Case Digests 2.) WON Samahan can use the name “Hanjin”?

Labor Law Review: Labor Relations RULING: Petition is partly meritorious.

Samahan ng Mangagawa Sa Hanjin Shipyard 1.) Yes, Samahan can form workers
vs. Bureau of Labor Relations association for the purpose of mutual aid
and protection.
The right to self-organization is not limited to
unionism. Workers may also form or join an In the case at bench, the Court cannot sanction
association for mutual aid and protection and the opinion of the CA that Samahan should have
for other legitimate purposes. formed a union for purposes of collective
bargaining instead of a workers' association
FACTS: Samahan argues that the right to form because the choice belonged to it. The right to
a workers' association is not exclusive to form or join a labor organization necessarily
intermittent, ambulant and itinerant workers. includes the right to refuse or refrain from
While the Labor Code allows the workers "to exercising the said right. It is self-evident that
form, join or assist labor organizations of their just as no one should be denied the exercise of a
own choosing" for the purpose of collective right granted by law, so also, no one should be
bargaining, it does not prohibit them from compelled to exercise such a conferred right.
forming a labor organization simply for Also inherent in the right to self-organization is
purposes of mutual aid and protection. All the right to choose whether to form a union for
members of Samahan have one common place purposes of collective bargaining or a workers'
of work, Hanjin Shipyard. Thus, there is no association for purposes of providing mutual aid
reason why they cannot use "Hanjin Shipyard" and protection.
in their name.
The right to self-organization, however, is
Hanjin counters that Samahan failed to adduce subject to certain limitations as provided by law.
sufficient basis that all its members were For instance, the Labor Code specifically
employees of Hanjin or its legitimate disallows managerial employees from joining,
contractors, and that the use of the name "Hanjin assisting or forming any labor union.
Shipyard" would create an impression that all its Meanwhile, supervisory employees, while
members were employess of HHIC. eligible for membership in labor organizations,
Samahan reiterates its stand that workers with a are proscribed from joining the collective
definite employer can organize any association bargaining unit of the rank and file employees.
for purposes of mutual aid and protection. Even government employees have the right to
Inherent in the workers' right to self- self-organization. It is not, however, regarded as
organization is its right to name its own existing or available for purposes of collective
organization. Samahan referred "Hanjin bargaining, but simply for the furtherance and
Shipyard" as their common place of work. protection of their interests.
Therefore, they may adopt the same in their Hanjin posits that the members of Samahan have
association's name. definite employers, hence, they should have
formed a union instead of a workers' association.
ISSUE:
The Court disagrees. There is no provision in the
1.) WON Samahan can form a workers Labor Code that states that employees with
association for mutual aid and protection?
definite employers may form, join or assist purposes of collective bargaining: provided, however, that
unions only. supervisory employees shall not be eligible for membership
in a labor union of the rank-and-file employees but may
form, join or assist separate labor unions of their own.
The Court cannot subscribe either to Hanjin's
Managerial employees shall not be eligible to form, join or
position that Samahan's members cannot form assist any labor unions for purposes of collective
the association because they are not covered by bargaining. Alien employees with valid working permits
the second sentence of Article 243 (now 249), to issued by the Department may exercise the right to self-
wit: organization and join or assist labor unions for purposes of
collective bargaining if they are nationals of a country
Article 243. Coverage and employees' right to self- which grants the same or similar rights to Filipino
organization. All persons employed in commercial, workers, as certified by the Department of Foreign Affairs.
industrial and agricultural enterprises and in religious,
For purposes of this section, any employee, whether
charitable, medical, or educational institutions, whether
employed for a definite period or not, shall beginning on
operating for profit or not, shall have the right to self-
the first day of his/her service, be eligible for membership
organization and to form, join, or assist labor
in any labor organization.
organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and itinerant
All other workers, including ambulant, intermittent and
workers, self-employed people, rural workers and those
other workers, the self-employed, rural workers and those
without any definite employers may form labor
without any definite employers may form labor
organizations for their mutual aid and protection. (As
organizations for their mutual aid and protection and other
amended by Batas Pambansa Bilang 70, May 1, 1980)
legitimate purposes except collective bargaining.
[Emphasis Supplied]
[Emphases Supplied]

Further, Article 243 should be read together with Clearly, there is nothing in the foregoing
Rule 2 of Department Order (D.O.) No. 40-03, implementing rules which provides that workers,
Series of 2003, which provides: with definite employers, cannot form or join a
RULE II workers' association for mutual aid and
protection. Section 2 thereof even broadens the
COVERAGE OF THE RIGHT TO SELF-ORGANIZATION coverage of workers who can form or join a
Section 1. Policy. - It is the policy of the State to promote workers' association. Thus, the Court agrees
the free and responsible exercise of the right to self- with Samahan's argument that the right to form a
organization through the establishment of a simplified workers' association is not exclusive to
mechanism for the speedy registration of labor unions and
ambulant, intermittent and itinerant workers.
workers associations, determination of representation
status and resolution of inter/intra-union and other related The option to form or join a union or a workers'
labor relations disputes. Only legitimate or registered association lies with the workers themselves,
labor unions shall have the right to represent their and whether they have definite employers or not.
members for collective bargaining and other purposes.
Workers' associations shall have the right to represent their 2.) No, Samahan cannot use the name
members for purposes other than collective bargaining. “Hanjin”
Section 2. Who may join labor unions and workers'
associations. - All persons employed in commercial,
Nevertheless, the Court agrees with the BLR
industrial and agricultural enterprises, including that "Hanjin Shipyard" must be removed in the
employees of government owned or controlled corporations name of the association. A legitimate workers'
without original charters established under the association refers to an association of workers
Corporation Code, as well as employees of religious,
organized for mutual aid and protection of its
charitable, medical or educational institutions whether
operating for profit or not, shall have the right to self- members or for any legitimate purpose other
organization and to form, join or assist labor unions for than collective bargaining registered with the
DOLE. Having been granted a certificate of impression that all of its members are employed
registration, Samahan's association is now by Hanjin.
recognized by law as a legitimate workers'
association. Holy Child Catholic School vs. Sto. Tomas &
HCC-TELU-PIGLAS (2013)
According to Samahan, inherent in the workers'
right to self-organization is its right to name its While there is a prohibition against the mingling
own organization. It seems to equate the of supervisory and rank-and-file employees in
dropping of words "Hanjin Shipyard" from its one labor organization, the Labor Code does not
name as a restraint in its exercise of the right to provide for the effects thereof. The alleged
self-organization. Hanjin, on the other hand, inclusion of supervisory employees in a labor
invokes that "Hanjin Shipyard" is a registered organization seeking to represent the bargaining
trade name and, thus, it is within their right to unit of rank-and-file employees does not affect
prohibit its use. that organization’s right to file a petition for
certification organization. Mingling is not
As there is no provision under our labor laws among the grounds for cancellation of its
which speak of the use of name by a workers' registration, unless such mingling was brought
association, the Court refers to the Corporation about by misrepresentation, false statement or
Code, which governs the names of juridical fraud under Article 239 of the Labor Code.
persons. Section 18 thereof provides:
FACTS: May 31, 2002 – A petition for
No corporate name may be allowed by the Securities and certification election was filed by HCSS-TELU-
Exchange Commission if the proposed name is identical or PIGLAS (PIGLAS), a duly registered labor
deceptively or confusingly similar to that of any existing
corporation or to any other name already protected by law
organization. 120 teachers and employees (out
or is patently deceptive, confusing or contrary to existing of 156 total employees) comprised the proposed
laws. When a change in the corporate name is approved, bargaining unit.
the Commission shall issue an amended certificate of
incorporation under the amended name. HCCS, on the other hand – in its comment and
position paper – alleged that PIGLAS members
[Emphases Supplied]
do not belong to the same class: PIGLAS is not
The policy underlying the prohibition in Section only a mixture of managerial, supervisory, and
18 against the registration of a corporate name rank-and-file employees (3 vice-principals, 1
which is "identical or deceptively or confusingly department head/supervisor, and 11
similar" to that of any existing corporation or coordinators) but also a combination of teaching
which is "patently deceptive" or "patently and non-teaching personnel (27 non-teaching
confusing" or "contrary to existing laws," is the personnel).
avoidance of fraud upon the public which would
have occasion to deal with the entity concerned, It insisted that the PIGLAS was an illegitimate
the evasion of legal obligations and duties, and labor organization lacking in personality to file a
the reduction of difficulties of administration petition for certification election for not being in
and supervision over corporations. accord with Article 245 and an inappropriate
bargaining unit for want of community or
For the same reason, it would be misleading for mutuality of interest.
the members of Samahan to use "Hanjin
Shipyard" in its name as it could give the wrong PIGLAS countered the HCCS failed to
substantiate its claim that some of the employees
included in the petition holds managerial and PIGLAS could exist as a legitimate labor org. –
supervisory positions. but it shall represent both classes of employees
in separate bargaining negotiations and
And even assuming that it is true, “mixture of agreements.
employees” is not one of the enumerated
instances in which a petition shall be dismissed HCSS filed before the CA a petition for
(DO No.9). certiorari with a Prayer for TRO and Preliminary
Injunction.
Questions pertaining to qualifications of
employees may be threshed out in the inclusion- The CA eventually dismissed the petition.
exclusion proceedings.
The CA held that the Vice Principals,
PIGLAS contended that the will of the Department Head, and Coordinators are neither
employees should be respected – they had supervisory nor managerial employees – they
manifested their desire to be represented by only wield no policy-making authority (they are
one bargaining unit. limited to recommending policies).

It asserted that academic and on-academic Thus, there is no improper commingling of

personnel have similar working conditions. members as to preclude the petition for
certification of election.
The Med-Arbiter denied the petition for
certification election on the ground that the unit The CA also ruled that the SOLE did not
which the PIGLAS sought to represent is commit GAD in not dismissing the petition for
inappropriate. certification election since it directed the
conduct of two separate certification elections
The Med-Arbiter held that PIGLAS failed the for teaching and non-teaching units.
“community or mutuality of interest” test:
whether or not it is fundamentally the The CA denied the MR hence, this petition.
combination which will best assure to all
employees the exercise of their collective ISSUE:
bargaining rights. (1) Is a petition for certification election is
There were 2 classes: teaching staff and non- dismissible on the ground that the labor
teaching staff. organization’s membership allegedly consists of
supervisory and rank-and-file employees. (NO.)
The Union appealed to the SOLE.
(2) Did the CA err in holding that the SOLE did
The SOLE ruled against the dismissal and not commit GAD in not dismissing the petition
directed the conduct of two separate certification for certification election? (NO.)
elections for the teaching and the non-teaching
personnel. RULING:

It held that although there are differences in the (1) Current rule: the alleged inclusion of
nature of work, hours and conditions of work supervisory employees in a labor organization
and salary determination, these differences are does not affect that organization’s right to file a
not substantial enough to warrant the dismissal petition for certification.
of the petition., as pointed out by PIGLAS.
Note: “bystander rule” – a certification election Moreover, the determination of whether union
is the sole concern of the workers. membership comprises managerial and/or
supervisory employees is a factual issue that is
Even when the employer has to file the petition best left for resolution in the inclusion-exclusion
(Art. 259), as after filing its role in the proceedings, which has not yet happened in this
certification process ceases. case so still premature to pass upon.
This is done in order to avoid the impression that (2) No error on the part of the CA in holding that
the employer is battling for a company union. the SOLE did not commit GAD in not
Current Rule dismissing the petition for certification election
on the ground that PIGLAS was not qualified to
But on June 21, 1997, the 1989 Amended file such a petition in the first place, for failing
Omnibus Rules was further amended by DO No. to qualify as a legitimate labor org.
9. The requirement under Sec. 2(c) - that the
SC: the concepts of a union and a legitimate
petition for certification election indicate that the
bargaining unit of rank-and-file employees has labor organization are different from, but relate
not been mingled with supervisory employees - to, the concept of a bargaining unit.
was removed. A labor organization as "any union or
In Tagaytay Highlands Int'l. Golf Club, Inc. v. association of employees which exists in whole
Tagaytay Highlands Employees Union- or in part for the purpose of collective
PTGWO, it was held that any mingling between bargaining or of dealing with employers
supervisory and rank-and-file employees in its concerning terms and conditions of
employment.” [Art. 212(g), LC]
membership cannot affect its legitimacy for that
is not among the grounds for cancellation of its Having been validly issued a certificate of
registration, unless such mingling was brought registration (by the Regional Office or Bureau),
about by misrepresentation, false statement or PIGLAS should be considered as having
fraud under Article 239 of the Labor Code. acquired juridical personality – which may not
Thus, the doctrine enunciated in Toyota and be attacked collaterally.
Dunlop was abandoned. The correct procedure for an employer would be
In subsequent cases, the SC reiterated that the to file a petition for cancellation of the union’s
alleged inclusion of supervisory employees in a certificate of registration – due to
labor organization seeking to represent the misrepresentation, false statement, or fraud,
bargaining unit of rank-and-file employees does under the circumstances enumerated in Art. 239
not divest it of its status as a legitimate labor of the LC, as amended.
organization. A bargaining unit has been defined as a "group
DO No. 9 is applicable in this case as the of employees of a given employer, comprised of
all or less than all of the entire body of
petition for certification election was filed on
May 31, 2002. It must also be stressed that employees, which the collective interests of all
HCCS cannot collaterally attack the legitimacy the employees, consistent with equity to the
of private respondent by praying for the employer, indicated to be best suited to serve
reciprocal rights and duties of the parties under
dismissal of the petition for certification election
(recall the Bystander Rule). the collective bargaining provisions of the law.
A bargaining unit is a group of employees The Registrar, upon the submission of the
sought to be represented by a petitioning union. required memorandums, ordered a decision to
Such employees need not be members of a union cancel the registration of SSSEA. PAFLU then
seeking the conduct of a certification election. filed this petition for certiorari and prohibition
saying that RA 875 violates the freedom of
A union certified as an exclusive bargaining assembly and association, and that Section 23 of
agent represents not only its members but also the law providing for the cancellation of union
other employees who are not union members. registration upon failure to submit the necessary
What the UP v. Ferrer-Calleja case prohibits is reportorial requirements was deemed repealed
the commingling of teaching and non-teaching when the Philippines ratified the ILO
Convention No. 87.
personnel in one bargaining unit – they have to
be separated into 2 bargaining units, with two ISSUE: WON the effect of Section 23(b) of
separate certification elections. Republic Act No. 8751 unduly curtails the
The SOLE’s decision was not incompatible with
this doctrine.
1 RA 875, Sec. 23 (b) - Any labor organization, association
SC: “Indeed, the purpose of a certification or union of workers duly organized for the material,
intellectual and moral well being of its members shall
election is precisely to ascertain the majority of acquire legal personality and be entitled to all the rights and
the employees’ choice of an appropriate privileges granted by law to legitimate labor organizations
bargaining unit – to be or not to be represented within thirty days of filing with the office of the Secretary
of Labor notice of its due organization and existence and
by a labor organization and, if in the affirmative the following documents, together with the amount of five
case, by which one.” pesos as registration fee, except as provided in paragraph
“d” of this section:
Petition DENIED. Decision of the CA (1) A copy of the constitution and by-laws of the
AFFIRMED. organization together with a list of all officers of the
association, their addresses and the address of the principal
PAFLU vs. Secretary of Labor (1969) office of the organization;

(2) A sworn statement of all officers of the said

The registration prescribed in paragraph (b) of organization, association or union to the effect that they are
said section is not a limitation to the right of not members of the Communist Party and that they are not
members of any organizations which teaches the overthrow
assembly or association, which may be exercised of the Government by force or by any illegal or
with or without said registration. The latter is unconstitutional method; and
merely a condition sine qua non for the
(3) If the applicant organization has been in existence for
acquisition of legal personality by labor one or more years, a copy of its last annual financial report.
organizations, associations or unions and the
(d) The registration and permit of a legitimate labor
possession of the "rights and privileges granted organization shall be cancelled by the Department of
by law to legitimate labor organizations. Labor, if the Department has reason to believe that the
labor organization no longer meets one or more of the
FACTS: The Registration of Labor requirements of paragraph (b) above; or fails to file with
the Department of Labor either its financial report within
Organizations issued a notice of hearing on the sixty days of the end of its fiscal year or the names of its
matter of cancellation of the registration of the new officers along with their non-subversive affidavits as
outlined in paragraph (b) above within sixty days of their
Social Security System Employees Association election; however, the Department of Labor shall not order
(SSSEA) – which was affiliated with PAFLU – the cancellation of the registration and permit without due
for failure to furnish the BLR with the reports of notice and hearing, as provided under paragraph (c) above,
and the affected labor organization shall have the same
finances and list of officers after the election. right of appeal to the courts as previously provided.
freedom of assembly and association guaranteed order to increase the local unions bargaining
in the Bill of Rights? powers respecting terms and conditions of
labor. D.O. 40- 03 represents an expression of
RULING: No. the governments implementing policy on trade
The registration prescribed in paragraph (b) of unionism. It builds upon the old rules by further
said section is not a limitation to the right of simplifying the requirements for the
establishment of locals or chapters.
assembly or association, which may be exercised
with or without said registration. The latter is FACTS: The private respondent Nagkakaisang
merely a condition sine qua non for the Samahan ng Manggagawa ng Electromat‐Wasto
acquisition of legal personality by labor (union), a charter affiliate of the Workers
organizations, associations or unions and the Advocates for Struggle, Transformation and
possession of the "rights and privileges granted Organization (WASTO), applied for registration
by law to legitimate labor organizations". with the Bureau of Labor Relations (BLR). The
The Constitution does not guarantee these rights BLR thereafter issued the union a Certification
and privileges, much less said personality, which of Creation of Local Chapter (equivalent to the
are mere statutory creations, for the possession certificate of registration of an independent
and exercise of which registration is required to union), pursuant to Department Order No.
protect both labor and the public against abuses, (D.O.) 40‐03.[4]
fraud, or impostors who pose as organizers, On October 1, 2003, the petitioner Electromat
although not truly accredited agents of the union Manufacturing and Recording Corporation
they purport to represent. Such requirement is a (company) filed a petition for cancellation of the
valid exercise of the police power, because the union's registration certificate, for the union's
activities in which labor organizations, failure to comply with Article 234 of the Labor
associations and union of workers are engaged Code. It argued that D.O. 40‐03 is an
affect public interest, which should be protected. unconstitutional diminution of the Labor Code's
Furthermore, the obligation to submit financial union registration requirements under Article
statements, as a condition for the non- 234. Specifically, it assails as unconstitutional
cancellation of a certificate of registration, is a Section 2(E), Rule III of D.O. 40‐03 which
reasonable regulation for the benefit of the provides:
members of the organization, considering that
The report of creation of a chartered local shall
the same generally solicits funds or membership,
be accompanied by a charter certificate issued
as well as oftentimes collects, on behalf of its
by the federation or national union indicating the
members, huge amounts of money due to them
creation or establishment of the chartered local.
or to the organization.
DECISION OF LOWER COURTS: * DOLE:
Electromat Manufacturing vs. Hon. dismissed the petition. * BLR Director: affirmed
Lagunzad (2011) the decision of the DOLE. * CA: affirmed BLR
Undoubtedly, the intent of the law in imposing Director.
lesser requirements in the case of a branch or
ISSUE: WON the Department order is
local of a registered federation or national
constitutional or whether D.O. 40‐03 is a valid
union is to encourage the affiliation of a local
exercise of the rule‐making power of the DOLE?
union with a federation or national union in
APPLICABLE LAWS: Article 2342 have lesser requirements because they and their
members are deemed to be direct members of
RULING: YES, constitutional. the federation to which they are affiliated, which
Undoubtedly, the intent of the law in imposing federations are the ones subject to the strict
lesser requirements in the case of a branch or registration requirements of the law.
local of a registered federation or national union NOTE: Local chapter to be entitled to all rights
is to encourage the affiliation of a local union and privileges of a legitimate labor organization
with a federation or national union in order to upon submission of the following documents in
increase the local unions bargaining powers addition to the charter certificate:
respecting terms and conditions of labor. D.O.
40-03 represents an expression of the 1) The names of the local/chapter’s officers,
governments implementing policy on trade their addresses, the principal office of the
unionism. It builds upon the old rules by further local/chapter, and;
simplifying the requirements for the
establishment of locals or chapters. As in D.O. 2) The chapter’s constitution and by-laws
9, we see nothing contrary to the law or the provided, that where the chapter’s constitution
Constitution in the adoption by the Secretary of and by-laws are the same as that of the
Labor and Employment of D.O. 40‐03 as this federation or the national union, that fact shall
department order is consistent with the intent of be indicated accordingly.
the government to encourage the affiliation of a San Miguel Corp Employees Union vs. San
local union with a federation or national union to Miguel Packing Employees Union (2007)
enhance the local's bargaining power. If changes
were made at all, these were those made to When an unregistered union becomes a branch,
recognize the distinctions made in the law itself local or chapter, some of the requirements for
between federations and their local chapters, and registration are no longer necessary or
independent unions; local chapters seemingly compulsory. Whereas an applicant for
registration of an independent union is
2 Art. 234. Requirements of Registration. Any applicant mandated to submit, among other things, the
labor organization, association or group of unions or
workers shall acquire legal personality and shall be entitled
number of employees and names of all its
to the rights and privileges granted by law to legitimate members comprising at least 20% of the
labor organizations upon issuance of the certificate of employees in the bargaining unit where it seeks
registration based on the following requirements:
to operate.
(a) Fifty pesos (P50.00) registration fee;
In sum, although PDMP as a trade union center
(b) The names of its officers, their addresses, the principal
address of the labor organization, the minutes of the
is a legitimate labor organization, it has no
organizational meetings and the list of the workers who power to directly create a local or chapter.
participated in such meetings; Thus, SMPPEU-PDMP cannot be created under
(c) The names of all its members comprising at least the more lenient requirements for chartering,
twenty percent (20%) of all the employees in the but must have complied with the more stringent
bargaining unit where it seeks to operate;
rules for creation and registration of an
(d) If the applicant union has been in existence for one or independent union, including the 20%
more years, copies of its annual financial reports; and membership requirement.
(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.
FACTS: Petitioner is the incumbent bargaining acquire legitimacy, citing Article 234(c) of the
agent for the bargaining unit comprised of the Labor Code. Petitioner also insists that the 20%
regular monthly-paid rank and file employees of requirement for registration of respondent must
the three divisions of San Miguel Corporation be based not on the number of employees of a
namely San Miguel Corporate Staff Unit single division, but in all three divisions of the
(SMCSU), San Miguel Brewing Philippines company in all the offices and plants of SMC
(SMBP), and the San Miguel Packaging since they are all part of one bargaining unit.
Products (SMPP) Petitioner thus maintains that respondent, in any
case, failed to meet this 20% membership
Respondent is registered as a chapter of requirement since it based its membership on the
Pambansang Diwa ng Manggagawang Pilipino. number of employees of a single division only,
Thereafter, respondent filed three separate namely, the SMPP.
petitions for certification election to represent
SMPP, SMCSU, and SMBP. All three petitions ISSUE: WON SM Packing Employees met the
were dismissed, on the ground that the separate requirements and thus, must remain a legitimate
petitions fragmented a single bargaining unit. labor organization?

Petitioner filed with the DOLE-NCR a petition RULING: NO, SM Packing Employees failed
seeking the cancellation of respondent’s to meet the requirement. Hence, they cannot be
registration and its dropping from the rolls of declared as a legitimate labor organization
legitimate labor organizations. Petitioner
accused respondent of committing fraud and A perusal of the records reveals that respondent
falsification, and non-compliance with is registered with the BLR as a local or chapter
registration requirements in obtaining its of PDMP. The applicable Implementing Rules
certificate of registration. It raised allegations (Department Order No. 9) enunciates a two-fold
that respondent violated Articles 239(a), (b) and procedure for the creation of a chapter or a local.
(c) and 234(c) of the Labor Code. The first involves the affiliation of an
independent union with a federation or national
DOLE-NCR Regional Director Maximo B. Lim union or industry union. The second, finding
found that respondent did not comply with the application in the instant petition, involves the
20% membership requirement and, thus, ordered direct creation of a local or a chapter through the
the cancellation of its certificate of registration process of chartering. The Implementing Rules
and removal from the rolls of legitimate labor stipulate that a local or chapter may be directly
organizations. created by a federation or national union.

Bureau of Labor Relations: Reversed DOLE Petitioner insists that Section 3 of the
NCR and declared that SM Packing Employees Implementing Rules, as amended by Department
shall hereby remain in the roster of legitimate Order No. 9, violated Article 234 of the Labor
labor organizations Code when it provided for less stringent
requirements for the creation of a chapter or
CA affirmed BLR local. Article 234 of the Labor Code provides
Petitioner’s contention: Petitioner posits that that an independent labor organization acquires
respondent is required to submit a list of legitimacy only upon its registration with the
members comprising at least 20% of the BLR: xxx 3) The names of all its members
employees in the bargaining unit before it may comprising at least twenty percent (20%) of all
the employees in the bargaining unit where it the procedure for chartering or creating a local
seeks to operate; xxx or chapter, namely Article 234-A, still makes no
mention of a "trade union center."
It is emphasized that the foregoing pertains to
the registration of an independent labor Also worth emphasizing is that even in the most
organization, association or group of unions or recent amendment of the implementing rules,
workers. there was no mention of a trade union center as
being among the labor organizations allowed to
However, the creation of a branch, local or charter.
chapter is treated differently. This Court, in the
landmark case of Progressive Development
Corporation v. Secretary, Department of
(a) Fifty pesos (P50.00) registration fee;
Labor and Employment, declared that when an
unregistered union becomes a branch, local or (b) The names of its officers, their addresses, the principal
chapter, some of the aforementioned address of the labor organization, the minutes of the
organizational meetings and the list of the workers who
requirements for registration are no longer participated in such meetings;
necessary or compulsory. Whereas an applicant
(c) In case the applicant is an independent union, the names
for registration of an independent union is of all its members comprising at least twenty percent (20%)
mandated to submit, among other things, the of all the employees in the bargaining unit where it seeks to
number of employees and names of all its operate;

members comprising at least 20% of the (d) If the applicant union has been in existence for one or
employees in the bargaining unit where it seeks more years, copies of its annual financial reports;
andcralawlibrary
to operate, as provided under Article 234 of the
Labor Code and Section 2 of Rule III, Book V of (e) Four copies of the constitution and by-laws of the
the Implementing Rules, the same is no longer applicant union, minutes of its adoption or ratification, and
the list of the members who participated in it.
required of a branch, local or chapter. The intent
of the law in imposing less requirements in the SECTION 2. A new provision is hereby inserted into the
Labor Code as Article 234-A to read as follows:
case of a branch or local of a registered
federation or national union is to encourage the ART. 234-A. Chartering and Creation of a Local Chapter. -
A duly registered federation or national union may directly
affiliation of a local union with a federation or
create a local chapter by issuing a charter certificate
national union in order to increase the local indicating the establishment of the local chapter. The
unions bargaining powers respecting terms and chapter shall acquire legal personality only for purposes of
filing a petition for certification election from the date it
conditions of labor. was issued a charter certificate.

