of a
collective agreement; it does not occasion a change of administrators of the
contract nor even an amendment of the provisions thereof." 6 But nowhere in
the record does it appear that the contract entered into by the petitioner and
ALUMETAL prohibits the withdrawal of the former from the latter.
This now brings us to the second issue. Under Section 3, Article I, of the
CBA, the obligation of the respondent companies to deduct and remit dues to
ALUMETAL is conditioned on the individual check-off authorization of
petitioner's members, In other words, ALUMETAL is entitled to receive the
dues from respondent companies as long as petitioner union is affiliated with
it and respondent companies are authorized by their employees (members of
petitioner union) to deduct union dues. Without said affiliation, the employer
has no link to the mother union. The obligation of an employee to pay union
dues is coterminous with his affiliation or membership. "The employees'
check-off authorization, even if declared irrevocable, is good only as long as
they remain members of the union concerned." 7 A contract between an
employer and the parent organization as bargaining agent for the employees
is terminated by the disaffiliation of the local of which the employees are
members. 8 Respondent companies therefore were wrong in continuing the
check-off in favor of respondent federation since they were duly notified of the
disaffiliation and of petitioner's members having already rescinded their
check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling
further on the last issue. Suffice it to state that respondent federation is not
entitled to union dues payments from petitioner's members. "A local union
which has validly withdrawn from its affiliation with the parent association and
which continues to represent the employees of an employer is entitled to the
check-off dues under a collective bargaining contract." 9
WHEREFORE, the Resolutions of the Bureau of Labor Relations of January
25, 1977 and March 14, 1977 are REVERSED and SET ASIDE. Respondent
ALUMETAL is ordered to return to petitioner union all the union dues
enforced and collected through the NLRC Sheriff by virtue of the writ of
execution dated April 4, 1977 issued by respondent Bureau.
No costs.
SO ORDERED.
Makasiar, Aquino, Concepcion, Jr., Abad Santos and Escolin, JJ., concur.

SECOND DIVISION

[G.R. No. 127374. January 31, 2002.]

PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO

DAKILA, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION,
LABOR ARBITER EMERSON TUMANON, PHILIPPINE ASSOCIATION OF
FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and
SERAFIN AYROSO, Respondents.

[G.R. No. 127431. January 31, 2002.]

PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW,

MACARIO CABANIAS, PEPITO RODILLAS, SHARON CASTILLO, DANILO
CARBONEL, MANUEL EDA, ROLANDO FELIX, JOCELYN FRONDA,
RICARDO LUMBA, JOSEPH MARISOL, NERISA MORTEL, TEOFILO
QUIRONG, LEONARDO REYES, MANUEL CADIENTE and HERMINIA
RIOSA, Petitioners, v. PHILIPPINE ASSOCIATION OF FREE LABOR
UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and NATIONAL
LABOR RELATIONS COMMISSION, SECOND DIVISION, Respondents.

DECISION

BELLOSILLO, J.:

This is a petition for certiorari 1 seeking to set aside the 31 July 1996
Decision 2 of the National Labor Relations Commission affirming the 30 June
1995 Decision of the Labor Arbiter holding petitioners Philippine Skylanders,
Inc., Mariles C. Romulo 3 and Francisco Dakila as well as the elected officers
of the Philippine Skylanders Employees and Workers Association-PAFLU 4
guilty of unfair labor practice and ordering them to pay private respondent
Philippine Association of Free Labor Union (PAFLU) September 5
P150,000.00 as damages. Petitioners likewise seek the reversal of the 31
October 1996 Resolution of the NLRC denying their Motion for
Reconsideration. chanrob1es virtua1 law library

In November 1993 the Philippine Skylanders Employees Association (PSEA),

a local labor union affiliated with the Philippine Association of Free Labor
Unions (PAFLU) September (PAFLU), won in the certification election
conducted among the rank and file employees of Philippine Skylanders, Inc.
(PSI). Its rival union, Philippine Skylanders Employees Association-WATU
(PSEA-WATU) immediately protested the result of the election before the
Secretary of Labor.

Several months later, pending settlement of the controversy, PSEA sent

PAFLU a notice of disaffiliation citing as reason PAFLU’s supposed deliberate
and habitual dereliction of duty toward its members. Attached to the notice
was a copy of the resolution adopted and signed by the officers and members
of PSEA authorizing their local union to disaffiliate from its mother federation.

PSEA subsequently affiliated itself with the National Congress of Workers

(NCW), changed its name to Philippine Skylanders Employees Association —
National Congress of Workers (PSEA-NCW), and to maintain continuity within
the organization, allowed the former officers of PSEA-PAFLU to continue
occupying their positions as elected officers in the newly-forged PSEA-NCW.

On 17 March 1994 PSEA-NCW entered into a collective bargaining

agreement with PSI which was immediately registered with the Department of
Labor and Employment.

Meanwhile, apparently oblivious to PSEA’s shift of allegiance, PAFLU

Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a copy
of PSI’s audited financial statement. Ayroso explained that with the dismissal
of PSEA-WATU’s election protest the time was ripe for the parties to enter
into a collective bargaining agreement.

On 30 July 1994 PSI through its personnel manager Francisco Dakila denied
the request citing as reason PSEA’s disaffiliation from PAFLU and its
subsequent affiliation with NCW.

Agitated by PSI’s recognition of PSEA-NCW, PAFLU through Serafin Ayroso

filed a complaint for unfair labor practice against PSI, its president Mariles
Romulo and personnel manager Francisco Dakila. PAFLU alleged that aside
from PSI’s refusal to bargain collectively with its workers, the company
through its president and personnel manager, was also liable for interfering
with its employees’ union activities. 6

Two (2) days later or on 6 October 1994 Ayroso filed another complaint in
behalf of PAFLU for unfair labor practice against Francisco Dakila. Through
Ayroso PAFLU claimed that Dakila was present in PSEA’s organizational
meeting thereby confirming his illicit participation in union activities. Ayroso
added that the members of the local union had unwittingly fallen into the
manipulative machinations of PSI and were lured into endorsing a collective
bargaining agreement which was detrimental to their interests. 7 The two (2)
complaints were thereafter consolidated.

On 1 February 1995 PAFLU amended its complaint by including the elected

officers of PSEA-PAFLU as additional party respondents. PAFLU averred that
the local officers of PSEA PAFLU, namely Macario Cabanias, Pepito Rodillas,
Sharon Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix, Jocelyn
Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo Quirong,
Leonardo Reyes, Manuel Cadiente, and Herminia Riosa, were equally guilty
of unfair labor practice since they brazenly allowed themselves to be
manipulated and influenced by petitioner Francisco Dakila. 8

PSI, its president Mariles C. Romulo, and its personnel manager Dakila
moved for the dismissal of the complaint on the ground that the issue of
disaffiliation was an inter-union conflict which lay beyond the jurisdiction of
the Labor Arbiter. On the other hand, PSEA-NCW took the cudgels for its
officers who were being sued in their capacities as former officers of PSEA-
PAFLU and asserted that since PSEA was no longer affiliated with PAFLU,
Ayroso or PAFLU for that matter had no personality to file the instant
complaint. In support of this assertion, PSEA-NCW submitted in evidence a
Katunayan signed by 111 out of 120 rank and file employees of PSI
disauthorizing Ayroso or PAFLU from instituting any action in their behalf. 9

In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA’s

disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their
respective officers guilty of unfair labor practice. The Decision explained that
despite PSEA-PAFLU’s status as the sole and exclusive bargaining agent of
PSI’s rank and file employees, the company knowingly sanctioned and
confederated with Dakila in actively assisting a rival union. This, according to
the Labor Arbiter, was a classic case of interference for which PSI could be
held responsible. As PSEA-NCW’s personality was not accorded recognition,
its collective bargaining agreement with PSI was struck down for being
invalid. Ayroso’s legal personality to file the complaint was sustained on the
ratiocination that under the Labor Code no petition questioning the majority
status of the incumbent bargaining agent shall be entertained outside of the
sixty (60)-day period immediately before the expiry date of such five (5)-year
term of the collective bargaining agreement that the parties may enter into.
Accordingly, judgment was rendered ordering PSI, PSEA-PAFLU and their
officers to pay PAFLU P150,000.00 in damages. 10

PSI, PSEA and their respective officers appealed to the National Labor
Relations Commission (NLRC). But the NLRC upheld the Decision of the
Labor Arbiter and conjectured that since an election protest questioning
PSEA-PAFLU’s certification as the sole and exclusive bargaining agent was
pending resolution before the Secretary of Labor, PSEA could not validly
separate from PAFLU, join another national federation and subsequently
enter into a collective bargaining agreement with its employer-company. 11

Petitioners separately moved for reconsideration but both motions were

denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW
together with their respective officers pleading for a reversal of the NLRC’s
Decision which they claimed to have been rendered in excess of jurisdiction.
In due time, both petitions were consolidated.

In these petitions, petitioner PSEA together with its officers argued that by
virtue of their disaffiliation PAFLU as a mere agent had no authority to
represent them before any proceedings. They further asserted that being an
independent labor union PSEA may freely serve the interest of all its
members and readily disaffiliate from its mother federation when
circumstances so warrant. This right, they averred, was consistent with the
constitutional guarantee of freedom of association. 12

For their part, petitioners PSI, Romulo and Dakila alleged that their decision
to bargain collectively with PSEA-NCW was actuated, to a large extent, by
PAFLU’s behavior. Having heard no objections or protestations from PAFLU
relative to PSEA’s disaffiliation, they reckoned that PSEA’s subsequent
association with NSW was done bona fide. 13

The Solicitor General filed a Manifestation in Lieu of Comment recommending

that both petitions be granted. In his Manifestation, the Solicitor General
argued against the Labor Arbiter’s assumption of jurisdiction citing the
following as reasons: first, there was no employer-employee relationship
between complainant Ayroso and PSI over which the Labor Arbiter could
rightfully assert his jurisdiction; second, since the case involved a dispute
between PAFLU as mother federation and PSEA as local union, the
controversy fell within the jurisdiction of the Bureau of Labor Relations; and
lastly, the relationship of principal-agent between PAFLU and PSEA had
been severed by the local union through the lawful exercise of its right of
disaffiliation. 14

Stripped of non-essentials, the fundamental issue tapers down to the

legitimacy of PSEA’s disaffiliation. To be more precise, may PSEA, which is
an independent and separate local union, validly disaffiliate from PAFLU
pending the settlement of an election protest questioning its status as the sole
and exclusive bargaining agent of PSI’s rank and file employees? chanrob1es virtua1 1aw 1ibrary

At the outset, let it be noted that the issue of disaffiliation is an inter-union

conflict the jurisdiction of which properly lies with the Bureau of Labor
Relations (BLR) and not with the Labor Arbiter. 15 Nonetheless, with due
recognition of this fact, we deem it proper to settle the controversy at this
instance since to remand the case to the BLR would only mean intolerable
delay for the parties.

The right of a local union to disaffiliate from its mother federation is not a
novel thesis unillumined by case law. In the landmark case of Liberty Cotton
Mills Workers Union v. Liberty Cotton Mills, Inc. 16 we upheld the right of
local unions to separate from their mother federation on the ground that as
separate and voluntary associations, local unions do not owe their creation
and existence to the national federation to which they are affiliated but,
instead, to the will of their members. The sole essence of affiliation is to
increase, by collective action, the common bargaining power of local unions
for the effective enhancement and protection of their interests. Admittedly,
there are times when without succor and support local unions may find it
hard, unaided by other support groups, to secure justice for themselves.

Yet the local unions remain the basic units of association, free to serve their
own interests subject to the restraints imposed by the constitution and by-
laws of the national federation, and free also to renounce the affiliation upon
the terms laid down in the agreement which brought such affiliation into
existence.

Such dictum has been punctiliously followed since then. 17

Upon an application of the aforecited principle to the issue at hand, the

impropriety of the questioned Decisions becomes clearly apparent. There is
nothing shown in the records nor is it claimed by PAFLU that the local union
was expressly forbidden to disaffiliate from the federation nor were there any
conditions imposed for a valid breakaway. As such, the pendency of an
election protest involving both the mother federation and the local union did
not constitute a bar to a valid disaffiliation. Neither was it disputed by PAFLU
that 111 signatories out of the 120 members of the local union, or an
equivalent of 92.5% of the total union membership supported the claim of
disaffiliation and had in fact disauthorized PAFLU from instituting any
complaint in their behalf. Surely, this is not a case where one (1) or two (2)
members of the local union decided to disaffiliate from the mother federation,
but it is a case where almost all local union members decided to disaffiliate.

It was entirely reasonable then for PSI to enter into a collective bargaining
agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU,
there would be no restrictions which could validly hinder it from subsequently
affiliating with NCW and entering into a collective bargaining agreement in
behalf of its members.

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

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

against those of a national federation, those of the former must be preferred.
Parenthetically though, the desires of the mother federation to protect its
locals are not altogether to be shunned. It will however be to err greatly
against the Constitution if the desires of the federation would be favored over
those of its members. That, at any rate, is the policy of the law. For if it were
otherwise, instead of protection, there would be disregard and neglect of the
lowly workingmen.

WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine

Skylanders and Workers Association-NCW, together with their respective
officers, are GRANTED. The Decision of the National Labor Relations
Commission of 31 July 1996 affirming the Decision of the Labor Arbiter of 30
June 1995 holding petitioners Philippine Skylanders and Workers
Association-NCW, Philippine Skylanders, Inc. and their respective officers,
guilty of unfair labor practice and ordering them to pay damages to private
respondent Philippine Association of Free Labor Unions (PAFLU) September
(now UNIFIED PAFLU) as well as the Resolution of 31 October 1996 denying
reconsideration is REVERSED and SET ASIDE. No costs.

SO ORDERED.

Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur.

G.R. No. L-33987 September 4, 1975

LIBERTY COTTON MILLS WORKERS UNION, RAFAEL NEPOMUCENO,
MARIANO CASTILLO, NELLY ACEVEDO, RIZALINO CASTILLO and
RAFAEL COMBALICER, petitioners,
vs.
LIBERTY COTTON MILLS, INC., PHILIPPINE ASSOCIATION OF FREE
LABOR UNION (PAFLU) and the COURT OF INDUSTRIAL RELATIONS,
respondents.
Carlos E. Santiago for petitioners.
Paredes, Poblador, Nazareno, Azada, Tomacuz & Paredes for respondent
Liberty Cotton Mills, Inc. Ernesto D. Llaguno for respondent Union.
Jose K. Manguiat, Jr. for respondent Court.

ESGUERRA, J.:
Petition for Certiorari to review the decision dated March 30, 1971 of the
Court of Industrial Relations in Case No. 4216, dismissing petitioners'
complaint for unfair labor practice.
The factual background of this case is as follows:
The Liberty Cotton Mills Workers Union, hereinafter referred to as the Union,
adopted its Constitution and By-laws on January 1, 1959.1 Among other
things, the said Constitution provided:
ARTICLE I — NAME AND DOMICILE.
Section 1. The name of this organization shall be Liberty Cotton Mills Workers
Union-PAFLU.
Section 2. This Union shall have its office at l233 Tecson, Tindalo, Tondo,
Manila.
xxx xxx xxx
ARTICLE X — UNION AFFILIATION
Section 1. The Liberty Cotton Mills Workers Union-Paflu shall be affiliated
with the Philippine Association of Free Labor Unions, otherwise known as
PAFLU, and shall remain an affiliate as long as ten or more of its members
evidence their desire to continue the said local union's affiliation, in
accordance with the Paflu Constitution, Article XI-Paragraph 11:15 thereof;
ARTICLE XIII — CHARGES, TRIALS, AND IMPEACHMENT OF OFFICERS

AND MEMBERS: APPEALS.
Section 1. Any member or officer of the Liberty Cotton Mills Workers Union-
Paflu may be charged, tried or impeached if an officer, in accordance with this
and the PAFLU CONSTITUTION.
On October 1, 1959, a Collective Bargaining Agreement2 was entered into by
and between the Company and the Union represented by PAFLU. Said
Agreement contained these clear and unequivocal provisions:
This Agreement, made and entered into this 1st day of October, 1959, in the
City of Manila, by and between
The LIBERTY COTTON MILLS INC., a corporation duly organized and
existing under the laws of the Philippines, with principal office at 549 San
Francisco Street, Karuhatan, Polo, Bulacan, hereinafter referred to as the
COMPANY, represented in this Act by its President, Mr. RAFAEL
GOSINGCO:
AND
THE PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, a legitimate
labor organization existing and operating under the laws of the Philippines,
with postal address at 1233 Tecson, Tindalo, Tondo, Manila, hereinafter
referred to as the UNION, represented in this Act by its National Treasurer
and duly authorized representative, Mr. CATALINO G. LUZANO, herein
acting for and in behalf of its affiliate the LIBERTY COTTON MILLS
WORKERS UNION-PAFLU, and the employees of the Company in the
appropriate bargaining unit hereinafter defined:
WITNESSETH:
I. UNION RECOGNITION
The COMPANY recognizes the UNION as the sole bargaining agent for all of
its employees, other than supervisors ... consonant with the certification of the
said UNION by the Court of Industrial Relations in Case No. 627-MC,
entitled" In re Petition for Certification Election, Liberty Cotton Mills, Inc.,
petitioner."
III. UNION SECURITY
All employees who, at the time of the signing of this Agreement are members
of the UNION, or who, at any time during the effectivity of this Agreement,
may join the UNION, shall as a condition for continued employment, remain
members of the UNION while this agreement remains in force; any employee,
who, at any time during the life of this agreement shall resign from the UNION
or be expelled, therefrom in accordance with its Constitution and By-Laws for
non-payment of union dues or other duly approved union assessments or for
disloyalty to the UNION shall be dismissed from employment by the
COMPANY upon request in writing by the UNION which shall hold the
COMPANY free from any liability arising from or caused by such dismissal.
XI. TERM
This Agreement shall be effective from October 1, 1959 to September 30,
1961, during which time it shall be binding upon the parties hereto and all the
employees of COMPANY comprised within the appropriate bargaining unit
defined above, and may not be modified by court action, by concerted
activities or by any other means. ... Should, either party fail to give written
notice to the other of its desire to amend or discontinue this Agreement at
least thirty (30) days from the expiry date set forth above, this Agreement
shall be continued in force for one (1) year, and thereafter for yearly terms
unless written notice is given at least thirty (30) days from the expiration of
the contract.
The above Collective Bargaining Agreement was amended on February 28,
1964, thus:3
Article III. UNION SECURITY
Additional Clause
The Company agrees to encourage casual workers and non-union members
to join the Union which is the sole and exclusive agent for all the employees
covered by this Agreement.
Article XI. DURATION
The Duration of this Agreement shall be for two (2) years, that is from
November 2, 1963 up to November, 1965.
The Agreements aforementioned bore the signatures of representatives of
both the Company and the PAFLU, and the incumbent President of the local
union.
On March 13, 1964, while the Collective Bargaining Agreement was in full
force, Marciano Castillo and Rafael Nepomuceno, President and Vice-
President, respectively, of the local union, wrote PAFLU, its mother
federation, complaining about the legal counsel assigned by the PAFLU to
assist them in a ULP case (Case No. 4001) they filed against the Company.
In said letter, the local union expressed its dissatisfaction and loss of
confidence in the PAFLU lawyers, claiming that PAFLU never lifted a finger
regarding this particular complaint.
On May 17, 1964, thirty two (32) out of the 36 members of the local union
disaffiliated themselves from respondent PAFLU pursuant to their local
union's Constitution and By-Laws, specifically Article X thereof, supra (p. 12
Record). A copy of the signed resolution of disaffiliation was furnished the
Company as well as the Bureau of Labor Relations. The following day, the
local union wrote the Company and required the turn-over of the checked-off
dues directly to its Treasurer.
On May 27, 1964, PAFLU, thru its National Secretary wrote the Company this
letter:
This is to inform your good office that sometime last May 25, 1964, our
federation was in receipt of a letter signed by 32 persons and informing us of
their desire to disaffiliate the local union from the mother federation —
PAFLU. The members and officers who made the letter have no right to do
the same under our existing contract and under the PAFLUs Constitution and
By-Laws.
We wish to make it clear with the management that the contractural union in
our contract which was signed a few months ago is the Philippine Association
of Free Labor Union (PAFLU). The actuation made by the supposed union
members is inconsistent with the present contract we have and under the
provisions of "Maintenance of Union Membership" they can an be dismissed.
Under the PAFLUs Constitution that is null and void. And in view of the
disloyalty shown by those members, the mother federation will take over the
administration of the Union in dealing with the management especially.
We inform your goodself that the mother federation is not honoring the said
letter and we request you do the same under the circumstances.
Hence, all the communications pertaining to union business and other relative
matters be coursed to the mother federation for prompt action.
And on May 29,1964, PAFLU wrote the Company again, this time quoting en
toto Article III of the Collective Bargaining Agreement on "Union Security" and
requesting the termination of the employment of Rafael Nepomuceno,
Marciano Castillo, Nelly Acevedo, Enrique Managan, Rizalino Castillo and
Rafael Combalicer, all petitioners herein. PAFLU at the same time expelled
the aforementioned workers from their' union membership in the mother
federation for allegedly "instigating union disaffiliation.".
On May 30,1964, the Company terminated the employment of the members
expelled by the PAFLU (Exhs. "D", "D-1" to "D-3" pp. 14-17 Record). On the
last day of May, 1964, counsel for the ousted workers wrote the Company
requesting their reinstatement. This was denied by the Company; hence the
complaint for unfair labor practice filed with the Court of Industrial Relations.
After due hearing, the Court rendered its decision dismissing the complaint,
but with a strong' recommendation for the reinstatement of complainant
workers in respondent Company. The workers (petitioners herein) being
unsatisfied with the decision, appealed to this Court and raised the following
questions:
1. Under the Collective Bargaining Agreement, who between the PAFLU and
the local union is the sole bargaining agent of the workers of the Company?
2. Was the disaffiliation of the local union from the PAFLU valid and justified
under the Constitution and By-laws of the Union?
3. Was the disaffiliation of the Union from the PAFLU an act of disloyalty of
the petitioners (workers) which could be a valid ground for their expulsion
from their own union and their dismissal from the Company?
4. Does the PAFLU as the mother federation of the union possess the power
to expel the officers and members of the union under the Constitution and By-
Laws? And assuming it has such powers, were the petitioner workers validly
expelled from the Union in accordance with the Constitution and By-Laws?
5. May the workers be summarily dismissed by the Company under the
Collective Bargaining Agreement even without valid proof of their valid
expulsion from their own union?
6. Did not the dismissal of only the five (5) petitioner workers constitute
discrimination, considering that the disaffiliation was signed by more than the
majority of the union members?
All these questions boil down to the single issue of whether or not the
dismissal of the complaining employees, petitioners herein, was justified or
not. The resolution of this question hinges on a precise and careful analysis
of the Collective Bargaining Agreements. (Exhs. "H' and "I") In these
contracts it appears that PAFLU has been recognized as the sole bargaining
agent for all the employees of the Company other than its supervisors and
security guards. Moreover it likewise appears that "PAFLU, represented in
this Act by its National Treasurer, and duly authorized representative, ...
(was) acting for and in behalf of its affiliate, the Liberty Cotton Mills Workers
Union and the employees of the Company, etc.' In other words, the PAFLU,
acting for and in behalf of its affiliate, had the status of an agent while the
local union remained the basic unit of the association free to serve the
common interest of all its members including the freedom to disaffiliate when
the circumstances warrant. This is clearly provided in its Constitution and By-
Laws, specifically Article X on Union Affiliation, supra. At this point, relevant is
the ruling in an American case:4
The locals are separate and distinct units primarily designed to secure and
maintain an equality of bargaining power between the employer and their
employee-members in the economic struggle for the fruits of the joint
productive effort of labor and capital; and the association of the locals into the
national union (as PAFLU) was in furtherance of the same end. These
associations are consensual entities capable of entering into such legal
relations with their members. The essential purpose was the affiliation of the
local unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association, free to serve their own and
the common interest of all, subject to the restraints imposed by the
Constitution and By-Laws of the Association, and also to renounce the
affiliation for mutual welfare upon the terms laid down in the agreement which
brought it into existence. (Emphasis supplied)
This brings Us to the question of disaffiliation which was the root cause of the
dismissal. It is claimed by PAFLU that the local union could not have validly
disaffiliated from it as the Union Security Clause so provided. We have
meticulously read the provision of the supposed union security clause and
We cannot agree with both the stand of PAFLU and the respondent court. For
while it is correct to say that a union security clause did exist, this clause was
limited by the provision in the Unions' Constitution and By-Laws, which
states:
That the Liberty Cotton Mills Workers Union-PAFLU shall be affiliated with the
PAFLU, and shall remain an affiliate as long as ten (10) or more of its
members evidence their desire to continue the said local unions affiliation.
Record shows that only four (4) out of its members remained for 32 out of the
36 members of the Union signed the resolution of disaffiliation on May 17,
1964, triggered by the alleged negligence of PAFLU in attending to the needs
of its local union, particularly its failure to assign a conscientious lawyer to the
local to attend to the ULP case they filed against the Company. The
disaffiliation was, therefore, valid under the local's Constitution and By-Laws
which, taken together with the Collective Bargaining Agreement, is
controlling. The Court of Industrial Relations likewise held in its decision that
the act of disaffiliation did not have any effect as the workers retracted from
such act. As stated by the respondent court —
... it is believed that the effect of their retraction obliterates their participation
in the resolution. Hence, under Article X of the said Constitution and By-Laws,
complainant union remained affiliated with respondent union at the time
termination of the services of complainant workers was requested and when
they were dismissed by the Company on May 30, 1964.
Although the fact of retraction is true, We find that the respondent court failed
to notice the fact that not all signatories to the resolution of disaffiliation dated
May 17, 1964, took part in the retraction. Only a number of employees, 16 to
be exact, retracted. Also, and this is a significant factor, the retraction is dated
June 3, 1964, or four days after the petitioners herein had been dismissed.
There is no use in saying that the retraction obliterated the act of disaffiliation
when they were already out of the service when it was done. The
disaffiliation, coming as it did from the greater majority of its members, is
more than enough to show the collective desire of the members of the Liberty
Cotton Mills Workers Union to sever their relations from the mother
federation. The right of disaffiliation is inherent in the compact and such act
should not have been branded as an act of disloyalty, especially considering
the cause which impelled the union to take such a step.
Lastly, we will take up the process by which the workers were dismissed. We
find that it was hastily and summarily done. The PAFLU received the
resolution to disaffiliate on or about May 25, 1964, after which it wrote the
Company about its stand, first on the 27th of May followed by its letter of the
29th requesting for the termination of petitioners herein for 'disloyalty in
having instigated disaffiliation'. The Company the acting on the request of the
mother federation sent notices of termination to the officers of the local union
immediately on the day following, or on May 30, 1964, heavily relying on the
Collective Bargaining Agreement, viz:
... for disloyalty to the union shall be dismissed from employment by the
Company upon request in writing by the Union, which shall hold the
COMPANY free from any liability arising from or caused by such dismissal.
While the above quoted provision may have been the basis for the
Company's actuation, as in fact it was alleged by the Company in its Brief,
We are of the opinion that such stipulation does not bind the courts much less
released the Company from liability should a finding for unfair labor practice
be positive. In the case at bar, however, considering that the dispute revolved
around the mother federation and its local, with the company dismissing the
workers at the instance of the mother federation, We believe that the
Company's liability should be limited to the immediate reinstatement of the
workers.
Considering, however, that their dismissal was effected without previous
hearing, and at the instance of PAFLU, this mother federation should be, as it
is hereby, held liable to the petitioners for the payment of their back wages.
Following the precedent of Mercury Drug Co. vs. CIR,5 of fixing an amount of
net backwages and doing away with the protracted process of determining
the complainants-workers' earnings elsewhere during the period of their
illegal dismissal, the Court fixes the amount of backwages to be paid under
this decision to the complainants-workers at three (3) years backwages
without deduction or qualification.
WHEREFORE, the decision appealed from is reversed and set aside and the
company is hereby ordered to immediately reinstate complainant workers,
within thirty (30) days from notice of this decision and failure to so reinstate
the workers without valid and just cause shall make respondent company
liable to the workers for the payment of their wages from and after the
expiration of such thirty-day period. The mother federation respondent
PAFLU is sentenced to pay complainants-workers the equivalent of three (3)
years backwages without deduction or qualification.
In view of the length of time that this dispute has been pending, this decision
shall be immediately executory upon promulgation and notice to the parties.
Without pronouncement as to costs.
Castro (Chairman), Teehankee, Makasiar, Muñoz Palma and Martin, JJ.,
concur.
 