Article 2343 now includes the term trade union The chapter shall be entitled to all other rights and
privileges of a legitimate labor organization only upon the
center, but interestingly, the provision indicating
submission of the following documents in addition to its
charter certificate:
3SECTION 1. Article 234 of Presidential Decree No. 442, (a) The names of the chapter's officers, their addresses, and
as amended, otherwise known as the Labor Code of the the principal office of the chapter; andcralawlibrary
Philippines, is hereby further amended to read as follows:
(b) The chapter's constitution and by-laws: Provided, That
ART. 234. Requirements of Registration. - A federation, where the chapter's constitution and by-laws are the same
national union or industry or trade union center or an as that of the federation or the national union, this fact shall
independent union shall acquire legal personality and shall be indicated accordingly.
be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the The additional supporting requirements shall be certified
certificate of registration based on the following under oath by the secretary or treasurer of the chapter and
requirements: attested by its president. (Emphasis ours.)
This Court deems it proper to apply the Latin mandate of the Labor Code in ensuring strict
maxim expressio unius est exclusio alterius. compliance with the procedural requirements for
Under this maxim of statutory interpretation, the registration is not without reason. It has been
expression of one thing is the exclusion of observed that the formation of a local or chapter
another. When certain persons or things are becomes a handy tool for the circumvention of
specified in a law, contract, or will, an intention union registration requirements. Absent the
to exclude all others from its operation may be institution of safeguards, it becomes a
inferred. If a statute specifies one exception to a convenient device for a small group of
general rule or assumes to specify the effects of employees to foist a not-so-desirable federation
a certain provision, other exceptions or effects or union on unsuspecting co-workers and pare
are excluded. Where the terms are expressly the need for wholehearted voluntariness, which
limited to certain matters, it may not, by is basic to free unionism. As a legitimate labor
interpretation or construction, be extended to organization is entitled to specific rights under
other matters. Such is the case here. If its intent the Labor Code and involved in activities
were otherwise, the law could have so easily and directly affecting public interest, it is necessary
conveniently included "trade union centers" in that the law afford utmost protection to the
identifying the labor organizations allowed to parties affected. However, as this Court has
charter a chapter or local. Anything that is not enunciated in Progressive Development
included in the enumeration is excluded Corporation v. Secretary of Department of
therefrom, and a meaning that does not appear Labor and Employment, it is not this Court's
nor is intended or reflected in the very language function to augment the requirements prescribed
of the statute cannot be placed therein. The rule by law. Our only recourse, as previously
is restrictive in the sense that it proceeds from discussed, is to exact strict compliance with
the premise that the legislating body would not what the law provides as requisites for local or
have made specific enumerations in a statute if it chapter formation.
had the intention not to restrict its meaning and
confine its terms to those expressly In sum, although PDMP as a trade union center
mentioned.58 Expressium facit cessare is a legitimate labor organization, it has no
tacitum.59 What is expressed puts an end to power to directly create a local or chapter. Thus,
what is implied. Casus omissus pro omisso SMPPEU-PDMP cannot be created under the
habendus est. A person, object or thing omitted more lenient requirements for chartering, but
must have been omitted intentionally. must have complied with the more stringent
rules for creation and registration of an
Therefore, since under the pertinent status and independent union, including the 20%
applicable implementing rules, the power membership requirement.
granted to labor organizations to directly create a
chapter or local through chartering is given to a The Certificate of Registration of San Miguel
federation or national union, then a trade union Packaging Union is ORDERED CANCELLED,
center is without authority to charter directly. and DROPPED from the rolls of legitimate labor
organizations.
The ruling of this Court in the instant case is not
a departure from the policy of the law to foster
the free and voluntary organization of a strong
and united labor movement, and thus assure the
rights of workers to self-organization. The
Heritage Hotel Manila vs. Pinag-Isang Galing petition for certiorari with the Court of Appeals.
at Lakas ng mga Manggagawa sa Heritage The CA issued a writ of injunction against the
Manila (2009) holding of HHE's certification election until the
petition for cancellation of its registration shall
The Labor Code and its implementing rules do have been resolved with finality.
not require that the number of members
appearing on the documents in question should In 2003, another union, herein respondent Pinag-
completely dovetail. For as long as the Isang Galing at Lakas ng mga Manggagawa sa
documents and signatures are shown to be Heritage Manila (PIGLAS), was formed by
genuine and regular and the constitution and by- certain rank and file employees of petitioner at a
laws democratically ratified, the union is meeting. PIGLAS was issued its registration
deemed to have complied with registration certificate by the DOLE-NCR in 2004. HHE
requirements. later on adopted a resolution for its dissolution
and then filed a petition for cancellation of its
Labor laws are liberally construed in favor of union registration.
labor especially if doing so would affirm it’s
constitutionally guaranteed right to self- PIGLAS filed a petition for certification election
organization. which petitioner opposed alleging that the new
union's officers and members were also those
The right of any person to join an organization who comprised the old union. Petitioner likewise
also includes the right to leave that organization alleged that PIGLAS was formed to circumvent
and join another one. the CA's injunction earlier issued. The Med-
FACTS: The Heritage Hotel Employees Union Arbiter nevertheless granted the petition for
certification election.
(HHE) was formed in 2000 by certain rank and
file employees of herein petitioner Heritage Petitioner filed a petition to cancel PIGLAS'
Hotel Manila, to which the Department of Labor registration, claiming that the documents
and Employment-National Capital Region submitted with the union's application for
issued a certificate of registration. HHE filed a registration bore the following false information:
petition for certification election which
petitioner opposed on the ground that HHE (a) The List of Members showed that the
misrepresented itself to be an independent union, PIGLAS union had 100 union members; (b) The
when in fact it was a local chapter of the Organizational Minutes said that 90 employees
National Union of Workers in Hotel and attended the meeting on December 10, 2003; (c)
Restaurant and Allied Industries (NUWHRAIN). The Attendance Sheet of the meeting of
It was also alleged that such omitted disclosure December 10, 2003 bore the signature of 127
was intentional because petitioner's supervisors members who ratified the union's Constitution
union was already affiliated with it. Petitioner and By-Laws; and (d) The Signature Sheet bore
also filed a petition to cancel the union's 128 signatures of those who attended that
registration certificate. The Med-Arbiter meeting.
nevertheless granted HHE's petition for
certification election. Petitioner alleged that the misrepresentation was
evidenced by the discrepancy in the number of
Petitioner appealed to the Secretary of Labor but union members appearing in the application and
it was denied as well as its motion for the list as well as the number of signatories to
reconsideration, prompting petitioner to file a the attendance and signature sheets. The minutes
reported only 90 employees attended the acquires none of the rights accorded to
meeting. Petitioner also alleged that 33 members registered organizations.
of PIGLAS were members of HHE, which is in
violation of the policy against dual unionism. The discrepancies can be explained. While it
appears that in the minutes of the December 10,
DOLE-NCR denied petitioner's petition to 2003 organizational meeting, only 90 employees
cancel PIGLAS' registration because the responded to the roll call at the beginning, it
discrepancies in the number of members in the cannot be assumed that such number could not
application's supporting documents were not grow to 128 as reflected on meeting lasted 12
material and did not constitute hours from 11:00am to 11:00pm. There is no
misrepresentation. The dual unionism is also not evidence that the meeting hall was locked up to
a ground for canceling registration, since the exclude late attendees. As to the fact that only
members of HHE simply exercised their right to 127 members ratified the union's constitution
self-organization and freedom of association and bylaws when 128 signed the attendance
when they joined PIGLAS. The Bureau of Labor sheet, it cannot be assumed that all those who
Relations affirmed the DOLE-NCR, by attended approved of such. Any member had the
reasoning that PIGLAS' organization meeting right to hold out and refrain from ratifying those
lasted for 12 hours. Thus, it was possible for the documents or to simply ignore the process. The
number of attendees to have increased as the Labor Code and its implementing rules do not
meeting progressed. Besides, the union only require that the number of members appearing
needed 50 members of the total of 250 on the documents in question should completely
employees in the bargaining unit to comply with dovetail. For as long as the documents and
the 20% membership requirement. Petitioner signatures are shown to be genuine and regular
filed a petition for certiorari with the Court of and the constitution and by-laws democratically
Appeals but it was denied as well as petitioner's ratified, the union is deemed to have complied
motion for reconsideration. Hence, this petition with registration requirements.
for review under Rule 45.
The discrepancy in the list of members (showing
ISSUES: only 100 members) and the signature and
attendance sheets (showing 127 or 128
(1) WON the union made fatal misrepresentation members) submitted is immaterial. A
in its application for union registration comparison of the documents shows that except
(2) WON dual unionism is a ground for for six members, the names found in the list are
also in the attendance and signature sheets.
canceling a union's registration.
PIGLAS more than complied with the 20%
RULING: requirement since only 50 employees out of 250
employees in the bargaining unit were required
(1) NO. Petitioner has no evidence of the alleged to unionize.
misrepresentation. The discrepancies alone
cannot be taken as indication that PIGLAS Labor laws are liberally construed in favor of
misrepresented the information contained in labor especially if doing so would affirm it’s
these documents. Charges of fraud and constitutionally guaranteed right to self-
misrepresentation should be clearly established organization. PIGLAS union's supporting
by evidence and surrounding circumstances documents reveal the unmistakable yearning of
because once it is proved, the labor union petitioner company's rank and file employees to
organize. This yearning should not be frustrated granted the application. The EREU then filed a
by inconsequential technicalities. petition for certification election in Eagle Ridge
Golf & Country Club. Eagle Ridge opposed this
(2) NO. The fact that some of respondent petition, followed by its filing of a petition for
PIGLAS union members were also members of the cancellation of the application.
the old rank and file union, the HHE union, is
not a ground for canceling the new unions Eagle Ridge’s petition ascribed
registration. The right of any person to join an misrepresentation, false statement, or fraud to
organization also includes the right to leave that EREU in connection with the adoption of its
organization and join another one. HHE union constitution and by-laws, the numerical
ceased to exist, its certificate of registration composition of the Union, and the election of its
being already cancelled Thus, the petition is officers. Petitioner alleged that the EREU
denied. declared in its application for registration having
30 members, when the minutes of its December
Eagle Ridge vs CA (2010) 6, 2005 organizational meeting showed it only
We have in precedent cases said that the had 26 members. The misrepresentation was
employees' withdrawal from a labor union made exacerbated by the discrepancy between the
before the filing of the petition for certification certification issued by the Union secretary and
election is presumed voluntary, while president that 25 members actually ratified the
withdrawal after the filing of such petition is constitution and by-laws on December 6, 2005
considered to be involuntary and does not affect and the fact that 26 members affixed their
the same. Now then, if a withdrawal from union signatures on the documents, making one
membership done after a petition for signature a forgery. Finally, petitioner contended
that five employees who attended the
certification election has been filed does not
organizational meeting had manifested the desire
vitiate such petition, is it not but logical to
assume that such withdrawal cannot work to to withdraw from the union. The five executed
nullify the registration of the union? individual affidavits or Sinumpaang Salaysay on
February 15, 2006, attesting that they arrived
FACTS: Petitioner Eagle Ridge is a corporation late at said meeting which they claimed to be
engaged in the business of maintaining golf drinking spree; that they did not know that the
courses. It had, at the end of CY 2005, around documents they signed on that occasion
112 rank-and-file employees. On December 6, pertained to the organization of a union; and that
2005, at least 20% of Eagle Ridge’s rank-and they now wanted to be excluded from the Union.
file employees—the percentage threshold The withdrawal of the five, Eagle Ridge
required under Article 234(c) of the Labor Code maintained, effectively reduced the union
for union registration—had a meeting where membership to 20 or 21, either of which is
they organized themselves into an independent below the mandatory minimum 20%
labor union, named "Eagle Ridge Employees membership requirement under Art. 234(c) of
Union" (EREU or Union), elected a set of the Labor Code. Reckoned from 112 rank-and-
officers, and ratified their constitution and by- file employees of Eagle Ridge, the required
laws. On December 19, 2005, EREU formally number would be 22 or 23 employees.
applied for registration before the Department of
Labor and Employment (DOLE) Regional As a counterpoint, EREU alleged that
Office IV (RO IV). In time, DOLE RO IV discrepancies are not real for before filing of its
application on December 19, 2005, four
additional employees joined the union on ISSUE: WON there was fraud in the application
December 8, 2005, thus raising the union to merit the cancellation of the EREU’s
membership to 30 members as of December 19, registration
2005; that the understatement by one member
who ratified the constitution and by-laws was a RULING: NO, a scrutiny of the records fails to
typographical error, which does not make it show any misrepresentation, false statement, or
either grave or malicious warranting the fraud committed by EREU to merit cancellation
cancellation of the union’s registration; that the of its registration. The Supreme Court succinctly
retraction of 5 union members should not be explained this decision in eight points:
given any credence for the reasons that: First. The Union submitted the required
(a) the sworn statements of the five retracting documents attesting to the facts of the
union members sans other affirmative evidence organizational meeting on December 6, 2005,
presented hardly qualify as clear and credible the election of its officers, and the adoption of
evidence considering the joint affidavits of the the Union’s constitution and by-laws.
other members attesting to the orderly conduct Second. The members of the EREU totaled 30
of the organizational meeting; employees when it applied on December 19,
(b) the retracting members did not deny signing 2005 for registration. The Union thereby
the union documents; complied with the mandatory minimum 20%
membership requirement under Art. 234(c). Of
(c) it can be presumed that "duress, coercion or note is the undisputed number of 112 rank-and-
valuable consideration" was brought to bear on file employees in Eagle Ridge, as shown in the
the retracting members; and Sworn Statement of the Union president and
secretary and confirmed by Eagle Ridge in its
(d) once the required percentage requirement has petition for cancellation.
been reached, the employees’ withdrawal from
union membership taking place after the filing of Third. The Union has sufficiently explained the
the petition for certification election will not discrepancy between the number of those who
affect the petition. After due proceedings, the attended the organizational meeting showing 26
DOLE Regional Director, focusing on the employees and the list of union members
question of misrepresentation, issued an Order showing 30. The difference is due to the
finding for Eagle Ridge. Aggrieved, the Union additional four members admitted two days after
appealed to the BLR, which affirmed the the organizational meeting as attested to by their
appealed order of the DOLE Regional Director. duly accomplished Union Membership form.
Undeterred by successive setbacks, EREU
interposed a motion for reconsideration which Fourth. In its futile attempt to clutch at straws,
was granted. Eagle Ridge sought but was denied Eagle Ridge assails the inclusion of the
reconsideration. Eagle Ridge thereupon went to additional four members allegedly for not
the CA, which dismissed the petition for complying with what it termed as "the sine qua
certiorari. The CA later denied Eagle Ridge’s non requirements" for union member
motion for reconsideration, hence the recourse applications under the Union’s constitution and
with the SC. by-laws, specifically Sec. 2 of Art. IV. We are
not persuaded. Any seeming infirmity in the
application and admission of union membership,
most especially in cases of independent labor
unions, must be viewed in favor of valid of the Labor Code covering Labor Relation. It is
membership. The right of employees to self- settled that affidavits partake the nature of
organization and membership in a union must hearsay evidence, since they are not generally
not be trammeled by undue difficulties. In this prepared by the affiant but by another who uses
case, when the Union said that the four his own language in writing the affiant’s
employee-applicants had been admitted as union statement, which may thus be either omitted or
members, it is enough to establish the fact of misunderstood by the one writing them. For
admission of the four that they had duly their non-presentation and consonant to the
signified such desire by accomplishing the above-quoted rule, the six affidavits of retraction
membership form. The fact, as pointed out by are inadmissible as evidence against the Union
Eagle Ridge, that the Union, owing to its scant in the instant case.
membership, had not yet fully organized its
different committees evidently shows the direct Seventh. The fact that six union members,
and valid acceptance of the four employee indeed, expressed the desire to withdraw their
applicants rather than deter their admission— as membership through their affidavits of retraction
erroneously asserted by Eagle Ridge. will not cause the cancellation of registration on
the ground of violation of Art. 234(c) of the
Fifth. The difference between the number of 26 Labor Code requiring the mandatory minimum
members, who ratified the Union’s constitution 20% membership of rank-and- file employees in
and by-laws, and the 25 members shown in the the employees’ union.
certification of the Union secretary as having
ratified it, is, as shown by the factual The six retracting union members clearly
antecedents, a typographical error. It was an severed and withdrew their union membership.
insignificant mistake committed without malice The query is whether such separation from the
or prevarication. The list of those who attended Union can detrimentally affect the registration of
the organizational meeting shows 26 members, the Union. We answer in the negative. Twenty
as evidenced by the signatures beside their percent (20%) of 112 rank-and-file employees in
handwritten names. Eagle Ridge would require a union membership
of at least 22 employees (112 x 205 = 22.4).
Sixth. In the more meaty issue of the affidavits When the EREU filed its application for
of retraction executed by six union members, we registration on December 19, 2005, there were
hold that the probative value of these affidavits clearly 30 union members. Thus, when the
cannot overcome those of the supporting certificate of registration was granted, there is no
affidavits of 12 union members and their counsel dispute that the Union complied with the
as to the proceedings and the conduct of the mandatory 20% membership requirement. With
organizational meeting on December 6, 2005. the withdrawal of six union members, there is
The DOLE Regional Director and the BLR OIC still compliance with the mandatory membership
Director obviously erred in giving credence to requirement under Art. 234(c), for the remaining
the affidavits of retraction, but not according the 24 union members constitute more than the 20%
same treatment to the supporting affidavits. membership requirement of 22 employees.

The six affiants of the affidavits of retraction Eighth. Finally, it may not be amiss to note,
were not presented in a hearing before the given the factual antecedents of the instant case,
Hearing Officer (DOLE Regional Director), as that Eagle Ridge has apparently resorted to filing
required under the Rules Implementing Book V the instant case for cancellation of the Union’s
certificate of registration to bar the holding of a CA RULING: Reversed the DOLE and upheld
certification election. This can be gleaned from the Med-Arbiter’s Ruling.
the fact that the grounds it raised in its
opposition to the petition for certification ISSUE: Does the commingling of supervisory
election are basically the same grounds it and rank-and-file employees in a union divest it
resorted to in the instant case for cancellation of of its personality as a legitimate labor
EREU’s certificate of registration. This amounts organization?
to a clear circumvention of the law and cannot RULING: NO. After a labor organization has
be countenanced. been registered, it may exercise all the rights and
SMCC-SUPER vs Charter Chemical (2011) privileges of a legitimate labor organization.
Any mingling between supervisory and rank-
After a labor organization has been registered, and-file employees in its membership cannot
it may exercise all the rights and privileges of a affect its legitimacy for that is not among the
legitimate labor organization. Any mingling grounds for cancellation of its registration,
between supervisory and rank-and-file unless such mingling was brought about by
employees in its membership cannot affect its misrepresentation, false statement or fraud under
legitimacy for that is not among the grounds for Article 239 of the Labor Code. Applying this
cancellation of its registration, unless such principle to the case at bar, petitioner union was
mingling was brought about by not divested of its status as a legitimate labor
misrepresentation, false statement or fraud organization even if some of its members were
under Article 239 of the Labor Code. supervisory employees. It had the right to file
the subject petition for certification election.
FACTS: Samahang Manggagawa sa Charter Besides, the legal personality of the union
Chemical Solidarity of Unions in the Philippines cannot be collaterally attacked by the company
for Empowerment and Reforms (petitioner in the certification election proceedings the latter
union) filed a petition for certification election being – in the eyes of the law – a mere bystander
among the regular rank-and-file employees of in such proceedings.
Charter Chemical and Coating Corporation
(respondent company) with the Mediation Yokohama Tires vs. Yokohama Employees
Arbitration Unit of the DOLE, National Capital Union (2010)
Region. Respondent company filed an Answer
with Motion to Dismiss on the ground that The charge that a labor organization committed
petitioner union is not a legitimate labor fraud and misrepresentation in securing its
organization because of (1) failure to comply registration is a serious charge and deserves
with the documentation requirements set by law, close scrutiny. It is serious because once such
and (2) the inclusion of supervisory employees charge is proved; the labor union acquires none
within petitioner union. of the rights accorded to registered
organizations. Consequently, charges of this
MED-ARBITER RULING: Sided with the nature should be clearly established by evidence
company. and the surrounding circumstances

DOLE RULING: Granted the union’s petition FACTS: Yokohama Employees Union is the
for a certification election. labor organization of the rank-and file
employees of petition. YEU was registered as
legitimate labor union on 10 Sept 1999.
Respondent filed before Regional Office a members involved as these appeared on the
petition for certification election. Petitioner filed documents that supported the unions application
a petition for revocation of YEU’s registration for registration, petitioner company has no
when (1) YEU fraudulently included the other evidence of the alleged misrepresentation.
signature of Pineda in the organizational But those discrepancies alone cannot be taken
documents; (2) Pineda was not aware of any as an indication that respondent misrepresented
election of union officers; (3) YEU fraudulently the information contained in these documents.
obtained employees signature by making them
believe that they were signing a petition for a The charge that a labor organization committed
125% increase in the minimum wage, not a fraud and misrepresentation in securing its
petition for registration; (4) the employees did registration is a serious charge and deserves
not belong to a single bargaining unit; and (5) close scrutiny. It is serious because once such
YEU fraudulently stated in its organizational charge is proved, the labor union acquires none
meeting minutes that its second vice president of the rights accorded to registered
was Bernard David, not Bernardo David. organizations. Consequently, charges of this
nature should be clearly established by evidence
ISSUE: WON YEU committed fraud or and the surrounding circumstances.(Emphasis
misrepresentation sufficing the revocation of its supplied)
registration?
WHEREFORE, we DENY the petition. We
RULING: No. AFFIRM the 16 January 2004 Decision and 12
May 2004 Resolution of the Court of Appeals in
CA found that YEU did not commit grave fraud CA-G.R. SP No. 65460.
or misrepresentation. The BLR correctly ruled
that the evidence to prove the participation of Takata Phils. vs. BLR (2014)
YEU in the failure to delete Pineda’s signature
from the organizational document was wanting. The 20% requirement does not apply to Art 234
YTPI has the burden of proving the truthfulness (b) or to those who joined the org. meeting. 20%
of its accusations. only applies to 234 (c) or all employees in the
bargaining unit. The “Pangalan ng mga Kasapi
In Heritage Hotel Manila v. Pinag-Isang ng Unyon” showed 119 names; more than 20%
Galing at Lakas ng mga Manggagawa sa of 396. There was no proof that members did not
Heritage Manila, the employer filed a petition understand what they were signing. The two
to revoke the registration of its rank-and-file repeated names is not a valid ground for
employees union, accusing it of committing cancellation because they do not constitute
fraud and misrepresentation. The Court held that grave misrepresentation.
the petition was rightfully denied because the
employer failed to prove that the labor union FACTS: July 7, 2009 – Takata Corp filed with
committed fraud and misrepresentation. The DOLE a petition for cancellation of Certificate
Court held that: of Union Registration of respondent SALAMAT
(Union) They alleged that SALAMAT was
Did respondent PIGLAS union commit fraud guilty of misrepresentation, false statements, and
and misrepresentation in its application for fraud with respect to the number of those who
union registration? We agree with the DOLE- participated in their organizational meeting, the
NCR and the BLR that it did not. Except for the adoption and ratification of its Constitution and
evident discrepancies as to the number of union by-laws, and in the election of its officers.
Takata’s contentions o In the May 1, 2009 employees assailed their inclusion in the list of
organizational meeting, only 68 signed the union members
attendance sheet out of 396 rank-and-file
employees. ISSUE: WON SALAMAT committed
misrepresentation, false statements, or fraud as a
“Pangalan ng mga Kasapi ng Unyon” (PKU) ground for cancelling registration?
bore no signatures of the 119 members and that
the employees were not given sufficient RULING: No.
information on the document they signed. It does not appear in Art 234 (b) that attendees
The document “Sama-Samang Pahayag ng in the organizational meeting must comprise at
Pagsapi” (SPP) was not submitted at the time of least 20% of the bargaining unit. Only in Art
application for union registration o 119 members 234 (c) that requires the names of all its
were only 117 o total number of employees as of members comprising at least twenty percent
May 1, 2009 was 470, not 396. (20%) of all the employees in the bargaining
unit where it seeks to operate. Clearly, the 20%
DOLE Director Atty. Ricardo Martinez granted minimum requirement pertains to the
petition for cancellation. employees’ membership in the union and not to
the list of workers who participated in the
68 is less than 20% of 396 hence, short of union organizational meeting.
registration requirement. The attendance sheet
containing the names and signatures of 68 (b) and (c) provide for separate requirements.
members contradicted list of names in the PKU.
Total number of employees was 396: 20% of
SPP was not attached to the application for which is about 79. The 119 member who signed
registration; only submitted in the petition for the PKU sufficiently complied with the 20%
certification election *Bukluran ng requirement. The 68 members who attended the
Manggagawang Pilipino (BMP) Paralegal org meeting were enough to constitute a quorum
Officer Domingo Mole filed an appeal on behalf to validly ratify their Constitution and its by-
of SALAMAT to BLR. Later, the counsel of laws of the union.
SALAMAT filed own appeal w/ BLR.
For fraud and misrepresentation to be a ground
Takata opposed on ground of forum shopping. for cancellation under Art 239, nature must be
grave and compelling enough to vitiate consent
Bureau of Labor Relations: Reversed DOLE of a majority of union members
Director.
No proof as to the lack of information given to
Takata failed to prove the deliberate and those who signed PKU. No member came
malicious misrepresentation of number of r-a-f forward to deny their membership in
employees. SALAMAT. Signing the SPP showed their
The list of employees who participated in the strengthening of desire to joing union.
organizational meeting is a separate and The two repeated names cannot be considered
disctinct requirement from list of names misrepresentation absent any showing that
comprising at least 20% of employees in the SALAMAT did so deliberately to increase union
bargaining unit and there was no evidence that membership. Even if the employees were 470,
instead of 396, 117 (without two repeated Employment. PAFLU Secretary General Serafin
names) is still more than 20%. Ayroso wrote Mariles C. Romulo requesting a
copy of PSI's audited financial statement.
Philippine Skylanders Inc. vs. NLRC (2002) Ayroso explained that with the dismissal of
The mere act of disaffiliation did not divest PSEA-WATUs election protest the time was
PSEA of its own personality; neither did it give ripe for the parties to enter into a collective
bargaining agreement. PSI denied the request
PAFLU the license to act independently of the
local union. Recreant to its mission, PAFLU citing as reason PSEA's disaffiliation from
cannot simply ignore the demands of the local PAFLU and its subsequent affiliation with
chapter and decide for its welfare. PAFLU NCW.
might have forgotten that as an agent it could PAFLU filed a complaint for unfair labor
only act in representation of and in accordance practice against PSI. PAFLU alleged that aside
with the interests of the local union. from PSIs refusal to bargain collectively with its
FACTS: Philippine Skylanders Employees workers, the company through its president and
Association (PSEA), a local labor union personnel manager, was also liable for
affiliated with the Philippine Association of Free interfering with its employees' union activities.
Labor Unions (PAFLU) September (PAFLU), In another complaint, PAFLU claimed that
won in the certification election conducted Dakila was present in PSEA's organizational
among the rank and file employees of Philippine meeting thereby confirming his illicit
Skylanders, Inc. (PSI). Its rival union, Philippine participation in union activities. Ayroso added
Skylanders Employees Association-WATU that the members of the local union had
(PSEA-WATU) immediately protested the result unwittingly fallen into the manipulative
machinations of PSI and were lured into
of the election before the Secretary of Labor.
endorsing a collective bargaining agreement
PSEA sent PAFLU a notice of disaffiliation which was detrimental to their interests. These
citing as reason PAFLU's supposed deliberate two were consolidated. PSEA-NCW took the
and habitual dereliction of duty toward its cudgels for its officers who were being sued in
members. Attached to the notice was a copy of their capacities as former officers of
the resolution adopted and signed by the officers PSEAPAFLU and asserted that since PSEA was
and members of PSEA authorizing their local no longer affiliated with PAFLU, Ayroso or
union to disaffiliate from its mother federation. PAFLU for that matter had no personality to file
PSEA subsequently affiliated itself with the the instant complaint.
National Congress of Workers (NCW), changed
its name to Philippine Skylanders Employees LABOR ARBITER’S RULING: declared
Association - National Congress of Workers PSEA's disaffiliation from PAFLU invalid and
(PSEA-NCW), and to maintain continuity within held PSI, PSEA-PAFLU and their respective
the organization, allowed the former officers of officers guilty of unfair labor practice.
PSEA-PAFLU to continue occupying their According to the Labor Arbiter, this was a
positions as elected officers in the newly-forged classic case of interference for which PSI could
PSEA-NCW. be held responsible. Its collective bargaining
agreement with PSI was struck down for being
PSEA-NCW entered into a collective bargaining invalid.
agreement with PSI which was immediately
registered with the Department of Labor and NLRC: Upheld LA
NOTE: The issue of disaffiliation is an inter- federation, and free also to renounce the
union conflict the jurisdiction of which properly affiliation upon the terms laid down in the
lies with the Bureau of Labor Relations (BLR) agreement which brought such affiliation into
and not with the Labor Arbiter. Nonetheless, existence.
with due recognition of this fact, we deem it
proper to settle the controversy at this instance Neither was it disputed by PAFLU that 111
since to remand the case to the BLR would only signatories out of the 120 members of the local
mean intolerable delay for the parties. union, or an equivalent of 92.5% of the total
union membership supported the claim of
ISSUE: WON PSEA, which is an independent disaffiliation and had in fact disauthorized
and separate local union, can validly disaffiliate PAFLU from instituting any complaint in their
from PAFLU pending the settlement of an behalf. Surely, this is not a case where one (1) or
election protest questioning its status as the sole two (2) members of the local union decided to
and exclusive bargaining agent of PSI's rank and disaffiliate from the mother federation, but it is a
file employees? case where almost all local union members
decided to disaffiliate.
RULING: Yes.
It was entirely reasonable then for PSI to enter
The pendency of an election protest involving into a collective bargaining agreement with
both the mother federation and the local union PSEA-NCW. As PSEA had validly severed
did not constitute a bar to a valid disaffiliation. itself from PAFLU, there would be no
There is nothing shown in the records nor is it restrictions which could validly hinder it from
claimed by PAFLU that the local union was subsequently affiliating with NCW and entering
expressly forbidden to disaffiliate from the into a collective bargaining agreement in behalf
federation nor were there any conditions of its members.
imposed for a valid breakaway.
The mere act of disaffiliation did not divest
We upheld the right of local unions to separate PSEA of its own personality; neither did it give
from their mother federation on the ground that PAFLU the license to act independently of the
as separate and voluntary associations, local local union. Recreant to its mission, PAFLU
unions do not owe their creation and existence to cannot simply ignore the demands of the local
the national federation to which they are chapter and decide for its welfare. PAFLU might
affiliated but, instead, to the will of their have forgotten that as an agent it could only act
members. The sole essence of affiliation is to in representation of and in accordance with the
increase, by collective action, the common interests of the local union.
bargaining power of local unions for the
effective enhancement and protection of their Petitions of Philippine Skylanders, Inc. and of
interests. Admittedly, there are times when Philippine Skylanders and Workers Association-
without succor and support local unions may NCW, together with their respective officers,
find it hard, unaided by other support groups, to were GRANTED
secure justice for themselves.
ANGLO-KMU vs. SAMANA BAY (1996)
Yet the local unions remain the basic units of
association, free to serve their own interests Generally, a labor union may disaffiliate from
subject to the restraints imposed by the the mother union to form a local or independent
constitution and by-laws of the national union only during the 60-day freedom period
immediately preceding the expiration of the Relations on the ground that the corporations,
CBA. However, even before the onset of the despite having been furnished copies of the
freedom period, disaffiliation may be carried out union resolution relating to said disaffiliation,
when there is a shift of allegiance on the part of refused to honor the same. ANGLO
the majority of the members of the union. counteracted by unseating all officers and board
members of SAMANA BAY and appointing, in
A local labor union is a separate and distinct their stead, a new set of officers who were duly
unit primarily designed to secure and maintain recognized by the corporations.
an equality of bargaining power between the
employer and their employee-members. A local In its position paper, ANGLO contended that the
union does not owe its existence to the disaffiliation was void considering that a
federation with which it is affiliated. It is a collective bargaining agreement is still existing
separate and distinct voluntary association and the freedom period has not yet set in. The
owing its creation to the will of its members. The Med-Arbiter resolved that the disaffiliation was
mere act of affiliation does not divest the local void but upheld the illegality of the ouster
union of its own personality, neither does it give officers of SAMANA BAY. Both parties filed
the mother federation the license to act their respective appeals with the Department of
independently of the local union. It only gives Labor and Employment. In a resolution dated
rise to a contract of agency where the former September 23, 1994, herein public respondent
acts in representation of the latter. modified the order and ruled in favor of
respondent union.
FACTS: Petitioner Alliance of Nationalist and
Genuine Labor Organization (ANGLO for ANGLO filed a motion for reconsideration but
brevity) is a duly registered labor organization the same was denied for lack of merit. Hence,
while respondent union Samahan Ng Mga this petition for certiorari under Rule 65.
Mangagawang Nagkakaisa sa Manila Bay
Spinning Mills and J.P. Coats (SAMANA BAY ISSUE:
for brevity) is its affiliate. In representation of 1) WON disaffiliation was valid; and
SAMANA BAY, ANGLO entered and
concluded a Collective Bargaining Agreement 2) WON petitioner can validly oust individual
(CBA) with Manila Bay Spinning Mills and J.P. private respondents from their positions?
Coats Manila Bay, Inc. (hereinafter referred to
as the corporations) on November 1, 1991. On RULING:
December 4, 1993, the Executive Committee of
1) Yes, disaffiliation was valid.
SAMANA BAY decided to disaffiliate from
ANGLO in view of the latter's dereliction of its Petitioner ANGLO wants to impress on us that
duty to promote and advance the welfare of the disaffiliation was invalid for two reasons,
SAMANA BAY and the alleged cases of namely: that the procedural requirements for a
corruption involving the federation officers. Said valid disaffiliation were not followed; and that it
disaffiliation was unanimously confirmed by the was made in violation of P.D. 1391.
members of SAMANA BAY.
Anent the first ground, we reiterate the rule that
On April 4, 1994, a petition to stop remittance of all employees enjoy the right to self-
federation dues to ANGLO was filed by organization and to form and join labor
SAMANA BAY with the Bureau of Labor organizations of their own choosing for the
purpose of collective bargaining. This is a the 60-day freedom period immediately
fundamental right of labor and derives its preceding the expiration of a collective
existence from the Constitution. In interpreting bargaining agreement,"
the protection to labor and social justice
provisions of the Constitution and the labor Said law is definitely not without exceptions.
laws, rules or regulations, we have always Settled is the rule that a local union has the right
adopted the liberal approach which favors the to disaffiliate from its mother union when
exercise of labor rights. circumstances warrant. Generally, a labor union
may disaffiliate from the mother union to form a
This Court is not ready to bend this principle to local or independent union only during the 60-
yield to a mere procedural defect, to wit: failure day freedom period immediately preceding the
to observe certain procedural requirements for a expiration of the CBA. However, even before
valid disaffiliation. Non-compliance with the the onset of the freedom period, disaffiliation
procedure on disaffiliation, being premised on may be carried out when there is a shift of
purely technical grounds cannot rise above the allegiance on the part of the majority of the
fundamental right of self- organization. members of the union.

We quote, with approval, the findings of herein 2) No.

public respondent, that:
ANGLO contends that individual private
"x x x the resolution of the general membership respondents were validly ousted as they have
ratifying the disaffiliation action initiated by the ceased to be officers of the incumbent union
Board, substantially satisfies the procedural (ANGLO-KMU) at the time of disaffiliation. In
requirements for disaffiliation. No doubt was order to fill the vacuum, it was deemed proper to
raised on the support of the majority of the appoint the individual replacements so as not to
union members on the decision to disaffiliate." put in disarray the organizational structure and
to prevent chaos and confusion among the
This, to our mind, is clearly supported by the general membership and within the company.
evidence. ANGLO's alleged acts inimical to the
interests of respondent union have not been The contention is bereft of merit. A local labor
sufficiently rebutted. It is clear under the facts union is a separate and distinct unit primarily
that respondent union's members have designed to secure and maintain an equality of
unanimously decided to disaffiliate from the bargaining power between the employer and
mother federation and ANGLO has nothing to their employee-members. A local union does not
offer in dispute other than the law prohibiting owe its existence to the federation with which it
the disaffiliation outside the freedom period. is affiliated. It is a separate and distinct
voluntary association owing its creation to the
In the same wise, we find no ground for ruling will of its members. The mere act of affiliation
against the validity of the disaffiliation in the does not divest the local union of its own
light of recent jurisprudential rules. personality, neither does it give the mother
Although P.D. 1391 provides: federation the license to act independently of the
local union. It only gives rise to a contract of
"Item No. 6. No petition for certification agency where the former acts in representation
election, for intervention and disaffiliation shall of the latter.
be entertained or given due course except within
By SAMANA BAY's disaffiliation from minimum of P10.00 to a maximum of P15.00
ANGLO, the vinculum that previously bound per day.
the two entities was completely severed.
ANGLO was divested of any and all power to Cirtek assailed the order of the Secretary on the
act in representation of SAMANA BAY. Thus, ground that it violates the MOA. CELU on the
any act performed by ANGLO affecting the other hand agreed with the Secretary invoking
interests and affairs of SAMANA BAY, that Cirtek agreed that should the Secretary
including the ouster of herein individual private order for a higher wage increase, the same
respondents, is rendered without force and should be followed and not the MOA. This
effect. agreement was however not included in the
MOA but was embodied in the minutes of the
WHEREFORE, premises considered, the meeting when the MOA was done.
petition is hereby DISMISSED.
ISSUE: WON the Secretary of Labor may issue
Cirtek Employees Labor Union vs. Cirtek an order superseding the said MOA.
Electronics Inc. (2010)
RULING: Yes. The order was issued in
A local labor union is a separate and distinct resolution of the CBA dispute over which the
unit primarily designed to secure and maintain Secretary assumed jurisdiction. The order is an
an equality of bargaining power between the arbitral award which can be considered an
employer and their employee-members. A local approximation of a collective bargaining
union does not owe its existence to the agreement which would otherwise have been
federation with which it is affiliated. It is a entered into by the parties; hence, it has the
separate and distinct voluntary association force and effect of a valid contract obligation.
owing its creation to the will of its members. The
mere act of affiliation does not divest the local The Supreme Court, however, clarified that the
union of its own personality, neither does it give Secretary’s order should be complied not merely
the mother federation the license to act because it is higher than what the MOA
independently of the local union. It only gives provides. The order was based on evidentiary
rise to a contract of agency where the former documents presented by both parties particularly
acts in representation of the latter. on the financial outlook of Cirtek.

FACTS: In 2005, a CBA dispute arose between But was it proper for the Secretary to decide the
Cirtek Electronics and Cirtek Employees Labor case despite the submission of the MOA?
Union (CELU). The dispute revolved around the Yes, in the first place, CELU manifested that the
provisions on the yearly wage increase. A MOA was entered into subject to a more
deadlock ensued as well as a strike. The favorable decision by the Secretary. Further, it
Secretary of Labor took over the case. bears noting that since the filing and submission
While the case was pending, Cirtek and CELU of the MOA did not have the effect of divesting
entered into a Memorandum of Agreement the Secretary of his jurisdiction, or of
(MOA) whereby Cirtek agreed to increase the automatically disposing the controversy, then
wage by P9.00 per day. Later, Secretary of neither should the provisions of the MOA
Labor finally came up with a decision ordering restrict the Secretary’s leeway in deciding the
Cirtek to increase the employees’ wages by a matters before him.
The agreement that the MOA provision may be either or both the FFW and the Union or a rival
superseded by a more favorable order by the labor organization, not the employer.
Secretary was not contained in the MOA itself,
does this bind Cirtek? Indeed, as respondent-movant itself argues, a
local union may disaffiliate at any time from its
Yes. In labor cases pending before the mother federation, absent any showing that the
Commission or the Labor Arbiter [in this case, same is prohibited under its constitution or rule.
the Secretary of Labor], the rules of evidence Such, however, does not result in it losing its
prevailing in courts of law or equity are not legal personality altogether. Verily, Anglo-
controlling. Rules of procedure and evidence are KMU v. Samahan Ng Mga Manggagawang
not applied in a very rigid and technical sense in Nagkakaisa Sa Manila Bay Spinning Mills At
labor cases. Hence, the Labor Arbiter is not J.P. Coats enlightens:
precluded from accepting and evaluating
evidence other than, and even contrary to, what A local labor union is a separate and distinct
is stated in the CBA. Therefore, the agreement unit primarily designed to secure and maintain
binds Cirtek and can be proven by mere an equality of bargaining power between the
presentation of the minutes. In short, the parol employer and their employee-members. A local
evidence rule is not applicable to labor cases. union does not owe its existence to the
federation with which it is affiliated. It is a
2011 MR separate and distinct voluntary association
owing its creation to the will of its members. The
FACTS: This resolves the motion for mere act of affiliation does not divest the local
reconsideration and supplemental motion for union of its own personality, neither does it give
reconsideration filed by respondent, Cirtek the mother federation the license to act
Electronics, Inc., of the Court’s Decision dated independently of the local union. It only gives
November 15, 2010. rise to a contract of agency where the former
Respondent-movant maintains that the Secretary acts in representation of the latter. (emphasis
of Labor cannot insist on a ruling beyond the and underscoring supplied)
compromise agreement entered into by the MR is denied.
parties; and that, as early as February 5, 2010,
petitioner Union had already filed with the LEGEND International vs. KML (2011)
Department of Labor and Employment (DOLE)
a resolution of disaffiliation from the Federation The legal personality of a legitimate labor
of Free Workers resulting in the latter’s lack of organization cannot be subject to a collateral
personality to represent the workers in the attack. The law is very clear on this matter. The
present case. Implementing Rules stipulate that a labor
organization shall be deemed registered and
ISSUE: WON petitioner lost its personality to vested with legal personality on the date of
represent the workers because of its issuance of its certificate of registration. Once a
disaffiliation from the Federation of Free certificate of registration is issued to a union, its
Workers? legal personality cannot be subject to a
collateral attack. It may be questioned only in an
RULING: The issue of disaffiliation is an intra- independent petition for cancellation in
union dispute which must be resolved in a accordance with Section 5 of Rule V, Book V of
different forum in an action at the instance of the Implementing Rules.
FACTS: KML filed with Med Arbitration Unit In Laguna Autoparts Manufacturing
of DOLE a Petition for Certification Election. Corporation v. Office of the Secretary,
KML alleged that it is a legitimate labor Department of Labor and Employment, the
organization. Legend moved to dismiss the Court ruled that such legal personality may not
petition alleging that KML is not a legitimate be subject to a collateral attack but only through
labor organization because its membership is a a separate action instituted particularly for the
mixture of rank-and-file and supervisory purpose of assailing it.
employees in violation of Art. 245 of the Labor
Code. The legal personality of a legitimate labor
organization cannot be subject to a collateral
Med-Arbiter ruled in favor of Petitioner, KML attack. The law is very clear on this matter.
appealed to Sec. of DOLE, Sec. ruled that that
KMLs legitimacy as a union could not be The Implementing Rules stipulate that a labor
collaterally attacked, citing Section 5, Rule V of organization shall be deemed registered and
Department Order No. 9, series of 1997. vested with legal personality on the date of
issuance of its certificate of registration. Once a
In a Resolution dated August 20, 2002, the certificate of registration is issued to a union, its
Office of the Secretary of DOLE denied legal personality cannot be subject to a collateral
LEGENDs motion for reconsideration. It opined attack. In may be questioned only in an
that Section 11, paragraph II (a), Rule XI of independent petition for cancellation in
Department Order No. 9 requires a final order of accordance with Section 5 of Rule V, Book V of
cancellation before a petition for certification the Implementing Rules.
election may be dismissed on the ground of lack
of legal personality. United PEPSI-COLA vs. Laguesma

ISSUE:WON the legal personality of KML can A distinction exists between those who have the
be collaterally attacked? authority to devise, implement and control
strategic and operational policies (top and
RULING: No, it cannot be collaterally attacked middle managers) and those whose task is
simply to ensure that such policies are carried
Based on the foregoing jurisprudence, it is clear out by the rank-and-file employees of an
that a certification election may be conducted organization (first-level managers/supervisors).
during the pendency of the cancellation What distinguishes them from the rank-and-file
proceedings. This is because at the time the employees is that they act in the interest of the
petition for certification was filed, the employer in supervising such rank-and-file
petitioning union is presumed to possess the employees.
legal personality to file the same. There is
therefore no basis for LEGENDs assertion that “Managerial employees” may therefore be said
the cancellation of KMLs certificate of to fall into two distinct categories: the
registration should retroact to the time of its “managers” per se, who compose the former
issuance or that it effectively nullified all of group described above, and the “supervisors”
KMLs activities, including its filing of the who form the latter group.
petition for certification election and its demand
to collectively bargain. FACTS: Petitioner is a union of supervisory
employees. It appears that on March 20, 1995
the union filed a petition for certification
election on behalf of the route managers at RULING:
Pepsi-Cola Products Philippines, Inc. However,
its petition was denied by the med-arbiter and, (1) Yes, the route managers at Pepsi-Cola are
on appeal, by the Secretary of Labor and managerial employees.
Employment, on the ground that the route As a class, managers constitute three levels of a
managers are managerial employees and, pyramid: (1) Top management; (2) Middle
therefore, ineligible for union membership under
Management; and (3) First-line Management
the first sentence of Art. 245 of the Labor Code, [also called supervisors].
which provides:
FIRST-LINE MANAGERS — The lowest
Ineligibility of managerial employees to join any level in an organization at which individuals are
labor organization; right of supervisory responsible for the work of others is called first-
employees. — Managerial employees are not line or first-level management. First-line
eligible to join, assist or form any labor managers direct operating employees only; they
organization. Supervisory employees shall not do not supervise other managers. Examples of
be eligible for membership in a labor first-line managers are the “foreman” or
organization of the rank-and-file employees but production supervisor in a manufacturing plant,
may join, assist or form separate labor the technical supervisor in a research
organizations of their own. department, and the clerical supervisor in a large
Petitioner brought this suit challenging the office. First-level managers are often called
validity of the order, dismissed. supervisors.

Hence, this petition. Pressing for resolution its MIDDLE MANAGERS — The term middle
contention that the first sentence of Art. 245 of management can refer to more than one level in
the Labor Code, so far as it declares managerial an organization. Middle managers direct the
employees to be ineligible to form, assist or join activities of other managers and sometimes also
unions, contravenes Art. III, Sec. 8 of the those of operating employees. Middle managers’
Constitution which provides: principal responsibilities are to direct the
activities that implement their organizations’
The right of the people, including those policies and to balance the demands of their
employed in the public and private sectors, to superiors with the capacities of their
form unions, associations, or societies for subordinates. A plant manager in an electronics
purposes not contrary to law shall not be firm is an example of a middle manager.
abridged.
TOP MANAGERS — Composed of a
ISSUES: comparatively small group of executives, top
management is responsible for the overall
(1) WON the route managers at Pepsi-Cola management of the organization. It establishes
Products Philippines, Inc. are managerial operating policies and guides the organization’s
employees and; interactions with its environment. Typical titles
(2) WON Art. 245, insofar as it prohibits of top managers are “chief executive officer,”
managerial employees from forming, joining or “president,” and “senior vice-president.” Actual
assisting labor unions, violates Art. III, Sec. 8 of titles vary from one organization to another and
the Constitution. are not always a reliable guide to membership in
the highest management classification.
A distinction exists between those who have the Thus, we have in this case an expert’s view that
authority to devise, implement and control the employees concerned are managerial
strategic and operational policies (top and employees within the purview of Art. 212.
middle managers) and those whose task is
simply to ensure that such policies are carried At the very least, the principle of finality of
out by the rank-and-file employees of an administrative determination compels respect for
organization (first-level managers/supervisors). the finding of the Secretary of Labor that route
What distinguishes them from the rank-and-file managers are managerial employees as defined
employees is that they act in the interest of the by law in the absence of anything to show that
employer in supervising such rank-and-file such determination is without substantial
employees. evidence to support it.

“Managerial employees” may therefore be said The Court now finds that the job evaluation
to fall into two distinct categories: the made by the Secretary of Labor is indeed
“managers” per se, who compose the former supported by substantial evidence. The nature of
group described above, and the “supervisors” the job of route managers is given in a four-page
who form the latter group. pamphlet, prepared by the company, called
“Route Manager Position Description,” the
It appears that this question was the subject of pertinent parts of which read:
two previous determinations by the Secretary of
Labor and Employment, in accordance with A. BASIC PURPOSE
which this case was decided by the med-arbiter. A Manager achieves objectives through others.
To qualify as managerial employee, there must
As a Route Manager, your purpose is to meet the
be a clear showing of the exercise of managerial sales plan; and you achieve this objective
attributes under paragraph (m), Article 212 of through the skillful MANAGEMENT OF YOUR
the Labor Code as amended. Designations or JOB AND THE MANAGEMENT OF YOUR
titles of positions are not controlling. As to the PEOPLE.
route managers and accounting manager, we are
convinced that they are managerial employees. These then are your functions as Pepsi-Cola
Their job descriptions clearly reveal so Route Manager. Within these functions —
(Worker’s Alliance Trade Union (WATU) v. managing your job and managing your people
Pepsi-Cola Products Philippines, Inc., Nov. 13, — you are accountable to your District Manager
1991). for the execution and completion of various
tasks and activities which will make it possible
This finding was reiterated in Case No. OS-A-3- for you to achieve your sales objectives.
71-92, Titled In Re: Petition for Direct
Certification and/or Certification Election-Route xxxx
Managers/Supervisory Employees of Pepsi-Cola
Products Phils.Inc. Distinction is evident in the work of the route
managers which sets them apart from
*doctrine of res judicata certainly applies to supervisors in general. Unlike supervisors who
adversary administrative proceedings basically merely direct operating employees in
line with set tasks assigned to them, route
managers are responsible for the success of the
company’s main line of business through
management of their respective sales teams. of the above definitions are considered rank-
Such management necessarily involves the and-file employees for purposes of this Book.
planning, direction, operation and evaluation of
their individual teams and areas which the work The distinction between top and middle
of supervisors does not entail. managers, who set management policy, and
front-line supervisors, who are merely
The route managers cannot thus possibly be responsible for ensuring that such policies are
classified as mere supervisors because their carried out by the rank and file, is articulated in
work does not only involve, but goes far beyond, the present definition. When read in relation to
the simple direction or supervision of operating this definition in Art. 212(m), it will be seen that
employees to accomplish objectives set by those Art. 245 faithfully carries out the intent of the
above them. Constitutional Commission in framing Art. III,
Sec. 8 of the fundamental law.
While route managers do not appear to have the
power to hire and fire people (the evidence *Framer’s Intent: MR. LERUM. My amendment
shows that they only “recommended” or is on Section 7, page 2, line 19, which is to
“endorsed” the taking of disciplinary action insert between the words “people” and “to” the
against certain employees), this is because this is following: WHETHER EMPLOYED BY THE
a function of the Human Resources or Personnel STATE OR PRIVATE ESTABLISHMENTS. In
Department of the company. other words, the section will now read as
follows: “The right of the people WHETHER
(2) No, the law is constitutional. EMPLOYED BY THE STATE OR PRIVATE
Art.245 is the result of the amendment of the ESTABLISHMENTS to form associations,
unions, or societies for purposes not contrary to
Labor Code in 1989 by R.A. No. 6715,
otherwise known as the Herrera-Veloso Law. law shall not be abridged.”
Unlike the Industrial Peace Act or the provisions Nor is the guarantee of organizational right in
of the Labor Code which it superseded, R.A. No. Art. III, Sec. 8 infringed by a ban against
6715 provides separate definitions of the terms managerial employees forming a union. The
“managerial” and “supervisory employees,” as right guaranteed in Art. III, Sec. 8 is subject to
follows: the condition that its exercise should be for
Art. 212. Definitions. purposes “not contrary to law.” In the case of
Art. 245, there is a rational basis for prohibiting
(m) “managerial employee” is one who is vested managerial employees from forming or joining
with powers or prerogatives to lay down and labor organizations.
execute management policies and/or to hire
transfer, suspend, lay off, recall, discharge, PETITION is DISMISSED.
assign or discipline employees. Supervisory Pinagkakaisa na mga Manggagawa sa
employees are those who, in the interest of the Triumph International-United Lumber and
employer, effectively recommend such General Workers of the Philippines vs.
managerial actions if the exercise of such Calleja (1990)
authority is not merely routinary or clerical in
nature but requires the use of independent The ends of unionism are better served if all the
judgment. All employees not falling within any rank-and-file employees with substantially the
same interests and who invoke their right to self-
organization are part of a single unit so that On September 5, 1988, Triumph International
they can deal with their employer with just one filed a motion for reconsideration which was
and yet potent voice. The employees’ bargaining denied by the public respondent in a resolution
power with management is strengthened dated October 28, 1988.
thereby. Hence, the circumstances of this case
impel us to disallow the holding of a ISSUE: WON the public respondent gravely
certification election among the workers sought abused its discretion in ordering the immediate
to be represented by the respondent union for holding of a certification election among the
want of proof that the right of said workers to workers sought to be represented by the
self-organization is being suppressed. respondent union?

FACTS: The petitioner is the recognized RULING: Yes.

collective bargaining agent of the rank-and-file There is no evidence in the records which
employees of Triumph International with which sufficiently distinguishes and clearly separates
the latter has a valid and existing collective the group of employees sought to be represented
bargaining agreement effective up to September by the private respondents into managerial and
24, 1989. supervisory on one hand or supervisory and
On November 25, 1987, a petition for rank-and-file on the other. The respondents’
certification election was filed by the respondent pleadings do not show the distinctions in
union with the Department of Labor and functions and responsibilities which differentiate
Employment. the managers from the supervisors and sets apart
the rank-and-file from either the managerial or
On January 30, 1988, a motion to dismiss the supervisory groups. As a matter of fact, the
petition for certification election was filed by formation of a supervisor’s union was never
Triumph International on the grounds that the before the Labor Arbiter and the Bureau of
respondent union cannot lawfully represent Labor Relations and neither is the issue before
managerial employees and that the petition us. We, therefore, abide by the public
cannot prosper by virtue of the contract-bar rule. respondent’s factual findings in the absence of a
showing of grave abuse of discretion.
On the same grounds, the petitioner, as
intervenor, filed its opposition to the petition on In the case at bar, there is no dispute that the
February 18, 1988. petitioner is the exclusive bargaining
representative of the rank-and-file employees of
On April 13, 1988, the Labor Arbiter issued an Triumph International. A careful examination of
order granting the petition for certification the records of this case reveals no evidence that
election and directing the holding of a rules out the commonality of interests among the
certification election to determine the sole and rank-and-file members of the petitioner and the
exclusive bargaining representative of all herein declared rank-and-file employees who are
monthly-paid administrative, technical, members of the respondent union. Instead of
confidential and supervisory employees of forming another bargaining unit, the law
Triumph International. requires them to be members of the existing one.
On appeal, the public respondent on August 24, The ends of unionism are better served if all the
1988 affirmed the Labor Arbiter’s order. rank-and-file employees with substantially the
same interests and who invoke their right to self-
organization are part of a single unit so that they federation, actively participates in the CSBTI-
can deal with their employer with just one and SU while ALU, the rank-and-file federation,
yet potent voice. The employees’ bargaining actively participates in the CSBTI-RFU, giving
power with management is strengthened occasion to possible conflicts of interest among
thereby. Hence, the circumstances of this case the common officers of the federation of rank-
impel us to disallow the holding of a and-file and the federation of supervisory
certification election among the workers sought unions. For as long as they are affiliated with
to be represented by the respondent union for the APSOTEU and ALU, the supervisory and
want of proof that the right of said workers to rank-and-file unions both do not meet the
self-organization is being suppressed. criteria to attain the status of legitimate labor
organizations, and thus could not separately
Once again we enunciate that the proliferation of petition for certification elections.
unions in an employer unit is discouraged as a
matter of policy unless compelling reasons exist FACTS: Private respondents Coastal Subic Bay
which deny a certain and distinct class of Terminal, Inc. Rank-and-File Union (CSBTI-
employees the right to self-organization for RFU) and Coastal Subic Bay Terminal, Inc.
purposes of collective bargaining. Supervisory Union (CSBTI-SU) filed separate
petitions for certification election before Med-
Anent the correlative issue of whether or not the Arbiter Eladio de Jesus of the Regional Office
contract-bar rule applies to the present case, No. III. The rank-and-file union insists that it is
Rule V, Section 3, Book V of the Implementing a legitimate labor organization having been
Rules and Regulations of the Labor Code is issued a charter certificate by the Associated
written in plain and simple terms. It provides in Labor Union (ALU), and the supervisory union
effect that if a collective bargaining agreement by the Associated Professional, Supervisory,
validly exists, a petition for certification election Office and Technical Employees Union
can only be entertained within sixty (60) days (APSOTEU).
prior to the expiry date of said agreement.
Respondent union's petition for certification The petitioner-company claims that the two
election was filed on November 25, 1987. At the unions are not legitimate organizations. The
time of the filing of the said petition, a valid and opposition was acted on favorably by the Med
existing CBA was present between petitioner Arbiter, who did not rule on the legitimacy but
and Triumph International. The CBA was dismissed the petitions of the respondents on the
effective up to September 24, 1989. There is no ground that the APSOTEU and ALU are one
doubt that the respondent union's CBA and the same and thus the two unions were
constituted a bar to the holding of the affiliated with one and the same federation. ·
certification election as petitioned by the
respondent union with public respondent. The SOLE reversed the rulings of the med
arbiter. He declared that they are separate and
Coastal Subic Bay Terminal vs. DOLE (2006) distinct labor unions having secured separate
certifications of registration from the DOLE. A
In the instant case, the national federations that certification election was ordered. This was
exist as separate entities to which the rank-and- affirmed by the CA.
file and supervisory unions are separately
affiliated with do have a common set of officers. ISSUES:
In addition, APSOTEU, the supervisory
1) What is the Status of APOSTEU?
2) WON the Secretary’s decision based on stare Even after the amendments, the rules did not
decisis is correct? divest the Regional Office and the BLR of their
jurisdiction over applications for registration by
3) WON supervisory and rank-and-file unions labor organizations. The amendments to the
can file separate petitions for certificate election implementing rules merely specified that when
and WON private respondents are guilty of the application was filed with the Regional
commingling? Office, the application would be acted upon by
the BLR.
RULING:

1) Legitimate labor organization. The records in this case showed that APSOTEU
was registered on March 1, 1991. Accordingly,
Petitioner argues that APSOTEU improperly the law applicable at that time was Section 2,
secured its registration from the DOLE Regional Rule II, Book V of the Implementing Rules4,
Director and not from the BLR; that it is the and not Department Order No. 95 which took
BLR that is authorized to process applications effect only on June 21, 1997. Thus, considering
and issue certificates of registration in further that APSOTEU’s principal office is
accordance with our ruling in Phil. Association located in Diliman, Quezon City, and its
of Free Labor Unions v. Secretary of Labor; registration was filed with the NCR Regional
that the certificates of registration issued by the Office, the certificate of registration is valid.
DOLE Regional Director pursuant to the rules
are questionable, and possibly even void ab The petitioner misapplied Villar v. Inciong. In
initio for being ultra vires; and that the Court of said case, there was no record in the BLR that
Appeals erred when it ruled that the law Amigo Employees Union was registered.
applicable at the time of APSOTEU’s 2) Yes, it is correct.
registration was the 1989 Revised Implementing
Rules and Regulations of Rep. Act No. 6715.
4 Rule II Book V, Section 2. Where to file application;
Petitioner insists that APSOTEU lacks legal procedure – Any national labor organization or labor
personality, and its chartered affiliate CSBTI-SU federation or local union may file an application for
registration with the Bureau or the Regional Office where
cannot attain the status of a legitimate labor the applicant’s principal offices is located. The Bureau or
organization to file a petition for certification the Regional Office shall immediately process and approve
election. It relies on Villar v. Inciong, where we or deny the application. In case of approval, the Bureau or
the Regional Office shall issue the registration certificate
held therein that Amigo Employees Union was within thirty (30) calendar days from receipt of the
not a duly registered independent union absent application, together with all the requirements for
registration as hereinafter provided.
any record of its registration with the Bureau.
5
Section 1, Rule III of Book V, as amended by Department
The DOLE issued Department Order No. 40-03, Order No. 9, thus:
which took effect on March 15, 2003, further
SECTION 1. Where to file applications. – The application
amending Book V of the above implementing for registration of any federation, national or industry union
rules. The new implementing rules explicitly or trade union center shall be filed with the Bureau. Where
the application is filed with the Regional Office, the same
provide that applications for registration of labor shall be immediately forwarded to the Bureau within forty-
organizations shall be filed either with the eight (48) hours from filing thereof, together with all the
Regional Office or with the BLR. documents supporting the registration.