G.R. No. L-37678 April 30, 1976
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
RUSTICO ABAY, defendant-appellant.
Nicolas V. Benedicto, Jr. for appellant.
Acting Solicitor General Conrado T. Limcaoco, Assistant Solicitor General
Hugo E. Gutierrez, Jr. and Trial Attorney Ronaldo T. Reyes for appellee.

ANTONIO, J.:
Appeal from a decision of the Court of First Instance of Manila, Branch XV,
convicting appellant Rustico Abay of the crime of Forcible Abduction with
Rape and sentencing him to suffer the penalty of reclusion perpetua, to
indemnify the offended party in the sum of P6,000.00, and to pay the costs.
The issue is one of credibility-whether Lydia Casaul, an 18 year old girl, was
forcibly abused by appellant in the night of May 17,1971, or whether appellant
had carnal knowledge of her with her consent.
The case arose from a complaint filed on May 18, 1971 by complainant Lydia
Casaul and her aunt, Amada Cargullo, with the police authorities. An
investigation was made by the National Bureau of Investigation and
subsequently the requisite preliminary investigation was conducted by Fiscal
Luis Pefia. On the basis of said investigation, a complaint was filed in court on
July 16, 1971, alleging:
That on or about May 17, 1971, in the City of Manila, Philippines, the said
accused conspiring and confederating together with two others whose true
names and Identities are still unknown, and helping one another did then and
there, willfully, unlawfully and feloniously abduct, take and carry away the
undersigned complainant, an unmarried girl 18 years of age, by means of
force and intimidation, to wit: by then and there pointing a gun at her, forcing
her to ride in a waiting taxi at España St. in said city, against her will and
consent and with lewd designs, and once there, said accused, by means of
force and intimidation, have sexual intercourse with her, likewise against her
will and consent.
The following facts have been established by the prosecution's evidence: At
about 10:00 o'clock in the night of May 17, 1971, while complainant Lydia
Casaul, an 18-year old waitress at the Taipeh House Restaurant in España
St., Manila, was waiting for transportation to her residence, a taxicab in which
appellant, Rustico Abay was riding stopped near her. Rustico Abay alighted
from the taxicab, pointed a gun at complainant's back, and ordered her to
board the cab. Two (2) companions of Abay immediately alighted from the
taxi. Abay then warned Lydia not to shout or else he would shoot her.
Stricken with fear, Lydia did as ordered. Inside the cab, appellant repeated
his threat. After a while, the taxicab stopped at a place where there were
trees but no houses. Appellant then pulled her out of the taxicab and took her
to a place near the seashore. While there, appellant Abay, despite
complainant's resistance, was able to touch her body including her private
parts. Rebuffed, however, in his attempts to remove her dress, appellant-
pulled her back into the taxicab. He then brought her to another place where
she was taken inside a locked room- illumined dimly by an electric bulb. As
she stood by the wall, Rustico Abay removed his shirt and trousers, after
which he forced her to drink a beverage which appellant represented to be
Pepsi Cola. After drinking the beverage, however, she felt dizzy. Abay then
pulled her toward the bed. She pleaded with him not to go on with what he
had in mind and to pity her, but her entreaties were ignored. She struggled to
get herself out of his grasp, but dizzy as she was, Abay succeeded in
removing her dress and panties. Abay then held her two hands, stepped on
her feet and forcibly tried to draw her legs apart, failing which he gave her a
fist blow on her stomach and thereafter forcibly inserted his penis in her
vagina. Lydia felt pain at this juncture and lost consciousness. Upon regaining
consciousness, she felt pain all over her body and noticed bleeding in her
private organ. She started to cry and Abay told her to dress up, which she
did. Abay then took her to Quiapo in a taxicab and left her near the church.
When Lydia failed to return home in the night of May 17, 1971, her aunt,
Amada Cargullo, got worried and went out to look for her. She failed,
however, to find her. The next day, May 18, 1971, she continued her search.
Passing by the Quiapo church on her way home, she found Lydia near one of
the doors of the church. Lydia could hardly stand. She was staring blankly,
her hair was dishevelled and in disarray, and her dress was torn at the back
with its zipper broken. When asked what happened to her, Lydia's answers
were incoherent. On their way home aboard a jeepney, she managed to
state: "Si Rustico, si Rustico, inabuso ako." Lydia was first taken to the house
of her aunt at 1704 Antipolo Street, Sta. Cruz, Manila, as it was already dark.
When she was asked what happened to her, she burst into tears and was
trembling. As she complained that she was raped, her aunt brought her the
following day to the Medico-Legal Division of the Manila Police Department
for examination. Dr. Abelardo Lucero, Medico-Legal Officer of said office,
found in her hymen a "healing laceration at 6:30 o'clock which bleeds upon
stretching" indicating forceful entry prior to the examination. Based on his
medical findings, Dr. Lucero opined that the victim could have had sexual
intercourse on May 17, 1971. From there, Lydia was brought to the National
Bureau of Investigation, Manila, for investigation. After her investigation, she
was referred to a psychiatrist at the National Mental Hospital in Mandaluyong,
Rizal, where she placed under observation from June 16 to July 23, 1971. Dr.
Simeona Martin, psychiatrist of the institution, found her to be suffering from
"re-active depression" caused by emotional and physical factors due to a
harrowing experience. In such a state, the patient is sleepless, refuses to talk
or eat and is unmindful of her surroundings. Lydia remained in such a state
for a month but had already improved when she was discharged on July 23,
1971. Dr. Martin testified that in the course of her interviews with Lydia, the
latter narrated to her, between sobs and tears, how she was abducted and
forcibly sexually abused by appellant.
NBI Agent Orlando Dizon also testified that he was able to take down the
statement of the offended party on June 10, 1971, 1 wherein Lydia narrated in
detail under oath how she was forcibly abducted and abused on the night of
May 17, 1971. After the NBI learned of the Identity of the perpetrators of the
offense, NBI Agents Orlando Dizon and Teodoro Pangilinan conducted a
surveillance at the Radiowealth Appliance Company at España Street,
Manila, the place where appellant was reportedly working. Only July 14,
1971, they noticed that a man, who fitted the description given, arrived on a
motorbike. After they approached him and asked about his Identity, appellant
told the NBI agents that his name was Enrique Ranchez; and when they
asked for his driver's license, he presented to them a license in the name of
Enrique Ranchez. When appellant was brought to the hospital, however,
Lydia informed the agents, that the man who represented himself as Enrique
Ranchez was actually the appellant who was the one who abducted and
raped her. 2 On the basis of Lydia's Identification and testimony, appellant
was arrested.
On the other hand, the defense's version of the story is that Rustico Abay and
Lydia Casaul were sweethearts and that they met at the Taipeh House
Restaurant where Abay used to take his meals and where Lydia worked as a
waitress. According to appellant, he and the complainant had gone to the San
Miguel Hotel twice-the first time on March 12, 1971 and the second an May
16, 1971. During the first time, they did not have sexual intercourse because
Lydia had her menstruation. On the second time, they arrived at the hotel at
about 11:00 a.m. and left at about 9:00 a.m. of the next day, May 17. While
they were at the hotel, they kissed and embraced each other and eventually
had sexual intercourse. All these, according to the accused were voluntary on
Lydia's part. It was only when Lydia suggested that he leave his wife and live
with her instead, and he refused, that she became angry and walked out,
leaving him. He followed her up to the Quiapo church where they separated.
Milagros Abay, wife of appellant, in an attempt to corroborate the declaration
of her husband, testified that she came to know Lydia Casaul, the offended
party, during the first week of March, 1971 when she found out that Lydia
used to serve her husband at the Taipeh House Restaurant. During the same
month, she claimed to have discovered a ring in her husband's pocket with an
inscription "Rusty with love, Lydia, 214-71". 3 The next time she saw Lydia
again was on July 16, 1971 at the National Mental Hospital because she was
sent there by her husband. On that occasion, Lydia allegedly confided to her
that her husband was courting her (Lydia) to which courtship she responded
favorably. As a consequence, they used to take a walk at the Luneta, or go to
the movies, and once even stayed in a motel overnight. After their overnight
stay in a motel, appellant allegedly told Lydia that he was married, which
revelation stunned her, and thereupon she asked Rustico to leave his wife
and children but Rustico refused.
Romeo Cireneo, a bellboy at the San Miguel Hotel, also declared that on
March 12, 1971, appellant and Lydia Casaul registered at the hotel and both
appeared to be happy, staying there for about two to three hours. They came
back on May 16, 1971 and stayed at the same hotel from 11:05 a.m. until
9:20 a.m. of the next day, May 17, 1971. He stated that he knew appellant
because Rustico Abay introduced himself to him and that he was able to talk
with the couple on various occasions when he entered the hotel room. To
substantiate his statements, he presented portions of the hotel register. 4
The trial court did not give credence to the aforementioned evidence for the
defense. Firstly, because of the clear and positive evidence of the
prosecution that the complainant was forcibly abused in the night of May 17,
1971; and, secondly, due to the inherent improbability of the version of the
incident given by appellant.
Certainly, the testimony of appellant's wife, Milagros Abay, that on July 16,
1971 Lydia Casaul confided to her at the National Mental Hospital that she
and her husband Rustico Abay were lovers could not be squared with the fact
that Lydia had, on the basis of the testimony of disinterested witnesses, such
as NBI Agent Dizon and Dr. Martin, complained that she had been forcibly
abducted and abused by the appellant. Moreover, during said period, Dr.
Martin clearly and categorically testified that on that date she could not have
conversed with Mrs. Abay in that manner as she was then in a state of
"reactive depression".
The testimony of Romeo Cireneo, bellboy at the San Miguel Hotel, was
properly rejected by the trial court. Certainly, a married man who uses a motel
or an hotel for his secret tryst avails of such establishment for the privacy
offered and for the concealment it gives to his philanderings. He would,
therefore, not blatantly reveal his Identity or that of his paramour to the hotel
bellboy. Attempts of the appellant to prove by means of copies of the hotel
register 5 that the appellant and the offended party were in the San Miguel
Hotel on May 16, 1971 and not on May 17, 1971 is equally futile. As observed
by the trial court, this cannot offset the facts established by the prosecution
witnesses, aside from the observation that the strokes of the handwriting in
Exhibit "4-A" are slanting backward, while those of the signature admitted by
appellants 6 are slanting forward. Moreover, it was proven that the offended
party was working on May 16, 1971. 7
Appellant in this appeal now assails the veracity and credibility of the
testimony of the offended party, particularly on the existence of force or
intimidation on the occasion of the sexual act. To this end, he points to certain
discrepancies in the narration of the attendant circumstances. These
discrepancies are trivial and cannot substantially detract from the credibility of
her testimony. Complainant's testimony appears positive, straightforward and
sincere. It is replete with details relative to the perpetration of the offense
which are consistent with her sworn statement taken on June 10, 1971 before
agents of the National Bureau of Investigation 8 and her supplemental sworn
statement taken on July 14, 1971, before the same NBI agents and in the
presence of witnesses 9 wherein she named the accused-appellant, Rustico
Abay, as the person who forcibly abused her. We have examined the afore-
mentioned records in relation to complainant's testimony in court and found
that they are consistent on all material points. In addition, We have
considered the medical examiner's testimony as well as his report 10 of the
examination conducted upon the person of the complainant on May 19, 1971,
immediately after the commission of the offense, in which report the following
findings were made:
1. Healing laceration in the hymen at 6:30 o'clock position which bleeds upon
stretching.
2. Introitus vagina admits two adult fingers tightly;
Opinion: From the above findings it is believed that sexual intercourse with a
man could have happened twice on May 17, 1971 as alleged by subject.
Likewise buttressing the claim of the offended party are the other testimonies
and records submitted by the prosecution. There is, for instance, that of
Amada Cargullo, the victim's aunt, who found her the following day, May 18,
1971, in a state of shock at one of the doors of the Quiapo church and,
because of her revelations that she was abused by appellant, brought her to
the Medico-Legal Division of Precinct 3, Manila Police Department, for
medical examination. There is also the testimony of Dr. Simeona Martin,
psychiatrist, that when she examined complainant on June 16, 1971, she was
on the verge of tears, that when asked what happened to her on May 17,
1971, she began to cry, relating the manner in which appellant forced her to
ride in a taxi and thereafter abused her. Notes of said interview were taken by
the psychiatrist. 11 It has also been established that when the NBI agents
apprehended appellant in front of Radiowealth Appliance Company at
España Street, Manila where he was employed, appellant, instead of
admitting his true Identity, falsely represented himself as one Enrique
Ranchez, showing to them a driver's license issued in such name, for which
act of misrepresentation, appellant was charged with the offense of
concealing his true name at the City Court of Manila. These are facts and
circumstances which strongly buttress the testimony of the complainant. They
reveal the inherent weakness of appellant's pretentions. Indeed, how could
such conduct on the part of the offended party be explained if, as appellant
claims, they were lovers and that Lydia submitted herself voluntarily to his
carnal desires? As correctly observed by the trial court, complainant would
not have been in such a depressed mental state in the morning of May 18,
1971 had she not undergone the harrowing and shocking experience
aforementioned.
Appellant places much stress on the fact that in the course of their ride in the
taxi, at the place near the sea and at the time they entered the hotel room,
the offended party made no outcries for help. It must be noted that in all these
occasions the offended party was under fear for her life because appellant
had repeatedly threatened to shoot her if she made any outcry. As to whether
such a threat would be sufficient to cow the victim into submission would
depend upon the particular facts of every case. In the case at bar, the
offended party was alone and it was late in the evening when appellant
suddenly threatened to kill her with a gun. Considering her tender age and
the environmental circumstances, it is not improbable that the fear and shock
were sufficient to still her tongue. This Court has, in similar cases, noted that
a young, innocent Filipina will not readily file a complaint for rape, narrate the
details thereof in a public trial and disclose the sordid circumstances
surrounding her dishonor, if her allegations do not bear the imprimatur of
truth. 12 We are, therefore, satisfied that the evidence for the prosecution has
established beyond reasonable doubt the guilt of appellant.
We note, however, that the court a quo ordered appellant to indemnify the
offended party in the amount of P6,000.60. In view of the fact that the
indemnity for the crime of rape has been raised to P12,000.00, 13 We hereby
order accused-appellant to indemnify complainant in such amount.
With the foregoing modification, the judgment appealed from is hereby
affirmed.
Fernando, Barredo and Concepcion Jr., JJ., concur.

G.R. No. L-41955 December 29, 1977

ELISCO-ELIROL LABOR UNION (NAFLU) and its OFFICERS AND
MEMBERS OF THE BOARD OF DIRECTORS, petitioners
vs.
CARMELO NORIEL, in his capacity as Director of the Bureau of Labor
Relations, ELIZALDE STEEL CONSOLIDATED, INC. and NATIONAL
FEDERATION OF LABOR UNIONS (NAFLU), respondents.
Villaluz, Villaluz & Villaluz, Padilla Law Offices and Rizalindo V. Diaz for
petitioners.
Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor Reynato S.
Puno and Solicitor Ramon A. Barcelona respondent Director.
Rolando M. Olalia for respondent Union (NAFLU).