The applications for registration of an independent union

shall be filed with and acted upon by the Regional Office
where the applicant’s principal office is located…
Section 5, Rule V, Book V of the Implementing Laguesma, we reiterated the rule that for the
Rules states: prohibition to apply, it is not enough that the
supervisory union and the rank-and-file union
Section 5. Effect of registration – The labor are affiliated with a single federation. In
organization or workers’ association shall be addition, the supervisors must have direct
deemed registered and vested with legal authority over the rank-and-file employees.
personality on the date of issuance of its
certificate of registration. Such legal personality In the instant case, the national federations that
cannot thereafter be subject to collateral attack, exist as separate entities to which the rank-and-
but maybe questioned only in an independent file and supervisory unions are separately
petition for cancellation in accordance with affiliated with do have a common set of officers.
these Rules. In addition, APSOTEU, the supervisory
federation, actively participates in the CSBTI-
Thus, APSOTEU is a legitimate labor SU while ALU, the rank-and-file federation,
organization and has authority to issue charter to actively participates in the CSBTI-RFU, giving
its affiliates. It may issue a local charter occasion to possible conflicts of interest among
certificate to CSBTI-SU and correspondingly, the common officers of the federation of rank-
CSBTI-SU is legitimate. and-file and the federation of supervisory
3) No. They cannot file separate petitions. Yes, unions. For as long as they are affiliated with the
they are guilty of commingling. APSOTEU and ALU, the supervisory and rank-
and-file unions both do not meet the criteria to
A word of caution though, under Article 245 of attain the status of legitimate labor
the Labor Code, supervisory employees are not organizations, and thus could not separately
eligible for membership in a labor union of rank- petition for certification elections.
and-file employees. The supervisory employees
are allowed to form their own union but they are The purpose of affiliation of the local unions
not allowed to join the rank-and-file union into a common enterprise is to increase the
because of potential conflicts of interest. collective bargaining power in respect of the
terms and conditions of labor. When there is
Further, to avoid a situation where supervisors
would merge with the rank-and-file or where the commingling of officers of a rank-and-file union
supervisors’ labor union would represent with a supervisory union, the constitutional
conflicting interests, a local supervisors’ union policy on labor is circumvented. Labor
should not be allowed to affiliate with the organizations should ensure the freedom of
employees to organize themselves for the
national federation of unions of rank-and-file
employees where that federation actively purpose of leveling the bargaining process but
participates in the union activity within the also to ensure the freedom of workingmen and
company. Thus, the limitation is not confined to to keep open the corridor of opportunity to
a case of supervisors wanting to join a rank-and- enable them to do it for themselves.
file union. The prohibition extends to a UP vs. FERRER-CALLEJA (1992)
supervisors’ local union applying for
membership in a national federation the On the contrary, the dichotomy of interests, the
members of which include local unions of rank- dissimilarity in the nature of the work and duties
and-file employees. In De La Salle University as well as in the compensation and working
Medical Center and College of Medicine v. conditions of the academic and non-academic
personnel dictate the separation of these two part of the organizational unit. For its part, the
categories of employees for purposes of University, through its General Counsel, made
collective bargaining. The formation of two of record its view that there should be two (2)
separate bargaining units, the first consisting of unions: one for academic, the other for non-
the rank-and-file non-academic personnel, and academic or administrative, personnel
the second, of the rank-and-file academic considering the dichotomy of interests,
employees, is the set-up that will best assure to conditions and rules governing these employee
all the employees the exercise of their collective groups.
bargaining rights. These special circumstances,
i.e., the dichotomy of interests and concerns as Director Calleja ruled on the matter on August 7,
well as the dissimilarity in the nature and 1990. She declared that "the appropriate
conditions of work, wages and compensation organizational unit should embrace all the
between the academic and non-academic regular rank-and-file employees, teaching and
personnel, bring the case at bar within the non-teaching, of the University of the
exception contemplated in Section 9 of Executive Philippines, including all its branches" and that
Order No. 180. there was no sufficient evidence "to justify the
grouping of the non-academic or administrative
FACTS: The case was initiated in the Bureau of personnel into an organization unit apart and
Labor Relations by a petition filed on March 2, distinct from that of the academic or teaching
1990 by a registered labor union, the personnel." Director Calleja adverted to Section
"Organization of Non-Academic Personnel of 9 of Executive Order No. 180.
UP" (ONAPUP). Claiming to have a
membership of 3,236 members — comprising The Director thus commanded that a
more than 33% of the 9,617 persons constituting certification election be "conducted among rank-
the non-academic personnel of UP-Diliman, Los and-file employees, teaching and non-teaching"
Baños, Manila, and Visayas, it sought the in all four autonomous campuses of the UP, and
holding of a certification election among all said that management appear and bring copies of the
non-academic employees of the University of corresponding payrolls for January, June, and
the Philippines. At a conference thereafter held July, 1990 at the "usual pre-election conference”
on March 22, 1990 in the Bureau, the University At the pre-election conference held on March
stated that it had no objection to the election. 22, 1990 at the Labor Organizational Division of
On April 18, 1990, another registered labor the DOLE, 8 the University sought further
union, the "All UP Workers' Union," filed a clarification of the coverage of the term, "rank-
comment, as intervenor in the certification and-file" personnel, asserting that not every
election proceeding. Alleging that its employee could properly be embraced within
membership covers both academic and non- both teaching and non-teaching categories since
academic personnel, and that it aims to unite all there are those whose positions are in truth
UP rank-and-file employees in one union, it managerial and policy-determining, and hence,
declared its assent to the holding of the election excluded by law.
provided the appropriate organizational unit was At a subsequent hearing (on October 4, 1990),
first clearly defined. It observed in this the University filed a Manifestation seeking the
connection that the Research, Extension and exclusion from the organizational unit of those
Professional Staff (REPS), who are academic employees holding supervisory positions among
non-teaching personnel, should not be deemed
non-academic personnel, and those in teaching October 18, 1990. Director Calleja subsequently
staff with the rank of Assistant Professor or promulgated an Order dated October 30, 1990,
higher, submitting the following as grounds resolving the "sole issue" of "whether or not
therefor: 1) Certain "high-level employees" with professors, associate professors and assistant
policy-making, managerial, or confidential professors are included in the definition of high-
functions, are ineligible to join rank-and-file level employee(s)" in light of Rule I, Section (1)
employee organizations under Section 3, EO of the Implementing Guidelines of Executive
180: Sec. 3. High-level employees whose Order No. 1806, defining "high level employee".
functions are normally considered as policy-
making or managerial or whose duties are of a The Director adjudged that said teachers are
highly confidential nature shall not be eligible to rank-and-file employees "qualified to join
join the organization of rank-and file unions and vote in certification elections
government employees; 2) In the University According to her —
hierarchy, not all teaching and non-teaching A careful perusal of the University Code shows
personnel belong the rank-and file: just as there
that the policy-making powers of the Council are
are those occupying managerial positions within limited to academic matters, namely, prescribing
the non-teaching roster, there is also a courses of study and rules of discipline, fixing
dichotomy between various levels of the student admission and graduation requirements,
teaching or academic staff; 3) Among the non- recommending to the Board of Regents the
teaching employees composed of Administrative conferment of degrees, and disciplinary power
Staff and Research personnel, only those holding
over students. The policy-determining functions
positions below Grade 18 should be regarded as contemplated in the definition of a high-level
rank-and-file, considering that those holding employee pertain to managerial, executive, or
higher grade positions, like Chiefs of Sections, organization policies, such as hiring, firing, and
perform supervisory functions including that of disciplining of employees, salaries,
effectively recommending termination of teaching/working hours, other monetary and
appointments or initiating appointments and non-monetary benefits, and other terms and
promotions; and 4) Not all teaching personnel conditions of employment. They are the usual
may be deemed included in the term, "rank-and- issues in collective bargaining negotiations so
file;" only those holding appointments at the that whoever wields these powers would be
instructor level may be so considered, because placed in a situation of conflicting interests if he
those holding appointments from Assistant were allowed to join the union of rank-and-file
Professor to Associate Professor to full employees.
Professor take part, as members of the
University Council, a policy-making body, in
the initiation of policies and rules with respect to
faculty tenure and promotion.
6 Rule 1, Sec. 1 of EO No. 180 - 1. High Level Employee
— is one whose functions are normally considered policy
The ONAPUP quite categorically made of determining, managerial or one whose duties are highly
record its position; that it was not opposing the confidential in nature.
University's proferred classification of rank-and A managerial function refers to the exercise of powers such
as:
file employees. On the other hand, the "All UP 1. To effectively recommend such managerial actions;
Workers' Union" opposed the University's view, 2. To formulate or execute management policies and
decisions; or
in a Position Paper presented by it under date of 3. To hire, transfer, suspend, lay-off, recall, dismiss, assign
or discipline employees."
The University seasonably moved for The Supreme Court applied the principles laid
reconsideration, seeking to make the following down in Democratic Labor Association vs.
points, to wit: Cebu Stevedoring Company, Inc ( 103 Phil.
1103). In the said case, the Supreme Court said
1) UP professors do "wield the most potent that there are various factors which must be
managerial powers: the power to rule on tenure, satisfied and considered in determining the
on the creation of new programs and new jobs, proper constituency of a bargaining unit. No one
and conversely, the abolition of old programs particular factor is itself decisive of the
and the attendant re-assignment of employees. determination. The weight accorded to any
2) To say that the Council is "limited to (acting particular factor varies in accordance with the
particular question or questions that may arise in
on) academic matters" is error, since academic
a given case. What are these factors?
decisions "are the most important decisions
made in a University (being, as it were) the Rothenberg mentions a good number, but the
heart, the core of the University as a workplace. most pertinent to our case are: (1) will of the
employees (Globe Doctrine); (2) affinity and
3) Considering that the law regards as a "high unit of employees' interest, such as substantial
level" employee, one who performs either similarity of work and duties, or similarity of
policy-determining, managerial, or confidential compensation and working conditions; (3) prior
functions, the Director erred in applying only the collective bargaining history; and (4)
"managerial functions" test, ignoring the employment status, such as temporary, seasonal
"policy-determining functions" test. probationary employees.

4) The Director's interpretation of the law would The Court further explained that "the test of the
lead to absurd results, e.g.: "an administrative grouping is community or mutuality of interests.
officer of the College of Law is a high level And this is so because 'the basic test of an
employee, while a full Professor who has asserted bargaining unit's acceptability is
published several treatises and who has whether or not it is fundamentally the
distinguished himself in argument before the combination which will best assure to all
Supreme Court is a mere rank-and-file employees the exercise of their collective
employee. A dormitory manager is classified as bargaining rights' (Rothenberg on Labor
a high level employee, while a full Professor or Relations, 490)." Hence, in that case, the Court
Political Science with a Ph. D. and several upheld the trial court's conclusion that two
Honorary doctorates is classified as rank-and- separate bargaining units should be formed, one
file." consisting of regular and permanent employees
and another consisting of casual laborers or
ISSUE: WON they, and other employees stevedores.
performing academic functions, should comprise
a collective bargaining unit distinct and different In the case at bar, the University employees
from that consisting of the non-academic may, as already suggested, quite easily be
employees of the University, considering the categorized into two general classes: one, the
dichotomy of interests, conditions and rules group composed of employees whose functions
existing between them. are non-academic, i.e., janitors, messengers,
typists, clerks, receptionists, carpenters,
RULING: Yes. electricians, grounds-keepers, chauffeurs,
mechanics, plumbers; and two, the group made
up of those performing academic functions, i.e., of the academic employees of the institution —
full professors, associate professors, assistant i.e., full professors, associate professors,
professors, instructors — who may be judges or assistant professors, instructors, and the
government executives — and research, research, extension and professorial staff, who
extension and professorial staff. Not much may, if so minded, organize themselves into a
reflection is needed to perceive that the separate collective bargaining unit; and that,
community or mutuality of interests which therefore, only said non-academic rank-and-file
justifies the formation of a single collective personnel of the University of the Philippines in
bargaining unit is wanting between the academic Diliman, Manila, Los Baños and the Visayas are
and non-academic personnel of the university. It to participate in the certification election.
would seem obvious that teachers would find
very little in common with the University clerks Baker vs. Trajano (1988)
and other non-academic employees as regards The test of "supervisory" or managerial status"
responsibilities and functions, working depends on whether a person possesses
conditions, compensation rates, social life and
authority to act in the interest of his employer in
interests, skills and intellectual pursuits, cultural the matter specified in Art. 212(k) of the Labor
activities, etc. On the contrary, the dichotomy of Code and Sec. 1(m) of its Implementing Rules
interests, the dissimilarity in the nature of the and whether such authority is not merely
work and duties as well as in the compensation routinary or clerical in nature, but requires the
and working conditions of the academic and use of independent judgment.
non-academic personnel dictate the separation of
these two categories of employees for purposes FACTS: This is a petition for certiorari seeking
of collective bargaining. The formation of two the annulment of the order of Mediator-Arbiter
separate bargaining units, the first consisting of Conchita Martinez of Ministry of Labor and
the rank-and-file non-academic personnel, and Employment and Dir Cresencio Trajano of
the second, of the rank-and-file academic MOLE. On April 23, 1984 Franklin Baker
employees, is the set-up that will best assure to Brotherhood Association filed a petition for
all the employees the exercise of their collective certification election among the office and
bargaining rights. These special circumstances, technical employees of the petitioner company
i.e., the dichotomy of interests and concerns as with the Ministry of Labor and Employment
well as the dissimilarity in the nature and Davao. It alleges that 90 employees in the Davao
conditions of work, wages and compensation plant which is distinct from the regular rank and
between the academic and non-academic file employees is excluded from the coverage of
personnel, bring the case at bar within the the existing CBA. Petitioner Company did not
exception contemplated in Section 9 of object on the election but manifested that out of
Executive Order No. 180. It was grave abuse of 90 employees 74 are managerial employees and
discretion on the part of the Labor Relations 2 are confidential employees.
Director to have ruled otherwise, ignoring plain
and patent realities. Med-Arbiter Martinez issued an order dated
Sept. 17, 1984 granting the petition and
The Order of August 7, 1990 is MODIFIED in certification election among the office and
the sense that the non-academic rank-and-file technical employees of the Davao plant. The
employees of the University of the Philippines petitioner company appealed to the Bureau of
shall constitute a bargaining unit to the exclusion Labor Relations for the order to be set aside and
declare the 74 employees as managerial Premises Considered, the petition is dismissed,
employees. During the pendency of the appeal, and the assailed resolution and orders are
61 employees involved filed a Motion to Affirmed. So Ordered
Withdraw the petition for certification election
praying for their exclusion from the bargaining SAN MIGUEL CORPORATION
unit because they are managerial employees as SUPERVISORS AND EXEMPT UNION
they are performing managerial functions. April AND ERNESTO L. PONCE, President V.
7, 1986 Cresencio Trajano of Bureau of Labor HONORABLE BIENVENIDO E.
Relations issued a resolution affirming the order LAGUESMA IN HIS CAPACITY AS
of Med-Arbiter Conchita Martinez. UNDERSECRETARY OF LABOR AND
EMPLOYMENT, HONORABLE DANILO
ISSUE: WON the subject employees are L. REYNANTE IN HIS CAPACITY AS
managerial employees under the purview of the MED-ARBITER AND SAN MIGUEL
Labor Code and its Implementing Rules. CORPORATION

RULING: No. An important element of the “confidential

employee rule” is the employee’s need to use
A managerial employee is defined as one "who labor relations information.
is vested with powers or prerogative to lay down
and execute management policies and/or to hire, The fact that the three plants are located in three
transfer, suspend, layoff, recall, discharge, different places is immaterial. Geographical
assign, or discipline employees or to effectively location can be completely disregarded if the
recommend such managerial actions." communal or mutual interests of the employees
are not sacrificed.
It will be noted that in the performance of their
duties and functions and in the exercise of their FACTS: Petitioner union filed before DOLE a
recommendatory powers, subject employees Petition for Direct Certification or Certification
may only recommend, as the ultimate power to Election among the supervisors and exempt
hire, fire or suspend as the case maybe rests employees of the SMC Magnolia Poultry
upon the plant manager. The test of Products Plants of Cabuyao, San Fernando and
"supervisory" or managerial status" depends on Otis.
whether a person possesses authority to act in
the interest of his employer in the matter Med-Arbiter Danilo L. Reynante issued an
specified in Art. 212(k) of the Labor Code and Order ordering the conduct of certification
Sec. 1(m) of its Implementing Rules and election among the abovementioned employees
whether such authority is not merely routinary or of the different plants as one bargaining unit.
clerical in nature, but requires the use of San Miguel Corporation filed a Notice of Appeal
independent judgement. The subject employees with Memorandum on Appeal, pointing out,
are not managerial employees because as borne among others, the Med-Arbiter’s error in
by the records, they do not participate in the grouping together all three (3) separate plants,
policy making but given ready policies to into one bargaining unit, and in including
execute and standard practice to observe, thus supervisory levels 3 and above whose positions
having little freedom of action. are confidential in nature.
The public respondent, Undersecretary labor organization of the rank-and-file
Laguesma, granted respondent company’s employees but may join, assist or form separate
Appeal and ordered the remand of the case to the labor organizations of their own.
Med-Arbiter of origin for determination of the
true classification of each of the employees The only question that need be addressed is
sought to be included in the appropriate whether these employees are properly classified
bargaining unit. as confidential employees or not. Confidential
employees are those who (1) assist or act in a
Upon petitioner-union’s motion, Undersecretary confidential capacity, (2) to persons who
Laguesma granted the reconsideration prayed for formulate, determine, and effectuate
and directed the conduct of separate certification management policies in the field of labor
elections among the supervisors ranked as relations. The two criteria are cumulative, and
supervisory levels 1 to 4 (S1 to S4) and the both must be met if an employee is to be
exempt employees in each of the three plants at considered a confidential employee – that is, the
Cabuyao, San Fernando and Otis. confidential relationship must exist between the
employees and his supervisor, and the supervisor
ISSUE: must handle the prescribed responsibilities
1) WON Supervisory employees 3 and 4 and the relating to labor relations.
exempt employees of the company are The broad rationale behind this rule is that
considered confidential employees, hence employees should not be placed in a position
ineligible from joining a union? involving a potential conflict of interests.
2) If they are not confidential employees, do the There have been ample precedents in this regard,
employees of the three plants constitute an thus in Bulletin Publishing Company v. Hon.
appropriate single bargaining unit? Augusto Sanchez, the Court held that “if these
managerial employees would belong to or be
RULING:
affiliated with a Union, the latter might not be
1) No. assured of their loyalty to the Union in view of
evident conflict of interest. The Union can also
On the first issue, this Court rules that said become company-dominated with the presence
employees do not fall within the term of managerial employees in Union
“confidential employees” who may be membership.”
prohibited from joining a union. There is no
question that the said employees, supervisors An important element of the “confidential
and the exempt employees, are not vested with employee rule” is the employee’s need to use
the powers and prerogatives to lay down and labor relations information.
execute management policies and/or to hire,
transfer, suspend, layoff, recall, discharge or It is the contention of respondent corporation
dismiss employees. They are, therefore, not that Supervisory employees 3 and 4 and the
qualified to be classified as managerial exempt employees come within the meaning of
employees who, under Article 245[4] of the the term “confidential employees” primarily
Labor Code, are not eligible to join, assist or because they answered in the affirmative when
form any labor organization. In the very same asked “Do you handle confidential data or
provision, they are not allowed membership in a documents?” in the Position Questionnaires
submitted by the Union. In the same
questionnaire, however, it was also stated that Undersecretary, is contrary to the one-company,
the confidential information handled by one-union policy.
questioned employees relate to product
formulation, product standards and product It adds that Supervisors level 1 to 4 and exempt
specification which by no means relate to “labor employees of the three plants have a similarity
relations.” As held in Westinghouse Electric or a community of interests.
Corporation v. National Labor Relations This Court finds the contention of the petitioner
Board, “an employee may not be excluded from meritorious.
appropriate bargaining unit merely because he
has access to confidential information A unit to be appropriate must effect a grouping
concerning employer’s internal business of employees who have substantial, mutual
operations and which is not related to the field of interests in wages, hours, working conditions
labor relations.” and other subjects of collective bargaining. It is
readily seen that the employees in the instant
It must be borne in mind that Section 3 of case have “community or mutuality of
Article XIII of the 1987 Constitution mandates interest,” which is the standard in determining
the State to guarantee to “all” workers the right the proper constituency of a collective
to self-organization. Hence, confidential bargaining unit. It is undisputed that they all
employees who may be excluded from belong to the Magnolia Poultry Division of San
bargaining unit must be strictly defined so as not Miguel Corporation. This means that, although
to needlessly deprive many employees of their
they belong to three different plants, they
right bargain collectively through
perform work of the same nature, receive the
representatives of their choosing.
same wages and compensation, and most
In the case at bar, supervisors 3 and above may importantly, share a common stake in
not be considered confidential employees merely concerted activities. The fact that the three
because the information they handle are properly plants are located in three different places is
classifiable as technical and internal business immaterial. Geographical location can be
operations data which, to our mind, has no completely disregarded if the communal or
relevance to negotiations and settlement of mutual interests of the employees are not
grievances wherein the interests of a union and sacrificed.
the management are invariably adversarial. WHEREFORE, the assailed Order of March 11,
Furthermore, even assuming that they are 1993 is hereby SET ASIDE and the Order of the
confidential employees, jurisprudence has Med-Arbiter on December 19, 1990 is
established that there is no legal prohibition REINSTATED under which a certification
against confidential employees who are not election among the supervisors (level 1 to 4) and
performing managerial functions to form and exempt employees of the San Miguel
join a union. Corporation Magnolia Poultry Products Plants
of Cabuyao, San Fernando, and Otis as one
2) Yes. bargaining unit is ordered conducted. SO
ORDERED
It is the contention of the petitioner union that
the creation of three (3) separate bargaining
units, one each for Cabuyao Otis and San
Fernando as ruled by the respondent
Sugbuanon Rural Bank Inc. vs. Laguesma union members in question may not transfer,
(2000) suspend, lay-off, recall, discharge, assign, or
discipline employees. Moreover, the forms also
When the employee does not have access to do not indicate that said officers could formulate
confidential labor relations information, there is and execute management policies which are
no legal prohibition against confidential normally expected of management officers.
employees from forming, assisting, or joining a Neither could the union members be treated as
union confidential employees. Although the cashier
FACTS: Petitioner is a duly-registered banking serves the bank's management, it could not be
institution in Cebu, while private respondent deemed to have access to confidential
information specifically relating to SRBI's labor
APSOTEU-TUCP was a labor organization
relations policies.
duly-registered with the Labor Department.
APSOTEU filed a petition for certification As regards the issue on the violation of the
election of the 5 supervisory employees. SRBI principle of separation of unions, records show
filed a motion to dismiss the union's petition on that respondent union was initially assisted by
two grounds. First, that the members of union ALU during its preliminary stages. A local
were in fact managerial or confidential union maintains its separate personality despite
employees and were to be disqualified from affiliation with a larger national federation.
forming or joining unions. Second, the
Association of Labor Unions-TUCP was APSOTEU-TUCP had separate legal personality
representing the union. Since ALU-TUCP also from ALU and TUCP. The law frowns on a
sought to represent the rank-and-file employees union where the membership is composed of
of SRBI, there was a violation of the principle of both supervisors and rank-and-file employees,
separation of unions. The union argued that its for fear that conflicts of interest may arise in the
members were not managerial employees but areas of discipline, collective bargaining, and
merely supervisory employees. Med-Arbiter: strikes. However, in the present case, none of the
denied petitioner's motion to dismiss. Secretary members of the respondent union came from the
of Labor and Employment: same was denied. rank-and-file employees of the bank.
DOLE Undersecretary: denied SRBI's appeal.
The petition for certification election was filed
ISSUE: WON the members of the respondent by APSOTEU-TUCP, a legitimate labor
union are managerial/confidential employees, organization. True, it was assisted to some
hence prohibited by law from joining labor extent by ALU and the national federation
organizations and engaging in union activities? TUCP. However, APSOTEU-TUCP had
separate legal personality from ALU and TUCP,
RULING: No. under the principle that a local union maintains
its separate legal personality despite affiliation
The petitioner bank failed to show that their
Cashiers, Accountant, and Acting Chief of the with a national federation. Hence, the petition
Loans Department possessed managerial powers for certificate election should be granted.
and duties. At best, they only had
recommendatory powers subject to evaluation,
review, and final decision by the bank's
management. The job description forms
submitted by petitioner clearly show that the
Tunay na Pagkakaisa ng Manggagawa sa 81 employees, believing that their membership
Asia Brewery vs. Asia Brewery (2010) in BLMA-INDEPENDENT violated the CBA.
18 of these affected employees are QA Sampling
Although Article 245 of the Labor Code limits Inspectors/Inspectresses and Machine Gauge
the ineligibility to join, form and assist any Technician (checkers) who formed part of the
labor organization to managerial employees, Quality Control Staff. The rest are
jurisprudence has extended this prohibition to secretaries/clerks directly under their respective
confidential employees or those who by reason division managers.
of their positions or nature of work are required
to assist or act in a fiduciary manner to Petitioner, however, maintains that except for
managerial employees and hence, are likewise those who had been promoted to monthly paid
privy to sensitive and highly confidential positions, the other secretaries/clerks are deemed
records. Confidential employees are thus included among the rank-and-file employees of
excluded from the rank-and-file bargaining unit. ABI. BLMA-INDEPENDENT claimed that
ABI’s actions restrained the employees’ right to
FACTS: Respondent ABI entered into a CBA self-organization.
with Bisig at Lakas ng mga Manggagawa sa
Asia-Independent (BLMA-INDEPENDENT), VA ruled that the subject employees qualify
the exclusive bargaining representative of ABI’s under the rank-and-file category because their
rank-and-file employees. functions are merely routinary and clerical. He
noted that the positions occupied by the checkers
Article I of the CBA defined the scope of the and secretaries/clerks in the different divisions
bargaining unit, as follows: The UNION shall are not managerial or supervisory, as evident
not represent or accept for membership from the duties and responsibilities assigned to
employees outside the scope of the bargaining them. With respect to QA Sampling
unit herein defined: Inspectors/Inspectresses and Machine Gauge
Section 2. Bargaining Unit. The bargaining unit Technician, he ruled that ABI failed to establish
shall be comprised of all regular rank-and-file with sufficient clarity their basic functions as to
consider them Quality Control Staff who were
daily-paid employees of the COMPANY.
However, the following jobs/positions as herein excluded from the coverage of the CBA.
defined shall be excluded from the bargaining Accordingly, the subject employees were
unit, to wit: declared eligible for inclusion within the
bargaining unit represented by BLMA-
xxx INDEPENDENT.

Confidential and Executive Secretaries CA reversed the VA, ruling that the 81
employees are excluded from and are not
xxx eligible for inclusion in the bargaining unit as
defined in Section 2, Article I of the CBA.
Purchasing and Quality Control Staff.
ISSUE: WON the checkers and
The CBA expressly excluded Confidential and
secretaries/clerks of respondent company are
Executive Secretaries from the rank-and-file
rank-and-file employees who are eligible to join
bargaining unit, for which reason ABI seeks
the Union of the rank-and-file employees.
their disaffiliation from petitioner. ABI’s
management stopped deducting union dues from
RULING: YES. The checkers and labor relations. The exclusion from bargaining
secretaries/clerks of respondent company are units of employees who, in the normal course of
rank-and-file employees who are eligible to join their duties, become aware of management
the Union of the rank-and-file employees. policies relating to labor relations is a principal
objective sought to be accomplished by the
Although Article 245 of the Labor Code limits confidential employee rule.
the ineligibility to join, form and assist any labor
organization to managerial employees, A perusal of the job descriptions of these
jurisprudence has extended this prohibition to secretaries/clerks reveals that their assigned
confidential employees or those who by reason duties and responsibilities involve routine
of their positions or nature of work are required activities of recording and monitoring, and other
to assist or act in a fiduciary manner to paper works for their respective departments
managerial employees and hence, are likewise while secretarial tasks such as receiving
privy to sensitive and highly confidential telephone calls and filing of office
records. Confidential employees are thus correspondence appear to have been commonly
excluded from the rank-and-file bargaining unit. imposed as additional duties. Respondent failed
The rationale for their separate category and to indicate who among these numerous
disqualification to join any labor organization is secretaries/clerks have access to confidential
similar to the inhibition for managerial data relating to management policies that could
employees because if allowed to be affiliated give rise to potential conflict of interest with
with a Union, the latter might not be assured of their Union membership. It is not even
their loyalty in view of evident conflict of farfetched that the job category may exist only
interests and the Union can also become on paper since they are all daily-paid workers.
company-denominated with the presence of With respect to the Sampling
managerial employees in the Union Inspectors/Inspectresses and the Gauge Machine
membership. Having access to confidential Technician, the job descriptions of these
information, confidential employees may also checkers showed that they perform routine and
become the source of undue advantage. Said mechanical tasks preparatory to the delivery of
employees may act as a spy or spies of either the finished products. No evidence was
party to a collective bargaining agreement. presented by the respondent to prove that these
daily-paid checkers actually form part of the
Confidential employees are defined as those company’s Quality Control Staff who as such
who: were exposed to sensitive, vital and confidential
1) Assist or act in a confidential capacity, information about [company’s] products or have
knowledge of mixtures of the products, their
2) To persons who formulate, determine, and defects, and even their formulas which are
effectuate management policies in the field of considered trade secrets.
labor relations.
San Miguel Foods Inc. vs. San Miguel
The two (2) criteria are cumulative, and both Corporation Supervisors and Exempt Union
must be met if an employee is to be considered a (2011)
confidential employee that is, the confidential
relationship must exist between the employee An appropriate bargaining unit is defined as a
and his supervisor, and the supervisor must group of employees of a given employer,
handle the prescribed responsibilities relating to comprised of all or less than all of the entire
body of employees, which the collective interest A certification election was conducted. On the
of all the employees, consistent with equity to the date of the election, petitioner filed the Omnibus
employer, indicate to be best suited to serve the Objections and Challenge to Voters, questioning
reciprocal rights and duties of the parties under the eligibility to vote by some of its employees
the collective bargaining provisions of the law. on the grounds that some employees do not
belong to the bargaining unit which respondent
It held that while the existence of a bargaining seeks to represent or that there is no existence of
history is a factor that may be reckoned with in employer-employee relationship with petitioner.
determining the appropriate bargaining unit, the
same is not decisive or conclusive. Other factors Based on the results of the election, the Med-
must be considered. The test of grouping is Arbiter issued the Order stating that since the
community or mutuality of interest. This is so Yes vote received 97% of the valid votes cast,
because the basic test of an asserted bargaining respondent is certified to be the exclusive
unit’s acceptability is whether or not it is bargaining agent of the supervisors and exempt
fundamentally the combination which will best employees of petitioner's Magnolia Poultry
assure to all employees the exercise of their Products Plants in Cabuyao, San Fernando, and
collective bargaining rights. Certainly, there is a Otis.
mutuality of interest among the employees. Their
functions mesh with one another. One group On appeal, the then Acting DOLE
needs the other in the same way that the Undersecretary, in the Resolution, affirmed the
company needs them both. There may be Order of the Med-Arbiter.
differences as to the nature of their individual CA affirmed the Resolution of DOLE
assignments, but the distinctions are not enough Undersecretary with modification stating that
to warrant the formation of a separate
those holding the positions of Human Resource
bargaining unit.
Assistant and Personnel Assistant are excluded
FACTS: In the case of San Miguel Corporation from the bargaining unit.
Supervisors and Exempt Union v. Laguesma, the Hence, this petition by the San Miguel Foods
Court held that even if they handle confidential
data regarding technical and internal business ISSUE: WON CA departed from jurisprudence
operations, supervisory employees 3 and 4 and when it expanded the scope of the bargaining
the exempt employees of petitioner San Miguel unit?
Foods, Inc. are not to be considered confidential
employees, because the same do not pertain to RULING: No. In San Miguel vs Laguesma,
labor relations, particularly, negotiation and the Court explained that the employees of San
settlement of grievances. Consequently, they Miguel Corporation Magnolia Poultry Products
were allowed to form an appropriate bargaining Plants of Cabuyao, San Fernando, and Otis
unit for the purpose of collective bargaining. constitute a single bargaining unit, which is not
The Court also declared that the employees contrary to the one-company, one-union policy.
belonging to the three different plants of San An appropriate bargaining unit is defined as a
Miguel Corporation Magnolia Poultry Products group of employees of a given employer,
Plants in Cabuyao, San Fernando, and Otis, comprised of all or less than all of the entire
having community or mutuality of interests, body of employees, which the collective interest
constitute a single bargaining unit. of all the employees, consistent with equity to
the employer, indicate to be best suited to serve
the reciprocal rights and duties of the parties Verceles vs. BLR (2005)
under the collective bargaining provisions of the
law. It states that a report of a violation of rights and
conditions of membership in a labor
It held that while the existence of a bargaining organization may be made by at least thirty
history is a factor that may be reckoned with in percent (30%) of all the members of a union or
determining the appropriate bargaining unit, the any member or members specially concerned.
same is not decisive or conclusive. Other factors The use of the permissive may in the provision at
must be considered. The test of grouping is once negates the notion that the assent of 30% of
community or mutuality of interest. This is so all the members is mandatory. More decisive is
because the basic test of an asserted bargaining the fact that the provision expressly declares
unit’s acceptability is whether or not it is that the report may be made, alternatively by
fundamentally the combination which will best any member or members specially concerned.
assure to all employees the exercise of their And further confirmation that the assent of 30%
collective bargaining rights. Certainly, there is a of the union members is not a factor in the
mutuality of interest among the employees. acquisition of jurisdiction by the Bureau of
Their functions mesh with one another. One Labor Relations is furnished by Article 226 of
group needs the other in the same way that the the same Labor Code, which grants original and
company needs them both. There may be exclusive jurisdiction to the Bureau, and the
differences as to the nature of their individual Labor Relations Division in the Regional Offices
assignments, but the distinctions are not enough of the Department of Labor, over all inter-union
to warrant the formation of a separate bargaining and intra-union conflicts, and all disputes,
unit. grievances or problems arising from or affecting
labor management relations, making no
The Court affirms the finding of the CA that reference whatsoever to any such 30%-support
there should be only one bargaining unit for the requirement. Indeed, the officials mentioned are
employees in Cabuyao, San Fernando, and Otis given the power to act on all inter-union and
of Magnolia Poultry Products Plant involved in intra-union conflicts (1) upon request of either
dressed chicken processing and Magnolia or both parties as well as (2) at their own
Poultry Farms engaged in live chicken initiative.
operations. Certain factors, such as specific line
of work, working conditions, location of work, FACTS: Private respondents Rodel E. Dalupan,
mode of compensation, and other relevant et al are members of the University of the East
conditions do not affect or impede their Employees’ Association (UEEA). On 15
commonality of interest. Although they seem September 1997, they each received a
separate and distinct from each other, the Memorandum from the UEEA charging them
specific tasks of each division are actually with spreading false rumors and creating
interrelated and there exists mutuality of disinformation among the members of the said
interests which warrants the formation of a association. They were given seventy-two hours
single bargaining unit. from receipt of the Memorandum to submit their
Answer.