TEEHANKEE, J.:
The Court sets aside respondent director's appealed resolution and rules in
accordance with the prevailing law and settled jurisprudence that the
petitioner union consisting of the members-employees of respondent
corporation is the principal party to the collective bargaining agreement
(rather than the respondent mother union which is merely its agent) and is
therefore entitled to be recognized as the sole and exclusive bargaining
representative entitled to administer and enforce the collective bargaining
agreement with the employer corporation.
The undisputed antecedent facts which gave rise to the present petition are
stated in the petition as follows:
2. That sometime on February 1974, petitioner-Elisco Elirol Labor Union
(NAFLU), negotiated and executed a collective bargaining agreement with
respondent-Elizalde Steel Consolidated, Inc.1
3. That upon verification by individual petitioners at the Registration division,
Bureau of Labor Relations, Department of Labor, the Elisco-Elirol Labor Union
(NAFLU), the contracting party in said collective bargaining agreement, was not
then registered and therefore not entitled to the benefits and privileges embodied in
said collective bargaining agreement; thus on March 3, 1975, the member of
petitioner-appellant union in a general membership meeting decided in a resolution
to register their union to protect and preserve the integrity and inviolability of the
collective bargaining agreement between the Elisco-Elirol Labor Union (NAFLU)
and the Elizalde Steel Consolidated, Inc.
4. That said resolution of the members of petitioner-appellant union was
passed upon by the officers and members of the Board of Directors on May
20, 1975, at a special meeting called for the purpose, resolution No. 6, s.
1975 was approved requesting the Acting Directors, Registration Division,
Bureau of Labor Relations, to register the union Elisco-Elirol Labor Union
(NAFLU).
5. That by virtue of resolution No. 6, Petitioner-appellant union applied for
registration with the Bureau of Labor Relations, hence on May 28, 1975,
Certificate of Registration No. 8511-IP was issued by said Office.
6. That with the issuance of the certificate of registration petitioner-appellant
acquired a personality separate and distinct from any other labor union.
7. That steps were taken by petitioner-appellant to enforce the collective
bargaining agreement as the principal party to the same representing the
workers covered by such agreement immediately after the issuance of the
certificate of registration.
8. That on June 10, 1975, at a special meeting called for the purpose, the
general membership of petitioner union decided that their mother union, the
National Federation of Labor Unions, can no longer safeguard the rights of its
members insofar as working conditions and other terms of employment are
concerned and that the interest and welfare of petitioner can be served best if
it will stay independent and disaffiliated from said mother union, hence, the
general membership adopted a resolution to disaffiliate from the National
Federation of Labor Unions.
9. That on June 11, 1975, petitioner, acting through its President Hilario Riza
informed respondents of said disaffiliation by means of a letter, and
subsequently requested respondents to recognize petitioner as the sole and
exclusive bargaining representative of the employees thereof.
10. That respondent without any justifiable reason refused and continues to
refuse to recognize petitioner as the sole and exclusive bargaining
representative of its employees, and, now actually dismissed the petitioner
union's officers and board members.2 In this connection, a complaint for unfair
labor practice was filed by petitioners against respondents for the latter's refusal to
bargain collectively with petitioner, which complaint is presently docketed as Case
No. LR-RO4-6-1662.
11. That by virtue of said refusal of respondent company to recognize
petitioner as the sole and exclusive bargaining representative of the
employees, petitioners filed a petition before the Bureau of Labor Relations,
Department of Labor on July 2, 1975, with Case No. LR-861 against
respondents Elizalde Steel Consolidated, Inc. and the National Federation of
Labor Unions be ordered to stop from presenting itself as the collective
bargaining agent and pursuant thereto, a writ of preliminary mandatory and
prohibitory injunction be issued.
12. That on August 19, 1975. the Bureau of Labor Relations, through Med-
Arbiter Reynaldo B. Carta, before whom the case was beard, issued an Order
dismissing the petition for lack of merit.
On appeal to respondent Director of the Bureau of Labor Relations, said
respondent issued his Resolution of October 30, 1975 affirming the dismissal
of petitioner-union's petition as follows:
On February, 1974 the members of the petitioner union who were then yet
affiliated with the National Association of Free Labor Union negotiated and
executed with the respondent company a collective bargaining agreement
with expiry date in November, 1976.
On May 28, 1975, after the same members, by valid resolution of the Board
of directors and approved by the general membership, have formed
themselves into an i t organization and applied for registration as a union, a
certificate of registration was issued by the Department of Labor. And on
June 10, 1975 again by a valid resolution the same members disaffiliated with
the NAFLU.
The issue for resolution is —
Which of the two unions should be recognized as the sole and exclusive
bargaining representative of the employees and ultimately recognized to
administer and supervise the enforcement of the collective bargaining
agreement.
Petitioner-union contends that it having the necessary interest and being the
real party must be the sole union to be recognized and given authority to
bargain with the company.
Setting aside jurisprudence and the collective bargaining agreement of the
parties, the appellant is correct. For to grant to the former mother union
(NAFLU) the authority to administer and enforce their collective bargaining
agreement without presumably any members in the bargaining unit is quite
absurd. But to transfer also the authority to the newly formed union although
the members of the same were the same members who composed then the
local chapter of the mother union is also in violation of the CBA particularly
article IV which is the union security clause, wherein it is a condition for a
continued employment in the company to maintain membership in the Union.
Theoretically therefore, when the employees disaffiliated from the mother
union and formed themselves into a new union, their status as employees
was also terminated. As such they could not therefore absolutely and legally
claim that they still comprise the majority of the bargaining unit.
Secondly, to vest, upon the new union the authority to bargain is in violation
of the whole CBA, under the theory that when the mother union (NAFLU)
entered and executed the same in its separate and distinct personality aside
from the people composing the same. In fine, the CBA then was executed by
and between the company and the (NAFLU) with the latter as an entity having
its own capacity and personality different from the members composing the
same.
Lastly, to preserve and avoid unstability and disorder in the labor movement
as correctly ruled by the med-arbiter, the status quo should be preserved,
there being no compelling reason to alter the same.3
Hence, the petition at bar. We find the petition to be clearly meritorious and reverse
the appealed resolution.
1. Respondent director correctly perceived in his Resolution that "to grant to
the former mother union (NAFLU) the authority to administer and enforce
their collective bargaining agreement without presumably any members in the
bargaining unit is quite absurd" but fell unto the grave error of holding that
"When the employees disaffiliated from the mother union and formed
themselves into a new union, their status as employees was also terminated."
His error was in not perceiving that the employees and members of the local
union did not form a new union but merely registered the local union as was
their right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of
employees and members of the local union was the principal party to the
agreement. NAFLU as the "mother union" in participation in the execution of
the bargaining agreement with respondent company acted merely as agent of
the local union, which remained the basic unit of the association existing
principally and freely to serve the common interest of all its members,
including the freedom to disaffiliated when the circumstances so warranted as
in the present case.
2. Contrary to respondent director's misimpression, our jurisprudence fully
supports 'petitioner's stand. In Liberty Cotton Mills Workers Union vs. Liberty
Cotton Mills, Inc.4 , the Court expressly cited and affirmed the basic principle that
"(T)he locals are separate and distinct units primarily designed to secure and
maintain an equality of bargaining power between the employer and their
employee-members in the economic struggle for the fruits of the joint productive
effort of labor and capital; and the association of the locals into the national union
(as PAFLU) was in furtherance of the same end. These associations are
consensual entities capable of entering into such legal relations with their members.
The essential purpose was the affirmation of the local unions into a common
enterprise to increase by collective action the common bargaining power in respect
of the terms and conditions of labor. Yet the locals remained the basic units of
association, free to serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws of the Association, and free
also to renounce the affiliation for mutual welfare upon the terms laid down in the
agreement which brought it into existence."
Corollarily, the "substitutionary" doctrine likewise fully supports petitioner's
stand. Petitioner union to whom the employees owe their allegiance has from
the beginning expressly avowed that it "does not intend to change and/or
amend the provisions of the present collective bargaining agreement but only
to be given the chance to enforce the same since there is a shift of allegiance
in the majority of the employees at respondent company." As was stressed by
the Court in Benguet Consolidated Inc. vs. BCI Employees & W Union-
PAFLU5 —
... This principle, formulated by the NLRB as its initial compromise solution to
the problem facing it when there occurs a shift in employees' union allegiance
after the execution of a bargaining contract with their employer, merely states
that even during the effectivity of a collective bargaining agreement executed
between employer and employees thru their agent, the employees can
change said agent but the contract continues to bind then up to its expiration
date. They may bargain however for the shortening of said expiration date.
In formulating the "substitutionary" doctrine, the only consideration involved
as the employees' interest in the existing bargaining agreement. The agent's
interest never entered the picture. In fact, the justification for said doctrine
was:
... that the majority of the employees, as an entity under the statute, is the
true party in interest to the contract, holding rights through the agency of the
union representative. Thus, any exclusive interest claimed by the agent is
defeasible at the will of the principal.
3. It need only be mentioned finally that the Secretary of Labor in his decision
of April 23, 1976 and order of January 10, 1977 denying reconsideration in
the sister unfair labor practice case and ordering respondent corporation to
immediately lift the suspension and reinstate the complainant officers and
board members of petitioner union6 has likewise adhered to the foregoing basic
principles and settled jurisprudence in contrast to respondent director (as well as
therein respondent NLRC which similarly adhered to the archaic and illogical view
that the officers and board members of petitioner local union committed an "act of
disloyalty" in disaffiliating from the mother union when practically all its members
had so voted to disaffiliate and the mother union [as mere agent] no longer had any
local union or members to represent), ruling that "(G)ranting arguendo that the
disaffiliation from the NAFLU is a legal cause for expulsion and dismissal, it could
not detract from the fact that only 13 individual complainants out of almost 700
members who disaffiliated, were singled out for expulsion and recommended for
dismissal. The actuation of NAFLU conclusively constitute discrimination. Since the
suspension of the complainants was effected at the instance of NAFLU, it should be
held liable to the payment of back wages."
The Presidential Assistant for Legal Affairs Ronaldo B. Zamora has likewise
dismissed as untenable in a similar case respondents' views that "such
maintenance of membership" clause be distorted as "intended for the security
of the union rather than the security of tenure for the workers", ruling that
"(W)hat is paramount, as it is expressly and explicitly emphasize in an
exacting language under the New Constitution, is the security of tenure of the
workers, not the security of the union. To impress, therefore, such
"maintenance of membership" — which is intended for the security of the
union rather than the security of tenure of the workers — as a bar to
employees' changing their affiliation is not only to infringe on the
constitutional right of freedom of association, but also to trample upon the
constitutional right of workers to security of tenure and to render meaningless
whatever "adequate social services" the State may establish or maintain in
the field of employment "to guarantee the enjoyment by the people of a
decent standard of living."7
It is expected that with this decision, any suspension or lay-off of the complainants
officers and board members or employees of petitioner union arising from the
respondents' misconception of the clearly applicable principles and jurisprudence
upholding the primacy of the employees and their freely chosen local union as the
true party in interest to the collective bargaining agreement will be forthwith rectified
and set aside.
ACCORDINGLY, the petition is granted and the appealed resolution is set
aside and petitioner local union is declared to be the sole and exclusive
bargaining representative of the employees of respondent corporation entitled
to administer and enforce any subsisting collective bargaining agreement with
said employer corporation. This decision shall be immediately executory upon
its promulgation.
Makasiar, Muñoz Palma, Fernandez and Guerrero, JJ., concur.

TANDUAY DISTILLERY, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), LAMBERTO
SANTOS, PEDRO ESTERAL, ROMAN CHICO, JOSELITO ESTANISLAO,
JOSE DELGADO, JUANITO ARGUELLES, RICARDO CAJOLES, and
JOSEFINO PAGUYO, respondents.
Jaime G. de Leon for petitioner in G.R. No. 75037.
Pacifico de Ocampo and Benjamin C. Gascon for petitioner in G.R. No.
75055.

GUTIERREZ, JR.:
These consolidated petitions for certiorari seek the review and setting aside
of respondent National Labor Relations Commission's decision in NLRC
Case No. AB-6-11685-81 dated May 26, 1986, affirming the October 12, 1984
decision of the Labor Arbiter, and of the NLRC resolution dated June 28,
1986, which denied the motion for reconsideration of the petitioners.
The facts of the case are as follows:
Private respondents were all employees of Tanduay Distillery, Inc., (TDI) and
members of the Tanduay Distillery Labor Union (TDLU), a duly organized and
registered labor organization and the exclusive bargaining agent of the rank
and file employees of the petitioner company.
On March 11, 1980, a Collective Bargaining Agreement (CBA), was executed
between TDI and TDLU. The CBA was duly ratified by a majority of the
workers in TDI including herein private respondents, and a copy was filed
with the Ministry of Labor and Employment (MOLE) on October 29, 1980 for
certification. The CBA had a term of three (3) years from July 1, 1979 to June
30, 1982. It also contained a union security clause. which provides:
All workers who are or may during the effectivity of this Contract, become
members of the Union in accordance with its Constitution and By-Laws shall,
as a condition of their continued employment, maintain membership in good
standing in the Union for the duration of the agreement.
On or about the early part of October 1980, while the CBA was in effect and
within the contract bar period the private respondents joined another union,
the Kaisahan Ng Manggagawang Pilipino KAMPIL) and organized its local
chapter in TDI, with private respondents Pedro Esteral and Lamberts Santos
being elected President and Vice-President, respectively.
On November 7, 1980, KAMPIL filed a petition for certification election to
determine union representation in TDI, which development compelled TDI to
file a grievance with TDLU on November 7, 1980 pursuant to Article XV of the
CBA.
Acting on the grievance of TDI, TDLU wrote the private respondents on
December 23, 1980 requiring them to explain why TDLU should not take
disciplinary action against them for, among other things —
Disloyalty to the Tanduay Distillery Labor Union (T.D.L.U.) by forming and
joining another union with a complete takeover intent as the sole and
exclusive bargaining representative of all rank and file employees at TDI. (p.
16, Rollo)
TDLU created a committee to investigate its erring members in accordance
with its by-laws which are not disputed by the private respondents. Except for
Josefino Paguyo who, despite due notice, was absent during the investigation
conducted on January 2, 1981, all the private respondents were present and
given a chance to explain their side. Thereafter, in a resolution dated January
9, 1981, TDLU, through the Investigating Committee and approved by
TDLU's Board of Directors, expelled the private respondents from TDLU for
disloyalty to the Union effective January 16, 1981. By letter dated January 10,
1981, TDLU notified TDI that private respondents had been expelled from
TDLU and demanded that TDI terminate the employment of private,
respondents because they had lost their membership with TDLU.
Acting on the demand of TDLU, TDI, in a Memorandum dated January 13,
1981, notified "that effective January 16, 1981, we shall file the usual
application for clearance (with preventive suspension to take effect on the
same day) to terminate your services on the basis of the union security
clause of our CBA.
Accordingly, TDI filed with the MOLE on January 14, 1981 its application for
clearance to terminate the employment of private respondents. This
application docketed as Case No. NCR-AC-1-435-81 specifically stated that
the action applied for was preventive suspension which will result in
termination of employment, ... due to (T)hreat to (P)roduction traceable to
rival (U)nion activity. The private respondents then filed with the MOLE a
complaint for illegal dismissal against TDI and Benjamin Agaloos, in his
capacity as President of TDLU, which complaint was docketed as Case No.
STF-1-333-91. The cases were jointly heard and tried by Labor Arbiter
Teodorico Dogelio.
However, on January 26, 1981, the Med-Arbiter granted the private
respondents' petition calling for a certification election among the rank and file
employees of TDI. The Med-Arbiter's Order stated, inter-alia that the
existence of an uncertified CBA cannot be availed of as a bar to the holding
of a certification election (Emphasis supplied). On appeal of TDI and TDLU to
the Bureau of Labor Relations (BLR), the order for the holding of a
certification election was reversed and set aside by the BLR on July 8,1982,
thus:
A careful perusal of the records of the case will reveal that the uncertified
CBA was duly filed and submitted on 29 October 1980, to last until June 30,
1982. Indeed, said CBA is certifiable for having complied with all the
necessary requirements for certification. Consistent with the intent and spirit
of P.D. 1391 and its implementing rules, the contract bar rule should have
been applied in this case. The representation issue cannot be entertained
except within the last sixty (60) days of the collective agreement. (Emphasis
supplied) (p. 243, Rollo)
The last 60 days in a collective bargaining agreement is referred to as the
"freedom period" when rival union representation can be entertained during
the existence of a valid CBA. In this case, the "freedom period" was May 1 to
June 30, 1982. After the term of the CBA lapsed, KAMPIL moved for a
reconsideration of the July 8, 1982 decision of the BLR on July 23, 1982 on
the same ground that since the CBA then in question was uncertified, the
contract bar rule could not be made to apply. On December 3, 1982, the BLR
reversed itself, but for a different reason and held that:
Movant union (Kampil) now seeks for the reconsideration of that Order on the
ground, among others, that the CBA in question is not certifiable and, hence,
the contract bar rule cannot properly apply in this case.
After a more careful examination of the records, this Bureau is of the view
that the instant motion should be given due course, not necessarily for the
arguments raised by herein movant.
It should be noted that the alleged CBA has now expired. Its expiry date
being 30 June 1982. Consequently; there appears to be no more obstacle in
allowing a certification election to be conducted among the rank and file of
respondent. The contract bar rule will no longer apply in view of the
supervening event, that is, the expiration of the contract. (Emphasis supplied)
(pp. 244-245, Rollo)
TDLU filed a petition for review of the BLR decision with the Supreme Court,
docketed as Case No. G.R. No. 63995 TDI argued that KAMPIL did not have
a cause of action when the petition for certification was filed on November 7,
1980 because the freedom period was not yet in effect. The fact that the BLR
issued its order when the 60-day freedom period had supervened, did not
cure this defect. Moreover, the BLR decision completely overlooked or
ignored the fact that on September 21, 1982, a new CBA had been executed
between the TDLU and TDI so that when the BLR allowed a certification
election in its order dated December 3, 1982, the contract bar rule was
applicable again. This Court denied TDLU's petition in a minute resolution on
November 14,1983.
Using the foregoing as relevant and applicable to the consolidated cases for
the clearance application for termination filed by TDI and the illegal dismissal
case filed by the private respondents on October 12, 1984, Labor Arbiter
Teodorico Dogelio rendered a decision denying TDI's application to terminate
the private respondents and ordering TDI to reinstate the complainants with
backwages. It should be noted that the Labor Arbiter rendered the decision
even before the petitioner company could file its memorandum, formal offer of
exhibits and its manifestation and motion to correct tentative markings of
exhibits. This decision of the arbiter was upheld by the respondent NLRC in
NLRC Case No. AB-6-11685-81 in its decision dated May 20,1986.
TDI and TDLU moved for reconsideration of the questioned decision, In its
motion, TDI alleged, inter alia, that respondent NLRC did not rule on the
validity of the CBA as a contract, neither did it resolve squarely the validity of
the enforcement of the union security clause of the CBA. TDI stated further
that respondent NLRC failed to consider the fact that at the time the private
respondents were expelled by TDLU and consequently terminated by TDI,
the union security clause of the CBA was in full force and effect, binding TDI
and TDLU.
For its part, TDLU said that the decision of the Supreme Court in the
certification case could not be used by respondent NLRC to justify its decision
in the dismissal case because the issues on the cases are entirely different
and miles apart. It is for this reason that there are two (2) cases that are
involved. TDLU explained that the Supreme Court decided to dismiss the
petition for certiorari of TDI and TDLU in the certification case because the
original CBA existing at the time the private respondents formed and joined
KAMPIL had already expired. However, TDLU made it clear that when the
private respondents organized KAMPIL in TDI, the same CBA was still in
force and the disaffiliation did not take place within the freedom period.
Hence, at that point in time, the private respondents committed disloyalty
against the union.
On June 26, 1986, respondent NLRC denied the motion for reconsideration
filed by TDI and TDLU for lack of merit. In its petition, TDI alleged that:
I
RESPONDENT COMMISSION ACTED IN EXCESS AND WITH GRAVE
ABUSE OF ITS DISCRETION AND IN A MANNER CONTRARY TO LAW IN
RENDERING ITS DECISION EN BANC OF MAY 20, 1986 AND IN
DENYING PETITIONER'S MOTION FOR RECONSIDERATION THEREOF
IN ITS RESOLUTION SOLUTION DATED JUNE 26, 1986 BECAUSE —
1. THE RESPONDENT COMMISSION HAS IGNORED THE FACT THAT
THE PRIVATE RESPONDENTS WERE EXPELLED BY TDLU FROM ITS
MEMBERSHIP ON JANUARY 16, 1981 AND, CONSEQUENTLY, TDLU HAD
DEMANDED OF THE PETITIONER OF THE ENFORCEMENT OF THE
UNION SECURITY CLAUSE OF THE CBA, THE SAID CBA WAS AN
EXISTING AND A VALID CONTRACT BETWEEN THE PETITIONER AND
TDLU, AND EFFECTIVE BETWEEN THE PARTIES;
2. IT IS FUNDAMENTAL THAT A UNION SECURITY CLAUSE PROVISION
IN COLLECTIVE BARGAINING AGREEMENT IS BINDING BETWEEN THE
PARTIES TO THE CBA UNDER THE LAWS;
3. THE EXPULSION OF THE PRIVATE RESPONDENTS FROM TDLU WAS
THE UNION'S OWN DECISION. HENCE, WHEN TDLU DEMANDED OF
THE PETITIONER THE ENFORCEMENT OF THE SECURITY CLAUSE
PROVISION OF THE CBA BY SEPARATING PRIVATE RESPONDENTS
FROM THEIR EMPLOYMENT, FOR HAVING LOST THEIR MEMBERSHIP
IN THE UNION, THE PETITIONER WAS DUTY BOUND TO DO SO;
4. THE ALLUSION THAT THE CBA WAS NOT CERTIFIED BY THE
BUREAU OF LABOR RELATIONS (BLR) HAS NOTHING TO DO WITH ITS
EFFECTIVENESS AS A VALID CONTRACT BETWEEN ALL PARTIES
THERETO.
II
RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF
DISCRETION AND IN EXCESS OF ITS JURISDICTION IN HOLDING THAT
PRIVATE RESPONDENTS DID NOT COMMIT ACTS PREJUDICIAL TO
THE PETITIONER'S PRODUCTION EFFORTS TO BE SUFFICIENT BASIS
FOR THEIR PREVENTIVE SUSPENSION AND EVENTUAL REMOVAL.
On the other hand, petitioner TDLU in essence contends that:
THE CBA IS VALID AND BINDING NOT ONLY ON TDI AND TDLU BUT
LIKEWISE ON PRIVATE RESPONDENTS WHO HAVE RATIFIED THE
SAME IN THEIR INDIVIDUAL CAPACITIES AS MEMBERS OF TDLU;
HENCE, THE UNION SECURITY CLAUSE IS VALID AND BINDING ON
THEM;
THE ACTION OF TDLU IN REQUESTING FOR THE ENFORCEMENT OF
THE UNION SECURITY CLAUSE OF THE CBA BETWEEN TDI AND TDLU
IS PART OF THE INHERENT RIGHT TO SELF- ORGANIZATION;
TDLU CANNOT BE MADE LIABLE FOR THE PAYMENT OF BACKWAGES
BECAUSE ALL THAT IT DID WAS ASK FOR THE ENFORCEMENT OF A
CBA, WHICH CBA HAS NEVER BEEN DECLARED NULL AND VOID AND
THE UNION SECURITY CLAUSE SOUGHT TO BE ENFORCED WAS NOT
ALSO DECLARED NULL AND VOID;
PRIVATE RESPONDENTS DISAFFILIATED THEMSELVES FROM TDLU
BY ORGANIZING THE LOCAL CHAPTER OF KAMPIL IN TDI IN OCTOBER
1980, BUT THE ACT OF DISAFFILIATION WAS COMMITTED OUTSIDE
THE FREEDOM PERIOD PROVIDED UNDER PRESIDENTIAL DECREE
1391 WHICH LIMIT ALL PETITIONS FOR CERTIFICATION ELECTION,
DISAFFILIATION AND INTERVENTION TO THE 60 DAY FREEDOM
PERIOD PRECEDING THE EXPIRATION OF THE CBA. HENCE, PRIVATE
RESPONDENTS COULD BE EXPELLED FROM MEMBERSHIP FOR
DISLOYALTY AND OTHER INIMICAL ACTS AGAINST THE INTEREST OF
TDLU.
The private respondents admit that the root of the whole controversy in the
instant case is the organization of a Local Union Chapter of KAMPIL at TDI
and the subsequent filing of a petition for certification election with the MOLE
by said local chapter. This local chapter of KAMPIL was organized with the
help of, among others, the private respondents some of whom were elected
union officers of said chapter. They contend that their act of organizing a local
chapter of KAMPIL and eventual filing of a petition for certification election
was pursuant to their constitutional right to self-organization.
The issues to be resolved are the following: (a) whether or not TDI was
justified in terminating private respondents' employment in the company on
the basis of TDLU's demand for the enforcement of the Union Security
Clause of the CBA between TDI and TDLU; and (b) whether or not TDI is
guilty of unfair labor practice in complying with TDLU's demand for the
dismissal of private respondents.
We enforce basic principles essential to a strong and dynamic labor
movement. An established postulate in labor relations firmly rooted in this
jurisdiction is that the dismissal of an employee pursuant to a demand of the
majority union in accordance with a union security agreement following the
loss of seniority rights is valid and privileged and does not constitute an unfair
labor practice.
Article 249 (e) of the Labor Code as amended specifically recognizes the
closed shop arrangement as a form of union security. The closed shop, the
union shop, the maintenance of membership shop, the preferential shop, the
maintenance of treasury shop, and check-off provisions are valid forms of
union security and strength. They do not constitute unfair labor practice nor
are they violations of the freedom of association clause of the Constitution.
(See Pascual, Labor Relations Law, 1986 Edition, pp. 221-225 and cases
cited therein.) There is no showing in these petitions of any arbitrariness or a
violation of the safeguards enunciated in the decisions of this Court
interpreting union security arrangements brought to us for review.
In this light, the petitioner points out that embedded at the very core and as
raison d'etre for the doctrine which enforces the closed-shop, the union shop,
and other forms of union security clauses in the collective bargaining
agreement is the principle of sanctity and inviolability of contracts guaranteed
by the Constitution.
This Court speaking thru Mr. Justice Labrador, in Victorias Milling Co., Inc., v.
Victorias-Manapia Workers Organization (9 SCRA 154), ruled:
Another reason for enforcing the closed-shop agreement is the principle of
sanctity or inviolability of contracts guaranteed by the Constitution. As a
matter of principle the provision of the Industrial Peace Act relating freedom
to employees to organize themselves and set their representative for entering
into bargaining agreements, should be subordinate to the constitutional
provision protecting the sanctity of contracts. We can not conceive how
freedom to contract, which should be allowed to be exercised without
limitation may be subordinated to the freedom of laborers to choose the
organization they desire to represent them. And even if the legislature had
intended to do so and made such freedom of the laborer paramount to the
sanctity of obligation of contracts, such attempt to override the constitutional
provision would necessarily and ipso facto be null and void.
xxx xxx xxx
[T]he action of the respondent company in enforcing the terms of the closed-
shop agreement is a valid exercise of its rights and obligations under the
contract. The dismissal by virtue thereof cannot constitute an unfair labor
practice, as it was in pursuance of an agreement that has been found to be
regular and of a closed-shop agreement which under our laws is valid and
binding.
In the instant case, the CBA in question provides for a Union Security Clause
requiring:
(c) All workers who are or may during the effectivity of this contract become
members of the union in accordance with its constitution and by-laws shall as
a condition of their continued employment, maintain membership in good
standing in the union for the duration of the agreement. (Emphasis supplied)
Having ratified that CBA and being then members of the TDLU, the private
respondents owe fealty and are required under the Union Security Clause to
maintain their membership in good standing with it during the term thereof, a
requirement which ceases to be binding only during the 60-day freedom
period immediately preceding the expiration of the CBA. When the private
respondents organized and joined the KAMPIL Chapter in TDI and filed the
corresponding petition for certification election in November 1980, there was
no freedom period to speak of yet. For under Presidential Decree No. 1391,
promulgated May 29, 1978, the law applicable in this instance provides:
No petition for certification election for intervention disaffiliation shall be
entertained or given due course except within the 60 day freedom period
immediately preceding the execution of the Collective Bargaining Agreement.
and under Section 21, Rule 3 of the Rules Implementing PD 1391 "... pending
certification of a duly filed collective bargaining agreement no petition for
certification election in the same bargaining unit shall be entertained or
processed." (promulgated September 19, 1978). The Labor Code further
mandates that "no certification election shall be entertained if a Collective
Bargaining Agreement which has been submitted in accordance with Article
231 of the Code exists between the employer and a legitimate labor
organization except within sixty (60) days prior to the expiration of the life of
such collective agreement (Art. 257).
The fact, therefore, that the Bureau of Labor Relations (BLR) failed to certify
or act on TDLU's request for certification of the CBA in question is of no
moment to the resolution of the issues presented in this case. The BLR itself
found in its order of July 8, 1982 that "the certified CBA was duly filed and
submitted on October 29, 1980, to last until June 30, 1982 is certifiable for
having complied with all the requirements for certification.
The validity of the CBA is not here assailed by private respondents. They
admitted having organized the local chapter of KAMPIL at TDI, although it is
claimed that this was done when there was no certified CBA between TDI
and TDLU that would constitute a bar to the certification election. Of
significance is the ruling in Manalang v. Artex Development Co., Inc., (21
SCRA 561, 569) decided on a factual setting where the petitioners had
affiliated themselves with another labor union, Artex Free Workers, without
first terminating their membership with Bagong Buhay Labor Union (BBLU)
and without the knowledge of the officers of the latter union, for which reason
the petitioners were expelled from the BBLU for acts of disloyalty; and the
company, upon the behest of BBLU dismissed them from employment
pursuant to the closed-shop stipulation in a Collective Bargaining Agreement.
This Court ruled:
The validity of the Collective Bargaining Agreement of March 4, 1960 is not
assailed by the petitioners. Nor do they deny that they were members of the
BBLU prior to March 4, 1960 and until they were expelled from the union. ...
The petitioners further contention that the closed-shop provision in the
collective Bargaining Agreement is illegal because it is
unreasonable,restrictive of right of freedom of association guaranteed by the
Constitution is a futile exercise in argumentation of this Court has in a number
of cases sustained closed-shop as valid union security.
Finally, even if we assume, in gratia argumenti,that the petition were unaware
of the stipulation set forth in the collective bargaining agreement since their
membership in the BBLU prior to t the expulsion thereform is undenied there
can be no question that as long as the agreement with closed-shop provision
was in force they were bound by it. Neither their ignorance of,nor their
dissatisfaction with, its terms and condition would justify breach thereof or the
formation by them of a union of their own.As has been aptly said the
collective bargaining agreement entered into by officers of a union as agent of
the member,and an employer,gives rise to valid inforcible contractual relation
against the individual union members in matters that affect the entire
membership or large classes of its member who employed under an
agreement between the union and his employer is bound by the provision
thereof,since it is a joint and several contract of the members of the union and
entered into by the union as their agent.
In an earlier case, this Court held:
Nor can it be said that the stipulation providing that the employer may dismiss
an employee whenever the union recommends his expulsion either for
disloyalty or for any violation of its by-laws and constitution is illegal or
constitute of unfair labor practice, for such is one of the matters on which
management and labor can agree in order to bring about harmonious
relations between them and the union, and cohesion and integrity of their
organization And as an act of loyalty a union may certainly require its
members not to affiliate with any other labor union and to consider its
infringement as a reasonable cause for separation. This is what was done by
respondent union. And the respondent employer did nothing but to put in
force their agreement when it separated the herein complainants upon the
recommendation of said union. Such a stipulation is not only necessary to
maintain loyalty and preserve the integrity of the union but is allowed by the
Magna Charta of Labor when it provided that while it is recognized that an
employee shall have the right to self-organization, it is at the same time
postulated that such right shall not injure the right of the labor organization to
prescribe its own rules with respect to the acquisition or retention of
membership therein (Section 41(b) par. 1, Republic Act 875). This provision is
significant. It is an indirect restriction on the right of an employee to self-
organization. It is a solemn pronouncement of a policy that while an employee
is given the right to join a labor organization, such right should only be
asserted in a manner that will not spell the destruction of the same
organization The law requires loyalty to the union on the part of its members
in order to obtain to the full extent its cohesion and integrity. We therefore,
see nothing improper in the disputed provisions of the collective bargaining
agreement entered into between the parties. (Ang Malayang Manggagawa ng
Ang Tibay Enterprises, et al. v. Ang Tibay, et al. 102 Phil. 669) (Emphasis
supplied)
We agree with petitioner TDLU that the dismissal of the petition for certiorari
in G.R. No. 63995 entitled TDLU v. Kaisahan ng Manggagawang Pilipina
could not be construed as to extinguish the right of TDLU to expel private
respondents for acts of disloyalty when they organized a local chapter of
KAMPIL in October 1980 in TDI. The subject matter brought to this Court in
G.R. No. 63995 was the decision of the Bureau of Labor Relations dated
December 3, 1982 requiring the holding of certification election in TDI within
twenty (20) days from receipt of said BLR's decision which reads:
Movant union (KAMPIL) now seeks for the reconsideration of that order on
the ground, among others, that the CBA in question is not certifiable and,
hence, the contract bar rule cannot properly apply to this case.
After a careful examination of the records, this Bureau is of the view that the
instant motion should be given due course, not necessarily for the arguments
raised by herein movant.
It should be noted that alleged CBA has now expired, its expiry date being 30
June 1982. Consequently, there appears to be no more obstacle in allowing a
certification election to be conducted among the rank and file of respondent.
The contract bar rule will no longer apply in view of the supervening even that
is, the expiration of the contract. (ANNEX C, TDI's Memorandum dated
November 28,1986; Emphasis supplied).
It is clearly apparent that the BLR aforesaid Order which this Court upheld in
G.R. No. 63995 when it dismissed TDLU's petition in a minute resolution, did
not pass upon the question of legality or illegality of the dismissal of private
respondents from TDI by reason of their expulsion from TDLU for disloyalty.
That question was neither raised nor passed upon in the certification case,
and was not a proper issue therein because a petition for certification election
is not a litigation but a mere investigation of a non-adversary character to
determine the bargaining unit to represent the employees (George Peter
Lines, Inc. v. Associated Labor Union, 134 SCRA 82). Hence, no inference
could be derived from the dismissal of said petition that either the BLR or this
Court has decided in favor of private respondents insofar as the question of
union disloyalty and their suspension and termination from employment of
TDI is concerned.
Simply put, the BLR ordered the holding of a certification election because
the CBA in question had already expired, its expiry date being June 30, 1982.
Consequently, there appears to be no more obstacle in allowing a certification
election. "... [T]he contract bar rule will not apply in view of the supervening
event, that is, the expiration of the CBA."
But the fact that the CBA had expired on June 30, 1982 and the BLR,
because of such supervening event, ordered the holding of a certification
election could not and did not wipe out or cleanse private respondents from
the acts of disloyalty committed in October 1980 when they organized
KAMPIL's local chapter in TDI while still members of TDLU. The ineluctable
fact is that private respondents committed acts of disloyalty against TDLU
while the CBA was in force and existing for which they have to face the
necessary sanctions lawfully imposed by TDLU.
In Villar v. Inciong (121 SCRA 444), we held that "petitioners, although
entitled to disaffiliation from their union and to form a new organization of their
own must however, suffer the consequences of their separation from the
union under the security clause of the CBA: "
Inherent in every labor union, or any organization for that matter, is the right
of self-preservation. When members of a labor union, therefore, sow the
seeds of dissension and strife within the union; when they seek the
disintegration and destruction of the very union to which they belong; they
thereby forfeit their rights to remain as members of the union which they seek
to destroy. Prudence and equity, as well as the dictates of law and justice,
therefore, compelling mandate the adoption by the labor union of such
corrective and remedial measures, in keeping with its laws and regulations,
for its preservation and continued existence; lest by its folly and inaction, the
labor union crumble and fall. (Idem., p. 458)
The private respondents cannot, therefore, escape the effects of the security
clause of their own applicable collective bargaining agreement.
WHEREFORE, the decision dated May 26, 1986 and the resolution dated
June 26, 1986 of respondent National Labor Relations Commission in NLRC
Case No. AB-11685-81 are hereby SET ASIDE. The expulsion of private
respondents from TANDUAY DISTILLERY LABOR UNION and their
consequent suspension and termination from employment with TANDUAY
DISTILLERY, INC., without reinstatement and backwages, are hereby
SUSTAINED. No cost.
SO ORDERED.
206 Phil. 366

GUERRERO, J.:
Petition for review by certiorari to set aside the Order
dated February 15, 1979 of respondent Deputy Minister
Amado G. Inciong affirming the Decision of the OIC of
Regional Office No. 4 dated October 14, 1978 which
jointly resolved R04-Case No. T-IV-3549-T and R04-Case
No. RD-4-4088-77-T.
The facts are as follows:
Petitioners were members of the Amigo Employees
Union-PAFLU, a duly registered labor organization which,
at the time of the present dispute, was the existing
bargaining agent of the employees in private respondent
Amigo Manufacturing, Inc. (hereinafter referred to as
Company). The Company and the Amigo Employees
Union-PAFLU had a collective bargaining agreement
governing their labor relations, which agreement was then
about to expire on February 28, 1977. Within the last sixty
(60) days of the CBA, events transpired giving rise to the
present dispute.
On January 5, 1977, upon written authority of at least 30%
of the employees in the company, including the
petitioners, the Federation of Unions of Rizal (hereinafter
referred to as FUR) filed a petition for certification election
with the Med-Arbiters's Office, Regional Office No. 4 of
the Ministry of Labor and Employment. The petition was,
however, opposed by the Philippine Association of Free
Labor Unions (hereinafter referred to as PAFLU) with
whom, as stated earlier, the Amigo Employees Union was
at that time affiliated. PAFLU's opposition cited the "Code
of Ethics" governing inter-federation disputes among and
between members of the Trade Unions Congress of the
Philippines (hereinafter referred to as TUCP).
Consequently, the Med-Arbiter indorsed the case to
TUCP for appropriate action but before any such action
could be taken thereon, the petitioners disauthorized FUR
from continuing the petition for certification election for
which reason FUR withdrew the petition.
On February 7, 1977, the same employees who had
signed the petition filed by FUR signed a joint resolution
reading in toto as follows:
"Sama-Samang Kapasiyahan
1. TUMIWALAG bilang kasaping Unyon ng Philippine
Association of Free Labor Unions (PAFLU) at kaalinsabay
nito, inaalisan namin ang PAFLU ng kapangyarihan na
katawanin kami sa anumang pakikipagkasundo (CBA) sa
Pangasiwaan ng aming pinapasukan at kung sila man ay
nagkasundo o magkakasundo sa kabila ng pagtitiwalag
na ito, ang nasabing kasunduan ay hindi namin
pinagtitibay at tahasang aming itinatakwil/tinatanggihan;
2. BINABAWI namin ang aming pahintulot sa Federation
of Unions of Rizal (FUR) na katawanin kami sa Petition for
Certification Election (R04-MED Case No. 743-77) at/o sa
sama-samang pakikipagkasundo sa aming patrono;
3. PANATILIHIN na nagsasarili (independent) ang aming
samahan, AMIGO EMPLOYEES UNION, alinsunod sa
Artikulo 240 ng Labor Code;
4. MAGHAIN KAAGAD ang aming Unyong nagsasarili, sa
pamumuno ng aming pangsamantalang Opisyal na
kinatawan, si Ginang DOLORES VILLAR, ng Petition for
Certification Election sa Department of Labor, para
kilalanin ang aming Unyong nagsasarili bilang tanging
kinatawan ng mga manggagawa sa sama-samang
pakikipagkasundo (CBA);
5. BIGYAN ng kopya nito ang bawa't kinauukulan at ang
mga kapasiyahang ito ay magkakabisa sa oras na
matanggap ng mga kinauukulan and kani-kanilang sipi
nito."[1]
Immediately thereafter or on February 9, 1977, petitioner
Dolores Villar, representing herself to be the authorized
representative of the Amigo Employees Union, filed a
petition for certification election in the Company before
Regional Office No. 4, with the Amigo Employees Union
as the petitioner. The Amigo Employees Union-PAFLU
intervened and moved for the dismissal of the petition for
certification election filed by Dolores Villar, citing as
grounds therefor, viz: (1) the petition lacked the
mandatory requisite of at least 30% of the employees in
the bargaining unit; (2) Dolores Villar had no legal
personality to sign the petition since she was not an
officer of the union nor is there factual or legal basis for
her claim that she was the authorized representative of
the local union; (3) there was a pending case for the same
subject matter filed by the same individuals; (4) the
petition was barred by the new CBA concluded on
February 15, 1977; (5) there was no valid disaffiliation
from PAFLU; and (6) the supporting signatures were
procured through false pretenses.
Finding that the petition involved the same parties and
causes of action as the case previously indorsed to the
TUCP, the Med-Arbiter dismissed the petition filed by
herein petitioner Villar, which dismissal is still pending
appeal before the Bureau of Labor Relations.
In the meantime, February 14, 1977, the Amigo
Employees Union-PAFLU called a special meeting of its
general membership. A Resolution was thereby
unanimously approved which called for the investigation
by the PAFLU national president, pursuant to the
constitution and by-laws of the Federation, of all of the
petitioners and one Felipe Manlapao, for "continuously
maligning, libelling and slandering not only the incumbent
officers but even the union itself and the federation;"
spreading 'false propaganda that the union officers were
merely appointees of the management'; and for causing
divisiveness in the union.
Pursuant to the Resolution approved by the Amigo
Employees Union-PAFLU, the PAFLU, through its
national President, formed a Trial Committee to
investigate the local union's charges against the
petitioners for acts of disloyalty inimical to the interest of
the local union, as well as directing the Trial Committee to
Subpoena the complainants (Amigo Employees Union-
PAFLU) and the respondents (herein petitioners) for
investigation, to conduct the said investigation and to
submit its findings and recommendations for appropriate
action.
And on the same date of February 15, 1977, the Amigo
Employees Union-PAFLU and the Company concluded a
new CBA which, besides granting additional benefits to
the workers, also reincorporated the same provisions of
the existing CBA, including the union security clause
reading, to wit:
"ARTICLE III
UNION SECURITY WITH RESPECT TO PRESENT
MEMBERS
All members of the UNION as of the signing of this
Agreement shall remain members thereof in good
standing. Therefore, any members who shall resign, be
expelled, or shall in any manner cease to be a member of
the UNION, shall be dismissed from his employment upon
written request of the UNION to the Company."[2]
Subsequently, petitioners were summoned to appear
before the PAFLU Trial Committee for the aforestated
investigation of the charges filed against them by the
Amigo Employees Union-PAFLU. Petitioners, however,
did not attend but requested for a "Bill of Particulars" of
the charges, which charges were stated by the Chairman
of the committee as follows:
"1. Disaffiliating from PAFLU and affiliating with the
Federation of Unions of Rizal (FUR).
"2. Filing petition for certification election with the Bureau
of Labor Relations and docketed as Case No. R04-
MED-830-77 and authorizing a certain Dolores Villar as
your authorized representative without the official sanction
of the mother Federation-PAFLU.
"3. Maligning, libelling and slandering the incumbent
officers of the union as well as of the PAFLU Federation.
"4. By spreading false propaganda among members of
the Amigo Employees Union-PAFLU that the incumbent
union officers are 'merely appointees' of the management.
"5. By sowing divisiveness instead of togetherness among
members of the Amigo Employees Union-PAFLU.
"6. By conduct unbecoming as members of the Amigo
Employees Union-PAFLU which is highly prejudicial to the
union as well as to the PAFLU Federation.
"All these charges were formalized in a resolution of the
incumbent officers of the Amigo Employees Union-PAFLU
dated February 14, 1977."[3]
Not recognizing PAFLU's jurisdiction over their case,
petitioners again refused to participate in the investigation
rescheduled and conducted on March 9, 1979. Instead,
petitioners merely appeared to file their Anwser to the
charges and moved for a dismissal.
Petitioners contend in their Answer that neither the
disaffiliation of the Amigo Employees Union from PAFLU
nor the act of filing the petition for certification election
constitute disloyalty as these are in the exercise of their
constitutional right to self-organization. They further
contended that PAFLU was without jurisdiction to
investigate their case since the charges, being intra-union
problems within the Amigo Employees Union-PAFLU,
should be conducted pursuant to the provision of Article
XI, Sections 2, 3, 4 and 5 of the local union's constitution
and by-laws.
The complainants, all of whom were the then incumbent
officers of the Amigo Employees Union-PAFLU, however,
appeared and adduced their evidence supporting the
charges against herein petitioners.
Based on the findings and recommendations of the
PAFLU trial committee, the PAFLU President, on March
15, 1977, rendered a decision finding the petitioners guilty
of the charges and disposing in the last paragraph
thereof, to wit,
"Excepting Felipe Manlapao, the expulsion from the
AMIGO EMPLOYEES UNION of all the other nine (9)
respondents, Dionisio Ramos, Recitation Bernus, Dolores
Villar, Romeo Dequito, Rolando de Guzman, Anselma
Andan, Rita Llagas, Benigno Mamaradlo and Orlando
Acosta is hereby ordered, and as a consequence the
Management of the employer, AMIGO
MANUFACTURING, INC. is hereby requested to
terminate them from their employment in conformity with
the security clause in the collective bargaining agreement.
Further the Trial Committee is directed to investigate
Felipe Manlapao when he shall have reported back for
duty."[4]
Petitioners, appealed the Decision to the PAFLU, citing
the same grounds as before, and in addition thereto,
argued that the PAFLU decision cannot legally invoke a
CBA which was unratified, not certified, and entered into
without authority from the union general membership, in
asking the Company to terminate them from their
employment. The appeal was, likewise, denied by PAFLU
in a Resolution dated March 28, 1977.
After denying petitioner's appeal, PAFLU on March 28,
1977 sent a letter to the Company stating, to wit,
"We are furnishing you a copy of our Resolution on the
Appeal of the respondent in Administrative Case No. 2,
Series of 1977, Amigo Employees Union-PAFLU vs.
Dionisio Ramos, et al.
"In view of the denial of their appeal and the Decision of
March 15, 1977 having become final and executory we
would appreciate full cooperation on your part by
implementing the provision of our CBA on security clause
by terminating the respondents concerned from their
employment."[5]
This was followed by another letter from PAFLU to the
Company dated April 25, 1977, reiterating the demand to
terminate the employment of the petitioners pursuant to
the security clause of the CBA, with a statement absolving
the Company from any liability or damage that may arise
from petitioner's termination.
Acting on PAFLU's demand, the Company informed
PAFLU that it will first secure the necessary clearances to
terminate petitioners. By letter dated April 28, 1977,
PAFLU requested the Company to put petitioners under
preventive suspension pending the application for said
clearances to terminate the petitioners, upon a declaration
that petitioners' continued stay within the work premises
will "result in the threat to the life and limb of the other
employees of the company."[6]
Hence, on April 29, 1977, the Company filed the request
for clearance to terminate the petitioners before the
Department of Labor, Regional Office No. 4. The
application, docketed as R04-Case No. 7-IV-3549-T,
stated as cause therefor, "Demand by the Union Pursuant
to the Union Security Clause"; and further, as effectivity
date, "Termination upon issuance of clearance;
Suspension upon receipt of notice of workers
concerned."[7] Petitioners were then informed by
memorandum dated April 29, 1977 that the Company has
applied for clearance to terminate them upon demand of
PAFLU, and that each of them were placed under
preventive suspension pending the resolution of the said
applications. The security guard was, likewise, notified to
refuse petitioners entry into the work premises.[8]
In an earlier development, on April 25, 1977, or five days
before petitioners were placed under preventive
suspension, they filed a complaint with application for
preliminary injunction before the same Regional Office
No. 4, docketed as R04-Case No. RD-4-4088-77-T,
praying that after due notice and hearing, "(1) A
preliminary injunction be issued forthwith to restrain the
respondents from doing the act herein complained of,
namely: the dismissal of the individual complainants from
their employment; (2) After due hearing on the merits of
the case, an Order be entered denying and/or setting
aside the Decision dated March 15, 1977 and the
Resolution dated March 28, 1977, issued by respondent
Onofre P. Guevara, National President of respondent
PAFLU; (3) The Appeal of the individual complainants to
the General Membership of the complainant AMIGO
EMPLOYEES UNION, dated March 22, 1977, pursuant to
Sections 2, 3, 4 & 5, Article XI in relation of Section 1,
Article XII of the Union Constitution and By-Laws, be
given due course; and (4) Thereafter, the said preliminary
injunction be made permanent, with costs, and with such
further orders/reliefs that are just and equitable in the
premises."[9]
In these two cases filed before the Regional Office No. 4,
the parties adopted their previous positions when they
were still arguing before the PAFLU trial committee.
On October 14, 1977, Vicente Leogardo, Jr., Officer-in-
charge of Regional Office No. 4, rendered a decision
jointly resolving said two cases, the dispositive portion of
which states, to wit,
"IN VIEW OF THE FOREGOING, judgment is hereby
rendered granting the application of the Amigo
Manufacturing, Inc., for clearance to terminate the
employment of Dolores D. Villar, Dionisio Ramos,
Benigno Mamaraldo, Orlando Acosta, Recitacion Bernus,
Anselma Andan, Rolando de Guzman, and Rita Llagas.
The application of oppositors, under R04-Case No.
RD-4-4088-77, for a preliminary injunction to restrain the
Amigo Manufacturing, Inc. from terminating their
employment and from placing them under preventive
suspension, is hereby DISMISSED."[10]
Not satisfied with the decision, petitioners appealed to the
Office of the Secretary of Labor. By Order dated February
15, 1979, the respondent Amado G. Inciong, Deputy
Minister of Labor, dismissed their appeal for lack of merit.
[11]
Hence, the instant petition for review, raising the following
issues:
"A. Is it not error in both constitutional and statutory law by
the respondent Minister when he affirmed the decision of
the R04-Officer-in-Charge allowing the preventive
suspension and subsequent dismissal of petitioners by
reason of the exercise of their right to freedom of
association?
B. Is it not error in law by the respondent Minister when he
upheld the decision of the R04 OIC which sustained the
availment of the respondent PAFLU's constitution over
that of the local union constitution in the settlement of
intra-union dispute?
C. Is it not error in law amounting to grave abuse of
discretion by the Minister in affirming the conclusion made
by the R04 OIC, upholding the legal applicability of the
security clause of a CBA over alleged offenses committed
earlier than its conclusion, and within the 60-day freedom
period of an old CBA?"[12]
The main thrust of the petition is the alleged illegality of
the dismissal of the petitioners by private respondent
Company upon demand of PAFLU which invoked the
security clause of the collective bargaining agreement
between the Company and the local union, Amigo
Employees Union-PAFLU. Petitioners contend that the
respondent Deputy Minister acted in grave abuse of
discretion when he affirmed the decision granting the
clearance to terminate the petitioners and dismissed
petitioners' complaint, and in support thereof, allege that
their constitutional right to self-organization had been
impaired. Petitioners' contention lacks merit.
It is true that disaffiliation from a labor union is not open to
legal objection. It is implicit in the freedom of association
ordained by the Constitution.[13] But this Court has laid
down the ruling that a closed shop is a valid form of union
security, and such provision in a collective bargaining
agreement is not a restriction of the right of freedom of
association guaranteed by the Constitution.[14]
In the case at bar, it appears as an undisputed fact that on
February 15, 1977, the Company and the Amigo
Employees Union-PAFLU entered into a Collective
Bargaining Agreement with a union security clause
provided for in Article XII thereof which is a reiteration of
the same clause in the old CBA. The quoted stipulation for
closed-shop is clear and unequivocal and it leaves no
room for doubt that the employer is bound, under the
collective bargaining agreement, to dismiss the
employees, herein petitioners, for non-union membership.
Petitioners became non-union members upon their
expulsion from the general membership of the Amigo
Employees Union-PAFLU on March 15, 1977 pursuant to
the Decision of the PAFLU national president.
We reject petitioners' theory that their expulsion was not
valid upon the grounds adverted to earlier in this Decision.
That PAFLU had the authority to investigate petitioners on
the charges filed by their co-employees in the local union
and after finding them guilty as charged, to expel them
from the roll of membership of the Amigo Employees
Union-PAFLU is clear under the constitution of the PAFLU
to which the local union was affiliated. And pursuant to the
security clause of the new CBA, reiterating the same
clause in the old CBA, PAFLU was justified in applying
said security clause. We find no abuse of discretion on the
part of the OIC of Regional Office No. 4 in upholding the
validity of the expulsion and on the part of the respondent
Deputy Minister of Labor in sustaining the same. We
agree with the OIC's decision, pertinent portion of which
reads:
"Stripped of non-essentials, the basic and fundamental
issue in this case tapers down to the determination of
WHETHER OR NOT PAFLU HAD THE AUTHORITY TO
INVESTIGATE OPPOSITORS AND, THEREAFTER,
EXPEL THEM FROM THE ROLL OF MEMBERSHIP OF
THE AMIGO EMPLOYEES UNION-PAFLU.
Recognized and salutary is the principle that when a labor
union affiliates with a mother union, it becomes bound by
the laws and regulations of the parent organization. Thus,
the Honorable Secretary of Labor, in the case of Amador
Bolivar, et al. vs. PAFLU, et al., NLRC Case NO. LR-133
& MC-476, promulgated on December 3, 1973, declared
'When a labor union affiliates with a parent organization or
mother union, or accepts a charter from a superior body, it
becomes subject to the laws of the superior body under
whose authority the local union functions. The
constitution, by-laws and rules of the parent body,
together with the charter it issues pursuant thereto to the
subordinate union, constitute an enforceable contract
between the parent body and the subordinate union, and
between the members of the subordinate union inter
se.' (Citing Labor Unions, Dangel and Shriber, pp.
279-280).
It is undisputable that oppositors were members of the
Amigo Employees Union at the time that said union
affiliated with PAFLU; hence, under the afore-quoted
principle, oppositors are bound by the laws and
regulations of PAFLU.
Likewise, it is undeniable that in the investigation of the
charges against them, oppositors were accorded 'due
process', because in this jurisdiction, the doctrine is
deeply entrenched that the term 'due process' simply
means that the parties were given the opportunity to be
heard. In the instant case, ample and unmistakable
evidence exists to show that the oppositors were afforded
the opportunity to present their evidence, but they
themselves disclaimed or spurned the said opportunity
given to them.
PAFLU, therefore, correctly and legally acted when,
pursuant to its Constitution and By-Laws, it conducted and
proceeded with the investigation of the charges against
the oppositors and found them guilty of acts prejudicial
and inimical to the interests of the Amigo Employees
Union-PAFLU, to wit: that of falsely and maliciously
slandering the officers of the union; spreading false
propaganda among the members of the Amigo
Employees Union-PAFLU; calling the incumbent officers
as mere appointees and robots of management; calling
the union company-dominated or assisted union;
committing acts unbecoming of the members of the union
and destructive of the union and its members.
Inherent in every labor union, or any organization for that
matter, is the right of self-preservation. When members of
a labor union, therefore, sow the seeds of dissension and
strife within the union; when they seek the disintegration
and destruction of the very union to which they belong;
they thereby forfeit their rights to remain as members of
the union which they seek to destroy. Prudence and
equity, as well as the dictates of law and justice, therefore,
compelling mandate the adoption by the labor union of
such corrective and remedial measures, in keeping with
its laws and regulations, for its preservation and continued
existence; lest by its folly and inaction, the labor union
crumble and fall.
Correctly and legally, therefore, the PAFLU acted when
after proper investigation and finding of guilt, it decided to
remove the oppositors from the list of members of the
Amigo Employees Union-PAFLU, and thereafter,
recommended to the Amigo Manufacturing, Inc.; the
termination of the employment of the oppositors."[15]
We see no reason to disturb the same.
The contention of petitioners that the charges against
them being intra-union problems, should have been
investigated in accordance with the constitution and by-
laws of the Amigo Employees Union-PAFLU and not of
the PAFLU, is not impressed with merit. It is true that
under the Implementing Rules and Regulations of the
Labor Code, in case of intra-union disputes, redress must
first be sought within the organization itself in accordance
with its constitution and by-laws. However, it has been
held that this requirement is not absolute but yields to
exception under varying circumstances. Thus, in
Kapisanan ng mga Manggagawa sa MRR vs. Hernandez,
20 SCRA 109, We held:
"In the case at bar, noteworthy is the fact that the
complaint was filed against the union and its incumbent
officers, some of whom were members of the board of
directors. The constitution and by-laws of the union
provide that charges for any violations thereof shall be
filed before the said board. But as explained by the lower
court, if the complainants had done so the board of
directors would in effect be acting as respondent
investigator and judge at the same time. To follow the
procedure indicated would be a farce under the
circumstances, where exhaustion of remedies within the
union itself would practically amount to a denial of justice
or would be illusory or vain, it will not be insisted upon,
particularly where property rights of the members are
involved, as a condition to the right to invoke the aid of a
court."
The facts of the instant petition stand on all fours with the
aforecited case that the principle therein enunciated
applies here as well. In the case at bar, the petitioners
were charged by the officers of the Amigo Employees
Union-PAFLU themselves who were also members of the
Board of Directors of the Amigo Employees Union-
PAFLU. Thus, were the petitioners to be charged and
investigated according to the local union's constitution,
they would have been tried by a trial committee of three
(3) elected from among the members of the Board who
are themselves the accusers. (Section 2, Article 11,
Constitution of the Local Union). Petitioners would be in a
far worse position had this procedure been followed.
Nonetheless, petitioners admit in their petition that two (2)
of the six (6) charges, i.e. disaffiliation and filing a petition
for certification election, are not intra-union matters and,
therefore, are cognizable by PAFLU.
Petitioners insist that their disaffiliation from PAFLU and
filing a petition for certification election are not acts of
disloyalty but an exercise of their right to self-organization.
They contend that these acts were done within the 60-day
freedom period when questions of representation may
freely be raised. Under the peculiar facts of the case, We
find petitioners' insistence untenable.
In the first place, had petitioners merely disaffiliated from
the Amigo Employees Union-PAFLU, there could be no
legal objections thereto for it was their right to do so. But
what petitioners did by the very clear terms of their
"Sama-Samang Kapasiyahan" was to disaffiliate the
Amigo Employees Union-PAFLU from PAFLU, an act
which they could not have done with any effective
consequence because they constituted the minority in the
Amigo Employees Union-PAFLU.
Extant from the records is the fact that petitioners
numbering ten (10), were among the ninety-six (96) who
signed the "Sama-Samang Kapasiyahan" whereas there
are two hundred thirty four (234) union members in the
Amigo Employees Union-PAFLU. Hence, petitioners
constituted a small minority for which reason they could
not have successfully disaffiliated the local union from
PAFLU. Since only 96 wanted disaffiliation, it can be
inferred that the majority wanted the union to remain an
affiliate of PAFLU and this is not denied or disputed by
petitioners. The action of the majority must, therefore,
prevail over that of the minority members.[16]
Neither is there merit to petitioners' contention that they
had the right to present representation issues within the
60-day freedom period. It is true, as contended by
petitioners, that under Article 257 of the Labor Code and
Section 3, Rule 2, Book 2 of its Implementing Rules,
questions of exclusive bargaining representation are
entertainable within the sixty (60) days prior to the expiry
date of an existing CBA, and that they did file a petition for
certification election within that period. But the petition
was filed in the name of the Amigo Employees Union
which had not disaffiliated from PAFLU, the mother union.
Petitioners being a mere minority of the local union may
not bind the majority members of the local union.
Moreover, the Amigo Employees Union, as an
independent union, is not duly registered as such with the
Bureau of Labor Relations. The appealed decision of OIC
Leogardo of Regional Office No. 4 states as a fact that
there is no record in the Bureau of Labor Relations that
the Amigo Employees Union (Independent) is registered,
and this is not disputed by petitioners, notwithstanding
their allegation that the Amigo Employees Union is a duly
registered labor organization bearing Ministry of Labor
Registration Certificate No. 5290-IP dated March 27,
1967. But the independent union organized after the
"Sama-Samang Kapasiyahan" executed February 7, 1977
could not have been registered earlier, much less March
27, 1967 under Registration Certificate No. 5290-IP. As
such unregistered union, it acquires no legal personality
and is not entitled to the rights and privileges granted by
law to legitimate labor organizations upon issuance of the
certificate of registration. Article 234 of the New Labor
Code specifically provides:
"Art. 234. Requirements of Registration. Any applicant
labor organization, association, or group of unions or
workers shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the
certificate of registration….."
In Phil. Association of Free Labor Unions vs. Sec. of
Labor, 27 SCRA 40, We had occasion to interpret Section
23 of R.A. No. 875 (Industrial Peace Act) requiring of
labor unions registration by the Department of Labor in
order to qualify as "legitimate labor organization." and We
said:
"The theory to the effect that Section 23 of Republic Act
No. 875 unduly curtails the freedom of assembly and
association guaranteed in the Bill of Rights is devoid of
factual basis. The registration prescribed in paragraph (b)
of said section[17] is not a limitation to the right of
assembly or association, which may be exercised with or
without said registration. The latter is merely a condition
sine qua non for the acquisition of legal personality by
labor organizations, associations or unions and the
possession of the 'rights and privileges granted by law to
legitimate labor organizations.' The Constitution does not
guarantee these rights and privileges, much less said
personality, which are mere statutory creations, for the
possession and exercise of which registration is required
to protect both labor and the public against abuses, fraud,
or impostors who pose as organizers, although not truly
accredited agents of the union they purport to represent.
Such requirement is a valid exercise of the police power,
because the activities in which labor organizations,
associations and union or workers are engaged affect
public interest, which should be protected."
Simply put, the Amigo Employees Union (Independent)
which petitioners claim to represent, not being a legitimate
labor organization, may not validly present representation
issues. Therefore, the act of petitioners cannot be
considered a legitimate exercise of their right to self-
organization. Hence, We affirm and reiterate the rationale
explained in Phil. Association of Free Labor Unions vs.
Sec. of Labor case, supra, in order to protect legitimate
labor and at the same time maintain discipline and
responsibility within its ranks.
The contention of petitioners that the new CBA concluded
between Amigo Employees Union-PAFLU and the
Company on February 15, 1977 containing the union
security clause cannot be invoked as against the
petitioners for offenses committed earlier than its
conclusion, deserves scant consideration. We find it to be
the fact that the union security clause provided in the new
CBA merely reproduced the union security clause
provided in the old CBA about to expire. And since
petitioners were expelled from Amigo Employees Union-
PAFLU on March 28, 1982 upon denial of their Motion for
Reconsideration of the decision expelling them, the CBA
of February 15, 1977 was already applicable to their case.
The "closed-shop provision" in the CBA provides:
"All members of the UNION as of the signing of this
Agreement shall remain members thereof in good
standing. Therefore, any members who shall resign, be
expelled, or shall in any manner cease to be a member of
the UNION, shall be dismissed from his employment upon
written request of the UNION to the Company." (Art. III)
A closed-shop is a valid form of union security, and a
provision therefor in a collective bargaining agreement is
not a restriction of the right of freedom of association
guaranteed by the Constitution. (Manalang, et al. vs. Artex
Development Co., Inc., et al., L-20432, October 30, 1967,
21 SCRA 561). Where in closed-shop agreement it is
stipulated that union members who cease to be in good
standing shall immediately be dismissed, such dismissal
does not constitute an unfair labor practice exclusively
cognizable by the Court of Industrial Relations. (Seno vs.
Mendoza, 21 SCRA 1124).
Finally, We reject petitioners' contention that respondent
Minister committed error in law amounting to grave abuse
of discretion when he affirmed the conclusion made by the
R04 OIC, upholding the legal applicability of the security
clause of a CBA over alleged offenses committed earlier
than its conclusion and within the 60-day freedom period
of an old CBA. In the first place, as We stated earlier, the
security clause of the new CBA is a reproduction or
reiteration of the same clause in the old CBA. While
petitioners were charged for alleged commission of acts of
disloyalty inimical to the interests of the Amigo Employees
Union-PAFLU in the Resolution of February 14, 1977 of
the Amigo Employees Union-PAFLU and on February 15,
1977 PAFLU and the Company entered into and
concluded a new collective bargaining agreement,
petitioners may not escape the effects of the security
clause under either the old CBA or the new CBA by
claiming that the old CBA had expired and that the new
CBA cannot be given retroactive enforcement. To do so
would be to create a gap during which no agreement
would govern, from the time the old contract expired to the
time a new agreement shall have been entered into with
the union. As this Court said in Seno vs. Mendoza, 21
SCRA 1124, "without any agreement to govern the
relations between labor and management in the interim,
the situation would well be productive of confusion and
result in breaches of the law by either party."
The case of Seno vs. Mendoza, 21 SCRA 1124
mentioned previously needs further citation of the facts
and the opinion of the Court, speaking through Justice
Makalintal who later became Chief Justice, and We quote:
"It appears that petitioners other than Januario T. Seno,
who is their counsel, were members of the United
Seamen's Union of the Philippines. Pursuant to a letter-
request of the Union stating that they 'had ceased to be
members in good standing' and citing a closed shop
clause in its bargaining agreement with respondent Carlos
A. Go Thong & Co., the latter dismissed said petitioners.
Through counsel, petitioners requested that they be
reinstated to their former positions and paid their
backwages, otherwise they would picket respondents'
offices and vessels. The request was denied on the
ground that the dismissal was unavoidable under the
terms of the collective bargaining agreement. . . .
"We agree with respondent company that the pendency of
the petitions for certification election did not bar or
preclude the renewal of the collective bargaining
agreement with the United Seamen's Union of the
Philippines. Otherwise there would be a gap or
interregnum during which no agreement would govern,
that is, from the time the old collective bargaining contract
expired to the time the petition for certification election is
decided and a new agreement entered into with the Union
that may be duly certified as the proper bargaining unit.
Without any agreement to govern the relations between
labor and management in the interim, the situation would
well be productive of confusion and result in breaches of
the law by either party. . . ."
We, therefore, hold and rule that petitioners, although
entitled to disaffiliate from their union and form a new
organization of their own, must, however, suffer the
consequences of their separation from the union under
the security clause of the CBA.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the
Order appealed from affirming the joint decision of the
OIC of Regional Office No. 4 in R04-Case No. T-IV-3549-
T and R04 Case No. RD-4-4088-77-T granting clearance
to terminate petitioners as well as dismissing their
complaint with application for preliminary injunction, is
hereby AFFIRMED. No costs.
SO ORDERED.
Makasiar (Chairman), Concepcion Jr., De Castro and
Escolin, JJ., concur.