Through a collective reply, they denied the

allegations and further sent a letter informing the
officers of UEEA informing them that the
memorandum was vague and without legal RULING:
basis. UEEA issued another memorandum
giving the private respondents another seventy- 1) No. On the matter concerning the 30%
two hours from receipt within which to properly support requirement needed to report violations
reply because the collective reply letter was not of rights and conditions of union membership, as
responsive to the first memorandum. Their found in the last paragraph of Article 241 of the
failure would be construed as an admission of Labor Code, we likewise cannot sanction the
the truthfulness and veracity of the charges. The petitioners. We have already made our
same was still denied by the respondents. pronouncement in the case of Rodriguez v.
Director, Bureau of Labor Relations that the
On 09 October 1997, Ernesto Verceles, in his 30% requirement is not mandatory. In this case,
capacity as president of the association, through the Court, speaking through Chief Justice
a Memorandum, informed Rodel Dalupan, et al., Andres R. Narvasa, held in part:
that their membership in the association has
been suspended and shall take effect The respondent Directors ruling, however, that
immediately upon receipt thereof. the assent of 30% of the union membership,
mentioned in Article 242 of the Labor Code, was
A result of which, a complaint for illegal mandatory and essential to the filing of a
suspension was filed by the private respondents complaint for any violation of rights and
before the Department of Labor and conditions of membership in a labor
Employment, National Capital Region (DOLE- organization (such as the arbitrary and
NCR). The Regional Director of the latter oppressive increase of union dues here
rendered a decision adverse to the petitioners. complained of), cannot be affirmed and will be
The petitioners appealed to the BLR-DOLE, but reversed. The very article relied upon militates
the same and the motion for reconsideration against the proposition. It states that a report of
were denied. When appealed before the Court of a violation of rights and conditions of
Appeals, said petition was still denied due membership in a labor organization may be
course for lack of merit. Hence, the petition is made by (a)t least thirty percent (30%) of all the
now elevated to the Supreme Court by way of members of a union or any member or members
petition for review on certiorari. specially concerned. The use of the permissive
may in the provision at once negates the notion
ISSUES: that the assent of 30% of all the members is
1) WON the assent of 30% of the members of mandatory. More decisive is the fact that the
provision expressly declares that the report may
the union is required to confer jurisdiction upon
the BLR or LRD in intra-union conflicts? be made, alternatively by any member or
members specially concerned. And further
2) WON the non-holding of meetings and non- confirmation that the assent of 30% of the union
submission of reports by the petitioners moot members is not a factor in the acquisition of
and academic, and whether the decision to hold jurisdiction by the Bureau of Labor Relations is
meetings and submit reports contradict and furnished by Article 226 of the same Labor
override the sovereign will of the majority? Code, which grants original and exclusive
jurisdiction to the Bureau, and the Labor
Relations Division in the Regional Offices of the
Department of Labor, over all inter-union and
intra-union conflicts, and all disputes,
grievances or problems arising from or affecting the official undertakings of union officers will
labor management relations, making no bolster genuine trade unionism in the country.
reference whatsoever to any such 30%-support
requirement. Indeed, the officials mentioned are BPI vs. BPI Employees Union Davao Chapter
given the power to act on all inter-union and et. al. (2010) (Absorption of EE’s in cases of
intra-union conflicts (1) upon request of either merger)
or both parties as well as (2) at their own
Human beings are never embraced in the term
initiative. “assets and liabilities”. The Corporation Code
2) No. This issue was precipitated by the Court does not also mandate the absorption of the
of Appeals decision affirming the order of employees of the non-surviving corporation by
DOLE Regional Director Maximo B. Lim for the surviving corporation in the case of a
the petitioners to hold a general membership merger.
meeting wherein they make open and available FACTS: Bangko Sentral ng Pilipinas approved
the union’s/association’s books of accounts and the Articles of Merger executed by and between
other documents pertaining to the union funds, BPI, herein petitioner, and Far East Bank and
and to regularly conduct special and general Trust Company (FEBTC) and was approved by
membership meetings in accordance with the the Securities and Exchange Commission. The
union’s constitution and by-laws. Articles of Merger and Plan of Merger did not
The passage of General Assembly Resolution contain any specific stipulation with respect to
No. 10 dated 10 December 1997 and Resolution the employment contracts of existing personnel
No. 8, Series of 2000, which supposedly cured of the non-surviving entity which is FEBTC.
the lapses committed by the association’s Pursuant to the said Article and Plan of Merger,
officers and reiterated the approval of the all the assets and liabilities of FEBTC were
general membership of the acts and collateral transferred to and absorbed by BPI as the
actions of the association’s officers cannot surviving corporation. FEBTC employees,
redeem the petitioners from their predicament. including those in its different branches across
The obligation to hold meetings and render the country, were hired by petitioner as its own
financial reports is mandated by UEEA’s employees, with their status and tenure
constitution and by-laws. This fact was never recognized and salaries and benefits maintained.
denied by the petitioners. Their eventual
ISSUE:
compliance, as what happened in this case, shall
not release them from the obligation to 1) WON absorbed Employees are covered by the
accomplish these things in the future. Union Shop Clause?

Prompt compliance in rendering financial 2) WON Employees are ipso jure absorbed in a
reports together with the holding of regular merger of two corporations?
meetings with the submission of the minutes
thereon with the BLR-DOLE and DOLE-NCR RULING:
shall negate any suspicion of dishonesty on the
1) Yes they are covered.
part of UEEA’s officers. This is not only true
with UEEA, but likewise with other Petitioner argues that the term new employees in
unions/associations, as this matter is imbued the Union Shop Clause of the CBA is qualified
with public interest. Undeniably, transparency in by the phrases who may hereafter be regularly
employed and after they become regular enterprise unless he or she is, becomes, and, for
employees which led petitioner to conclude that the duration of the agreement, remains a
the new employees referred to in, and member in good standing of a union entirely
contemplated by, the Union Shop Clause of the comprised of or of which the employees in
CBA were only those employees who were new interest are a part.
to BPI, on account of having been hired initially
on a temporary or probationary status for In other words, the purpose of a union shop or
possible regular employment at some future other union security arrangement is to guarantee
date. BPI argues that the FEBTC employees the continued existence of the union through
absorbed by BPI cannot be considered as new enforced membership for the benefit of the
employees of BPI for purposes of applying the workers.
Union Shop Clause of the CBA.
All employees in the bargaining unit covered by
We do not agree. a Union Shop Clause in their CBA with
management are subject to its terms. However,
Section 2, Article II of the CBA is silent as to under law and jurisprudence, the following kinds
how one becomes a regular employee of the BPI of employees are exempted from its coverage,
for the first time. There is nothing in the said namely, employees who at the time the union
provision which requires that a new regular shop agreement takes effect are bona fide
employee first undergo a temporary or members of a religious organization which
probationary status before being deemed as such prohibits its members from joining labor unions
under the union shop clause of the CBA. on religious grounds; employees already in the
service and already members of a union other
Union security is a generic term which is applied than the majority at the time the union shop
to and comprehends closed shop, union shop, agreement took effect; confidential employees
maintenance of membership or any other form who are excluded from the rank and file
of agreement which imposes upon employees bargaining unit; and employees excluded from
the obligation to acquire or retain union the union shop by express terms of the
membership as a condition affecting agreement.
employment. There is union shop when all new
regular employees are required to join the union When certain employees are obliged to join a
within a certain period for their continued particular union as a requisite for continued
employment. There is maintenance of employment, as in the case of Union Security
membership shop when employees, who are Clauses, this condition is a valid restriction of
union members as of the effective date of the the freedom or right not to join any labor
agreement, or who thereafter become members, organization because it is in favor of unionism.
must maintain union membership as a condition This Court, on occasion, has even held that a
for continued employment until they are union security clause in a CBA is not a
promoted or transferred out of the bargaining restriction of the right of freedom of association
unit or the agreement is terminated. A closed- guaranteed by the Constitution.
shop, on the other hand, may be defined as an
enterprise in which, by agreement between the Moreover, a closed shop agreement is an
employer and his employees or their agreement whereby an employer binds himself
representatives, no person may be employed in to hire only members of the contracting union
any or certain agreed departments of the who must continue to remain members in good
standing to keep their jobs. It is the most prized company benefits will be paid to them, thus
achievement of unionism. It adds membership reducing the Banks financial status. Based on
and compulsory dues. By holding out to loyal this ratiocination, she ruled that the same are not
members a promise of employment in the closed new employees of BPI as contemplated by the
shop, it wields group solidarity. CBA at issue, noting that the Certificate of
Filing of the Articles of Merger and Plan of
Indeed, the situation of the former FEBTC Merger between FEBTC and BPI stated that x x
employees in this case clearly does not fall x the entire assets and liabilities of FAR
within the first three exceptions to the EASTERN BANK & TRUST COMPANY will
application of the Union Shop Clause discussed be transferred to and absorbed by the BANK OF
earlier. No allegation or evidence of religious THE PHILIPPINE ISLANDS x x x (underlining
exemption or prior membership in another union supplied). In sum, the Voluntary Arbiter upheld
or engagement as a confidential employee was the reasoning of petitioner that the FEBTC
presented by both parties. The sole category employees became BPI employees by operation
therefore in which petitioner may prove its claim of law because they are included in the term
is the fourth recognized exception or whether the assets and liabilities.
former FEBTC employees are excluded by the
express terms of the existing CBA between 2) NO. Human beings are never embraced in the
petitioner and respondent. term “assets and liabilities.” Moreover, BPI’s
absorption of former FEBTC employees was
To reiterate, petitioner insists that the term new neither by operation of law nor by legal
employees, as the same is used in the Union consequence of contract. There was no
Shop Clause of the CBA at issue, refers only to government regulation or law that compelled the
employees hired by BPI as non-regular merger of the two banks or the absorption of the
employees who later qualify for regular employees of the dissolved corporation by the
employment and become regular employees, and surviving corporation. Had there been such law
not those who, as a legal consequence of a or regulation, the absorption of employees of the
merger, are allegedly automatically deemed non-surviving entities of the merger would have
regular employees of BPI. However, the CBA been mandatory on the surviving corporation. In
does not make a distinction as to how a regular the present case, the merger was voluntarily
employee attains such a status. Moreover, there entered into by both banks presumably for some
is nothing in the Corporation Law and the mutually acceptable consideration. In fact, the
merger agreement mandating the automatic Corporation Code does not also mandate the
employment as regular employees by the absorption of the employees of the non-
surviving corporation in the merger. surviving corporation by the surviving
It is apparent that petitioner hinges its argument corporation in the case of a merger.
that the former FEBTC employees were The Court cannot uphold the reasoning that the
absorbed by BPI merely as a legal consequence general stipulation regarding transfer of FEBTC
of a merger based on the characterization by the assets and liabilities to BPI as set forth in the
Voluntary Arbiter of these absorbed employees Articles of Merger necessarily includes the
as included in the assets and liabilities of the transfer of all FEBTC employees into the
dissolved corporation - assets because they help employ of BPI and neither BPI nor the FEBTC
the Bank in its operation and liabilities because employees allegedly could do anything about it.
redundant employees may be terminated and Even if it is so, it does not follow that the
absorbed employees should not be subject to the otherwise, that would be tantamount to
terms and conditions of employment obtaining involuntary servitude.
in the surviving corporation.
NOTE: However in a MR (in 2011) this
Furthermore, the Court believes that it is decision was reversed.
contrary to public policy to declare the former
FEBTC employees as forming part of the assets In said case the SC ruled that, employees should
or liabilities of FEBTC that were transferred and be absorbed.
absorbed by BPI in the Articles of Merger. It is more in keeping with the dictates of social
Assets and liabilities, in this instance, should be justice and the State policy of according full
deemed to refer only to property rights and protection to labor to deem employment
obligations of FEBTC and do not include the contracts as automatically assumed by the
employment contracts of its personnel. A surviving corporation in a merger, even in the
corporation cannot unilaterally transfer its absence of an express stipulation in the articles
employees to another employer like chattel. of merger or the merger plan. In his dissenting
Certainly, if BPI as an employer had the right to opinion, Justice Brion reasoned that:
choose who to retain among FEBTC’s
employees, FEBTC employees had the To my mind, due consideration of Section 80 of
concomitant right to choose not to be absorbed the Corporation Code, the constitutionally
by BPI. Even though FEBTC employees had no declared policies on work, labor and
choice or control over the merger of their employment, and the specific FEBTC-BPI
employer with BPI, they had a choice whether or situation — i.e., a merger with complete “body
not they would allow themselves to be absorbed and soul” transfer of all that FEBTC embodied
by BPI. Certainly nothing prevented the and possessed and where both participating
FEBTC’s employees from resigning or retiring banks were willing (albeit by deed, not by their
and seeking employment elsewhere instead of written agreement) to provide for the affected
going along with the proposed absorption. human resources by recognizing continuity of
employment — should point this Court to a
Employment is a personal consensual contract
declaration that in a complete merger situation
and absorption by BPI of a former FEBTC where there is total takeover by one corporation
employee without the consent of the employee is over another and there is silence in the merger
in violation of an individual’s freedom to agreement on what the fate of the human
contract. It would have been a different matter resource complement shall be, the latter should
if there was an express provision in the articles
not be left in legal limbo and should be properly
of merger that as a condition for the merger, BPI provided for, by compelling the surviving entity
was being required to assume all the to absorb these employees. This is what Section
employment contracts of all existing FEBTC 80 of the Corporation Code commands, as the
employees with the conformity of the surviving corporation has the legal obligation to
employees. In the absence of such a provision assume all the obligations and liabilities of the
in the articles of merger, then BPI clearly had merged constituent corporation.
the business management decision as to whether
or not employ FEBTC’s employees. FEBTC Not to be forgotten is that the affected
employees likewise retained the prerogative to employees managed, operated and worked on
allow themselves to be absorbed or not; the transferred assets and properties as their
means of livelihood; they constituted a basic
component of their corporation during its employees are covered by the Union Shop
existence. In a merger and consolidation Clause.
situation, they cannot be treated without
consideration of the applicable constitutional Victoriano vs. Elizalde (1974)
declarations and directives, or, worse, be simply Section 1 (6) of Article III of the agreements
disregarded. If they are so treated, it is up to this with the employers; that in spite of any closed
Court to read and interpret the law so that they
shop agreement, members of said religious sects
are treated in accordance with the legal cannot be refused employment or dismissed from
requirements of mergers and consolidation, read their jobs on the sole ground that they are not
in light of the social justice, economic and social members of the collective bargaining union. It is
provisions of our Constitution. Hence, there is a
clear, therefore, that the assailed Act, far from
need for the surviving corporation to take
infringing the constitutional provision on
responsibility for the affected employees and to freedom of association, upholds and reinforces
absorb them into its workforce where no it. It does not prohibit the members of said
appropriate provision for the merged
religious sects from affiliating with labor
corporation’s human resources component is unions. It still leaves to said members the liberty
made in the Merger Plan. and the power to affiliate, or not to affiliate,
By upholding the automatic assumption of the with labor unions. If, notwithstanding their
non-surviving corporation’s existing religious beliefs, the members of said religious
employment contracts by the surviving sects prefer to sign up with the labor union, they
corporation in a merger, the Court strengthens can do so. If in deference and fealty to their
judicial protection of the right to security of religious faith, they refuse to sign up, they can
tenure of employees affected by a merger and do so; the law does not coerce them to join;
avoids confusion regarding the status of their neither does the law prohibit them from joining;
various benefits which were among the chief and neither may the employer or labor union
objections of our dissenting colleagues. compel them to join. Republic Act No. 3350,
However, nothing in this Resolution shall impair therefore, does not violate the constitutional
the right of an employer to terminate the provision on freedom of association.
employment of the absorbed employees for a FACTS: Benjamin Victoriano (hereinafter
lawful or authorized cause or the right of such an referred to as Appellee), a member of the
employee to resign, retire or otherwise sever his religious sect known as the "Iglesia ni Cristo",
employment, whether before or after the merger, had been in the employ of the Elizalde Rope
subject to existing contractual obligations. In Factory Inc. (hereinafter referred to as
this manner, Justice Brion’s theory of automatic Company) since 1958. As such employee, he
assumption may be reconciled with the was a member of the Elizalde Rope Workers'
majority’s concerns with the successor Union (hereinafter referred to as Union) which
employer’s prerogative to choose its employees had with the Company a collective bargaining
and the prohibition against involuntary agreement containing a closed shop provision
servitude. which reads as follows:
Notwithstanding this concession, the Court finds "Membership in the Union shall be required as
no reason to reverse our previous a condition of employment for all permanent
pronouncement that the absorbed FEBTC employees workers covered by this Agreement.”
The collective bargaining agreement expired on organizations guaranteed by the Bill of Rights,
March 3, 1964 but was renewed the following and thus becomes obnoxious to Article III,
day, March 4, 1964. Section 1 (6) of the 1935 Constitution.

Under Section 4 (a), paragraph 4, of Republic ISSUE: WON R.A. No. 3350 violates the
Act No. 875, prior to its amendment by Republic constitutional provision on freedom of
Act No. 3350, the employer was not precluded association as it prohibits and bans the members
"from making an agreement with a labor of religious sects that forbid affiliation of their
organization to require as a condition of members with labor unions from joining labor
employment membership therein, if such labor unions?
organization is the representative of the
employees." On June 18, 1961, however, RULING: No. Appellant Union's contention
Republic Act No. 3350 was enacted, introducing that Republic Act No. 3350 prohibits and bans
an amendment to paragraph (4) subsection (a) the members of such religious sects that forbid
of section 4 of Republic Act No. 875, as follows: affiliation of their members with labor unions
. . "but such agreement shall not cover members from joining labor unions appears nowhere in
of any religious sects which prohibit affiliation the wording of Republic Act No. 3350; neither
of their members in any such labor can the same be deduced by necessary
organization”. implication therefrom. It is not surprising,
therefore, that appellant, having thus misread the
Being a member of a religious sect that prohibits Act, committed the error of contending that said
the affiliation of its members with any labor Act is obnoxious to the constitutional provision
organization, Appellee presented his resignation on freedom of association. Both the Constitution
to appellant Union. The management of the and Republic Act No. 875 recognize freedom of
Company in turn notified Appellee and his association. Section 1 (6) of Article III of the
counsel that unless the Appellee could achieve a Constitution of 1935, as well as Section 7 of
satisfactory arrangement with the Union, the Article IV of the Constitution of 1973, provide
Company would be constrained to dismiss him that the right to form associations or societies for
from the service. This prompted the appellee to purposes not contrary to law shall not be
file a motion for injunction to enjoin the abridged. Section 3 of Republic Act No. 875
Company and the Union from dismissing him. provides that employees shall have the right to
self-organization and to form, join or assist labor
In its answer, the Union contended, among organizations of their own choosing for the
others, that Republic Act No. 3350 infringes on purpose of collective bargaining and to engage
the fundamental right to form lawful in concerted activities for the purpose of
associations; that "the very phraseology of said collective bargaining and other mutual aid or
Republic Act 3350, that 'membership in a labor protection. What the Constitution and the
organization is banned to all those belonging to Industrial Peace Act recognize and guarantee is
such religious sect prohibiting affiliation with the "right" to form or join associations.
any labor organization’”, "prohibits all the Notwithstanding the different theories
members of a given religious sect from joining propounded by the different schools of
any labor union if such sect prohibits affiliations jurisprudence regarding the nature and contents
of their members thereto”; and, consequently, of a "right", it can be safely said that whatever
deprives said members of their constitutional theory one subscribes to, a right comprehends at
right to form or join lawful associations or least two broad notions, namely: first, liberty or
freedom, i.e., the absence of legal restraint, making an agreement with a labor organization
whereby an employee may act for himself to require as a condition of employment
without being prevented by law; and second, membership therein, if such labor organization is
power, whereby an employee may, as he the representative of the employees". By virtue,
pleases, join or refrain from joining an therefore, of a closed shop agreement, before the
association. It is, therefore, the employee who enactment of Republic Act No. 3350, if any
should decide for himself whether he should join person, regardless of his religious beliefs, wishes
or not an association; and should he choose to to be employed or to keep his employment, he
join, he himself makes up his mind as to which must become a member of the collective
association he would join; and every after he has bargaining union. Hence, the right of said
joined, he still retains the liberty and the power employee not to join the labor union is curtailed
to leave and cancel his membership with said and withdrawn.
organization at any time. It is clear, therefore,
that the right to join a union includes the right to To that all embracing coverage of the closed
abstain from joining any union. Inasmuch as shop arrangement, Republic Act No. 3350
what both the Constitution and the Industrial introduced an exception, when it added to
Peace Act have recognized, and guaranteed to Section 4 (a) (4) of the Industrial Peace Act the
the employee, is the "right" to join associations following proviso: "but such agreement shall not
of his choice, it would be absurd to say that the cover members of any religious sects which
law also imposes, in the same breath, upon the prohibit affiliation of their members in any such
employee the duty to join associations. The law labor organization". Republic Act No. 3350
does not enjoin an employee to sign up with any merely excludes ipso jure from the application
association. and coverage of the closed shop agreement the
employees belonging to any religious sects
The right to refrain from joining labor which prohibit affiliation of their members with
organizations recognized by Section 3 of the any labor organization. What the exception
Industrial Peace Act is, however, limited. The provides, therefore, is that members of said
legal protection granted to such right to refrain religious sects cannot be compelled or coerced
from joining is withdrawn by operation of law, to join labor unions even when said unions have
where a labor union and an employer have closed shop and Republic Act No. 875 recognize
agreed on a closed shop, by virtue of which the freedom of association. Section 1 (6) of Article
employer may employ only members of the III of the agreements with the employers; that in
collective bargaining union, and the employees spite of any closed shop agreement, members of
must continue to be members of the union for said religious sects cannot be refused
the duration of the contract in order to keep their employment or dismissed from their jobs on the
jobs. Thus Section 4 (a) (4) of the Industrial sole ground that they are not members of the
Peace Act, before its amendment by Republic collective bargaining union. It is clear, therefore,
Act No. 3350, provides that although it would be that the assailed Act, far from infringing the
an unfair labor practice for an employer "to constitutional provision on freedom of
discriminate in regard to hire or tenure of association, upholds and reinforces it. It does not
employment or any term or condition of prohibit the members of said religious sects from
employment to encourage or discourage affiliating with labor unions. It still leaves to
membership in any labor organization" the said members the liberty and the power to
employer is, however, not precluded "from affiliate, or not to affiliate, with labor unions. If,
notwithstanding their religious beliefs, the ISSUES:
members of said religious sects prefer to sign up
with the labor union, they can do so. If in 1) WON Part time employees are entitled to
deference and fealty to their religious faith, they retirement benefits?
refuse to sign up, they can do so; the law does 2) WON Bernardo's cause of action for his
not coerce them to join; neither does the law retirement benefits had already prescribed when
prohibit them from joining; and neither may the
Bernardo filed his complaint only 10 years later
employer or labor union compel them to join. after reaching the compulsory retirement age of
Republic Act No. 3350, therefore, does not 65?
violate the constitutional provision on freedom
of association. RULING:

De Lassle vs. Bernardo (2017) 1) Yes. The law does not distinguish between
part time and full time employees. Hence part
The law does not distinguish between part time
time employees are entitled to retirement
and full time employees. Hence part time benefits provided the requisites are complied
employees are entitled to retirement benefits with.
provided the requisites are complied with.
For the availment of the retirement benefits
FACTS: Bernardo was a part-time professional under Article 302 [287] of the Labor Code, as
lecturer at De La Salle-Araneta University amended by Republic Act No. 7641, the
(DLS-AU). On November 8, 2003, DLS-AU following requisites must concur: (1) the
informed Bernardo through a telephone call that employee has reached the age of 60 years for
he could not teach at the school anymore as the
optional retirement or 65 years for compulsory
school was implementing the retirement age retirement; (2) the employee has served at least
limit for its faculty members. As he was already five years in the establishment; and (3) there is
75 years old, Bernardo had no choice but to no retirement plan or other applicable agreement
retire. He claimed retirement benefits after 27 providing for retirement benefits of employees
years of employment. in the establishment. Bernardo - being 75 years
However, the petitioner countered that Bernardo old at the time of his retirement, having served
was not entitled to any kind of separation pay or DLS-AU for a total of 27 years, and not being
benefits under DLS-AU's policy and CBA. covered by the grant of retirement benefits in the
Neither was DLS-AU mandated by law to pay CBA – is qualified to avail himself of retirement
Bernardo retirement benefits. benefits under said statutory provision, i.e.,
equivalent to one-half month salary for every
Assuming arguendo that Bernardo was entitled year of service, a fraction of at least six months
to retirement benefits, he should have claimed being considered as one whole year.
the same upon reaching the age of 65 years old.
Under Article 291 of the Labor Code, as 2) No. the cause of action for Bernardo's
amended, all money claims arising from retirement benefits only accrued after the refusal
employer-employee relations shall be filed of DLS-AU to pay him the same as expressed in
within three years from the time the cause of a letter dated February 12, 2004. Hence,
action accrues. Bernardo's complaint, filed with the NLRC on
February 26, 2004, was filed within the three-
year prescriptive period provided under Article On 7 March 2008, Union A filed a Petition for
291 of the Labor Code. Certification Election to represent all the rank-
and-file employees of Super Lamination.
Erson Ang Lee doing business as Super
Lamination Services vs. Samahan ng Mga Notably, on the same date, Express Lamination
Manggagawa ng Super Lamination (2016) Workers' Union (Union B) also filed a Petition
for Certification Election to represent all the
A settled formulation of the doctrine of piercing rank-and-file employees of Express Lamination.
the corporate veil is that when two business
enterprises are owned, conducted, and Also on the same date, the Samahan ng mga
controlled by the same parties, both law and Manggagawa ng Express Coat Enterprises, Inc.
equity will, when necessary to protect the rights (Union C) filed a Petition for Certification
of third parties, disregard the legal fiction that Election to represent the rank-and-file
these two entities are distinct and treat them as employees of Express Coat.
identical or as one and the same
Super Lamination, Express Lamination, and
Therefore, it is only proper that, in order to Express Coat, all represented by one counsel,
safeguard the right of the workers and Unions separately claimed in their Comments and
A, B, and C to engage in collective bargaining, Motions to Dismiss that the petitions must be
the corporate veil of Express Lamination and dismissed on the same ground — lack of
Express Coat must be pierced. The separate employer-employee relationship between these
existence of Super Lamination, Express establishments and the bargaining units that
Lamination, and Express Coat must be Unions A, B, and C seek to represent as well as
disregarded. In effect, we affirm the lower these unions' respective members. Super
tribunals in ruling that these companies must be Lamination, in its Motion, posited that a
treated as one and the same unit for purposes of majority of the persons who were enumerated in
holding a certification election the list of members and officers of Union A
were not its employees, but were employed by
FACTS: Petitioner Erson Ang Lee (petitioner), either Express Lamination or Express Coat.
through Super Lamination, is a duly registered Interestingly, both Express Lamination and
entity principally engaged in the business of Express Coat, in turn, maintained the same
providing lamination services to the general argument that a majority of those who had
public. Respondent Samahan ng mga assented to the Petition for Certification Election
Manggagawa ng Super Lamination Services were not employees of either company, but of
(Union A) is a legitimate labor organization, one of the two other companies involved.
which is also a local chapter affiliate of the
National Federation of Labor Unions - Kilusang All three Petitions for Certification Election of
Mayo Uno. It appears that Super Lamination is a the Unions were denied. On 21 May 2008, an
sole proprietorship under petitioner's name, Order was issued by DOLE National Capital
while Express Lamination and Express Coat are Region (NCR) Med-Arbiter Michael Angelo
duly incorporated entities separately registered Parado denying the respective petitions of
with the Securities and Exchange Commission Unions B and C on the ground that there was no
(SEC). existing employer-employee relationship
between the members of the unions and the
companies concerned. On 23 May 2008, DOLE
NCR Med-Arbiter Alma Magdaraog-Alba also enterprises are owned, conducted, and controlled
denied the petition of respondent Union A on the by the same parties, both law and equity will,
same ground. when necessary to protect the rights of third
parties, disregard the legal fiction that these two
The three unions filed their respective appeals entities are distinct and treat them as identical or
before the Office of the DOLE Secretary, which as one and the same.
consolidated the appeal because the involved
companies alternately referred to one another as This formulation has been applied by this Court
the employer of the members of the bargaining to cases in which the laborer has been put in a
units sought to be represented. The unions disadvantageous position as a result of the
argued that their petitions should have been separate juridical personalities of the employers
allowed considering that the companies involved involved. Pursuant to veil-piercing, we have
were unorganized, and that the employers had held two corporations jointly and severally liable
no concomitant right to oppose the petitions. for an employee's back wages. We also
They also claimed that while the questioned considered a corporation and its separately
employees might have been assigned to perform incorporated branches as one and the same for
work at the other companies, they were all under purposes of finding the corporation guilty of
one management's direct control and illegal dismissal. These rulings were made
supervision. pursuant to the fundamental doctrine that the
corporate fiction should not be used as a
ISSUES: subterfuge to commit injustice and circumvent
1) WON the application of the doctrine of labor laws. Here, a certification election was
piercing the corporate veil is warranted to treat ordered to be held for all the rank-and-file
employees of Super Lamination, Express
separate corporations with related businesses as
Lamination, and Express Coat. The three
a single bargaining unit?
companies were supposedly distinct entities
2) WON rank-and-file employees of Super based on the fact that Super Lamination is a sole
Lamination, Express Lamination, and Express proprietorship while Express Lamination and
Coat constitute an appropriate bargaining unit? Express Coat were separately registered with the
SEC. The directive was therefore, in effect, a
RULING: piercing of the separate juridical personalities of
the corporations involved. We find the piercing
1) Yes.
to be proper and in accordance with the law.
This Court has time and again disregarded
Further, we discern from the synchronized
separate juridical personalities under the
movements of petitioner and the two other
doctrine of piercing the corporate veil. It has
companies an attempt to frustrate or defeat the
done so in cases where a separate legal entity is
workers' right to collectively bargain through the
used to defeat public convenience, justify
shield of the corporations' separate juridical
wrong, protect fraud, or defend crime, among
personalities.
other grounds. In any of these situations, the law
will regard it as associations of persons or, in Due to the finger-pointing by the three
case of two corporations, merge them into one. companies at one another, the petitions were
dismissed. As a result, the three unions were not
A settled formulation of the doctrine of piercing
able to proceed with the conduct of the
the corporate veil is that when two business
certification election. This also caused confusion and working conditions were so substantially
among the employees as to who their real similar as to justify a conclusion that they shared
employer is, as Union A claims in its Comment. a community of interest. This finding is
consistent with the policy in favor of a single-
We hold that if we allow petitioner and the two employer unit, unless the circumstances require
other companies to continue obstructing the otherwise. The more solid the employees are, the
holding of the election in this manner, their stronger is their bargaining capacity.
employees and their respective unions will never
have a chance to choose their bargaining PAL vs. NLRC (1993)
representative. We take note that all three
establishments were unorganized. That is, no When the subject affects the employees’ rights,
union therein was ever duly recognized or duties, and welfare, which in the given case
certified as a bargaining representative. affecting the employee’s tenure, employees
participation in shaping the policy is required. It
Therefore, it is only proper that, in order to must be noted however that participation does
safeguard the right of the workers and Unions A, not mean co-management. Participation in this
B, and C to engage in collective bargaining, the sense refers to the Union’s right to be allowed to
corporate veil of Express Lamination and participate in policy formulation and decision-
Express Coat must be pierced. The separate making process on matters affecting the Union
existence of Super Lamination, Express members’ right, duties and welfare as required
Lamination, and Express Coat must be by Art. 211 (a and g).
disregarded. In effect, we affirm the lower
tribunals in ruling that these companies must be FACTS: PAL completely revised its 1966 Code
treated as one and the same unit for purposes of of Discipline. The Code was circulated among
holding a certification election. the employees and was immediately
implemented, and some employees were
2) Yes instantly subjected to the disciplinary measures.

The basic test for determining the appropriate Respondent PALEA filed a complaint before the
bargaining unit is the application of a standard NLRC contending that PAL is guilty of unfair
whereby a unit is deemed appropriate if it affects labor practice due to its unilateral
a grouping of employees who have substantial, implementation of the Code, specifically
mutual interests in wages, hours, working violating par. E and G of Article 249 and Article
conditions, and other subjects of collective 253 of the Labor Code. PALEA alleged that
bargaining. We have ruled that geographical copies of the Code had been circulated in limited
location can be completely disregarded if the numbers; that being penal in nature the Code
communal or mutual interests of the employees must conform with the requirements of
are not sacrificed. sufficient publication, and that the Code was
arbitrary, oppressive, and prejudicial to the
In the present case, there was communal interest rights of the employees. Respondent prayed that
among the rank-and-file employees of the three implementation of the Code be held in abeyance;
companies based on the finding that they were that PAL should first discuss the substance of
constantly rotated to all three companies, and the Code; that employees dismissed under the
that they performed the same or similar duties Code be reinstated and their cases subjected to
whenever rotated. Therefore, aside from
geographical location, their employment status
further hearing; and that PAL should pay The objectionable provisions of the Code reveal
damages. that they are not purely business-oriented nor do
they concern the management aspect of the
PAL asserts its management prerogative and business. Management should see to it that its
further alleged that it had not violated the CBA employees are at least properly informed of its
or any provision of the Labor Code. It decisions. A provision in the CBA may not be
maintained that Article 253 of the Labor Code interpreted as cession of employees' rights to
cited by PALEA was inapplicable since the participate in the deliberation of matters which
current CBA had been negotiated. may affect their rights and the formulation of
ISSUE: WON management may be compelled policies such as the formulation of a code of
discipline. Whatever disciplinary measures are
to share with the union or its employees its
adopted cannot be properly implemented in the
prerogative of formulating a code of discipline?
absence of full cooperation of the employees.
RULING: Yes. PAL asserts that when it revised Such cooperation cannot be attained if the
its Code on March 15, 1985, there was no law employees are left out in the determination of
which mandated the sharing of responsibility cardinal and fundamental matters affecting their
therefor between employer and employee. It was employment.
only on March 2, 1989, with the approval of
Republic Act No. 6715, amending Article 211 of Note: Principle of Co-determination, employees
the Labor Code, that the law explicitly should be included in the deliberations regarding
considered it a State policy "to ensure the the creation and implementation of a code of
participation of workers in decision and policy- conduct provided such code of conduct involves
making processes affecting the rights, duties and the rights and benefits of the union/employees.
welfare." However, even in the absence of said Rivera et. al. vs. Espiritu (2002)
clear provision of law, the exercise of
managerial prerogatives is not unlimited. It is In the instant case, it was PALEA, as the
circumscribed by limitations found in law, a exclusive bargaining agent of PAL’s ground
collective bargaining agreement, or the general employees that voluntarily entered into the CBA
principles of fair play and justice. Thus, with PAL. It was also PALEA that voluntarily
management prerogative must be without abuse opted for the 10-year suspension of the CBA.
of discretion. When the subject affects the Either case was the union’s exercise of its right
employees’ rights, duties, and welfare, which in to collective bargaining. The right to free
the given case affecting the employee’s tenure, collective bargaining includes the right to
employees participation in shaping the policy is suspend it. It can be deduced then that nothing
required. It must be noted however that prohibits the parties from waiving or suspending
participation does not mean co-management. the mandate timetables and agreeing on the
Participation in this sense refers to the Union’s remedies to enforce the same. In sum, the Court
right to be allowed to participate in policy is of the view that the PAL-PALEA agreement
formulation and decision-making process on dated Sept. 27, 1998 is valid exercise of the
matters affecting the Union members’ right, freedom to contract. Under the principle of
duties and welfare as required by Art. 211 (a and inviolability of contracts guaranteed by the
g). Constitution, the contract must be upheld
FACTS: Faced with bankruptcy, PAL adopted a the necessary referendum was scheduled. Of the
rehabilitation plan and downsized its labor force votes cast, 61% were in favor of accepting the
by more than one-third, prompting PALEA to go PAL-PALEA agreement, while 34% rejected it.
on strike to protest the retrenchment measures On the same date PAL resumed domestic
adopted by the airline. A Task Force composed operations, seven officers and members of
of herein public respondents was created to hold PALEA filed this instant petition to annul the
conciliation meetings between PAL agreement entered into between PAL and
management and the unions representing the PALEA on the ground that public respondents
airline employees, among them PALEA. PAL gravely abused their discretion and exceeded
eventually ceased its operations and sent notices their jurisdiction in actively pursuing the
of termination to its employees. However, conclusion of the PAL-PALEA agreement as the
PALEA offered a 10-year moratorium on strikes constitutional rights to self-organization and
and similar actions and a waiver of some of the collective bargaining, being founded on public
economic benefits in the existing CBA. PAL policy, may not be waived, nor the waiver,
management accepted the PALEA proposal7 and ratified.

7 *PALEA PROPOSAL (Terms and Conditions) ISSUE: WON the agreement stipulating the
suspension of the PAL-PALEA CBA is
1. Each PAL employee shall be granted 60,000 shares of unconstitutional and contrary to public policy?
stock with a par value of P5.00, from Mr. Lucio Tan’s
shareholdings, with three (3) seats in the PAL Board and an
additional seat from government shares as indicated by His RULING: No.
Excellency;
There is no conflict between said agreement and
2. Likewise, PALEA shall, as far as practicable, be granted
adequate representation in committees or bodies which deal Article 253-A of the Labor Code. Article 253-A
with matters affecting terms and conditions of employment; has a two-fold purpose. One is to promote
industrial stability and predictability. Inasmuch
3. To enhance and strengthen labor-management relations,
the existing Labor-Management Coordinating Council shall as the agreement sought to promote industrial
be reorganized and revitalized, with adequate peace at PAL during its rehabilitation, said
representation from both PAL management and PALEA;
agreement satisfies the first purpose of Article
4. To assure investors and creditors of industrial peace, 253-A. The other is to assign specific timetables
PALEA agrees, subject to the ratification by the general wherein negotiations become a matter of right
membership, (to) the suspension of the PAL-PALEA
CBA for a period of ten (10) years, provided the and requirement. Nothing in Article 253-A,
following safeguards are in place: prohibits the parties from waiving or suspending
a. PAL shall continue recognizing PALEA as the duly the mandatory timetables and agreeing on the
certified bargaining agent of the regular rank-and-file remedies to enforce the same.
ground employees of the Company;
b. The ‘union shop/maintenance of membership’ In the instant case, it was PALEA, as the
provision under the PAL-PALEA CBA shall be
respected. exclusive bargaining agent of PAL’s ground
c. No salary deduction, with full medical benefits. employees that voluntarily entered into the CBA
5. PAL shall grant the benefits under the 26 July 1998 with PAL. It was also PALEA that voluntarily
Memorandum of Agreement forged by and between PAL opted for the 10-year suspension of the CBA.
and PALEA, to those employees who may opt to retire or Either case was the union’s exercise of its right
be separated from the company.
to collective bargaining. The right to free
6. PALEA members who have been retrenched but have
not received separation benefits shall be granted priority in
the hiring/rehiring of employees. 7. In the absence of applicable Company rule or regulation,
the provisions of the Labor Code shall apply.
collective bargaining includes the right to FACTS: Petitioner-union entered into a CBA
suspend it. It can be deduced then that nothing with SMC to take effect upon the expiration of
prohibits the parties from waiving or suspending the previous CBA or on June 30, 1989 until June
the mandate timetables and agreeing on the 30, 1992. The CBA also stated that the term of
remedies to enforce the same. In sum, the Court the Agreement insofar as the representation
is of the view that the PAL-PALEA agreement aspect is concerned, shall be for 5 years from
dated Sept. 27, 1998 is valid exercise of the July 1, 1989 to June 30, 1994. Hence, the
freedom to contract. Under the principle of freedom period for purposes of such
inviolability of contracts guaranteed by the representation shall be sixty (60) days prior to
Constitution, the contract must be upheld. June 30, 1994.

Further, the acts of public respondents in After June 30, 1992, the CBA was renegotiated
sanctioning the 10-year suspension of the PAL- in accordance with the terms of the CBA and
PALEA CBA did not contravene the "protection Article 253-A of the Labor Code. Negotiations
to labor" policy of the Constitution. The started sometime in July, 1992 with the two
agreement afforded full protection to labor; parties submitting their respective proposals and
promoted the shared responsibility between counterproposals. During the negotiations, the
workers and employers; and exercised the petitioner-union insisted that the bargaining unit
voluntary modes in settling disputes, including of SMC should still include the employees of the
conciliation to foster industrial peace. spun-off corporations: Magnolia and SMFI; and
that the renegotiated terms of the CBA shall be
Moreover, the agreement does not violate the effective only for the remaining period of two
five-year representation limit mandate by Article years or until June 30, 1994.
253-A. Under said article, the representation
limit for the exclusive bargaining agent applies SMC, on the other hand, contended that the
only when there is an extant CBA in full force members/employees who had moved to
and effect. In the instant case, the parties agreed Magnolia and SMFI, automatically ceased to be
to suspend the CBA and put in abeyance the part of the bargaining unit at the SMC.
limit on the representation period. Furthermore, the CBA should be effective for
three years in accordance with Art. 253-A of the
SMCEU-PTGWO vs. Hon. Confesor (1996) Labor Code.
In the event however, that the parties, by mutual ISSUES:
agreement, enter into a renegotiated contract
with a term of three (3) years or one which does 1) WON the duration of the renegotiated terms
not coincide with the said 5-year term, and said of the CBA is to be effective for three years or
agreement is ratified by majority of the members for only two years? And;
in the bargaining unit, the subject contract is
valid and legal and therefore, binds the 2) WON the bargaining unit of SMC includes
contracting parties. The same will however not also the employees of the Magnolia and SMFI?
adversely affect the right of another union to
RULING:
challenge the majority status of the incumbent
bargaining agent within sixty (60) days before 1) The renegotiated terms of the CBA shall be
the lapse of the original five (5) year term of the for three (3) years.
CBA.
Article 253-A states that the CBA has a term of three (3) years or one which does not coincide
five (5) years instead of three years, before the with the said 5-year term, and said agreement is
amendment of the law as far as the ratified by majority of the members in the
representation aspect is concerned. All other bargaining unit, the subject contract is valid and
provisions of the CBA shall be negotiated not legal and therefore, binds the contracting parties.
later than three (3) years after its execution. The The same will however not adversely affect the
"representation aspect" refers to the identity and right of another union to challenge the majority
majority status of the union that negotiated the status of the incumbent bargaining agent within
CBA as the exclusive bargaining representative sixty (60) days before the lapse of the original
of the appropriate bargaining unit concerned. five (5) year term of the CBA.
"All other provisions" simply refers to the rest of
the CBA, economic as well as noneconomic 2) No. As a result of the spin-offs:
provisions, except representation. 1. Each of the companies are run by, supervised
From the congressional discussions, the and controlled by different management teams
legislators were more inclined to have the period including separate human resource/personnel
of effectivity for three (3) years insofar as the managers.
economic as well as non-economic provisions 2. Each Company enforces its own
are concerned, except representation. Obviously, administrative and operational rules and policies
the framers of the law wanted to maintain and are not dependent on each other in their
industrial peace and stability by having both operations.
management and labor work harmoniously
together without any disturbance. Thus, no 3. Each entity maintains separate financial
outside union can enter the establishment within statements and are audited separately from each
five (5) years and challenge the status of the other.
incumbent union as the exclusive bargaining
agent. Likewise, the terms and conditions of Indubitably, therefore, Magnolia and SMFI
employment (economic and non-economic) became distinct entities with separate juridical
cannot be questioned by the employers or personalities. Thus, they can not belong to a
employees during the period of effectivity of the single bargaining unit. There are various factors
CBA. which must be satisfied and considered in
determining the proper constituency of a
The CBA is a contract between the parties and bargaining unit. (1) will of the employees
the parties must respect the terms and conditions (Globe Doctrine); (2) affinity and unit of
of the agreement. Notably, the framers of the employees' interest, such as substantial
law did not give a fixed term as to the effectivity similarity of work and duties, or similarity of
of the terms and conditions of employment. It compensation and working conditions; (3) prior
can be gleaned from their discussions that it was collective bargaining history; and (4)
left to the parties to fix the period. As a matter of employment status, such as temporary, seasonal
policy the parties are encouraged to enter into a and probationary employees.
renegotiated CBA with a term which would
coincide with the aforesaid five (5) year term of Even assuming in gratia argumenti that at the
the bargaining representative. In the event time of the election they were regular employees
however, that the parties, by mutual agreement, of San Miguel, nonetheless, these workers are no
enter into a renegotiated contract with a term of longer connected with San Miguel Corporation
in any manner because Magnolia has ceased to certification election had been held in PASAR
be a division of San Miguel Corporation and has within twelve (12) months immediately
been formed into a separate corporation with a preceding the filing of the said petition.
personality of its own. This development, which
was brought to our attention by private Petitioner moved to intervene and sought the
respondents, necessarily renders moot and dismissal of the petition on the ground that
academic any further discourse on the propriety NAFLU failed to present the necessary
of the elections which petitioners impugn via the signatures in support of its petition. In the order
recourse. dated April 21, 1987, Med-Arbiter Bienvenido
C. Elorcha dismissed the petition. However, the
ALU vs. Ferrer-Calleja (November 6, 1989) order of dismissal was set aside in another order
dated May 8, 1987 and the case was rescheduled
PASAR hastily concluded a CBA despite the for hearing on May 29, 1987. The said order
order of the Med-Arbiter enjoining them from likewise enjoined PASAR from entering into a
doing so until the issue of representation is collective bargaining agreement with any union
finally resolved. As pointed out by public until after the issue of representation is finally
respondent in its comment, the parties were in resolved. In the order dated June 1, 1987, the
bad faith when they concluded the CBA. Their petition for certification was dismissed for
act was clearly intended to bar the petition for failure of NAFLU to solicit 20% of the total
certification election filed by NAFLU. A number of rank and file employees while ALU
collective bargaining agreement which was submitted 33 pages containing the signatures of
prematurely renewed is not a bar to the holding 88.5% of the rank and file employees at
of a certification election. Such indecent haste in PASAR.
renewing the CBA despite an order enjoining
them from doing so is designed to frustrate the Private respondent appealed the order of
constitutional right of the employees to self- dismissal to the Bureau of Labor Relations.
organization While the appeal was pending, petitioner ALU
concluded negotiations with PASAR on the
FACTS: The Philippine Associated Smelting proposed CBA. On July 24, 1987, copies of the
and Refining Corporation (PASAR) is a newly concluded CBA were posted in four (4)
corporation established and existing pursuant to conspicuous places in the company premises.
Philippine laws and is engaged in the The said CBA was ratified by the members of
manufacture and processing of copper cathodes the bargaining unit on July 28, 1987.[3]
with a plant operating in Isabel, Leyte. Thereafter, petitioner ALU moved for the
Petitioner Associated Labor Union (ALU) had a dismissal of the appeal alleging that it had just
collective bargaining agreement (CBA) with concluded a CBA with PASAR and that the said
PASAR which expired on April 1, 1987. Several CBA had been ratified by 98% of the regular
days before the expiration of the said CBA or on rank-and-file employees and that at least 75 of
March 23, 1987, private respondent National NAFLU’s members renounced their
Federation of Labor Unions (NAFLU) filed a membership thereat and affirmed membership
petition for certification election with the Bureau with PEA-ALU in separate affidavits.
of Labor Relations Regional Office in Tacloban In a resolution dated September 30, 1987, the
City docketed as MED-ARB-RO VII Case No. public respondent gave due course to the appeal
3-28-87, alleging, among others, that no by ordering the conduct of a certification
election among the rank-and-file employees of Said article traverses the claim of the petitioner
PASAR with ALU, NAFLU and no union as that in this case there is a need for a considerable
choices, and denied petitioner’s motion to support of the rank-and-file employees in order
dismiss. that a certification election may be ordered.
Nowhere in the said provision does it require
Both parties moved for reconsideration of the that the petition in organized establishments
said resolution. However, both motions were should be accompanied by the written consent of
denied by public respondent in the order dated at least twenty percent (20%) of the employees
April 22, 1988. of the bargaining unit concerned much less a
requirement that the petition be supported by the
ISSUES:
majority of the rank-and-file employees. As
1) WON the holding of certification elections in above stated, Article 257 is applicable only to
organized establishments is mandated only unorganized establishments. The Court reiterates
where a petition is filed questioning the majority that in cases of organized establishments where
status of the incumbent union, and that it is only there exists a certified bargaining agent, what is
after establishing that a union has indeed a essential is whether the petition for certification
considerable support that a certification election election was filed within the sixty-day freedom
should be ordered? period. Article 256 of the Labor Code, as
amended by Executive Order No. 111 provides:
2) WON the petition filed by NAFLU was
instituted within the freedom period? “ART. 256. Representation issue in organized
establishments. — In organized establishments,
RULING: when a petition questioning the majority status
of the incumbent bargaining agent is filed before
1) No.
the Department within the sixty-day period
Article 257 is applicable only to unorganized before the expiration of the collective
labor organizations and not to establishments bargaining agreement, the Med-Arbiter shall
like PASAR where there exists a certified automatically order an election by secret ballot
bargaining agent, petitioner ALU, which as the to ascertain the will of the employees in the
record shows had previously entered into a CBA appropriate bargaining unit. To have a valid
with the management. This could be discerned election, at least a majority of all elegible voters
from the clear intent of the law which provides in the unit must have cast their votes. The labor
that — union receiving the majority of the valid votes
cast shall be certified as the exclusive
“ART. 257. Petitions in unorganized bargaining agent of all the workers in the unit.
establishments. — In any establishment where When an election which provides for three or
there is no certified bargaining agent, the more choices results in no choice receiving a
petition for certification election filed by a majority of the valid votes cast, a run-off
legitimate labor organization shall be supported election shall be conducted between the choices
by the written consent of at least twenty per cent receiving the two highest number of votes.”
(20%) of all the employees in the bargaining
unit. Upon receipt and verification of such Article 256 is clear and leaves no room for
petition, the Med-Arbiter shall automatically interpretation. The mere filing of a petition for
order the conduct of a certification election.” certification election within the freedom period
is sufficient basis for the respondent Director to certified and yet the Court affirmed the order of
order the holding of a certification election. the Director of the Bureau of Labor Relations
which dismissed the petition for certification
2) Yes. election filed by the labor union.
The previous CBA entered into by petitioner In TUPAS, the dismissal of the petition for
ALU was due to expire on April 1, 1987. The certification, was based on the fact that the
petition for certification was filed by NAFLU on contending union had a clear majority of the
March 23, 1987, well within the freedom period. workers concerned since out of 641 of the total
The contract bar rule is applicable only where working force, the said union had 499 who did
the petition for certification election was filed not only ratify the CBA concluded between the
either before or after the freedom period. said union and the management but also
Petitioner, however, contends that since the new affirmed their membership in the said union so
CBA had already been ratified overwhelmingly that apparently petitioners therein did not have
by the members of the bargaining unit and that the support of 30% of all the employees of the
said CBA had already been consummated and bargaining unit.
the members of the bargaining unit have been
continuously enjoying the benefits under the Nevertheless, even assuming for the sake of
said CBA, no certification election may be argument that the petitioner herein has the
conducted, citing, Foamtex Labor Union- majority of the rank-and-file employees and that
TUPAS vs. Noriel, and Trade Unions of the some members of the NAFLU even renounced
Phil. and Allied Services vs. Inciong. their membership thereat and affirmed
membership with the petitioner, We cannot,
The reliance on the aforementioned cases is however, apply TUPAS in the case at bar.
misplaced. Unlike in the case of herein petitioner, in
In Foamtex, the petition for certiorari TUPAS, the petition for certification election
questioning the validity of the order of the was filed nineteen (19) days after the CBA was
Director of Labor Relations which in turn signed which was well beyond the freedom
period.
affirmed the order of the Med-Arbiter calling for
a certification election was dismissed by the On the other hand, as earlier mentioned, the
Court on the ground that although a new CBA petition for certification election in this case was
was concluded between the petitioner and the filed within the freedom period but the petitioner
management, only a certified CBA would serve and PASAR hastily concluded a CBA despite
as a bar to the holding of a certification election, the order of the Med-Arbiter enjoining them
citing Article 232 of the Labor Code. from doing so until the issue of representation is
Foamtex weakens rather than strengthens finally resolved. As pointed out by public
respondent in its comment, the parties were in
petitioner’s stand. As pointed out by public
respondent, the new CBA entered into between bad faith when they concluded the CBA. Their
petitioner on one hand and by the management act was clearly intended to bar the petition for
on the other has not been certified as yet by the certification election filed by NAFLU. A
Bureau of Labor Relations. There is an collective bargaining agreement which was
appreciable difference in Trade Unions of the prematurely renewed is not a bar to the holding
Phil. and Allied Services (TUPAS for short). of a certification election. Such indecent haste in
Here, as in Foamtex, the CBA was not yet renewing the CBA despite an order enjoining
them from doing so is designed to frustrate the conduct preventive mediation proceedings
constitutional right of the employees to self- between it and UFE-DFA-KMU owing to an
organization. Moreover, we cannot countenance alleged impasse in said dialogue. Conciliation
the actuation of the petitioner and the proceedings proved ineffective UFE-DFA-KMU
management in this case which is not conducive filed a Notice of Strike with the NCMB,
to industrial peace. complaining, in essence, of a bargaining
deadlock pertaining to economic issues, i.e.,
The renewed CBA cannot constitute a bar to the "retirement (plan). Another Notice of Strike was
instant petition for certification election for the filed by the union, this time predicated on
very reason that the same was not yet in Nestlé’s alleged unfair labor practices. Prior to
existence when the said petition was filed The holding the strike, Nestlé filed with the DOLE a
holding of a certification election is a statutory Petition for Assumption of Jurisdiction, praying
policy that should not be circumvented. for the Secretary of the DOLE, Hon. Patricia A.
Sto. Tomas, to assume jurisdiction over the
Union of Filipro Employees vs. Nestle (2008)
current labor dispute.
G.R. No. 158930-31

The corporation simply wanted to exclude the Sec. Sto. Tomas issued an Order15 assuming
Retirement Plan from the issues to be taken up jurisdiction over the subject labor dispute.
during CBA negotiations, on the postulation that Accordingly, any strike or lockout is hereby
such was in the nature of a unilaterally granted enjoined. The parties are further directed to meet
benefit. An employer’s steadfast insistence to and convene for the discussion before the
exclude a particular substantive provision is no NCMB. If no settlement of all the issues is
different from a bargaining representative’s reached, this Office shall thereafter define the
outstanding issues and order the filing of
perseverance to include one that they deem of
position papers for a ruling on the merits.
absolute necessity. It is not enough that the
union believed that the employer committed acts Despite the order enjoining the conduct of any
of unfair labor practice when the circumstances strike or lockout and conciliation efforts by the
clearly negate even a prima facie showing to NCMB, the employee members of UFE-DFA-
warrant such a belief. KMU at Nestlé’s Cabuyao Plant went on strike.
FACTS: UFE-DFA-KMU was the sole and Sec. Sto. Tomas directed them to Return-to-
exclusive bargaining agent of the rank-and-file Work. Notwithstanding the Return-to-Work
employees of Nestlé belonging to the latter’s Order, the members of UFE-DFA-KMU
continued with their strike, thus, prompting Sec.
Alabang and Cabuyao plants. (CBA) between
Nestlé and UFE-DFA-KMU was to end on 5 Sto. Tomas to seek the assistance of the
June 2001, the Presidents of the Alabang and Philippine National Police (PNP) for the
Cabuyao Divisions of UFE-DFA-KMU enforcement of said order.
informed Nestlé of their intent to "open [our] Nestlé and UFE-DFA-KMU filed their
new Collective Bargaining Negotiation for the respective position papers.
year 2001-2004 x x x as early as June 2001."
Nestlé informed them that it was also preparing UFE-DFA-KMU filed several pleadings, one of
its own counter-proposal. which was a Manifestation with Motion for
Reconsideration. The union posited that Sec.
Dialogue between the company and the union Sto. Tomas "could only assume jurisdiction over
thereafter ensued. Nestlé requested NCMB to
the issues mentioned in the notice of strike 3) WON the order of resumption of negotiations
subject of the current dispute. Sec. Sto. Tomas respecting the Retirement Plan directs the parties
denied the motion for reconsideration of UFE- to submit to a voluntary mode of dispute
DFA-KMU. settlement?