G.R. No. 87266-69 July 30, 1990

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

G.R. No. 196276               June 4, 2014

TAKATA (PHILIPPINES) CORPORATION, Petitioner,
vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS
MANGGAGAWA NG TAKATA (SALAMAT), Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA
Philippines Corporation assailing the Decision1 dated December 22, 2010 and
the Resolution2 dated March 28, 2011 of the Court of Appeals in CA-G.R. SP
No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and
Employment (DOLE) Regional Office a Petition3 for Cancellation of the
Certificate of Union Registration of Respondent Samahang Lakas
Manggagawa ng Takata (SALAMA1) on the ground that the latter is guilty of
misrepresentation, false statement and fraud with respect to the number of
those who participated in the organizational meeting, the adoption and
ratification of its Constitution and By-Laws, and in the election of its officers. It
contended that in the May 1, 2009 organizational meeting of respondent, only
68 attendees signed the attendance sheet, and which number comprised only
17% of the total number of the 396 regular rank- and-file employees which
respondent sought to represent, and hence, respondent failed to comply with
the 20% minimum membership requirement. Petitioner insisted that the
document "Pangalan ng mga Kasapi ng Unyon" bore no signatures of the
alleged 119 union members; and that employees were not given sufficient
information on the documents they signed; that the document "Sama-
Samang Pahayag ng Pagsapi" was not submitted at the time of the filing of
respondent's application for union registration; that the 119 union members
were actually only 117; and, that the total number of petitioner's employees
as of May 1, 2009 was 470, and not 396 as respondent claimed.4
Respondent denied the charge and claimed that the 119 union members
were more than the 20% requirement for union registration. The document
"Sama-Samang Pahayag ng Pagsapi sa Unyon" which it presented in its
petition for certification election5 supported their claim of 119 members.
Respondent also contended that petitioner was estopped from assailing its
legal personality as it agreed to a certification election and actively
participated in the pre-election conference of the certification election
proceedings.6 Respondent argued that the union members were informed of
the contents of the documents they signed and that the 68 attendees to the
organizational meeting constituted more than 50% of the total union
membership, hence, a quo rumexisted for the conduct of the said meeting.7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr.,
issued a Decision8 granting the petition for cancellation of respondent's
certificate of registration, the dispositive portion of which reads:
WHEREFORE, from the foregoing considerations, the petition is hereby
GRANTED. Accordingly, the respondent Union Certificate of Registration No.
RO400A-2009-05-01-UR-LAG, dated May 19, 2009 is hereby REVOCKED
(sic) and /or CANCELLED pursuant to paragraph (a) & (b), Section 3, Rule
XIV of Department Order No. 40-03 and the Samahang Lakas ng
Manggagawa ng TAKATA (SALAMAT) is hereby delisted from the roll of
legitimate labor organization of this office.9
In revoking respondent's certificate of registration, the Regional Director
found that the 68 employees who attended the organizational meeting was
obviously less than 20% of the total number of 396 regular rank-and-file
employees which respondent sought to represent, hence, short of the union
registration requirement; that the attendance sheet which contained the
signatures and names of the union members totalling to 68 contradicted the
list of names stated in the document denominated as "Pangalan ng mga
Kasaping Unyon." The document "Sama-Samang Pahayag ng Pagsapi" was
not attached to the application for registration as it was only submitted in the
petition for certification election filed by respondent at a later date. The
Regional Director also found that the proceedings in the cancellation of
registration and certification elections are two different and entirely separate
and independent proceedings which were not dependent on each other.
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP)
Paralegal Officer, Domingo P. Mole, filed a Notice and Memorandum of
Appeal10 with the Bureau of Labor Relations (BLR). However, on September
28,2009, respondent, through its counsels, Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal
Memorandum with Formal Entry of Appearance11 to the Office of the DOLE
Secretary, which the latter eventually referred to the BLR. Petitioner filed an
Opposition to the Appeals12 praying for their dismissal on the ground of forum
shopping as respondent filed two separate appeals in two separate venues;
and for failing to avail of the correct remedy within the period; and that the
certificate of registration was tainted with fraud, misrepresentation and
falsification.
In its Answer,13 respondent claimed that there was no forum shopping as
BMP's Paralegal Officer was no longer authorized to file an appeal on behalf
of respondent as the latter's link with BMP was already terminated and only
the Union President was authorized to file the appeal; and that it complied
with Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal Memorandum
with Formal Entry of Appearance and petitioner's Answer, the BLR rendered
its Decision14 reversing the Order of the Regional Director, the decretal portion
of which reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional
Director Ricardo S. Martinez, Sr., dated 27 August 2009, is hereby
REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall
remain in the roster of labor organizations.15
In reversing, the BLR found that petitioner failed to prove that respondent
deliberately and maliciously misrepresented the number of rank-and-file
employees. It pointed out petitioner's basis for the alleged noncompliance
with the minimum membership requirement for registration was the
attendance of 68 members to the May 1, 2009 organizational meeting
supposedly comprising only 17% of the total 396 regular rank-and-file
employees. However, the BLR found that the list of employees who
participated in the organizational meeting was a separate and distinct
requirement from the list of the names of members comprising at least 20% of
the employees in the bargaining unit; and that there was no requirement for
signatures opposite the names of the union members; and there was no
evidence showing that the employees assailed their inclusion in the list of
union members.
Petitioner filed a motion for reconsideration, which was denied by the BLR in
a Resolution16 dated January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari under Rule
65.
After the submission of the parties' respective pleadings, the case was
submitted for decision.
On December 22, 2010, the CA rendered its assailed decision which denied
the petition and affirmed the decision of the BLR. Petitioner's motion for
reconsideration was denied in a Resolution dated March 29, 2011.
Hence this petition for review filed by petitioner raising the following issues, to
wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND
SERIOUS ERROR IN AFFIRMING THE DECISION OF PUBLIC
RESPONDENT BLR AND NOT FINDING ANY VIOLATION BY SAMAHANG
LAKAS MANGGAGAWA SA TAKATA (SALAMAT) OF THE RULE ON
FORUM SHOPPING IN THE FILING OF TWO VERIFIED APPEALS FOR
AND ITS BEHALF. BOTH OF THE APPEALS SHOULD HAVE BEEN
DISMISSED OUTRIGHT BY PUBLIC RESPONDENT BLR, ON GROUND OF
FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING
THAT THE APPLICATION FOR REGISTRATION OF SAMAHANG LAKAS
MANGGAGAWA SA TAKATA (SALAMAT) WAS COMPLIANT WITH THE
LAW. CONSIDERING THE CIRCUMSTANCES OBTAINING IN THE
REGISTRATION OF SALAMAT, IT IS CLEAR THAT THE SAME IS
TAINTED WITH FRAUD, MISREPRESENTATION AND FALSIFICATION.
SALAMAT DID NOT POSSESS THE REQUIREDNUMBER OF MEMBERS
AT THE TIME OF FILING OF ITS APPLICATION FOR REGISTRATION,
HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION, AND
FALSE STATEMENTS AND FRAUD IN CONNECTION THEREWITH.17
Anent the first issue, petitioner contends that respondent had filed two
separate appeals with two different representations at two different venues, in
violation of the rule on multiplicity of suits and forum shopping, and instead of
dismissing both appeals, the appeal erroneously filed before the Labor
Secretary was the one held validly filed, entertained and even granted; that it
is not within the discretion of BLR to choose which between the two appeals
should be entertained, as it is the fact of the filing of the two appeals that is
being prohibited and not who among the representatives therein possessed
the authority.
We are not persuaded.
We find no error committed by the CA in finding that respondent committed
no forum shopping. As the CA correctly concluded, to wit:
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer
authorized to file an appeal on behalf of union SALAMAT and that BMP was
duly informed that its services was already terminated. SALAMAT even
submitted before the BLR its "Resolusyon Blg. 01-2009" terminating the
services of BMP and revoking the representation of Mr. Domingo Mole in any
of the pending cases being handled by him on behalf of the union. So,
considering that BMP Paralegal Officer Domingo P. Mole was no longer
authorized to file an appeal when it filed the Notice and Memorandum of
Appeal to DOLE Regional Office No. IV-A, the same can no longer be treated
as an appeal filed by union SALAMAT. Hence, there is no forum shopping to
speak of in this case as only the Appeal Memorandum with Formal Entry of
Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty. Jehn Louie W.
Velandrez is sanctioned by SALAMAT.18
Since Mole's appeal filed with the BLR was not specifically authorized by
respondent, such appeal is considered to have not been filed at all. It has
been held that "if a complaint is filed for and in behalf of the plaintiff who is
not authorized to do so, the complaint is not deemed filed.
An unauthorized complaint does not produce any legal effect."19
Respondent through its authorized representative filed its Appeal
Memorandum with Formal Entry of Appearance before the Labor Secretary,
and not with the BLR. As the appeal emanated from the petition for
cancellation of certificate of registration filed with the Regional Office, the
decision canceling the registration is appealable to the BLR, and not with the
Labor Secretary. However, since the Labor Secretary motu propio referred
the appeal with the BLR, the latter can now act on it. Considering that Mole's
appeal with the BLR was not deemed filed, respondent’s appeal, through
Banzuela and Associates, which the Labor Secretary referred to the BLR was
the only existing appeal with the BLR for resolution. There is, therefore, no
merit to petitioner's claim that BLR chose the appeal of Banzuela and
Associates over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories
Employees Union20 cited by petitioner is not at all applicable in this case as
the issue therein is the authority of the Labor Secretary to review the decision
of the Bureau of Labor Relations rendered in the exercise of its appellate
jurisdiction over decision of the Regional Director in cases involving
cancellations of certificate of registration of labor unions. We found no grave
abuse of discretion committed by the Secretary of Labor in not acting on
therein petitioner's appeal. The decision of the Bureau of Labor Relations on
cases brought before it on appeal from the Regional Director are final and
executory. Hence, the remedy of the aggrieved party is to seasonably avail of
the special civil action of certiorari under Rule 65 and the Rules of Court. In
this case, after the Labor Secretary motu propio referred respondent's appeal
filed with it to the BLR which rendered its decision reversing the Regional
Director, petitioner went directly to the CA via a petition for certiorari under
Rule 65.
As to the second issue, petitioner seeks the cancellation of respondent's
registration on grounds offraud and misrepresentation bearing on the
minimum requirement of the law as to its membership, considering the big
disparity in numbers, between the organizational meeting and the list of
members, and so misleading the BLR that it obtained the minimum required
number of employees for purposes of organization and registration.
We find no merit in the arguments.
Art. 234 of the Labor Code provides:
ART. 234. Requirements of Registration. - A federation, national union or
industry or trade union center or an independent union shall acquire legal
personality and shall be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate of registration
based on the following requirements:
(a) Fifty pesos (₱50.00)registration fee;
(b) The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the list of
the workers who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its
members comprising at least twenty percent (20%) of all the employees in the
bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies
of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes
of its adoption or ratification, and the list of the members who participated in
it."
And after the issuance of the certificate of registration, the labor
organization's registration could be assailed directly through cancellation of
registration proceedings in accordance with Articles 238 and 239 of the Labor
Code. And the cancellation of union certificate of registration and the grounds
thereof are as follows:
ART. 238. Cancellation of Registration. - The certificate of registration of any
legitimate labor organization, whether national or local, may be cancelled by
the Bureau, after due hearing, only on the grounds specified in Article 239
hereof.
ART. 239. Grounds for Cancellation of Union Registration. - The following
may constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took part in
the ratification;
(b) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
Petitioner's charge that respondent committed misrepresentation and fraud in
securing its certificate of registration is a serious charge and must be carefully
evaluated. Allegations thereof should be compounded with supporting
circumstances and evidence.21 We find no evidence on record to support
petitioner's accusation.
Petitioner's allegation of misrepresentation and fraud is based on its claim
that during the organizational meeting on May 1, 2009, only 68 employees
attended, while respondent claimed that it has 119 members as shown in the
document denominated as "Pangalan ng mga Kasapi ng Unyon;" hence,
respondent misrepresented on the 20% requirement of the law as to its
membership.
We do not agree.
It does not appear in Article 234 (b) of the Labor Code that the attendees in
the organizational meeting must comprise 20% of the employees in the
bargaining unit. In fact, even the Implementing Rules and Regulations of the
Labor Code does not so provide. It is only under Article 234 (c) that requires
the names of all its members comprising at least twenty percent (20%) of all
the employees in the bargaining unit where it seeks to operate. Clearly, the
20% minimum requirement pertains to the employees’ membership in the
union and not to the list of workers who participated in the organizational
meeting. Indeed, Article 234 (b) and (c) provide for separate requirements,
which must be submitted for the union's registration, and which respondent
did submit. Here, the total number of employees in the bargaining unit was
396, and 20% of which was about 79. Respondent submitted a document
entitled "Pangalan ng Mga Kasapi ng Unyon" showing the names of 119
employees as union members, thus respondent sufficiently complied even
beyond the 20% minimum membership requirement. Respondent also
submitted the attendance sheet of the organizational meeting which
contained the names and signatures of the 68 union members who attended
the meeting. Considering that there are 119 union members which are more
than 20% of all the employees of the bargaining unit, and since the law does
not provide for the required number of members to attend the organizational
meeting, the 68 attendees which comprised at least the majority of the 119
union members would already constitute a quorum for the meeting to proceed
and to validly ratify the Constitution and By-laws of the union. There is,
therefore, no basis for petitioner to contend that grounds exist for the
cancellation of respondent's union registration. For fraud and
misrepresentation to be grounds for cancellation of union registration under
Article 239 of the Labor Code, the nature of the fraud and misrepresentation
must be grave and compelling enough to vitiate the consent of a majority of
union members.22
Petitioner's claim that the alleged union members signed documents without
adequate information is not persuasive. The one who alleges a fact has the
burden of proving it and a mere allegation is not evidence.23 In fact, we note
that not one of those listed in the document denominated as "Pangalan ng
Mga Kasaping Unyon" had come forward to deny their membership with
respondent. Notably, it had not been rebutted that the same union members
had signed the document entitled "Sama-Samang Pahayag ng Pagsapi,"
thus, strengtheningtheir desire to be members of the respondent union.
Petitioner claims that in the list of members, there was an employee whose
name appeared twice and another employee who was merely a project
employee. Such could not be considered a misrepresentation in the absence
of showing that respondent deliberately did so for the purpose of increasing
their union membership. In fact, even if those two names were not included in
the list of union members, there would still be 117 members which was still
more than 20% of the 396 rank-and-file employees.
As to petitioner's argument that the total number of its employees as of May
1, 2009 was 470, and not396 as respondent claimed, still the 117 union
members comprised more than the 20% membership requirement for
respondent's registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and
Employment,24 we said:
For the purpose of de-certifying a union such as respondent, it must be
shown that there was misrepresentation, false statement or fraud in
connection with the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the list of voters, or
failure to submit these documents together with the list of the newly elected-
appointed officers and their postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list of those who
participated in the organizational meeting would not, to our mind, provide a
valid reason to cancel respondent’s certificate of registration. The cancellation
of a union’s registration doubtless has an impairing dimension on the right of
labor to self-organization. For fraud and misrepresentation to be grounds for
cancellation of union registration under the Labor Code, the nature of the
fraud and misrepresentation must be grave and compelling enough to vitiate
the consent of a majority of union members. 1âwphi1