Thereafter, UFE-DFA-KMU filed a Petition for RULING:

Certiorari before the Court of Appeals.
1) NO. The duty to bargain collectively is
In the interim, in an attempt to finally resolve mandated by Labor Code
the crippling labor dispute between the parties,
then Acting Secretary of the DOLE, Hon. Arturo ART. 252. Meaning of duty to bargain
D. Brion, came out with an Order that: collectively. – The duty to bargain collectively
Retirement Plan not a mandatory subject for means the performance of a mutual obligation to
bargaining; ULP against the Company is hereby meet and convene promptly and expeditiously in
dismissed; all union demands that are not good faith for the purpose of negotiating an
covered by the provisions of the CBAs are agreement with respect to wages, hours, of work
hereby denied; the parties shall execute their and all other terms and conditions of
CBA within thirty (30) days from receipt of this employment including proposals for adjusting
Order. any grievances or questions arising under such
agreement and executing a contract
UFE-DFA-KMU moved to reconsider the incorporating such agreements if requested by
aforequoted ruling, but such was subsequently either party but such duty does not compel any
denied. For the second time, UFE-DFA-KMU party to agree to a proposal or to make any
went to the Court of Appeals via another concession.
Petition for Certiorari seeking to annul the
Orders. The statutes invite and contemplate a collective
bargaining contract, but they do not compel one.
CA: promulgated its Decision on the twin The duty to bargain does not include the
petitions for certiorari, ruling entirely in favor of obligation to reach an agreement.
UFE-DFA-KMU. Both parties appealed the
ruling. UFE-DFA-KMU argues therein that For a charge of unfair labor practice to prosper,
Nestlé’s "refusal to bargain on a very important it must be shown that Nestlé was motivated by
CBA economic provision constitutes unfair ill will, "bad faith, or fraud, or was oppressive to
labor practice." It explains that Nestlé set as a labor, or done in a manner contrary to morals,
precondition for the holding of collective good customs, or public policy, and, of course,
bargaining negotiations the non-inclusion of the that social humiliation, wounded feelings, or
issue of Retirement Plan. grave anxiety resulted x x x" In disclaiming
unilateral grants as proper subjects in their
ISSUE/S: collective bargaining negotiations. While the
law makes it an obligation for the employer and
1) WON Nestle is guilty of ULP? the employees to bargain collectively with each
2) WON the DOLE Secretary’s jurisdiction was other, such compulsion does not include the
limited to the resolution of questions and matters commitment to precipitately accept or agree to
pertaining merely to the ground rules of the the proposals of the other. All it contemplates is
collective bargaining negotiations? that both parties should approach the negotiation
with an open mind and make reasonable effort to Dole Secretary subservient to the whims of the
reach a common ground of agreement. parties.

Herein, the union merely bases its claim of 3) NO. Nowhere in the Court’s previous
refusal to bargain on a letter by Nestlé where the Decision did we require parties to submit to
latter laid down its position that "unilateral negotiate by themselves the tenor of the
grants, one-time company grants, company- retirement benefits of the concerned employees
initiated policies and programs, which include, of Nestlé, precisely because the Secretary of the
but are not limited to the Retirement Plan, DOLE had already assumed jurisdiction over the
Incidental Straight Duty Pay and Calling Pay labor dispute subject of herein petitions. The
Premium, are by their very nature not proper Secretary of the DOLE has been explicitly
subjects of CBA negotiations and therefore shall granted by Article 263(g) of the Labor Code the
be excluded therefrom." Said letter is not authority to assume jurisdiction over a labor
tantamount to refusal to bargain. dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
The corporation simply wanted to exclude the national interest, and decide the same
Retirement Plan from the issues to be taken up accordingly. And, as a matter of necessity, it
during CBA negotiations, on the postulation that includes questions incidental to the labor
such was in the nature of a unilaterally granted dispute; that is, issues that are necessarily
benefit. An employer’s steadfast insistence to involved in the dispute itself, and not just to that
exclude a particular substantive provision is no ascribed in the Notice of Strike or otherwise
different from a bargaining representative’s submitted to him for resolution. The Secretary
perseverance to include one that they deem of having already assumed jurisdiction over the
absolute necessity. It is not enough that the labor dispute subject of these consolidated
union believed that the employer committed acts petitions, the issue concerning the retirement
of unfair labor practice when the circumstances benefits of the concerned employees must be
clearly negate even a prima facie showing to remanded back to him for proper disposition.
warrant such a belief.
Samahan ng Manggagawa ng Filsystems vs.
Employers are accorded rights and privileges to Secretary (1998)
assure their self-determination and independence
and reasonable return of capital. There is no per A dismissal of a petition for certification
se test of good faith in bargaining. Good faith or election seasonably appealed shall stop the
bad faith is an inference to be drawn from the holding of any certification of election, pursuant
facts. to Rule V, Section 10, which provides that the
filing of the appeal from the decision of the Med-
2) NO. The Secretary of the DOLE simply relied Arbiter stays the holding of any certification
on the Notices of Strike that were filed by UFE- election
DFA-KMU alleging bargaining deadlock. Based
on the Notices of Strike filed by UFE-DFA- FACTS: Petitioner Samahan ng mga
KMU, the Secretary of the DOLE rightly Manggagawa sa Filsystems (SAMAFIL-
decided on matters of substance. That the union NAFLU-KMU) filed a petition for certification
later on changed its mind is of no moment election among the rank-and-file employees of
because to give premium to such would make Filsystems. It submitted the Certificate of
the legally mandated discretionary power of the Registration issued by the DOLE, copies of
union membership signed by 33 rank-and-file In its opposition, petitioner contended its appeal
employees of the company, the Charter is not moot as the certification election held on
Certificate showing its affiliation with the April 19, 1996 was void as
NAFLU, the list of union officers, the
certification of the union secretary of the a. It violated Rule V Sec. 108 of the
minutes of the general membership meeting, the Implementing Rules of the LC, which provides
Books of Accounts and its CBL. that the filing of the appeal from the decision of
the Med-Arbiter stays the holding of any
Filsystems opposed the petition, questioning the certification election.
status of petitioner as a legitimate labor org on
the ground of lack of proof that its contract of b. The CBA executed between FWU and
affiliation with the NAFLU-KMU has been Filsystems could not affect its pending
submitted to the BLR within 30 days from its representation case pursuant to Rule V§4 which
execution. Petitioner replied that as a duly provides that the representation case shall not be
registered labor union, it has all the rights and adversely affected by a CBA registered before or
privileges to act as representative of its members during the last 60 days of the subsisting
for the purpose of collective bargaining with agreement or during the pendency of the
employers. representation case.

The Med-Arbiter dismissed the petition for SOLE: Dismissed SAMAFIL’s appeal as it has
certification election. He ruled that petitioner, as been rendered MOOT by the subsequent
an affiliate of NAFLU-KMU, has no legal certification of FWU as the sole and exclusive
personality on account of its failure to comply bargaining agent of the R&F workers of
with pars (a), (b), and (e) of Rule II§3 of the respondent company
Implementing Rules of the LC.
ISSUES:
Petitioner appealed to the Office of the SOLE, 1) WON petitioner had legal personality to file
reiterating its contention that as an the petition
independently registered union, it has the right
to file a petition for certification election 2) WON the appeal was rendered moot and
regardless of its failure to prove its affiliation academic
with the NAFLU-KMU. Filsystems opposed the
appeal. RULING:

On Feb. 7, 1996, the Filsystems Workers Union 1) Yes.

(FWU) filed a PCE in the same bargaining unit,
Petitioner is an independently registered labor
which the Med-Arbitration – NCR Branch
union. As a legitimate labor organization, its
granted on April 19, 1996.
right to file a petition for certification election
Filsystems filed a Motion to Dismiss Appeal of
petitioner as it has become moot and academic. 8
Rule V Section 10: Decision of the Secretary Final
It invoked Rule V§3 of the Implementing Rules and Inappealable. – The Secretary shall have fifteen
of Book V of the LC stating that “once a union (15) calendar days within which to decide the appeal
has been certified, no certification election may from receipt of the records of the case. The filing of
be held within one year from the date of the appeal from the decision of the Med-Arbiter stays
the holding of any certification election. The decision
issuance of a final certification election”. of the Secretary shall be final and inappealable.
cannot be questioned. Reasoning Petitioner’s especially true where the Union's request for a
failure to prove its affiliation with NAFLU- counter proposal is left unanswered.
KMU will, at most, result in an ineffective
affiliation. Despite affiliation, the local union FACTS: Pambansang Kilusang Paggawa
remains the basic unit free to serve the interests (Union for short) won and was subsequently
of its members independently of the federation. certified in a resolution by the BLR in a
certification election as the sole and exclusive
2) No. bargaining agent of the rank-and-file employees
of Sweden Ice Cream Plant (Company for
Petitioner’s appeal was not rendered moot and short). The Company's motion for
academic by virtue of the subsequent reconsideration of the said resolution was
certification election later held on April 19, denied.
1996. The order of the Med-Arbiter dismissing
petitioner’s petition for certification election was The Company was given two copies of its
seasonably appealed. The appeal stopped the proposed collective bargaining agreement by the
holding of any certification election. Union. At the same time, it requested the
Company for its counter proposals. Eliciting no
There was an unresolved representation case at response to the aforesaid request, the Union
the time Filsystems entered into a CBA with again wrote the Company reiterating its request
FWU. Following Rule V Section 4 of the for collective bargaining negotiations and for the
Implementing Rules of Book V of the LC, such Company to furnish them with its counter
CBA cannot and will not prejudice petitioner’s proposals. Both requests were ignored and
pending representation case or render the same remained unacted upon by the Company.
moot. This rule was applied in Associated
Labor Unions (ALU-TUCP) v. Trajano where The Union filed a "Notice of Strike", with the
the Court held that “There should be no obstacle BLR on ground of unresolved economic issues
to the right of the employees to petition for a in collective bargaining. Conciliation
certification election at the proper time, which is proceedings then followed during the thirty-day
60 days prior to the expiration of the life of a statutory cooling-off period. But all attempts
certified CBA x x x, not even by a collective towards an amicable settlement failed,
agreement submitted during the pendency of the prompting the Bureau of Labor Relations to
representation case. certify the case to the NLRC for compulsory
arbitration. The Union submitted its position
Kiok Loy vs. NLRC (1986) paper. The Company did not and instead
Unfair labor practice is committed when it is requested for a resetting which was granted. The
shown that the respondent employer, after case was further reset to May 11, 1979 due to
having been served with a written bargaining the withdrawal of the Company's counsel of
record. Atty. Fortunato Panganiban formally
proposal by the petitioning Union, did not even
bother to submit an answer or reply to the said entered his appearance as counsel for the
proposal. Company only to request for another
postponement allegedly for the purpose of
A Company's refusal to make counter proposal if acquainting himself with the case. Meanwhile,
considered in relation to the entire bargaining the Company submitted its position paper on
process, may indicate bad faith and this is May 28, 1979. the Company's representative,
Mr. Ching, who was supposed to be examined,
failed to appear. Atty. Panganiban then preconditions are present, namely, (1)
requested for another postponement which the possession of the status of majority
labor arbiter denied. representation of the employees' representative
in accordance with any of the means of selection
LA ruled that the Company has waived its right or designation provided for by the Labor Code;
to present further evidence and, therefore, (2) proof of majority representation; and (3) a
considered the case submitted for resolution. demand to bargain under Article 251, par. (a) of
NLRC: Guilty of unjustified refusal to bargain the New Labor Code all of which preconditions
are undisputedly present in the instant case.
Petitioner Company now maintains that its right
to procedural due process has been violated We are in total conformity with respondent
when it was precluded from presenting further NLRC's pronouncement that petitioner
evidence in support of its stand and when its Company is GUILTY of unfair labor practice. It
request for further postponement was denied; has been indubitably established that (1)
that when the Union furnished them with a copy respondent Union was a duly certified
of the proposed Collective Bargaining bargaining agent; (2) it made a definite request
Agreement and it was only then that they came to bargain, accompanied with a copy of the
to know of the Union's demands; and finally, proposed Collective Bargaining Agreement, to
that the Collective Bargaining Agreement the Company not only once but twice which
approved and adopted by the NLRC is were left unanswered and unacted upon; and (3)
unreasonable and lacks legal basis. the Company made no counter proposal
whatsoever all of which conclusively indicate
ISSUE: WON the company is guilty of ULP? lack of a sincere desire to negotiate.

RULING: Yes. Petition lacks merit. There can A Company's refusal to make counter proposal
be no doubt that the Union has a valid cause to if considered in relation to the entire bargaining
complain against its (Company's) attitude, the process, may indicate bad faith and this is
totality of which is indicative of the latter's especially true where the Union's request for a
disregard of, and failure to live up to, what is counter proposal is left unanswered. Even during
enjoined by the Labor Code — to bargain in the period of compulsory arbitration before the
good faith. NLRC, petitioner Company's approach and
attitude stalling the negotiation by a series of
Collective bargaining is one of the democratic postponements, non-appearance at the hearing
frameworks under the New Labor Code, conducted, and undue delay in submitting its
designed to stabilize the relation between labor financial statements, lead to no other conclusion
and management and to create a climate of except that it is unwilling to negotiate and reach
sound and stable industrial peace. It is a mutual an agreement with the Union.
responsibility of the employer and the Union and
is characterized as a legal obligation. Petitioner has not at any instance, evinced good
faith or willingness to discuss freely and fully
While it is a mutual obligation of the parties to the claims and demands set forth by the Union
bargain, the employer, however, is not under any much less justify its opposition thereto.
legal duty to initiate contract negotiation. The Certainly, the moves and overall behavior of
mechanics of collective bargaining is set in petitioner-company were in total derogation of
motion only when the following jurisdictional the policy enshrined in the New Labor Code
which is aimed towards expediting settlement of An employee may be retired, either upon
economic disputes. application by the employee himself or by the
decision of the Director of the School, upon
Hence, this Court is not prepared to affix its reaching the age of sixty (60) or after having
imprimatur to such an illegal scheme and rendered at least twenty (20) years of service to
dubious maneuvers. Where the intervention of the School the last three (3) years of which must
the National Labor Relations Commission was be continuous.
properly sought for after conciliation efforts
undertaken by the BLR failed. The instant case Because of the foregoing, the union filed a
being a certified one, it must be resolved by the Notice of Strike with the NCMB and later staged
NLRC pursuant to the mandate of P.D. 873, as a strike and picketed in the school’s entrance.
amended, which authorizes the said body to Later, the union filed a complaint for unfair
determine the reasonableness of the terms and labor practice against petitioner school before
conditions of employment embodied in any the NLRC.
Collective Bargaining Agreement. To that
extent, utmost deference to its findings of The School avers that the retirement of Llagas
reasonableness of any Collective Bargaining and Javier was clearly in accordance with a
Agreement as the governing agreement by the specific right granted under the CBA. The
employees and management must be accorded School justifies its actions by invoking our
due respect by this Court. rulings in Pantranco North Express, Inc. v.
NLRC and Bulletin Publishing Corporation v.
Note: The law does not require the employer to Sanchez that no unfair labor practice is
file a counter-proposal, but a reply. As committed by management if the retirement was
consequence of failing to file a reply within the made in accord with management prerogative or
prescribed period, the proposal given by the in case of voluntary retirement, upon approval of
union will automatically become the CBA. management.

Cainta Catholic School vs. Cainta Catholic The Union, on the other hand, argues that the
School Employees Union (2006) retirement of the two union officers is a mere
subterfuge to bust the union.
A CBA may validly accord management the
prerogative to optionally retire an employee ISSUE: WON the retirement of Llagas and
under the terms and conditions mutually agreed Javier is legal?
upon by management and the bargaining union,
even if such agreement allows for retirement at RULING: Yes.
an age lower than the optional retirement age or The SC held that the termination of employment
the compulsory retirement age of Llagas and Javier was valid, arising as it did
FACTS: On 15 October 1993, petitioner school from a management prerogative granted by the
retired Llagas and Javier, President and Vice- mutually-negotiated CBA between the School
president of respondent union, respectively, who and the Union.
had rendered more than twenty (20) years of Pursuant to the existing CBA, the School has the
continuous service, pursuant to Section 2, option to retire an employee upon reaching the
Article X of the CBA, to wit: age limit of sixty (60) or after having rendered at
least twenty (20) years of service to the School,
the last three (3) years of which must be has served at least five (5) years in the said
continuous. Retirement is different specie of establishment, may retire and shall be entitled to
termination of employment from dismissal for retirement pay equivalent to at least one-half
just or authorized causes under Articles 282 and (1/2) month salary for every year of service, a
283 of the Labor Code. While in all three cases, fraction of at least six (6) months being
the employee to be terminated may be unwilling considered as one whole year.
to part from service, there are eminently higher
standards to be met by the employer validly By their acceptance of the CBA, the Union and
exercising the prerogative to dismiss for just or its members are obliged to abide by the
authorized causes. In those two instances, it is commitments and limitations they had agreed to
indispensable that the employer establish the cede to management. The questioned retirement
existence of just or authorized causes for provisions cannot be deemed as an imposition
dismissal as spelled out in the Labor Code. foisted on the Union, which very well had the
Retirement, on the other hand, is the result of a right to have refused to agree to allow
bilateral act of the parties, a voluntary agreement management to retire employees with at least 20
between the employer and the employee years of service.
whereby the latter after reaching a certain age It should not be taken to mean that retirement
agrees and/or consents to sever his employment provisions agreed upon in the CBA are
with the former. absolutely beyond the ambit of judicial review
Article 287 of the Labor Code, as amended, and nullification. A CBA, as a labor contract, is
governs retirement of employees, stating: not merely contractual in nature but impressed
with public interest. If the retirement provisions
ART. 287. Retirement. – Any employee may in the CBA run contrary to law, public morals,
be retired upon reaching the retirement age or public policy, such provisions may very well
established in the collective bargaining be voided. Certainly, a CBA provision or
agreement or other applicable employment employment contract that would allow
contract. management to subvert security of tenure and
allow it to unilaterally “retire” employees after
In case of retirement, the employee shall be one month of service cannot be upheld. Neither
entitled to receive such retirement benefits as he will the Court sustain a retirement clause that
may have earned under existing laws and any entitles the retiring employee to benefits less
collective bargaining agreement and other than what is guaranteed under Article 287 of the
agreements: Provided, however, That an Labor Code, pursuant to the provision’s express
employee’s retirement benefits under any proviso thereto in the provision.
collective bargaining agreement and other
agreements shall not be less than those provided Yet the CBA in the case at bar contains no such
herein. infirmities which must be stricken down.
Twenty years is a more than ideal length of
In the absence of a retirement plan or agreement service an employee can render to one employer.
providing for retirement benefits of employees in Under ordinary contemplation, a CBA provision
the establishment, an employee upon reaching entitling an employee to retire after 20 years of
the age of sixty (60) years or more, but not service and accordingly collect retirement
beyond sixty-five (65) years which is hereby benefits is “reward for services rendered since it
declared the compulsory retirement age, who enables an employee to reap the fruits of his
labor — particularly retirement benefits, Due to certain disagreements between the
whether lump-sum or otherwise — at an earlier MSMG and ULGWP regarding the collection of
age, when said employee, in presumably better certain fees from members, the MSMG declared
physical and mental condition, can enjoy them general autonomy from ULGWP thru a Board
better and longer.” Resolution which was later ratified by the
general membership.
A CBA may validly accord management the
prerogative to optionally retire an employee Herein petitioners were later expelled from
under the terms and conditions mutually agreed ULGWP allegedly because of their acts of
upon by management and the bargaining union, disloyalty and/or acts inimical to the interest and
even if such agreement allows for retirement at violative of the Constitution and By-laws of the
an age lower than the optional retirement age or federation. On the same day, the federation
the compulsory retirement age. advised respondent company of the expulsion of
the 30 union officers and demanded their
Petition is granted. separation from employment pursuant to the
Union Security Clause in their collective
Malayang Samahan ng mga Manggagawa sa
bargaining agreement. The company then
Greenfield vs. Ramos (2000)
dismissed the services of petitioners by bodily
While respondent company may validly dismiss removing them from the premises of the
the employees expelled by the union for company. This provoked some of the members
disloyalty under the union security clause of the of the local union to demonstrate their protest
collective bargaining agreement upon the for the dismissal of the said union officers. Some
recommendation by the union, this dismissal union members left their work posts and walked
should not be done hastily and summarily out of the company premises. The employees
thereby eroding the employees right to due then staged a strike. The strike was attended
process, self-organization and security of with violence, force and intimidation on both
tenure. The enforcement of union security sides resulting to physical injuries to several
clauses is authorized by law provided such employees, both striking and non-striking, and
enforcement is not characterized by damage to company properties.
arbitrariness, and always with due process.
Even on the assumption that the federation had The employees who participated in the strike
valid grounds to expel the union officers, due and allegedly figured in the violent incident
process requires that these union officers be were placed under preventive suspension by
respondent company. The company also sent
accorded a separate hearing by respondent
company. return-to-work notices to the home addresses of
the striking employees thrice successively,
FACTS: MSMG is the local union/affiliate of however only a handful of employees returned
respondent federation ULGWP. MSMG and the to work. The company then dismissed the
company Greenfield entered into a CBA. The employees who did not return to work for
CBA contains a Union Security Clause abandonment.
providing that “any employee who fails to join
or maintain membership in the Union shall be The petitioners herein filed a complaint charging
dismissed from the employment by the company private respondents of unfair labor practice
upon written recommendation to the company which consists of union busting, illegal
by the Union. dismissal, illegal suspension, interference in
union activities, discrimination, threats, ISSUES:
intimidation, coercion, violence, and oppression.
1) WON the employer can dismiss an employee
Petitioners contend that their dismissal from by virtue of the Union Security Clause without
work was effected in an arbitrary, hasty, investigating whether the employees were given
capricious and illegal manner because it was due process by the Union?
undertaken by the respondent company without
any prior administrative investigation; that, had 2) WON the act of disaffiliating from a
respondent company conducted prior federation can be considered as an act of
independent investigation it would have found disloyalty on the part of the local union?
that their expulsion from the union was unlawful 3) WON the dismissal of an employee based on
similarly for lack of prior administrative the Union Security Clause of the CBA
investigation; that the federation cannot constitutes ULP?
recommend the dismissal of the union officers
because it was not a principal party to the 4) WON the employees in this case were validly
collective bargaining agreement between the dismissed?
company and the union.
5) WON the strike stage by the employees was
Private respondents, on the other hand, maintain illegal?
that the thirty dismissed employees who were
former officers of the federation have no cause RULING:
of action against the company, the termination
1) No. As held the case of Carino v. National
of their employment having been made upon the
Labor Relations Commission, "the right of an
demand of the federation pursuant to the union
employee to be informed of the charges against
security clause of the CBA; the expelled officers
him and to reasonable opportunity to present his
of the local union were accorded due process of
side in a controversy with either the company or
law prior to their expulsion from their
his own union is not wiped away by a union
federation; that the strike conducted by the
security clause or a union shop clause in a
petitioners was illegal for noncompliance with
collective bargaining agreement. An employee is
the requirements; that the employees who
entitled to be protected not only from a company
participated in the illegal strike and in the
which disregards his rights but also from his
commission of violence thereof were validly
own union the leadership of which could yield to
terminated from work; that petitioners were
the temptation of swift and arbitrary expulsion
deemed to have abandoned their employment
from membership and mere dismissal from his
when they did not respond to the three return to
job." While respondent company may validly
work notices sent to them; that petitioner labor
dismiss the employees expelled by the union for
union has no legal personality to file and
disloyalty under the union security clause of the
prosecute the case for and on behalf of the
collective bargaining agreement upon the
individual employees as the right to do so is
recommendation by the union, this dismissal
personal to the latter; and that, the officers of
should not be done hastily and summarily
respondent company cannot be liable because as
thereby eroding the employees right to due
mere corporate officers, they acted within the
process, self-organization and security of tenure.
scope of their authority.
The enforcement of union security clauses is
authorized by law provided such enforcement is
not characterized by arbitrariness, and always reason relied upon by respondent Federation was
with due process. Even on the assumption that not valid. Nonetheless, the dismissal still does
the federation had valid grounds to expel the not constitute unfair labor practice.
union officers, due process requires that these
union officers be accorded a separate hearing by 5) No, when respondent company dismissed the
respondent company. union officers, the issue was transformed into a
termination dispute and brought respondent
2) No. A local union has the right to disaffiliate company into the picture. Petitioners believed in
from its mother union or declare its autonomy. A good faith that in dismissing them upon request
local union, being a separate and voluntary by the federation, respondent company was
association, is free to serve the interests of all its guilty of unfair labor practice in that it violated
members including the freedom to disaffiliate or the petitioner’s right to self-organization. The
declare its autonomy. A local union which has strike was staged to protest respondent
affiliated itself with a federation is free to sever company’s act of dismissing the union officers.
such affiliation anytime and such disaffiliation Even if the allegations of unfair labor practice
cannot be considered disloyalty. In the absence are subsequently found out to be untrue, the
of specific provisions in the federations presumption of legality of the strike prevails.
constitution prohibiting disaffiliation or the
declaration of autonomy of a local union, a local Automotive Engine Rebuilders vs.
may dissociate with its parent union from the Progresibong Unyon ng mga Manggagawa sa
federation to which it belongs when AER (2011)
circumstances warrant, in accordance with the In pari delicto in labor cases is a situation
constitutional guarantee of freedom of which warrants the maintenance of the status
association Here in the Constitution and By-
quo. This means that the contending parties
Laws of the federation, there is no specific
must be brought back to their respective
provision prohibiting disaffiliation or declaration positions before the controversy; that is, before
of autonomy by local unions. the strike
3) No. Union security clauses in collective
FACTS: AER is an automotive engine repair
bargaining agreements, if freely and voluntarily company. Progresibong Unyon is the legitimate
entered into, are valid and binding. Corollary, labor union of AER’s rank and file employees.
dismissals pursuant to union security clauses are Both parties filed a complaint against each other
valid and legal subject only to the requirement before the NLRC.
of due process, that is, notice and hearing prior
to dismissal. Thus, the dismissal of an employee AER filed a complaint against Unyon and its 18
by the company pursuant to a labor unions members for illegal concerted activities. It
demand in accordance with a union security likewise suspended 7 union members tested
agreement does not constitute unfair labor positive for illegal drugs. AER claims that
practice. Unyon was guilty of staging an illegal strike.
On the other hand, Unyon filed a counter
4) No. The dismissal was invalidated in this case charge accusing AER of unfair labor
because of respondent company’s failure to practice, illegal suspension and illegal
accord petitioners with due process, that is, dismissal. Unyon claims that AER committed an
notice and hearing prior to their termination. illegal lockout.
Also, said dismissal was invalidated because the
The dispute arose a day after the union filed a was silent as to whether the drug test was a
petition for certification election before the regular company policy and practice in their 35
DOLE. At that time, AER required all its years in the automotive engine repair and
employees to undergo a compulsory drug test. rebuilding business. As the Court sees it, it was
Employees who were found positive for illegal AERs first ever drug test of its employees
drugs were suspended thereafter. In protest of immediately implemented after the workers
the alleged illegal suspension, the complaining manifested their desire to organize themselves
workers staged a one day walkout. into a union. Indeed, the timing of the drug test
Subsequently, AER dismissed concerned was suspicious.
employees as penalty for the alleged illegal
strike. The in pari delicto doctrine in labor cases is not
novel to us. It has been applied in the case of
Likewise, AER had also pulled out machines Philippines Inter-Fashion, Inc. v NLRC,
from the main building to the AER-PSC where the Court held:
compound located on another street.
Consequently, protesting employees forced their The Solicitor General has correctly stated in his
way to the AER-PSC premises to try to bring comment that "from these facts are derived the
out the boring machine. following conclusions which are likewise
undisputed: that petitioner engaged in an illegal
On appeal, CA decided to order reinstatement of lockout while the NAFLU engaged in an illegal
all suspended employees without back wages. strike; that the unconditional offer of the 150
striking employees to return to work and to
ISSUE: WON both parties guilty of in pari withdraw their complaint of illegal lockout
delicto? against petitioner constitutes condonation of the
RULING: Yes. illegal lock-out; and that the unqualified
acceptance of the offer of the 150 striking
It cannot be disputed that both parties filed employees by petitioner likewise constitutes
charges against each other, blaming the other condonation of the illegal strike insofar as the
party for violating labor laws. AER filed a reinstated employees are concerned."
complaint against Unyon and its 18 members for
illegal concerted activities. It likewise suspended The issues at bar arise, however, from
7 union members who tested positive for illegal respondent commission's approval of its
commissioner's conclusions that (1) petitioner
drugs. On the other hand, Unyon filed a
countercharge accusing AER of unfair labor must be deemed to have waived its right to
practice, illegal suspension and illegal dismissal. pursue the case of illegal strike against the 114
In other words, AER claims that Unyon was employees who were not reinstated and who
guilty of staging an illegal strike while Unyon pursued their illegal lockout claim against
petitioner; and (2) the said 114 employees are
claims that AER committed an illegal lockout.
entitled to reinstatement with three months'
AERs fault is obvious from the fact that a day backwages.
after the union filed a petition for certification
election before the DOLE, it hit back by The Court approves the stand taken by the
requiring all its employees to undergo a Solicitor General that there was no clear and
compulsory drug test. Although AER argues that unequivocal waiver on the part of petitioner and
the drug test was applied to all its employees, it on the contrary the record shows that it
tenaciously pursued its application for their pursue the case to the end, simply means that it
dismissal, but nevertheless in view of the did not pardon the 114 strikers.
undisputed findings of illegal strike on the part
of the 114 employees and illegal lockout on xxx xxx xxx
petitioner's part, both parties are in pari delicto The finding of illegal strike was not disputed.
and such situation warrants the restoration of Therefore, the 114 strikers employees who
the status quo ante and bringing the parties back
participated therein are liable for termination
to the respective positions before the illegal (Liberal Labor Union v. Phil. Can Co., 91 Phil.
strike and illegal lockout through the 72; Insurefco Employees Union v. Insurefco, 95
reinstatement of the said 114 employees, as Phil. 761). On the other hard, the finding of
follows:
illegal lockout was likewise not disputed.
The Bisaya case (102 Phil. 438) is inapplicable Therefore, the 114 employees affected by the
to the present case, because in the former, there lockout are also subject to reinstatement.
were only two strikers involved who were both Petitioner, however, contends that the
reinstated by their employer upon their request application for readmission to work by the 150
to return to work. However, in the present case, strikers constitutes condonation of the lockout
there were more than 200 strikers involved, of which should likewise bind the 114 remaining
which 150 who desired to return to work were strikers. Suffice it to say that the 150 strikers
reinstated. The rest were not reinstated because acted for themselves, not on behalf of the 114
they did not signify their intention to return to remaining strikers, and therefore the latter could
work. Thus, the ruling cited in the Bisaya case not be deemed to have condoned petitioner's
that the employer waives his defense of illegality lockout.
of the strike upon reinstatement of strikers is
The findings show that both petitioner and the
applicable only to strikers who signified their
114 strikers are in pari delicto, a situation
intention to return to work and were accepted which warrants the maintenance of the status
back ... quo. This means that the contending parties
Truly, it is more logical and reasonable for must be brought back to their respective
condonation to apply only to strikers who positions before the controversy; that is, before
signified their intention to return and did return the strike. Therefore, the order reinstating the
to work. The reason is obvious. These strikers 114 employees is proper.
took the initiative in normalizing relations with With such restoration of the status quo ante it
their employer and thus helped promote
necessarily follows, as likewise submitted by the
industrial peace. However, as regards the Solicitor General, that the petition must be
strikers who decided to pursue with the case, as granted insofar as it seeks the setting aside of
in the case of the 114 strikers herein, the the award of three months' backwages to the 114
employer could not be deemed to have condoned employees ordered reinstated on the basis of the
their strike, because they had not shown any general rule that strikers are not entitled to
willingness to normalize relations with it. So, if backwages (with some exceptions not herein
petitioner really had any intention to pardon the applicable, such as where the employer is guilty
114 strikers, it would have included them in its of oppression and union-busting activities and
motion to withdraw on November 17, 1980. The strikers ordered reinstated are denied such
fact that it did not, but instead continued to reinstatement and therefore are declared
entitled to backwages from the date of such Private respondent preventively suspended the
denial). More so, is the principle of "no work, no union officers and members who attended the
pay" applicable to the case at bar, in view of the hearing. The common ground alleged by private
respondent for its action was "abandonment of
undisputed finding of illegality of the strike.
work on February 27, 1980." On the same date,
Both AER and Unyon are at fault or in pari all the gate passes of all the above-mentioned
employees to Clark Air Base were confiscated
delicto, thus, they should be restored to their
by a Base guard.
respective positions prior to the illegal strike and
illegal lockout. Nonetheless, if reinstatement is Claiming that private respondent instigated the
no longer feasible, the concerned employees confiscation of their gate passes to prevent them
should be given separation pay up to the date set from performing their duties and that respondent
for the return of the complaining employees in firm did not pay them their overtime pay, 13th
month pay and other benefits, petitioner union
lieu of reinstatement.
and its members filed a complaint for
Petitions denied constructive lockout and unfair labor practice
against private respondent.
CLLC E.G. Gochangco Workers Union vs.
Private respondent filed an application for
NLRC (1988)
clearance to dismiss the union officers and
ULP cases are not, in view of the public interest members
involved, subject to compromises. Petitioner Ricardo Dormingo who was
preventively suspended, filed a complaint for
FACTS: Petitioner CCLC E.G. Gochangco
ULP. Services of 9 more union members were
Workers Union is a local chapter of the Central
terminated by private respondent on the ground
Luzon Labor Congress (CLLC), a legitimate
that its contract with the U.S. Air Force had
labor federation duly registered with the
expired. The 9 employees filed a complaint for
Ministry of Labor and Employment (MOLE),
illegal dismissal against private respondents
while the individual petitioners are former
employees of private respondent who were
Private respondent filed with MOLE a Notice of
officers and members of the petitioner union.
Termination of Contract together with a list of
employees affected by the expiration of the
Majority of the rank and file employees of
contract, among them, the 39 individual
respondent firm organized the e.g. Gochangco
petitioners herein.
Workers Union as an affiliate of the CLLC.
LA ordered: To reinstate all the
Union filed a petition for certification
suspended/dismissed employees to their former
positions without loss of seniority rights and
CLLC national president wrote the general
other privileges, with full backwages including
manager of respondent firm informing him of
cost of emergency living allowance from the
the organization of the union and requesting for
date of their suspension/dismissal up to the
a labor management conference to normalize
supposed date of actual reinstatement
employer-employee relations
NLRC: set aside the decision of the LA; granted
Union sent a written notice to respondent firm
the application for clearance to terminate the
requesting permission for certain member
services of individual complainants-appellees
officers and members of the union to attend the
filed by respondent-appellant.
hearing of the petition for certification election.
The management refused to acknowledge receipt
of said notice
ISSUE: WON petitioners waived their penned the unfair labor practice/illegal dismissal
economic demands, as alleged by private case.)
respondent, by way of compromise?
The Honorable Aquino's disposition reads:
RULING:
The records show that a "Waiver of Claims,
NO. Rights and Interest" was filed by above-named
petitioners stating, among other things, that said
We are convinced that the respondent company petitioners are waiving their claims, rights and
is indeed guilty of an ULP. It is no coincidence interests against the respondents.
that at the time said respondent issued its
suspension and termination orders, the ACCORDINGLY, let the above-entitled cases be
petitioners were in the midst of a certification DISMISSED in view of the waiver made by the
election preliminary to a labor management petitioners.
conference, purportedly, "to normalize
employer-employee relations." It was within the Acting on these allegations, the respondent
legal right of the petitioners to do so, the Commission, baring its clear bias for
exercise of which was their sole prerogative, and management, ruled that the petitioners had
in which management may not as a rule waived their claims. Thus:
interfere. In this connection, the respondent xxx xxx xxx
company deserves our strongest condemnation
for ignoring the petitioners' request for With respect to the second issue, that is, whether
permission for some time out to attend to the or not the waiver of rights and interests executed
hearing of their petition before the med-arbiter. by Fernando do so, 6 The G Lising, Odilon do
It is not only an act of arrogance, but a brazen so, 6 The G Lising, Jose C. Tiamzon, Ernesto
interference as well with the employees’ right to Tuazon, Pedro Santos, Ruben Buela, Eduardo
self-organization, contrary to the prohibition of Alegado, Estrael Vino, Rogelio Manguerra,
the Labor Code against unfair labor practices. Edilberto Bingcang, Olimpio Gumin, Leo
Tropico, Orlando Nacu, Rodolfo T. Capitly and
In finding the petitioners' suspension illegal, Juanito Suba, are valid, the alleged president of
with more reason do we hold their subsequent complainant-appellee union Benigno Navarro,
dismissal to be illegal. We are not persuaded by Sr., contends that Id Atty. Solomon has no
the respondent firm's argument that final authority to appear floor and in behalf of
termination should be effected as the contract individual complainants-appellees who waived
has expired. What impresses us is the Solicitor their rights and interests in these cases since
General's submission that the petitioners were there was no authority from him. Records,
regular employees and as such, their tenure did however, disclose that said Atty. Solomon had
not end with the expiration of the contract. been the attorney of record for complainants-
The Court rejects the claims of an alleged appellees since the inception of these cases, and,
waiver by the petitioners of their economic therefore, is authority to represent them cannot
demands, in the light of an alleged order issued be questioned- not even by Ministry. Navarro
by Labor Arbiter Aquino in connection with who allegedly took over the presidency of
another case(s) involving the same parties. (It complainant-appellee union after the
was Labor Arbiter Federico Bernardo who disappearance of the former president, Mr.
Ficardo Alconga, Sr. And besides, the waiver of
rights and interests were personally executed by undesirable result wherein the Secretary and the
the signatories therein and all that Atty. labor arbiter concerned may have diametrically
Solomon did was to assist them. opposed rulings. As we have said, ‘it is
fundamental that a statute is to be read in a
xxx xxx xxx manner that would breathe life into it, rather
We find this puzzling for clearly, Labor Arbiter than defeat it.
Aquino's resolution refers to other cases and not FACTS: Petitioner is the sole and exclusive
the instant unfair labor practice controversy. The bargaining agent of the rank-and-file employees
Commission cannot feign simple mistake for of Respondent. They had a CBA. Prior to the
such a lapse. In any event, we have held that expiration of the CBA, respondent company was
ULP cases are not, in view of the public approached by the petitioner, through its
interest involved, subject to compromises. officers. The Union inquired about the stand of
the company regarding the duration of the CBA
Furthermore, these alleged waivers do not
which was set to expire in a few months. Salazar
appear to have been presented in the first told the union officers that the matter could be
instance. They cannot be introduced for the first best discussed during the formal negotiations
time on appeal. which would start soon.