In this case, we agree with the BLR and the CA that respondent could not
have possibly committed misrepresentation, fraud, or false statements. The
alleged failure of respondent to indicate with mathematical precision the total
number of employees in the bargaining unit is of no moment, especially as it
was able to comply with the 20% minimum membership requirement. Even if
the total number of rank-and-file employees of petitioner is 528, while
respondent declared that it should only be 455, it still cannot be denied that
the latter would have more than complied with the registration requirement.25
WHEREFORE, premises considered, the petition for review is DENIED. The
Decision dated December 22, 2010 and the Resolution dated March 28, 2011
of the Court of Appeals, in CA-G.R. SP No. 112406, are AFFIRMED.
SO ORDERED.

G.R. No. 183317               December 21, 2009

MARIWASA SIAM CERAMICS, INC., Petitioner,
vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, CHIEF OF THE BUREAU OF LABOR RELATIONS,
DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL DIRECTOR
OF DOLE REGIONAL OFFICE NUMBER IV-A & SAMAHAN NG MGA
MANGGAGAWA SA MARIWASA SIAM CERAMICS, INC. (SMMSC-
INDEPENDENT), Respondents.
DECISION
NACHURA, J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court,
seeking to annul the Decision2 dated December 20, 2007 and the Resolution3
dated June 6, 2008 of the Court of Appeals in CA-G.R. SP No. 98332.
The antecedent facts are as follows—
On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa
Siam Ceramics, Inc. (SMMSC-Independent) was issued a Certificate of
Registration4 as a legitimate labor organization by the Department of Labor
and Employment (DOLE), Region IV-A.
On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for
Cancellation of Union Registration against respondent, claiming that the latter
violated Article 2345 of the Labor Code for not complying with the 20%
requirement, and that it committed massive fraud and misrepresentation in
violation of Article 2396 of the same code. The case was docketed as Case
No. RO400-0506-AU-004.
On August 26, 2005, the Regional Director of DOLE IV-A issued an Order
granting the petition, revoking the registration of respondent, and delisting it
from the roster of active labor unions.
Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).
In a Decision7 dated June 14, 2006, the BLR granted respondent’s appeal
and disposed as follows—
WHEREFORE, premises considered, the appeal by Samahan ng
Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) is
hereby GRANTED, and the Decision dated 26 August 2005 by DOLE-
Region-IV-A Director Maximo B. Lim is hereby REVERSED and SET ASIDE.
Samahan ng Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-
Independent), under Registration Certificate No. RO400-200505-UR-002,
remains in the roster of legitimate labor organizations.
SO DECIDED.8
Petitioner filed a Motion for Reconsideration but the BLR denied it in a
Resolution9 dated February 2, 2007.
Petitioner sought recourse with the Court of Appeals (CA) through a Petition
for Certiorari; but the CA denied the petition for lack of merit.
Petitioner’s motion for reconsideration of the CA Decision was likewise
denied, hence, this petition based on the following grounds—
Review of the Factual Findings of the Bureau of Labor Relations, adopted
and confirmed by the Honorable Court of Appeals is warranted[;]
The Honorable Court of Appeals seriously erred in ruling that the affidavits of
recantation cannot be given credence[;]
The Honorable Court of Appeals seriously erred in ruling that private
respondent union complied with the 20% membership requirement[; and]
The Honorable Court of Appeals seriously erred when it ruled that private
respondent union did not commit misrepresentation, fraud or false statement.
10

The petition should be denied.

The petitioner insists that respondent failed to comply with the 20% union
membership requirement for its registration as a legitimate labor organization
because of the disaffiliation from the total number of union members of 102
employees who executed affidavits recanting their union membership.
It is, thus, imperative that we peruse the affidavits appearing to have been
executed by these affiants.
The affidavits uniformly state—
Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado
bilang Rank & File sa Mariwasa Siam Ceramics, Inc., Bo. San Antonio, Sto.
Tomas, Batangas, matapos na makapanumpa ng naaayon sa batas ay
malaya at kusang loob na nagsasaad ng mga sumusunod:
1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa
sa Mariwasa Siam Ceramics, Inc. o SMMSC-Independent sa kabila ng aking
pag-aalinlangan[;]
2. Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at
handa ako[ng] tumalikod sa anumang kasulatan na aking nalagdaan sa
kadahilanan na hindi angkop sa aking pananaw ang mga mungkahi o
adhikain ng samahan.
SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan
ngayong ika-____ ng ______, 2005 dito sa Lalawigan ng Batangas, Bayan ng
Sto. Tomas.
____________________
Nagsasalaysay
Evidently, these affidavits were written and prepared in advance, and the pro
forma affidavits were ready to be filled out with the employees’ names and
signatures.
The first common allegation in the affidavits is a declaration that, in spite of
his hesitation, the affiant was forced and deceived into joining the respondent
union. It is worthy to note, however, that the affidavit does not mention the
identity of the people who allegedly forced and deceived the affiant into
joining the union, much less the circumstances that constituted such force
and deceit. Indeed, not only was this allegation couched in very general terms
and sweeping in nature, but more importantly, it was not supported by any
evidence whatsoever.
The second allegation ostensibly bares the affiant’s regret for joining
respondent union and expresses the desire to abandon or renege from
whatever agreement he may have signed regarding his membership with
respondent.
Simply put, through these affidavits, it is made to appear that the affiants
recanted their support of respondent’s application for registration.
In appreciating affidavits of recantation such as these, our ruling in La Suerte
Cigar and Cigarette Factory v. Director of the Bureau of Labor Relations11 is
enlightening, viz.—
On the second issue—whether or not the withdrawal of 31 union members
from NATU affected the petition for certification election insofar as the 30%
requirement is concerned, We reserve the Order of the respondent Director of
the Bureau of Labor Relations, it appearing undisputably that the 31 union
members had withdrawn their support to the petition before the filing of said
petition. It would be otherwise if the withdrawal was made after the filing of
the petition for it would then be presumed that the withdrawal was not free
and voluntary. The presumption would arise that the withdrawal was procured
through duress, coercion or for valuable consideration. In other words, the
distinction must be that withdrawals made before the filing of the petition are
presumed voluntary unless there is convincing proof to the contrary, whereas
withdrawals made after the filing of the petition are deemed involuntary.
The reason for such distinction is that if the withdrawal or retraction is made
before the filing of the petition, the names of employees supporting the
petition are supposed to be held secret to the opposite party. Logically, any
such withdrawal or retraction shows voluntariness in the absence of proof to
the contrary. Moreover, it becomes apparent that such employees had not
given consent to the filing of the petition, hence the subscription requirement
has not been met.
When the withdrawal or retraction is made after the petition is filed, the
employees who are supporting the petition become known to the opposite
party since their names are attached to the petition at the time of filing.
Therefore, it would not be unexpected that the opposite party would use foul
means for the subject employees to withdraw their support.12
In the instant case, the affidavits of recantation were executed after the
identities of the union members became public, i.e., after the union filed a
petition for certification election on May 23, 2005, since the names of the
members were attached to the petition. The purported withdrawal of support
for the registration of the union was made after the documents were
submitted to the DOLE, Region IV-A. The logical conclusion, therefore,
following jurisprudence, is that the employees were not totally free from the
employer’s pressure, and so the voluntariness of the employees’ execution of
the affidavits becomes suspect.
It is likewise notable that the first batch of 25 pro forma affidavits shows that
the affidavits were executed by the individual affiants on different dates from
May 26, 2005 until June 3, 2005, but they were all sworn before a notary
public on June 8, 2005.
There was also a second set of standardized affidavits executed on different
dates from May 26, 2005 until July 6, 2005. While these 77 affidavits were
notarized on different dates, 56 of these were notarized on June 8, 2005, the
very same date when the first set of 25 was notarized.
Considering that the first set of 25 affidavits was submitted to the DOLE on
June 14, 2005, it is surprising why petitioner was able to submit the second
set of affidavits only on July 12, 2005.
Accordingly, we cannot give full credence to these affidavits, which were
executed under suspicious circumstances, and which contain allegations
unsupported by evidence. At best, these affidavits are self-serving. They
possess no probative value.
A retraction does not necessarily negate an earlier declaration. For this
reason, retractions are looked upon with disfavor and do not automatically
exclude the original statement or declaration based solely on the recantation.
It is imperative that a determination be first made as to which between the
original and the new statements should be given weight or accorded belief,
applying the general rules on evidence. In this case, inasmuch as they remain
bare allegations, the purported recantations should not be upheld.13
Nevertheless, even assuming the veracity of the affidavits of recantation, the
legitimacy of respondent as a labor organization must be affirmed. While it is
true that the withdrawal of support may be considered as a resignation from
the union, the fact remains that at the time of the union’s application for
registration, the affiants were members of respondent and they comprised
more than the required 20% membership for purposes of registration as a
labor union. Article 234 of the Labor Code merely requires a 20% minimum
membership during the application for union registration. It does not mandate
that a union must maintain the 20% minimum membership requirement all
throughout its existence.14 1avvphi1

Respondent asserts that it had a total of 173 union members at the time it
applied for registration. Two names were repeated in respondent’s list and
had to be deducted, but the total would still be 171 union members. Further,
out of the four names alleged to be no longer connected with petitioner, only
two names should be deleted from the list since Diana Motilla and T.W.
Amutan resigned from petitioner only on May 10, 2005 and May 17, 2005,
respectively, or after respondent’s registration had already been granted.
Thus, the total union membership at the time of registration was 169. Since
the total number of rank-and-file employees at that time was 528, 169
employees would be equivalent to 32% of the total rank-and-file workers
complement, still very much above the minimum required by law.
For the purpose of de-certifying a union such as respondent, it must be
shown that there was misrepresentation, false statement or fraud in
connection with the adoption or ratification of the constitution and by-laws or
amendments thereto; the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the list of voters, or
failure to submit these documents together with the list of the newly elected-
appointed officers and their postal addresses to the BLR.15
The bare fact that two signatures appeared twice on the list of those who
participated in the organizational meeting would not, to our mind, provide a
valid reason to cancel respondent’s certificate of registration. The cancellation
of a union’s registration doubtless has an impairing dimension on the right of
labor to self-organization. For fraud and misrepresentation to be grounds for
cancellation of union registration under the Labor Code, the nature of the
fraud and misrepresentation must be grave and compelling enough to vitiate
the consent of a majority of union members.
In this case, we agree with the BLR and the CA that respondent could not
have possibly committed misrepresentation, fraud, or false statements. The
alleged failure of respondent to indicate with mathematical precision the total
number of employees in the bargaining unit is of no moment, especially as it
was able to comply with the 20% minimum membership requirement. Even if
the total number of rank-and-file employees of petitioner is 528, while
respondent declared that it should only be 455, it still cannot be denied that
the latter would have more than complied with the registration requirement.
WHEREFORE, the petition is DENIED. The assailed December 20, 2007
Decision and the June 6, 2008 Re