Interphil Laboratories Employees Union vs.

All the rank-and-file employees of the company
Interphil Laboratories (2001)
refused to follow their regular two-shift work
In the present case, the Secretary was explicitly schedule. The employees stopped working and
left their workplace without sealing
granted by Article 263(g) of the Labor Code the the containers and securing the raw materials
authority to assume jurisdiction over a labor they were working on.
dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
To minimize the damage the overtime boycott
national interest, and decide the same was causing the company, Salazar
accordingly. Necessarily, this authority to immediately asked for a meeting with the union
assume jurisdiction over the said labor dispute officers. In the meeting, Enrico Gonzales, a
must include and extend to all questions and union director, told Salazar that the employees
controversies arising therefrom, including cases would only return to their normal work schedule
over which the labor arbiter has exclusive if the company would agree to their demands as
to the effectivity and duration of the new CBA.
jurisdiction.
Salazar again told the union officers that the
Moreover, Article 217 of the Labor Code is not matter could be better discussed during the
formal renegotiations of the CBA. Since the
without, but contemplates, exceptions thereto.
union was apparently unsatisfied with the
This is evident from the opening proviso therein answer of the company, the
reading ‘(e)xcept as otherwise provided under overtime boycott continued. In addition, the
this Code x x x.’ Plainly, Article 263(g) of the employees started to engage in a work
Labor Code was meant to make both the slowdown campaign during the time they were
Secretary (or the various regional directors) and working, thus substantially delaying the
production of the company.
the labor arbiters share jurisdiction, subject to
certain conditions. Otherwise, the Secretary
would not be able to effectively and efficiently Respondent company filed with the National
dispose of the primary dispute. To hold the NLRC a petition to declare illegal
petitioner union’s “overtime boycott” and “work
contrary may even lead to the absurd and
slowdown” which, according to respondent over which the labor arbiter has exclusive
company, amounted to illegal strike. It also filed jurisdiction.
with Office Secretary of Labor a petition for
assumption of jurisdiction. Secretary of Labor
Nieves Confesor issued an assumption order Moreover, Article 217 of the Labor Code is not
over the labor dispute. without, but contemplates, exceptions thereto.
This is evident from the opening proviso therein
reading ‘(e)xcept as otherwise provided under
Labor Arbiter Caday submitted his this Code x x x.’ Plainly, Article 263(g) of the
recommendation to the then Secretary of Labor Labor Code was meant to make both the
Leonardo A. Quisumbing. Then Secretary Secretary (or the various regional directors) and
Quisumbing approved and adopted the report in the labor arbiters share jurisdiction,
his Order, finding illegal strike on the part of subject to certain conditions. Otherwise, the
petitioner Union. Secretary would not be able to effectively
and efficiently dispose of the primary dispute. To
hold the contrary may even lead to the absurd
ISSUE: WON the Labor Secretary has and undesirable result wherein the Secretary
jurisdiction to rule over an illegal strike. and the labor arbiter concerned may have
diametrically opposed rulings. As we have said,
RULING: Yes. ‘it is fundamental that a statute is to be read in a
manner that would breathe life into it, rather
than defeat it.
On the matter of the authority and jurisdiction of
the Secretary of Labor and Employment to rule In fine, the issuance of the assailed orders is
on the illegal strike committed by petitioner within the province of the Secretary as
union, it cannot be denied that the issues of authorized by Article 263(g) of the Labor Code
“overtime boycott” and “work slowdown” and Article 217(a) and (5) of the same Code,
amounting to illegal strike before Labor Arbiter taken conjointly and rationally construed to
Caday are intertwined with the labor dispute subserve the objective of the jurisdiction vested
before the Labor Secretary. in the Secretary.

The appellate court also correctly held that the Liwayway Publications Inc. vs. Permanent
question of the Secretary of Labor Concrete Workers Union (1981) (Sub-lessee,
and Employment’s jurisdiction over labor- Innocent Bystander Rule)
related disputes was already settled in
International Pharmaceutical, Inc. vs. Hon.
Secretary of Labor and Associated Labor While peaceful picketing is entitled to protection
Union (ALU) where the Court declared: as an exercise of free speech, we believe that
courts are not without power to confine or
localize the sphere of communication or the
In the present case, the Secretary was explicitly demonstration to the parties to the labor dispute,
granted by Article 263(g) of the Labor Code the including those with related interest, and to
authority to assume jurisdiction over a labor insulate establishments or persons with no
dispute causing or likely to cause a strike or industrial connection or having interest totally
lockout in an industry indispensable to the foreign to the context of the dispute. Thus, the
national interest, and decide the same right may be regulated at the instance of third
accordingly. Necessarily, this authority to parties or "innocent bystanders" if it appears
assume jurisdiction over the said labor dispute that the inevitable result of its exercise is to
must include and extend to all questions and create an impression that a labor dispute with
controversies arising therefrom, including cases which they have no connection or interest exists
between them and the picketing union or Lower Court: denied the motion to dismiss and
constitute an invasion of their rights motion to dissolve writ on the ground that there
was no labor dispute between the plaintiff and
defendant of which the Court of Industrial
FACTS: Plaintiff alleged that it is a second sub- Relations may take cognizance.
lessee of a part of the premises of the Permanent
Concrete Products, Inc. Their premises are
The Union was declared in default and the writ
separated by a concrete and barbed wire fence
of preliminary injunction was made permanent.
with its own entrance and road leading to the
Plaintiff then filed with the Supreme Court a
national road. This entrance is separate and
petition praying that a writ of attachment be
distinct from the entrance road of PCPI. The
issued on any sum of money which may be used
daily supply of newsprint needed to feed its
to satisfy the judgment. SC denied but without
printing plant is taken from this bodega.
prejudice to same petition with the CFI.
PCPI employees, who are representatives and
ISSUE: WON the lower court has jurisdiction to
members of the Union declared a strike against
issue a Writ of Preliminary Injunction
the company. Less than a month later, Union
considering that there was a labor dispute
members picketed, stopped and prohibited
between Permanent Concrete Products, Inc. and
plaintiff's truck from entering the compound to
appellants for alleged unfair labor practices
load newsprint from its bodega. The union
committed by the former?
members intimidated and threatened with bodily
harm the employees who were in the truck. They
also stopped and prohibited the general manager, RULING: Yes. Appellee is not in any way
personnel manager, bodega-in-charge and other related to the striking union except for the fact
employees of the plaintiff from getting that it is the sub-lessee of a bodega in the
newsprint in their bodega. Despite pleas to stop company's compound. The business of the
intimidating and threatening Plaintiff’s appellee is exclusively the publication of the
employees, the Union continued their acts. magazines Bannawag Bisaya, Hiligaynon and
Liwayway weekly magazines which has
absolutely no relation or connection whatsoever
As a consequence thereof, plaintiff rented
with the cause of the strike of the union against
another bodega during the time members of the
their company, much less with the terms,
defendant union prevented its employees from
conditions or demands of the strikers. In such a
entering its bodega in the compound of
factual situation, the query to be resolved is
Permanent Concrete Products, Inc. and thus
whether the appellee is a third party or an
incurred expenses both in terms of bodega
"innocent bystander" whose right has been
rentals and in transporting newsprint from the
invaded and, therefore, entitled to protection by
pier to the temporary bodega.
the regular courts.
Plaintiff then brought an action for the issuance
While peaceful picketing is entitled to protection
of a writ of preliminary injunction and for
as an exercise of free speech, we believe that
damages against the union. The Lower Court
courts are not without power to confine or
issued the writ of preliminary injunction for the
localize the sphere of communication or the
Union to stop threatening and intimidating
demonstration to the parties to the labor dispute,
Plaintiff’s employees. The Union filed Motion to
including those with related interest, and to
Dismiss because the CFI had no jurisdiction
insulate establishments or persons with no
over the ULP and that Plaintiff is not the real
industrial connection or having interest totally
party in interest. Plaintiff opposed by saying that
foreign to the context of the dispute. Thus, the
there is no ER-EE relation, no labor dispute and
right may be regulated at the instance of third
that Plaintiff’s compound is separate and distinct
parties or "innocent bystanders" if it appears that
from the Union’s place of employment.
the inevitable result of its exercise is to create an
impression that a labor dispute with which they employees are classified into those who are
have no connection or interest exists between members of the union and those who are not.
them and the picketing union or constitute an
invasion of their rights.
FACTS: When the management introduced a
profit-sharing scheme for its managers and
It may be conceded that the appellant Union has
supervisors, the union wrote the management to
a labor dispute with the Permanent Concrete
ask that the union members be allowed to
Products Company and that the dispute is
participate in the profit- sharing program. The
pending before the Court of Industrial Relations
management denied the request on the ground
that such participation was not provided in the
We find and hold that there is no connection CBA. Later, when the renegotiation of the CBA
between the appellee Liwayway publications, was approaching, the management wrote the
Inc. and the striking Union, nor with the union that it was willing to consider including
company against whom the strikers staged the the union members in the profit- sharing scheme
strike, and neither are the acts of the driver of if the negotiations would be concluded before
the appellee, its general manager, personnel December 1987.
manager, the man in-charge of the bodega and
other employees of the appellee in reaching the
bodega to obtain newsprint therefrom to feed On March 30, 1988, the company distributed the
and supply its publishing business interwoven profit- sharing benefit not only to managers and
with the labor dispute between the striking supervisors but also to all rank-and-file
Union and the Permanent Concrete Products employees not covered by the CBA because they
company. Being situated in the same premises were excluded from their agreed definition of
does not mean being interwoven. bargaining unit, such as the regular rand-and-file
employees in the office of the president, vice
The acts complained of against the striking president, security office, corporate affairs
union members are properly called mere acts of office, accounting and treasury department.
trespass (perturbacion de mero hecho) such that
following the doctrine laid down in Goldstein
ISSUE: WON the grant by the management of
vs. Roces, the lessor shall not be obliged to
profit- sharing benefits to its employees who are
answer for the mere fact of a trespass
non-union members is discriminatory against the
(perturbacion de mero hecho) made by a third
union members which amount to ULP?
person in the use of the estate leased but the
lessee shag have a direct action against the
trespasser. RULING: No. There can be no discrimination
committed by the employer as the situation of
the union employees is different from the non
Wise and Co. Inc. vs. Wise and Co. Inc.
union employees. Discrimination per se is not
Employees Union-NATU ETC. (1989)
unlawful. There can be no discrimination where
employees concerned are not similarly situated.
Discrimination per se is not unlawful. There can The grant of the employer of profit- sharing
be no discrimination where employees benefits to the employees outside the
concerned are not similarly situated. The grant “bargaining unit” falls under the ambit of its
of the employer of profit- sharing benefits to the managerial prerogative. It appears to have been
employees outside the “bargaining unit” falls done in good faith and without ulterior motive.
under the ambit of its managerial prerogative. It More so when as in this case there is a clause in
appears to have been done in good faith and the CBA where the employees are classified into
without ulterior motive. More so when as in this those who are members of the union and those
case there is a clause in the CBA where the who are not. In the case of the union members,
they derive their benefits from the terms and
conditions of the CBA which constitutes the law contracting out jobs without need to consult the
between the contracting parties. Both the Union.
employer and the union members are bound by
such agreement. However, the Court serves
ISSUES:
notice that it will not hesitate to strike down any
act of the employer that tends to be
discriminatory against union members. It is only 1) WON the increase in wages will result in
because of the peculiar circumstances of this higher prices of electricity?
case showing there is no such intention that this
court has ruled otherwise. 2) WON the grant of Collective Bargaining
Agreement (CBA) arbitral awards retroactive?
Meralco vs. Quisimbing (Feb 2000)
3) WON the cooperative may demand for the
loan for a cooperative?
In general, a CBA negotiated within six months
after the expiration of the existing CBA retroacts
to the day immediately following such date and 4) WON contracting without need to consult the
if agreed thereafter, the effectivity depends on Union is a valid provision?
the agreement of the parties. On the other hand,
the law is silent as to the retroactivity of a CBA RULING:
arbitral award or that granted not by virtue of
the mutual agreement of the parties but by
intervention of the government. Despite the 1) ON THE INCREASE IN WAGES
silence of the law, the Court rules herein that
CBA arbitral awards granted after six months No, it doesn’t follow. An increase in the prices
from the expiration of the last CBA shall of electric current needs the approval of the
retroact to such time agreed upon by both appropriate regulatory government agency and
employer and the employees or their union. does not automatically result from a mere
Absent such an agreement as to retroactivity, the increase in the wages of petitioner's employees.
award shall retroact to the first day after the six- Collective bargaining disputes particularly those
month period following the expiration of the last affecting the national interest and public service
day of the CBA should there be one. In the "requires due consideration and proper
absence of a CBA, the Secretary's determination balancing of the interests of the parties to the
of the date of retroactivity as part of his dispute and of those who might be affected by
discretionary powers over arbitral awards shall the dispute. It should be noted that the relations
control. between labor and capital is impressed with
public interest which must yield to the common
FACTS: In 1999, the Supreme Court good. Neither party should act oppressively
promulgated a decision directing the parties to against the other or impair the interest or
execute a CBA which provided for increase in convenience of the public. Besides, matters of
wages and retroactive application of arbitral salary increases are part of management
awards. MERALCO filed this petition arguing prerogative.
that an increase in wages will result in higher
rates of electricity which will be passed to the 2) ON THE RETROACTIVITY OF
consumers. The Union likewise asks for ARBITRAL AWARDS
reconsideration insofar as the 1999 decision
which denied them the benefit of being granted
loans to set up a cooperative. Finally, the Union Labor laws are silent as to when an arbitral
questions the right given to MERALCO in award in a labor dispute where the Secretary had
assumed jurisdiction by virtue of Article 263 (g)
of the Labor Code shall retroact. In general, a which affect the rights of employees, and in
CBA negotiated within six months after the treating the latter, the employer should see to it
expiration of the existing CBA retroacts to the that its employees are at least properly informed
day immediately following such date and if of its decision or modes of action in order to
agreed thereafter, the effectivity depends on the attain a harmonious labor-management
agreement of the parties. On the other hand, the relationship and enlighten the workers
law is silent as to the retroactivity of a CBA concerning their rights.
arbitral award or that granted not by virtue of the
mutual agreement of the parties but by Hiring of workers is within the employer's
intervention of the government. Despite the inherent freedom to regulate and is a valid
silence of the law, the Court rules herein that exercise of its management prerogative subject
CBA arbitral awards granted after six months only to special laws and agreements on the
from the expiration of the last CBA shall matter and the fair standards of justice. The
retroact to such time agreed upon by both management cannot be denied the faculty of
employer and the employees or their union. promoting efficiency and attaining economy by
Absent such an agreement as to retroactivity, the a study of what units are essential for its
award shall retroact to the first day after the six- operation. It has the ultimate determination of
month period following the expiration of the last whether services should be performed by its
day of the CBA should there be one. In the personnel or contracted to outside agencies.
absence of a CBA, the Secretary's determination While there should be mutual consultation,
of the date of retroactivity as part of his eventually deference is to be paid to what
discretionary powers over arbitral awards shall management decides. Contracting out of
control. services is an exercise of business judgment or
management prerogative. Absent proof that
3) ON COOPERATIVE’S DEMAND FOR management acted in a malicious or arbitrary
LOAN manner, the Court will not interfere with the
exercise of judgment by an employer.
On the allegation concerning the grant of loan to
a cooperative, there is no merit in the union's Meralco vs. Quisimbing (Aug 2000)
claim that it is no different from housing loans
granted by the employer. The award of loans for FACTS: Petitioner Manila Electric Company
housing is justified because it pertains to a basic filed with this Court, a "Motion for Partial
necessity of life. It is part of a privilege Modification (Re: Resolution Dated 22 February
recognized by the employer and allowed by law. 2000)" anchored on the following grounds:
In contrast, providing seed money for the
establishment of the employee's cooperative is a
matter in which the employer has no business I. Honorable Court’s ruling on the retroactivity
interest or legal obligation. Courts should not be issue: (a) fails to account for previous rulings of
utilized as a tool to compel any person to grant the Court on the same issue; (b) fails to indicate
loans to another nor to force parties to undertake the reasons for reversing the original ruling in
an obligation without justification. this case on the retroactivity issue; and (c) is
internally inconsistent.
4) ON CONTRACTING WITHOUT
CONSULTING THE UNION II. Honorable Court’s ruling on the retroactivity
issue does not take into account the huge cost
that this award imposes on petitioner, estimated
The employer is allowed to contract out services at no less than P800 Million.
for six months or more. However, a line must be
drawn between management prerogatives
regarding business operations per se and those
Petitioner specifically assails the Resolution as 2) WON collective bargaining agreement shall
being logically flawed, arguing, take effect only upon its signing and shall
remain in full force and effect for a period of
First, that while it alludes to the Secretary’s five years?
discretionary powers only in the absence of a
CBA, Article 253-A of the Labor Code always RULING:
presupposes the existence of a prior or subsisting
CBA; hence the exercise by the Secretary of his 1) No. Article 253-A is hereunder reproduced
discretionary powers will never come to pass. for ready reference:

Second, petitioner contends that this Court erred ART. 253-A. Terms of a collective bargaining
in holding that the effectivity of CBA provisions agreement. --- Any Collective Bargaining
are automatically retroactive. Petitioner invokes, Agreement that the parties may enter into shall,
rather, this Court’s ruling in the Decision dated insofar as the representation aspect is
January 27, 1999, which was modified in the concerned, be for a term of five (5) years. No
assailed Resolution, that in the absence of an petition questioning the majority status of the
agreement between the parties, an arbitrated incumbent bargaining agent shall be entertained
CBA takes on the nature of any judicial or quasi- and no certification election shall be conducted
judicial award; it operates and may be executed by the Department of Labor and Employment
only prospectively unless there are legal outside of the sixty-day period immediately
justifications for its retroactive application. before the date of expiry of such five year term
of the Collective Bargaining Agreement. All
Third, petitioner contends that the Resolution is other provisions of the Collective Bargaining
internally flawed because when it held that the Agreement shall be renegotiated not later than
award shall retroact to the first day after the six- three (3) years after its execution. Any
month period following the expiration of the last agreement on such other provisions of the
day of the CBA, the reckoning date should have Collective Bargaining Agreement entered into
been June 1, 1996, not December 1, 1995, which within six (6) months from the date of expiry of
is the last day of the three-year lifetime of the the term of such other provisions as fixed in
economic provisions of the CBA. such Collective Bargaining Agreement, shall
retroact to the day immediately following such
The petitioner also prays that the two-year term date. If any such agreement is entered into
of the CBA be fixed from December 28, 1996 to beyond six months, the parties shall agree on
December 27, 1998 since the application of the the duration of retroactivity thereof. In case of
arbitral award will cost it no less than P800 a deadlock in the renegotiation of the collective
Million. Petitioner also seeks this Court’s bargaining agreement, the parties may exercise
declaration that the award of P2,000.00 be paid their rights under this Code.
to petitioner’s rank-and-file employees during
this two-year period. In the alternative, Under the circumstances of the case, Article
petitioner prays that the award of P2,000.00 be 253-A cannot be properly applied to herein case.
made to retroact to June 1, 1996 as the As correctly stated by public respondent in his
effectivity date of the CBA. assailed Order of April 12, 1991 dismissing
petitioner’s Motion for Reconsideration –
ISSUES:
Anent the alleged lack of basis for the
1) WON Art. 253-A of the Labor Code applies retroactivity provisions awarded, we would
in this case? stress that the provision of law invoked by the
Hospital, Article 253-A of the Labor Code,
speaks of agreements by and between the
parties, and not arbitral awards . . . (p. 818 December 27, 1998. That is to say, the arbitral
Rollo). award was given prospective effect. Upon a
reconsideration of the Decision, this Court
Therefore, in the absence of a specific provision issued the assailed Resolution which ruled that
of law prohibiting retroactivity of the effectivity where an arbitral award granted beyond six
of arbitral awards issued by the Secretary of months after the expiration of the existing CBA,
Labor pursuant to Article 263(g) of the Labor and there is no agreement between the parties as
Code, such as herein involved, public to the date of effectivity thereof, the arbitral
respondent is deemed vested with plenary and award shall retroact to the first day after the six-
discretionary powers to determine the effectivity month period following the expiration of the last
thereof (223 SCRA 779, 792-793 [1993]; day of the CBA. In the dispositive portion,
reiterated in Philippine Airlines, Inc. v. however, the period to which the award shall
Confessor 231 SCRA 41 [1994]). Indeed, retroact was inadvertently stated as beginning on
petitioner has not shown that the question of December 1, 1995 up to November 30, 1997.
effectivity was not included in the general
agreement of the parties to submit their dispute In resolving the motions for reconsideration in
for arbitration. To the contrary, as the order of this case, this Court took into account the fact
the labor arbiter states, this question was among that petitioner belongs to an industry imbued
those submitted for arbitration by the parties. with public interest. As such, this Court cannot
ignore the enormous cost that petitioner will
2. As regards the "Effectivity and Duration" have to bear as a consequence of the full
clause, the company proposes that the collective retroaction of the arbitral award to the date of
bargaining agreement shall take effect only upon expiry of the CBA, and the inevitable effect that
its signing and shall remain in full force and it would have on the national economy. On the
effect for a period of five years. The union other hand, under the policy of social justice, the
proposes that the agreement shall take effect law bends over backward to accommodate the
retroactive to March 15, 1989, the expiration interests of the working class on the humane
date of the old CBA. justification that those with less privilege in life
should have more in law. Balancing these two
contrasting interests, this Court turned to the
And after an evaluation of the parties’ respective dictates of fairness and equitable justice and thus
contention and argument thereof, it is believed arrived at a formula that would address the
that of the union is fair and reasonable. It is the concerns of both sides. Hence, this Court held
observation of this Arbitrator that in almost that the arbitral award in this case be made to
subsequent CBAs, the effectivity of the retroact to the first day after the six-month
renegotiated CBA, usually and most often is period following the expiration of the last day of
made effective retroactive to the date when the the CBA, i.e., from June 1, 1996 to May 31,
immediately preceding CBA expires so as to 1998. This Court, therefore, maintains the
give a semblance of continuity. Hence, for this foregoing rule in the assailed Resolution pro hac
particular case, it is believed that there is nothing vice. It must be clarified, however, that
wrong adopting the stand of the union, that is consonant with this rule, the two-year effectivity
that this CBA be made retroactive effective period must start from June 1, 1996 up to May
March 15, 1989. 31, 1998, not December 1, 1995 to November
30, 1997.
Parenthetically, the Decision rendered in the
case at bar on January 27, 1999 ordered that the
CBA should be effective for a term of two years
counted from December 28, 1996 (the date of
the Secretary of Labor’s disputed Order on the
parties’ motion for reconsideration) up to