G.R. No. 178296               January 12, 2011

THE HERITAGE HOTEL MANILA, acting through its owner, GRAND PLAZA
HOTEL CORPORATION, Petitioner,
vs.
NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND
ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS
CHAPTER (NUWHRAIN-HHMSC), Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari of the Decision1 of the
Court of Appeals (CA) dated May 30, 2005 and Resolution dated June 4,
2007. The assailed Decision affirmed the dismissal of a petition for
cancellation of union registration filed by petitioner, Grand Plaza Hotel
Corporation, owner of Heritage Hotel Manila, against respondent, National
Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage
Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC), a labor
organization of the supervisory employees of Heritage Hotel Manila.
The case stemmed from the following antecedents:
On October 11, 1995, respondent filed with the Department of Labor and
Employment-National Capital Region (DOLE-NCR) a petition for certification
election.2 The Med-Arbiter granted the petition on February 14, 1996 and
ordered the holding of a certification election.3 On appeal, the DOLE
Secretary, in a Resolution dated August 15, 1996, affirmed the Med-Arbiter’s
order and remanded the case to the Med-Arbiter for the holding of a
preelection conference on February 26, 1997. Petitioner filed a motion for
reconsideration, but it was denied on September 23, 1996.
The preelection conference was not held as initially scheduled; it was held a
year later, or on February 20, 1998. Petitioner moved to archive or to dismiss
the petition due to alleged repeated non-appearance of respondent. The latter
agreed to suspend proceedings until further notice. The preelection
conference resumed on January 29, 2000.
Subsequently, petitioner discovered that respondent had failed to submit to
the Bureau of Labor Relations (BLR) its annual financial report for several
years and the list of its members since it filed its registration papers in 1995.
Consequently, on May 19, 2000, petitioner filed a Petition for Cancellation of
Registration of respondent, on the ground of the non-submission of the said
documents. Petitioner prayed that respondent’s Certificate of Creation of
Local/Chapter be cancelled and its name be deleted from the list of legitimate
labor organizations. It further requested the suspension of the certification
election proceedings.4
On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss
or Suspend the [Certification Election] Proceedings,5 arguing that the
dismissal or suspension of the proceedings is warranted, considering that the
legitimacy of respondent is seriously being challenged in the petition for
cancellation of registration. Petitioner maintained that the resolution of the
issue of whether respondent is a legitimate labor organization is crucial to the
issue of whether it may exercise rights of a legitimate labor organization,
which include the right to be certified as the bargaining agent of the covered
employees.
Nevertheless, the certification election pushed through on June 23, 2000.
Respondent emerged as the winner.6
On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification
of Election Results and Winner,7 stating that the certification election held on
June 23, 2000 was an exercise in futility because, once respondent’s
registration is cancelled, it would no longer be entitled to be certified as the
exclusive bargaining agent of the supervisory employees. Petitioner also
claimed that some of respondent’s members were not qualified to join the
union because they were either confidential employees or managerial
employees. It then prayed that the certification of the election results and
winner be deferred until the petition for cancellation shall have been resolved,
and that respondent’s members who held confidential or managerial positions
be excluded from the supervisors’ bargaining unit.
Meanwhile, respondent filed its Answer8 to the petition for the cancellation of
its registration. It averred that the petition was filed primarily to delay the
conduct of the certification election, the respondent’s certification as the
exclusive bargaining representative of the supervisory employees, and the
commencement of bargaining negotiations. Respondent prayed for the
dismissal of the petition for the following reasons: (a) petitioner is estopped
from questioning respondent’s status as a legitimate labor organization as it
had already recognized respondent as such during the preelection
conferences; (b) petitioner is not the party-in-interest, as the union members
are the ones who would be disadvantaged by the non-submission of financial
reports; (c) it has already complied with the reportorial requirements, having
submitted its financial statements for 1996, 1997, 1998, and 1999, its updated
list of officers, and its list of members for the years 1995, 1996, 1997, 1998,
and 1999; (d) the petition is already moot and academic, considering that the
certification election had already been held, and the members had manifested
their will to be represented by respondent.
Citing National Union of Bank Employees v. Minister of Labor, et al.9 and
Samahan ng Manggagawa sa Pacific Plastic v. Hon. Laguesma,10 the Med-
Arbiter held that the pendency of a petition for cancellation of registration is
not a bar to the holding of a certification election. Thus, in an Order11 dated
January 26, 2001, the Med-Arbiter dismissed petitioner’s protest, and certified
respondent as the sole and exclusive bargaining agent of all supervisory
employees.
Petitioner subsequently appealed the said Order to the DOLE Secretary.12
The appeal was later dismissed by DOLE Secretary Patricia A. Sto. Tomas
(DOLE Secretary Sto. Tomas) in the Resolution of August 21, 2002.13
Petitioner moved for reconsideration, but the motion was also denied.14
In the meantime, Regional Director Alex E. Maraan (Regional Director
Maraan) of DOLE-NCR finally resolved the petition for cancellation of
registration. While finding that respondent had indeed failed to file financial
reports and the list of its members for several years, he, nonetheless, denied
the petition, ratiocinating that freedom of association and the employees’ right
to self-organization are more substantive considerations. He took into
account the fact that respondent won the certification election and that it had
already been certified as the exclusive bargaining agent of the supervisory
employees. In view of the foregoing, Regional Director Maraan—while
emphasizing that the non-compliance with the law is not viewed with favor—
considered the belated submission of the annual financial reports and the list
of members as sufficient compliance thereof and considered them as having
been submitted on time. The dispositive portion of the decision15 dated
December 29, 2001 reads:
WHEREFORE, premises considered, the instant petition to delist the National
Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage
Hotel Manila Supervisors Chapter from the roll of legitimate labor
organizations is hereby DENIED.
SO ORDERED.16
Aggrieved, petitioner appealed the decision to the BLR.17 BLR Director Hans
Leo Cacdac inhibited himself from the case because he had been a former
counsel of respondent.
In view of Director Cacdac’s inhibition, DOLE Secretary Sto. Tomas took
cognizance of the appeal. In a resolution18 dated February 21, 2003, she
dismissed the appeal, holding that the constitutionally guaranteed freedom of
association and right of workers to self-organization outweighed respondent’s
noncompliance with the statutory requirements to maintain its status as a
legitimate labor organization.
Petitioner filed a motion for reconsideration,19 but the motion was likewise
denied in a resolution20 dated May 30, 2003. DOLE Secretary Sto. Tomas
admitted that it was the BLR which had jurisdiction over the appeal, but she
pointed out that the BLR Director had voluntarily inhibited himself from the
case because he used to appear as counsel for respondent. In order to
maintain the integrity of the decision and of the BLR, she therefore accepted
the motion to inhibit and took cognizance of the appeal.
Petitioner filed a petition for certiorari with the CA, raising the issue of whether
the DOLE Secretary acted with grave abuse of discretion in taking
cognizance of the appeal and affirming the dismissal of its petition for
cancellation of respondent’s registration.
In a Decision dated May 30, 2005, the CA denied the petition. The CA opined
that the DOLE Secretary may legally assume jurisdiction over an appeal from
the decision of the Regional Director in the event that the Director of the BLR
inhibits himself from the case. According to the CA, in the absence of the BLR
Director, there is no person more competent to resolve the appeal than the
DOLE Secretary. The CA brushed aside the allegation of bias and partiality
on the part of the DOLE Secretary, considering that such allegation was not
supported by any evidence.
The CA also found that the DOLE Secretary did not commit grave abuse of
discretion when she affirmed the dismissal of the petition for cancellation of
respondent’s registration as a labor organization. Echoing the DOLE
Secretary, the CA held that the requirements of registration of labor
organizations are an exercise of the overriding police power of the State,
designed for the protection of workers against potential abuse by the union
that recruits them. These requirements, the CA opined, should not be
exploited to work against the workers’ constitutionally protected right to self-
organization.
Petitioner filed a motion for reconsideration, invoking this Court’s ruling in
Abbott Labs. Phils., Inc. v. Abbott Labs. Employees Union,21 which
categorically declared that the DOLE Secretary has no authority to review the
decision of the Regional Director in a petition for cancellation of union
registration, and Section 4,22 Rule VIII, Book V of the Omnibus Rules
Implementing the Labor Code.
In its Resolution23 dated June 4, 2007, the CA denied petitioner’s motion,
stating that the BLR Director’s inhibition from the case was a peculiarity not
present in the Abbott case, and that such inhibition justified the assumption of
jurisdiction by the DOLE Secretary.
In this petition, petitioner argues that:
I.
The Court of Appeals seriously erred in ruling that the Labor Secretary
properly assumed jurisdiction over Petitioner’s appeal of the Regional
Director’s Decision in the Cancellation Petition x x x.
A. Jurisdiction is conferred only by law. The Labor Secretary had no
jurisdiction to review the decision of the Regional Director in a petition for
cancellation. Such jurisdiction is conferred by law to the BLR.
B. The unilateral inhibition by the BLR Director cannot justify the Labor
Secretary’s exercise of jurisdiction over the Appeal.
C. The Labor Secretary’s assumption of jurisdiction over the Appeal without
notice violated Petitioner’s right to due process.
II.
The Court of Appeals gravely erred in affirming the dismissal of the
Cancellation Petition despite the mandatory and unequivocal provisions of the
Labor Code and its Implementing Rules.24
The petition has no merit.
Jurisdiction to review the decision of the Regional Director lies with the BLR.
This is clearly provided in the Implementing Rules of the Labor Code and
enunciated by the Court in Abbott. But as pointed out by the CA, the present
case involves a peculiar circumstance that was not present or covered by the
ruling in Abbott. In this case, the BLR Director inhibited himself from the case
because he was a former counsel of respondent. Who, then, shall resolve the
case in his place?
In Abbott, the appeal from the Regional Director’s decision was directly filed
with the Office of the DOLE Secretary, and we ruled that the latter has no
appellate jurisdiction. In the instant case, the appeal was filed by petitioner
with the BLR, which, undisputedly, acquired jurisdiction over the case. Once
jurisdiction is acquired by the court, it remains with it until the full termination
of the case.25
Thus, jurisdiction remained with the BLR despite the BLR Director’s inhibition.
When the DOLE Secretary resolved the appeal, she merely stepped into the
shoes of the BLR Director and performed a function that the latter could not
himself perform. She did so pursuant to her power of supervision and control
over the BLR.26
Expounding on the extent of the power of control, the Court, in Araneta, et al.
v. Hon. M. Gatmaitan, et al.,27 pronounced that, if a certain power or authority
is vested by law upon the Department Secretary, then such power or
authority may be exercised directly by the President, who exercises
supervision and control over the departments. This principle was incorporated
in the Administrative Code of 1987, which defines "supervision and control"
as including the authority to act directly whenever a specific function is
entrusted by law or regulation to a subordinate.28 Applying the foregoing to
the present case, it is clear that the DOLE Secretary, as the person
exercising the power of supervision and control over the BLR, has the
authority to directly exercise the quasi-judicial function entrusted by law to the
BLR Director.
It is true that the power of control and supervision does not give the
Department Secretary unbridled authority to take over the functions of his or
her subordinate. Such authority is subject to certain guidelines which are
stated in Book IV, Chapter 8, Section 39(1)(a) of the Administrative Code of
1987.29 However, in the present case, the DOLE Secretary’s act of taking
over the function of the BLR Director was warranted and necessitated by the
latter’s inhibition from the case and the objective to "maintain the integrity of
the decision, as well as the Bureau itself."30
Petitioner insists that the BLR Director’s subordinates should have resolved
the appeal, citing the provision under the Administrative Code of 1987 which
states, "in case of the absence or disability of the head of a bureau or office,
his duties shall be performed by the assistant head."31 The provision clearly
does not apply considering that the BLR Director was neither absent nor
suffering from any disability; he remained as head of the BLR. Thus, to dispel
any suspicion of bias, the DOLE Secretary opted to resolve the appeal
herself.
Petitioner was not denied the right to due process when it was not notified in
advance of the BLR Director’s inhibition and the DOLE Secretary’s
assumption of the case. Well-settled is the rule that the essence of due
process is simply an opportunity to be heard, or, as applied to administrative
proceedings, an opportunity to explain one’s side or an opportunity to seek a
reconsideration of the action or ruling complained of.32 Petitioner had the
opportunity to question the BLR Director’s inhibition and the DOLE
Secretary’s taking cognizance of the case when it filed a motion for
reconsideration of the latter’s decision. It would be well to state that a critical
component of due process is a hearing before an impartial and disinterested
tribunal, for all the elements of due process, like notice and hearing, would be
meaningless if the ultimate decision would come from a partial and biased
judge.33 It was precisely to ensure a fair trial that moved the BLR Director to
inhibit himself from the case and the DOLE Secretary to take over his
function.
Petitioner also insists that respondent’s registration as a legitimate labor
union should be cancelled. Petitioner posits that once it is determined that a
ground enumerated in Article 239 of the Labor Code is present, cancellation
of registration should follow; it becomes the ministerial duty of the Regional
Director to cancel the registration of the labor organization, hence, the use of
the word "shall." Petitioner points out that the Regional Director has admitted
in its decision that respondent failed to submit the required documents for a
number of years; therefore, cancellation of its registration should have
followed as a matter of course.
We are not persuaded.
Articles 238 and 239 of the Labor Code read:
ART. 238. CANCELLATION OF REGISTRATION; APPEAL
The certificate of registration of any legitimate labor organization, whether
national or local, shall be canceled by the Bureau if it has reason to believe,
after due hearing, that the said labor organization no longer meets one or
more of the requirements herein prescribed.34
ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION.
The following shall constitute grounds for cancellation of union registration:
xxxx
(d) Failure to submit the annual financial report to the Bureau within thirty (30)
days after the closing of every fiscal year and misrepresentation, false entries
or fraud in the preparation of the financial report itself;
xxxx
(i) Failure to submit list of individual members to the Bureau once a year or
whenever required by the Bureau.35
These provisions give the Regional Director ample discretion in dealing with a
petition for cancellation of a union’s registration, particularly, determining
whether the union still meets the requirements prescribed by law. It is
sufficient to give the Regional Director license to treat the late filing of
required documents as sufficient compliance with the requirements of the law.
After all, the law requires the labor organization to submit the annual financial
report and list of members in order to verify if it is still viable and financially
sustainable as an organization so as to protect the employer and employees
from fraudulent or fly-by-night unions. With the submission of the required
documents by respondent, the purpose of the law has been achieved, though
belatedly.
We cannot ascribe abuse of discretion to the Regional Director and the DOLE
Secretary in denying the petition for cancellation of respondent’s registration.
The union members and, in fact, all the employees belonging to the
appropriate bargaining unit should not be deprived of a bargaining agent,
merely because of the negligence of the union officers who were responsible
for the submission of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in treating petitions
for cancellation of union registration, lest they be accused of interfering with
union activities. In resolving the petition, consideration must be taken of the
fundamental rights guaranteed by Article XIII, Section 3 of the Constitution,
i.e., the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities. Labor authorities should bear
in mind that registration confers upon a union the status of legitimacy and the
concomitant right and privileges granted by law to a legitimate labor
organization, particularly the right to participate in or ask for certification
election in a bargaining unit.36 Thus, the cancellation of a certificate of
registration is the equivalent of snuffing out the life of a labor organization.
For without such registration, it loses - as a rule - its rights under the Labor
Code.37
It is worth mentioning that the Labor Code’s provisions on cancellation of
union registration and on reportorial requirements have been recently
amended by Republic Act (R.A.) No. 9481, An Act Strengthening the
Workers’ Constitutional Right to Self-Organization, Amending for the Purpose
Presidential Decree No. 442, As Amended, Otherwise Known as the Labor
Code of the Philippines, which lapsed into law on May 25, 2007 and became
effective on June 14, 2007. The amendment sought to strengthen the
workers’ right to self-organization and enhance the Philippines’ compliance
with its international obligations as embodied in the International Labour
Organization (ILO) Convention No. 87,38 pertaining to the non-dissolution of
workers’ organizations by administrative authority.39 Thus, R.A. No. 9481
amended Article 239 to read:
ART. 239. Grounds for Cancellation of Union Registration.—The following
may constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took part in
the ratification;
(b) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:
ART. 242-A. Reportorial Requirements.—The following are documents
required to be submitted to the Bureau by the legitimate labor organization
concerned:
(a) Its constitution and by-laws, or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification of the
constitution and by-laws within thirty (30) days from adoption or ratification of
the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters
within thirty (30) days from election;
(c) Its annual financial report within thirty (30) days after the close of every
fiscal year; and
(d) Its list of members at least once a year or whenever required by the
Bureau.
Failure to comply with the above requirements shall not be a ground for
cancellation of union registration but shall subject the erring officers or
members to suspension, expulsion from membership, or any appropriate
penalty.
ILO Convention No. 87, which we have ratified in 1953, provides that
"workers’ and employers’ organizations shall not be liable to be dissolved or
suspended by administrative authority." The ILO has expressed the opinion
that the cancellation of union registration by the registrar of labor unions,
which in our case is the BLR, is tantamount to dissolution of the organization
by administrative authority when such measure would give rise to the loss of
legal personality of the union or loss of advantages necessary for it to carry
out its activities, which is true in our jurisdiction. Although the ILO has allowed
such measure to be taken, provided that judicial safeguards are in place, i.e.,
the right to appeal to a judicial body, it has nonetheless reminded its
members that dissolution of a union, and cancellation of registration for that
matter, involve serious consequences for occupational representation. It has,
therefore, deemed it preferable if such actions were to be taken only as a last
resort and after exhausting other possibilities with less serious effects on the
organization.40
The aforesaid amendments and the ILO’s opinion on this matter serve to
fortify our ruling in this case. We therefore quote with approval the DOLE
Secretary’s rationale for denying the petition, thus:
It is undisputed that appellee failed to submit its annual financial reports and
list of individual members in accordance with Article 239 of the Labor Code.
However, the existence of this ground should not necessarily lead to the
cancellation of union registration. Article 239 recognizes the regulatory
authority of the State to exact compliance with reporting requirements. Yet
there is more at stake in this case than merely monitoring union activities and
requiring periodic documentation thereof.
The more substantive considerations involve the constitutionally guaranteed
freedom of association and right of workers to self-organization. Also involved
is the public policy to promote free trade unionism and collective bargaining
as instruments of industrial peace and democracy. An overly stringent
1avvphi1

interpretation of the statute governing cancellation of union registration

without regard to surrounding circumstances cannot be allowed. Otherwise, it
would lead to an unconstitutional application of the statute and emasculation
of public policy objectives. Worse, it can render nugatory the protection to
labor and social justice clauses that pervades the Constitution and the Labor
Code.
Moreover, submission of the required documents is the duty of the officers of
the union. It would be unreasonable for this Office to order the cancellation of
the union and penalize the entire union membership on the basis of the
negligence of its officers. In National Union of Bank Employees vs. Minister of
Labor, L-53406, 14 December 1981, 110 SCRA 296, the Supreme Court
ruled:
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The
rights of workers to self-organization finds general and specific constitutional
guarantees. x x x Such constitutional guarantees should not be lightly taken
much less nullified. A healthy respect for the freedom of association demands
that acts imputable to officers or members be not easily visited with capital
punishments against the association itself."
At any rate, we note that on 19 May 2000, appellee had submitted its financial
statement for the years 1996-1999. With this submission, appellee has
substantially complied with its duty to submit its financial report for the said
period. To rule differently would be to preclude the union, after having failed
to meet its periodic obligations promptly, from taking appropriate measures to
correct its omissions. For the record, we do not view with favor appellee’s late
submission. Punctuality on the part of the union and its officers could have
prevented this petition.41
WHEREFORE, premises considered, the Court of Appeals Decision dated
May 30, 2005 and Resolution dated June 4, 2007 are AFFIRMED.

THIRD DIVISION

[G.R. Nos. 100342-44. October 29, 1999.]

RURAL BANK OF ALAMINOS EMPLOYEES UNION (RBAEU) and ISMAEL

TAMAYO, SR., Petitioner, v. NATIONAL LABOR RELATIONS
COMMISSION, Third Division, Exec. Labor Arbiter JOSE B. BOLISAY and
RURAL BANK OF ALAMINOS, Inc., Respondents.

DECISION

PURISIMA, J.:

Before The Court is a Petition for Certiorari under Rule 65 of the Revised
Rules of Court to nullify and set aside the Resolution of the National Labor
Relations Commission, dated January 31, 1991, and the subsequent
Resolution of March 26, 1991 denying petitioner’s motion for reconsideration,
for being tainted with grave abuse of discretion amounting to lack or excess
of jurisdiction. The assailed Resolutions set aside the consolidated decision
of Labor Arbiter Ricardo N. Olairez and remanded the cases to the Regional
Arbitration Branch of origin for further proceedings.
chanrobles virtual lawlibrary
The Petition stems from three cases originally instituted before Sub-Regional
Arbitration Branch No. 1 of the National Labor Relations Commission in
Dagupan City. The first case, NLRC Case No. 01-03-7-0049-89, was
commenced by the herein petitioner, Ismael Tamayo, Sr., against Rural Bank
of Alaminos, Inc. (RBAI) for illegal dismissal and damages. The second case,
docketed as NLRC Case No. 01-04-7-0059-89, was filed by the herein private
respondent, Rural Bank of Alaminos, Inc., against the Rural Bank of Alaminos
Employees Union for unfair labor practice, declaration of illegality of strike
and damages. While the third case, docketed as NLRC Case No.
01-06-0097-89, was filed by the Employees Union against the Bank, charging
the latter with unfair labor practice and damages.

As gathered by the respondent National Labor Relations Commission, the

facts of the controversy litigated upon are as follows:
chanrob1es virtual 1aw library

With the appointment of one Benefredo Quinto to the position of internal

auditor, which position he had held since January 1, 1976, Ismael P. Tamayo,
Sr., who had been with Rural Bank of Alaminos, Inc. (RBAI for brevity) since it
started operations in September of 1956, feeling shortchanged, filed on June
3, 1988 a complaint against RBAI for illegal dismissal.

In an effort to buy peace, that is, to settle the case amicably, RBAI agreed on
a compromise agreement dated July 13, 1988 to reinstate Ismael P. Tamayo,
Sr. to the position of internal auditor.
chanrobles

Claiming that his services were not actually needed, RBAI terminated
effective January 1, 1989 Ismael P. Tamayo, Sr.’s services. This led to the
filing on March 27, 1989 of a complaint for illegal dismissal by Ismael P.
Tamayo, Sr. against Rural Bank of Alaminos, Inc. docketed as NLRC Case
No. SUB-RAB-01-03-7-0049-89.

Subsequent to its certification on December 12, 1989 as the sole bargaining

agent of the employees of RBAI, the Rural Bank of Alaminos Employees
Union (hereinafter called the Union) submitted sometime in February 1989
proposals with respect to salary/wage increases.
RBAI’s counter-proposals not (sic) acceptable to it, the Union, which had
earlier filed a notice of strike on March 3, 1989, went on strike on April 3,
1989.

Its position being that the strike staged by the Union is illegal and in violation
of Article 248 (e) of the Labor Code, RBAI instituted a petition for the
declaration of the strike as illegal and for actual damages it incurred by way of
loss of earnings to the tune of P30,000.00 per day. This petition was
docketed as NLRC CASE NO. SUB-RAB-01-04-7-0059-89.

The Union, assailing the alleged constructive dismissal of its members

brought about or resulting from the strike, lodged against RBAI a complaint
for unfair labor practice with prayer for moral and exemplary damages. This
complaint has been docketed as NLRC CASE NO. SUB-
RAB-01-06-7-0097-89.

The identity of the parties led the Labor Arbiter, Ricardo N. Olairez, to
consolidate the three (3) aforementioned cases.

On December 14, 1989, Labor Arbiter Ricardo N. Olairez rendered a

consolidated decision. chanrobles virtual lawlibrary

With respect to Ismael P. Tamayo’s complaint for illegal dismissal against

RBAI, the Labor Arbiter held that complainant, whose nature of work, that of
internal auditor, was usually necessary and desirable in the business
engaged in by the respondent, was a regular employee whose summary
discharge from the service effective January 1, 1989, was illegal.

The dismissal being illegal, complainant should have ordinarily been

reinstated to his former position. However, the Labor Arbiter, finding the
complainant to have reached the retirable age, opted instead to award the
latter the following amounts, to wit: P63,442.56 representing full backwages/
benefits; P29,822.80 as retirement pay; and P9,326.53 as attorney’s fees, or
a grand total of P102, 591.89 plus one (1) percent interest per month until
actually paid.

Regarding the bank’s petition, NLRC Case No. SUB-RAB-01-04-7-0059-89,

the Labor Arbiter disposed of the same by holding that the strike staged by
the Union was legal and not in violation of any provision of the Labor Code.
Hence, the dismissal of the petition.

In the third case, NLRC CASE NO. SUB-RAB-01-06-0097-89, the Labor

Arbiter held the bank accountable for the full backwages and other benefits
due the Union members who he found to have been constructively dismissed
during the strike.

Moreover, the Labor Arbiter, on the Union’s claim for damages of not less
than P200,000.00, ruled that the award of P10,000.00 moral damages and
P5,000.00 exemplary damages to each of the union member is in order.

The Labor Arbiter disposed thus: jgc:chanrobles.com.ph

"WHEREFORE, with all the foregoing considerations, judgment is hereby

rendered as follows: chanrob1es virtual 1aw library

1. In the first case, we find complainant Ismael Tamayo, Sr. illegally and
unjustly dismissed and we hereby order the respondent Rural Bank of
Alaminos, Inc. to pay him as follows: chanrob1es virtual 1aw library

P 63,442.56 — Total full backwages/benefits

29,822.80 — Retirement pay

————

P 93,265.36

9,326.53 — 10% Attorney’s fees

————

P102,591.89 — Total award as of December 31, 1989

plus one (l) percent interest per month until the award is actually paid.
2. In the second case, we find the strike legal and the Union having violated
no provision of the Labor Code, the complaint of the Rural Bank of Alaminos,
Inc. is hereby dismissed for lack of merit.
chanroblesvirtuallawlibrary

3. In the third case, we find the respondent Rural Bank of Alaminos, Inc. guilty
of unfair labor practice, whose act is tantamount to an illegal lockout
amounting to a constructive dismissal of the Union members, and we hereby
order the bank to pay them their full backwages and other benefits for the
nine (9) months period from April to December 1989 with the computations to
include the wage increase under R.A. 6727 effective July 1, 1989.

The Bank is hereby ordered to re-open and accept/reinstate the striking union
members without loss of seniority rights and the union members are likewise
ordered to return to work and may now claim their respective 13th month pay
for 1989. In case they are not immediately reinstated, their full backwages
shall not exceed a maximum of three (3) years.

The respondent bank is further ordered to pay the Union members

P10,000.00 as moral damages and P5,000.00 as exemplary damages to
each of the Union members, plus attorney’s fees and litigation expenses of
ten (10) percent of the total awards.

The order of reinstatement or return to work is immediately executory, hence

the Bank is commanded to reopen its banking business immediately.

SO ORDERED"

Dissatisfied with the disposition of the Labor Arbiter, the Rural Bank of
Alaminos, Inc. appealed to the National Labor Relations Commission, which
promulgated, on January 31, 1991 its assailed Resolution setting aside the
ruling of the Labor Arbiter and ordering the remand of all the three cases to
wit:
jgc:chanrobles.com.ph

". . . In the broader interest of justice, We deem it best to remand all the
afore-numbered cases to Regional Arbitration Branch of origin for further
proceedings.
WHEREFORE, premises considered, all the aforenumbered cases are
hereby remanded to the Regional Arbitration Branch of origin for further
proceedings.

SO ORDERED." chanrobles virtual lawlibrary

The reversal by the respondent Commission of the Labor Arbiter’s original

Resolution prompted petitioners to bring the present petition imputing grave
abuse of discretion amounting to lack of or excess jurisdiction to the
respondent Commission, particularly describing the errors under attack: chanrob1es virtual 1aw library

A. Case No. 0059-89: chanrob1es virtual 1aw library

Whether or not the respondent NLRC Third Division committed grave abuse
of discretion and exceeded its jurisdiction amounting to lack of jurisdiction in
remanding the case for further proceedings, in spite of its finding which
affirmed the ruling of the Labor Arbiter that the strike is legal and where the
complaint is for a declaration of illegality of the strike.

B. Case No. 0097-89: chanrob1es virtual 1aw library

Whether or not the respondent NLRC Third Division committed grave abuse
of discretion and exceeded its jurisdiction amounting to lack of jurisdiction in
remanding the case for further proceedings, despite the fact that the private
respondent failed to appeal the Labor Arbiter’s finding that the respondent is
guilty of unfair labor practice thus the said issue not raised on appeal had
become final.

Whether or not the respondent NLRC Third Division committed grave abuse
of discretion and exceeded its jurisdiction amounting to lack of jurisdiction in
remanding the case for further proceedings for the reason that it could not
resolve the issues squarely because it was at a loss as to the exact number
of the bank’s employees, but which is contrary to the record of the case, as
evidenced by the list of employees in private respondent’s Annex "A" .

C. Case No. 0049-89: chanrob1es virtual 1aw library

Whether or not respondent NLRC Third Division committed grave abuse of
discretion amounting to lack of jurisdiction where it ruled that private
respondent was denied the right to cross-examine petitioner Ismael Tamayo,
in spite of the express mandate of Article 221 of the Labor Code and the 90-
day Rule under Executive Order No.109 (1-23-89)

D. In all three cases:

chanrob1es virtual 1aw library

Whether or not the right of petitioners to speedy disposition of labor justice

has been violated in the remand of the cases for further proceedings and
consequently, whether a writ of prohibition shall lie.chanroblesvirtual|awlibrary

Whether or not respondent NLRC Third Division committed grave abuse of

discretion amounting to lack of jurisdiction when it denied the motion for
reconsideration for being filed out of time, despite the fact that neither
petitioner Ismael Tamayo, Sr. nor his deceased counsel was furnished with a
copy of the resolution, and likewise the copy for the petitioner union was
served to a stranger who is not an employee of the law office of petitioner’s
counsel.

Respondent NLRC ordered the remand of all the three cases to the Labor
Arbiter for further proceedings: opining that with respect to NLRC Case No.
0049-89, respondent Bank should have been given an opportunity to cross-
examine the petitioner, Ismael Tamayo, Sr., as to the veracity of the
allegations contained in his unverified position paper, the lack or absence of
which amounted to a denial of due process. As regards, Case No. 097-89,
the NLRC held that the finding by the Labor Arbiter of an illegal lock-out was
not substantiated by evidence, as it was found out that no proof was ever
adduced by the Union to show that the bank refused them employment during
the pendency of the strike, thus necessitating the remand of the case to the
Labor Arbiter for reception of evidence. So also, the NLRC ruled that a
complete disposition of the case could not be had since there was nothing in
the record which indicates the number of employees constructively dismissed
by the respondent Bank.

Before delving into the merits of the case, it should be remembered that in the
decision in the case of St. Martin Funeral Homes v. National Labor Relations
Commission, G.R. No. 130866, promulgated on September 16, 1998, this
Court pronounced that petitions for certiorari relating to NLRC decisions must
be filed directly with the Court of Appeals, and labor cases pending before
this Court should be referred to the appellate court for proper disposition.
However, in cases where the Memoranda of both parties have been filed with
this Court prior to the promulgation of the St. Martin decision, the Court
generally opts to take the case itself for its final disposition.

With respect to the first assigned error, petitioners contend that it was an
error for NLRC to remand Case No. 0059-89 to the Labor Arbiter as the issue
of legality of subject strike has been resolved in favor of the Union by the
Arbiter and the Commission.

There is merit in petitioners’ contention. NLRC Case No. 0059-89 was filed by
the respondent Bank against the Union, for declaration of illegality of the
strike, unfair labor practice and damages. In the proceedings below, the
Labor Arbiter found that the strike conducted by the Union was legal and
complied with all the requirements of law. Such finding was, in fact, affirmed
by the NLRC in the following Resolution, to wit: chanroblesvirtual|awlibrary

". . . It appears that the Union filed its notice of strike on March 3, 1989 and
that it commenced its strike thirty (30) days thereafter, or on April 3, 1989.

Obviously, the Union had duly observed the mandatory cooling-off period
such that the strike it eventually undertook complied with what is required by
the Labor Code. Hence, Our finding that the strike is legal." cralaw virtua1aw library

It is well-settled that when findings of fact by the labor arbiter are sufficiently
supported by the evidence on record, the same must be accorded due
respect by this Court. 1 More so when such findings by the Labor Arbiter are
affirmed by the NLRC on appeal. Since the NLRC found the strike conducted
by the Union legal, the Court finds no justifiable reason for the Commission to
remand Case No. 0059-89 to the Labor Arbiter for further proceedings. The
allegation of unfair labor practice and the claim for damages proceed from
and are consequences of the strike, the findings of which are based on the
legality or illegality thereof. The strike thus being adjudged as legal, the
charges of unfair labor practice and damages are thereby negated and bereft
of any basis. Therefore, the NLRC gravely abused its discretion when it
ordered the remand of NLRC Case No. 0059-89 to the Labor Arbiter for
further proceedings.

Anent the second assigned error which pertains to NLRC Case No. 0097-89,
the case instituted by the Union against the respondent Bank for unfair labor
practice with damages, the Court believes, and so holds, that the remand of
said case was in order. chanroblesvirtuallawlibrary:red

NLRC Case No. 0097-89 charged RBAI with unfair labor practice and the
Labor Arbiter concluded that the Bank employed all available means to
further delay the resolution of the dispute, thus creating a scenario of an
illegal lock-out.

A "lock-out" means the temporary refusal of an employer to furnish work as a

result of an industrial or labor dispute. 2 As correctly found by the NLRC, in
the case under consideration evidence of illegal lock-out is wanting such that
there can be no conclusive determination by the NLRC as to the charge.
Petitioners failed to present sufficient proof to support the allegation of illegal
lock-out. No evidence was adduced by the Union to show that the Bank really
refused them employment during the pendency of the strike. As to the
allegation that the Bank was interfering with and restraining the employees in
the exercise of their right to self-organization, suffice it to state that filing a
petition for cancellation of the Union’s registration is not per se an act of
unfair labor practice. It must be shown by substantial evidence that the filing
of the petition for cancellation of union registration by the employer was
aimed to oppress the Union. Consequently, the NLRC was right in ordering
the remand of Case No. 0097-89 for further proceedings.

Anent the observation of NLRC that it was at a loss as to the exact number of
employees who were constructively dismissed by the Bank, such claim is
belied by the records clearly indicating that in its Complaint in NLRC Case.
0059-89, petitioner Union did attach a letter addressed to the respondent
Bank containing a list of the bank’s employees together with their length of
service and monthly basic salary. 3 Respondent avers that since the said list
was presented in evidence in Case No. 0059-89, the same could not be
considered as evidence in Case No. 0097-89 because these two cases are
separate and distinct from each other.
The contention is untenable. It must be recalled that Case No. 0097-89 was
filed in the nature of a countercharge to Case No. 0059-89 by the petitioner
Union against respondent Bank. Besides, all the three cases were
consolidated before the Labor Arbiter because of the identity of the parties.
Thus, the list, although introduced in Case No. 0059-89, could likewise be
properly considered as evidence in Case No. 0097-89. As held by this Court,
proceedings before a labor arbiter are non-litigious in nature in which, subject
to the requirements of due process, the technicalities of law and procedure
and the rules obtaining in courts of law do not strictly apply. 4

Petitioners’ stance that the finding of unfair labor practice already became
final as the issue was not raised on appeal, is untenable. The first, fourth and
fifth issues raised by the Bank in its Appeal Memorandum filed with the NLRC
on December 24, 1989 theorized that: chanrobles law library : red

"1. The Labor Arbiter gravely abused his discretion in holding that appellant
violated its duty to bargain collectively.

x       x       x

4. The Labor Arbiter gravely abused his discretion in holding that appellant is
guilty of illegal lock-out.

5. The Labor Arbiter gravely abused his discretion in holding that appellant
illegally dismissed its employees.

x       x       x." 5

Although the issue was not collectively appealed as unfair labor practice, the
first, fourth and fifth issues relate to acts which by themselves constitute
unfair labor practice.

As regards the third assigned error, petitioners maintain that the NLRC acted
with grave abuse of discretion in remanding NLRC Case No. 0049-89 for
further proceedings because the Labor Arbiter denied respondent Bank’s
right to cross-examine petitioner Ismael Tamayo, Sr. Respondent NLRC, on
the other hand, ruled that the Labor Arbiter should have granted respondent
Bank the right to cross-examine the said petitioner on the veracity of the
allegations in his unverified position paper, and it was grave abuse of
discretion not to allow respondent Bank to cross-examine petitioner Tamayo.

In a long line of cases, this Court has held that the holding of a trial is
discretionary on the part of the Labor Arbiter, and it cannot be demanded as a
matter of right by the parties. 6 The absence of a formal hearing or trial before
the Labor Arbiter is no cause for a party to impute grave abuse of discretion.
7 The submission of position papers and memoranda in labor cases satisfies
the requirements of due process, and a decision rendered on the basis of the
position papers which were found to be sufficient, meets the requirements of
a fair and open hearing. 8 Thus, in the case under scrutiny, the Labor Arbiter
did not act with grave abuse his discretion in not conducting a formal hearing
or trial and in basing his decision solely on the position papers submitted by
the parties. The fact that the position paper submitted by petitioner Tamayo
was not verified is of no moment. Succinct and clear is the ruling of this Court
that the lack of a verification of a position paper is only a formal and not a
jurisdictional defect. 9 It is not fatal and could be easily corrected by requiring
an oath. 10

Petitioner Tamayo faults respondent NLRC for denying his motion for
reconsideration for the reason that it was filed out of time. He contends that
neither he nor his deceased former counsel, Atty. de Vera was furnished a
copy of the NLRC’s resolution. chanroblesvirtuallawlibrary

Petitioner’s allegation is not meritorious. It is axiomatic that notice to counsel

is notice to parties and when a party is represented by counsel, notices
should be made upon the counsel of record at his given address, to which
notices of all kinds emanating from the court should be sent. 11 In the appeal
before the respondent Commission, it was Atty. Teofilo Humilde who entered
appearance in behalf of the Union and petitioner Tamayo. It was thus
reasonable for the NLRC to send a copy of the NLRC Resolution to the said
lawyer. Since the said resolution was received by counsel on February 26,
1991 and the motion for reconsideration was filed only on March 13, 1991,
the denial by the NLRC was in order, the ten-day period for filing a motion for
reconsideration having lapsed.
WHEREFORE, the petition is partly GRANTED in that the Order of the NLRC
remanding NLRC Cases No. 0049-89 and No. 0059-89 to the Labor Arbiter is
SET ASIDE but, the Order remanding NLRC Case No. 0097-89 to said Labor
Arbiter for further proceedings, is UPHELD. No pronouncement as to costs.

SO ORDERED.

G.R. No. 167141               March 13, 2009

SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS SA INDUSTRIYA
NG KAPATIRANG HALIGI NG ALYANSA (SAMMA-LIKHA), Petitioner,
vs.
SAMMA CORPORATION, Respondent.
DECISION
This is a petition for review on certiorari1 of the August 31, 2004 decision2 and
February 15, 2005 resolution3 of the Court of Appeals (CA) in CA-G.R. SP
No. 77156.
Petitioner Samahan ng mga Manggagawa sa Samma– Lakas sa Industriya
ng Kapatirang Haligi ng Alyansa (SAMMA-LIKHA) filed a petition for
certification election on July 24, 2001 in the Department of Labor and
Employment (DOLE), Regional Office IV.4 It claimed that: (1) it was a local
chapter of the LIKHA Federation, a legitimate labor organization registered
with the DOLE; (2) it sought to represent all the rank-and-file employees of
respondent Samma Corporation; (3) there was no other legitimate labor
organization representing these rank-and-file employees; (4) respondent was
not a party to any collective bargaining agreement and (5) no certification or
consent election had been conducted within the employer unit for the last 12
months prior to the filing of the petition.
Respondent moved for the dismissal of the petition arguing that (1) LIKHA
Federation failed to establish its legal personality; (2) petitioner failed to prove
its existence as a local chapter; (3) it failed to attach the certificate of non-
forum shopping and (4) it had a prohibited mixture of supervisory and rank-
and-file employees.5
In an order dated November 12, 2002, med-arbiter Arturo V. Cosuco ordered
the dismissal of the petition on the following grounds: (1) lack of legal
personality for failure to attach the certificate of registration purporting to
show its legal personality; (2) prohibited mixture of rank-and-file and
supervisory employees and (3) failure to submit a certificate of non-forum
shopping.6
Petitioner moved for reconsideration on November 29, 2001. The Regional
Director of DOLE Regional Office IV forwarded the case to the Secretary of
Labor. Meanwhile, on December 14, 2002, respondent filed a petition for
cancellation of petitioner’s union registration in the DOLE Regional Office IV.7
On January 17, 2003, Acting Secretary Manuel G. Imson, treating the motion
for reconsideration as an appeal, rendered a decision reversing the order of
the med-arbiter. He ruled that the legal personality of a union cannot be
collaterally attacked but may only be questioned in an independent petition
for cancellation of registration. Thus, he directed the holding of a certification
election among the rank-and-file employees of respondent, subject to the
usual pre-election conference and inclusion-exclusion proceedings.8
On January 23, 2003 or six days after the issuance of said decision,
respondent filed its comment on the motion for reconsideration of petitioner,
asserting that the order of the med-arbiter could only be reviewed by way of
appeal and not by a motion for reconsideration pursuant to Department Order
(D.O.) No. 9, series of 1997.9
On February 6, 2003, respondent filed its motion for reconsideration of the
January 17, 2003 decision. In a resolution dated April 3, 2003, Secretary
Patricia A. Sto. Tomas denied the motion.10
Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr., Officer-in-Charge/
Regional Director of DOLE Regional Office IV, issued a resolution revoking
the charter certificate of petitioner as local chapter of LIKHA Federation on
the ground of prohibited mixture of supervisory and rank-and-file employees
and non-compliance with the attestation clause under paragraph 2 of Article
235 of the Labor Code.11 On May 6, 2003, petitioner moved for the
reconsideration of this resolution.12
Respondent filed a petition for certiorari13 in the CA assailing the January 17,
2003 decision and April 3, 2003 resolution of the Secretary of Labor. In a
decision dated August 31, 2004, the CA reversed the same.14 It denied
reconsideration in a resolution dated February 15, 2005. It held that
Administrative Circular No. 04-94 which required the filing of a certificate of
non-forum shopping applied to petitions for certification election. It also ruled
that the Secretary of Labor erred in granting the appeal despite the lack of
proof of service on respondent. Lastly, it found that petitioner had no legal
standing to file the petition for certification election because its members were
a mixture of supervisory and rank-and-file employees.15
Hence, this petition.
The issues for our resolution are the following: (1) whether a certificate for
non-forum shopping is required in a petition for certification election; (2)
whether petitioner’s motion for reconsideration which was treated as an
appeal by the Secretary of Labor should not have been given due course for
failure to attach proof of service on respondent and (3) whether petitioner had
the legal personality to file the petition for certification election.
Requirement of Certificate

Of Non-Forum Shopping

Is Not Required in a Petition

For Certification Election
In ruling against petitioner, the CA declared that under Administrative Circular
No. 04-94,16 a certificate of non-forum shopping was required in a petition for
certification election. The circular states:
The complaint and other initiatory pleadings referred to and subject of this
Circular are the original civil complaint, counterclaim, cross-claim, third
(fourth, etc.) party complaint, or complaint-in-intervention, petition, or
application wherein a party asserts his claim for relief. (Emphasis supplied)
According to the CA, a petition for certification election asserts a claim, i.e.,
the conduct of a certification election. As a result, it is covered by the circular.
17

We disagree.
The requirement for a certificate of non-forum shopping refers to complaints,
counter-claims, cross-claims, petitions or applications where contending
parties litigate their respective positions regarding the claim for relief of the
complainant, claimant, petitioner or applicant. A certification proceeding, even
though initiated by a "petition," is not a litigation but an investigation of a non-
adversarial and fact-finding character.18
Such proceedings are not predicated upon an allegation of misconduct
requiring relief, but, rather, are merely of an inquisitorial nature. The Board's
functions are not judicial in nature, but are merely of an investigative
character. The object of the proceedings is not the decision of any alleged
commission of wrongs nor asserted deprivation of rights but is merely the
determination of proper bargaining units and the ascertainment of the will and
choice of the employees in respect of the selection of a bargaining
representative. The determination of the proceedings does not entail the entry
of remedial orders to redress rights, but culminates solely in an official
designation of bargaining units and an affirmation of the employees'
expressed choice of bargaining agent.19 (Emphasis supplied)
In Pena v. Aparicio,20 we ruled against the necessity of attaching a
certification against forum shopping to a disbarment complaint. We looked
into the rationale of the requirement and concluded that the evil sought to be
avoided is not present in disbarment proceedings.
… [The] rationale for the requirement of a certification against forum shopping
is to apprise the Court of the pendency of another action or claim involving
the same issues in another court, tribunal or quasi-judicial agency, and
thereby precisely avoid the forum shopping situation. Filing multiple petitions
or complaints constitutes abuse of court processes, which tends to degrade
the administration of justice, wreaks havoc upon orderly judicial procedure,
and adds to the congestion of the heavily burdened dockets of the courts.
Furthermore, the rule proscribing forum shopping seeks to promote candor
and transparency among lawyers and their clients in the pursuit of their cases
before the courts to promote the orderly administration of justice, prevent
undue inconvenience upon the other party, and save the precious time of the
courts. It also aims to prevent the embarrassing situation of two or more
courts or agencies rendering conflicting resolutions or decisions upon the
same issue.
It is in this light that we take a further look at the necessity of attaching a
certification against forum shopping to a disbarment complaint. It would seem
that the scenario sought to be avoided, i.e., the filing of multiple suits and the
possibility of conflicting decisions, rarely happens in disbarment complaints
considering that said proceedings are either "taken by the Supreme Court
motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the
verified complaint of any person." Thus, if the complainant in a disbarment
case fails to attach a certification against forum shopping, the pendency of
another disciplinary action against the same respondent may still be
ascertained with ease.21 (Emphasis supplied)
The same situation holds true for a petition for certification election. Under the
omnibus rules implementing the Labor Code as amended by D.O. No. 9,22 it
is supposed to be filed in the Regional Office which has jurisdiction over the
principal office of the employer or where the bargaining unit is principally
situated.23 The rules further provide that where two or more petitions involving
the same bargaining unit are filed in one Regional Office, the same shall be
automatically consolidated.24 Hence, the filing of multiple suits and the
possibility of conflicting decisions will rarely happen in this proceeding and, if
it does, will be easy to discover.
Notably, under the Labor Code and the rules pertaining to the form of the
petition for certification election, there is no requirement for a certificate of
non-forum shopping either in D.O. No. 9, series of 1997 or in D.O. No. 40-03,
series of 2003 which replaced the former.25
Considering the nature of a petition for certification election and the rules
governing it, we therefore hold that the requirement for a certificate of non-
forum shopping is inapplicable to such a petition.
Treatment of Motion for Reconsideration as an Appeal
The CA ruled that petitioner’s motion for reconsideration, which was treated
as an appeal by the Secretary of Labor, should not have been given due
course for lack of proof of service in accordance with the implementing rules
as amended by D.O. No. 9:
Section 12. Appeal; finality of decision. – The decision of the Med-Arbiter may
be appealed to the Secretary for any violation of these Rules. Interloculory
orders issued by the Med-Arbiter prior to the grant or denial of the petition,
including order granting motions for intervention issued after an order calling
for a certification election, shall not be appealable. However, any issue arising
therefrom may be raised in the appeal on the decision granting or denying the
petition.
The appeal shall be under oath and shall consist of a memorandum of appeal
specifically stating the grounds relied upon by the appellant with the
supporting arguments and evidence. The appeal shall be deemed not filed
unless accompanied by proof of service thereof to appellee.26 (Emphasis
supplied)
In accepting the appeal, the Secretary of Labor stated:
[Petitioner’s] motion for reconsideration of the Med-Arbiter’s Order dated
November 12, 2002 was verified under oath by [petitioner’s] president Gil
Dispabiladeras before Notary Public Wilfredo A. Ruiz on 29 November 2002,
and recorded in the Notarial Register under Document No. 186, Page No. 38,
Book V, series of 2002. On page 7 of the said motion also appears the
notation "copy of respondent to be delivered personally with the name and
signature of one Rosita Simon, 11/29/02." The motion contained the grounds
and arguments relied upon by [petitioner] for the reversal of the assailed
Order. Hence, the motion for reconsideration has complied with the formal
requisites of an appeal.
The signature of Rosita Simon appearing on the last page of the motion can
be considered as compliance with the required proof of service upon
respondent. Rosita Simon’s employment status was a matter that should
have been raised earlier by [respondent]. But [respondent] did not question
the same and slept on its right to oppose or comment on [petitioner’s] motion
for reconsideration. It cannot claim that it was unaware of the filing of the
appeal by [petitioner], because a copy of the indorsement of the entire
records of the petition to the Office of the Secretary "in view of the
memorandum of appeal filed by Mr. Jesus B. Villamor" was served upon the
employer and legal counsels Atty. Ismael De Guzman and Atty. Anatolio
Sabillo at the Samma Corporation Office, Main Avenue, PEZA, Rosario,
Cavite on December 5, 2002.27 (Emphasis supplied)
The motion for reconsideration was properly treated as an appeal because it
substantially complied with the formal requisites of the latter. The lack of proof
of service was not fatal as respondent had actually received a copy of the
motion. Consequently, it had the opportunity to oppose the same. Under
these circumstances, we find that the demands of substantial justice and due
process were satisfied.
We stress that rules of procedure are interpreted liberally to secure a just,
speedy and inexpensive disposition of every action. They should not be
applied if their application serves no useful purpose or hinders the just and
speedy disposition of cases. Specifically, technical rules and objections
should not hamper the holding of a certification election wherein employees
are to select their bargaining representative. A contrary rule will defeat the
declared policy of the State1avvphi1.zw+

to promote the free and responsible exercise of the right to self-organization

through the establishment of a simplified mechanism for the speedy
registration of labor organizations and workers’ associations, determination of
representation status, and resolution of intra and inter-union disputes.28 xxx
(Emphasis supplied)
Legal Personality of Petitioner
Petitioner argues that the erroneous inclusion of one supervisory employee in
the union of rank-and-file employees was not a ground to impugn its
legitimacy as a legitimate labor organization which had the right to file a
petition for certification election.
We agree.
LIKHA was granted legal personality as a federation under certificate of
registration no. 92-1015-032-11638-FED-LC. Subsequently, petitioner as its
local chapter was issued its charter certificate no. 2-01.29 With certificates of
registration issued in their favor, they are clothed with legal personality as
legitimate labor organizations:
Section 5. Effect of registration. – The labor organization or workers’
association shall be deemed registered and vested with legal personality on
the date of issuance of its certificate of registration. Such legal personality
cannot thereafter be subject to collateral attack, but may be questioned only
in an independent petition for cancellation in accordance with these Rules.30
-0-
Section 3. Acquisition of legal personality by local chapter. - A local/chapter
constituted in accordance with Section 1 of this Rule shall acquire legal
personality from the date of filing of the complete documents enumerated
therein. Upon compliance with all the documentary requirements, the
Regional Office or Bureau of Labor Relations shall issue in favor of the local/
chapter a certificate indicating that it is included in the roster of legitimate
labor organizations.31
Such legal personality cannot thereafter be subject to collateral attack, but
may be questioned only in an independent petition for cancellation of
certificate of registration.32 Unless petitioner’s union registration is cancelled
in independent proceedings, it shall continue to have all the rights of a
legitimate labor organization, including the right to petition for certification
election.
Furthermore, the grounds for dismissal of a petition for certification election
based on the lack of legal personality of a labor organization are the
following: (a) petitioner is not listed by the Regional Office or the Bureau of
Labor Relations in its registry of legitimate labor organizations or (b) its legal
personality has been revoked or cancelled with finality in accordance with the
rules.33
As mentioned, respondent filed a petition for cancellation of the registration of
petitioner on December 14, 2002. In a resolution dated April 14, 2003,
petitioner’s charter certificate was revoked by the DOLE. But on May 6, 2003,
petitioner moved for the reconsideration of this resolution. Neither of the
parties alleged that this resolution revoking petitioner’s charter certificate had
attained finality. However, in this petition, petitioner prayed that its charter
certificate be "reinstated in the roster of active legitimate labor
[organizations]."34 This cannot be granted here. To repeat, the proceedings
on a petition for cancellation of registration are independent of those of a
petition for certification election. This case originated from the latter. If it is
shown that petitioner’s legal personality had already been revoked or
cancelled with finality in accordance with the rules, then it is no longer a
legitimate labor organization with the right to petition for a certification
election.
A Final Note
Respondent, as employer, had been the one opposing the holding of a
certification election among its rank-and-file employees. This should not be
the case. We have already declared that, in certification elections, the
employer is a bystander; it has no right or material interest to assail the
certification election.35
[This] Court notes that it is petitioner, the employer, which has offered the
most tenacious resistance to the holding of a certification election among its
monthly-paid rank-and-file employees. This must not be so, for the choice of
a collective bargaining agent is the sole concern of the employees. The only
exception to this rule is where the employer has to file the petition for
certification election pursuant to Article 258 of the Labor Code because it was
requested to bargain collectively, which exception finds no application in the
case before us. Its role in a certification election has aptly been described in
Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, as
that of a mere bystander. It has no legal standing in a certification election as
it cannot oppose the petition or appeal the Med-Arbiter's orders related
thereto. . .36
WHEREFORE, the petition is hereby GRANTED. Let the records of the case
be remanded to the office of origin, the Regional Office IV of the Department
of Labor and Employment, for determination of the status of petitioner’s legal
personality. If petitioner is still a legitimate labor organization, then said office
shall conduct a certification election subject to the usual pre-election
conference.
SO ORDERED.