January 23, 2017 G.R. No.

207971
ASIAN INSTITUTE OF MANAGEMENT, Petitioner, vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION, Respondent.

DEL CASTILLO, J.:

This Petition for Review on Certiorari1assails the January 8, 2013 Decision2 of the Court of
Appeals (CA) which dismissed the Petition for Certiorari3in CA-G.R. SP No. 114122, and its
subsequent June 27, 2013 Resolution 4 denying herein petitioner's Motion for
Reconsideration. 5

Factual Antecedents

Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, non-profit

educational institution. Respondent Asian Institute of Management Faculty Association
(AFA) is a labor organization composed of members of the AIM faculty, duly registered
under Certificate of Registration No. NCR-UR-12-4076-2004.

On May 16, 2007, respondent filed a petition for certification election6 seeking to

represent a bargaining unit in AIM consisting of forty (40) faculty members. The case
was docketed as DOLE Case No. NCR-OD-M-0705-007. Petitioner opposed the petition,
claiming that respondent's members are neither rank-and-file nor supervisory, but rather,
managerial employees.7

On July 11, 2007, petitioner filed a petition for cancellation of respondent's certificate of
registration8 - docketed as DOLE Case No. NCROD-0707-001-LRD - on the grounds of
misrepresentation in registration and that respondent is composed of managerial employees
who are prohibited from organizing as a union.

On August 30, 2007, the Med-Arbiter in DOLE Case No. NCR-OD-M-0705-007 issued an
Order9 denying the petition for certification election on the ground that AIM' s faculty
members are managerial employees. This Order was appealed by respondent before the
Secretary of the Department of Labor and Employment (DOLE), 10 who reversed the same
via a February 20, 2009 Decision 11 and May 4, 2009 Resolution, 12 decreeing thus:

WHEREFORE, the appeal filed by the Asian Institute of Management Faculty Association
(AIMFA) is GRANTED. The Order dated 30 August 2007 of DOLE-NCR Mediator-Arbiter
Michael T. Parado is hereby REVERSED and SET ASIDE.

Accordingly, let the entire records of the case be remanded to DOLE NCR for the conduct of
a certification election among the faculty members of the Asian Institute of Management
(AIM), with the following choices:

1. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION (AIMFA); and

2. No Union.

SO ORDERED.13

Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order14 dated February 16,

2009 was issued by DOLE-NCR Regional Director Raymundo G. Agravante granting AIM's
petition for cancellation of respondent's certificate of registration and ordering its delisting
from the roster of legitimate labor organizations. 1bis Order was appealed by respondent
before the Bureau labor Relations15 (BLR), which, in a December 29, 2009
Decision,16 reversed the same and ordered respondent's retention in the roster of legitimate
labor organizations. The BLR held that the grounds relied upon in the petition for
cancellation are not among the grounds authorized under Article 239 of the Labor
Code, 17 and that respondent's members are not managerial employees. Petitioner moved to
reconsider, but was rebuffed in a March 18, 2010 Resolution. 18
CA-G.R. SP No.109487 and G.R. No.197089

Petitioner filed a Petition for Certiorari before the CA, questioning the DOLE Secretary's
February 20, 2009 Decision and May 4, 2009 Resolution relative to DOLE Case No. NCR-
OD-M-0705-007, or respondent's petition for certification election. Docketed as CA-G.R. SP
No. 109487, the petition is based on the arguments that 1) the bargaining unit within AIM
sought to be represented is composed of managerial employees who are not eligible to join,
assist, or form any labor organization, and 2) respondent is not a legitimate labor
organization that may conduct a certification election.

On October 22, 2010, the CA rendered its Decision19 containing the following

pronouncement:

AIM insists that the members of its tenure-track faculty are managerial employees, and
therefore, ineligible to join, assist or form a labor organization. It ascribes grave abuse of
discretion on SOLE20 for its rash conclusion that the members of said tenure-track faculty are
not managerial employees solely because the faculty's actions are still subject to evaluation,
review or final approval by the board of trustees ("BOT'). AIM argues that the BOT does not
manage the day-to-day affairs, nor the making and implementing of policies of the Institute,
as such functions are vested with the tenure-track faculty.

We agree.

Article 212(m) of the Labor Code defines managerial employees as:

'ART. 212. Definitions. – x x x

(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay

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

There are, therefore, two (2) kinds of managerial employees under Art. 212(m) of the Labor
Code. Those who 'lay down x x x management policies', such as the Board of Trustees, and
those who 'execute management policies and/or hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees'.

xxxx

On its face, the SOLE's opinion is already erroneous because in claiming that the 'test of
'supervisory' or 'managerial status' depends on whether a person possesses authority to act
in the interest of his employer in the matter specified in Article 212(m) of the Labor Code
and Section l(m) of its Implementing Rules', he obviously was referring to the old definition
of a managerial employee. Such is evident in his use of 'supervisory or managerial status',
and reference to 'Section l(m) of its Implementing Rules'. For presently, as aforequoted in
Article 212(m) of the Labor Code and as amended by Republic Act 6715 which took effect
on March 21, 1989, a managerial employee is already different from a supervisory
employee. x x x

xxxx

In further opining that a managerial employee is one whose 'authority is not merely

routinary or clerical in nature but requires the use of independent judgment', a
description which fits now a supervisory employee under Section l(t), Rule I, Book V of
the Omnibus Rules Implementing the Labor Code, it then follows that the SOLE was not
aware of the change in the law and thus gravely abused its discretion amounting to lack of
jurisdiction in concluding that AIM's 'tenure-track' faculty are not managerial employees.

SOLE further committed grave abuse of discretion when it concluded that said tenure-track
faculty members are not managerial employees on the basis of a 'footnote' in AIM's Policy
Manual, which provides that 'the policy[-] making authority of the faculty members is
merely recommendatory in nature considering that the faculty standards they formulate
are still subject to evaluation, review or final approval by the [AIM]'s Board of
Trustees'. x x x

xxxx

Clearly, AIM's tenure-track faculty do not merely recommend faculty standards.

They 'determine all faculty standards', and are thus managerial employees. The
standards' being subjected to the approval of the Board of Trustees would not make AIM's
tenure-track faculty non-managerial because as earlier mentioned, managerial employees
are now of two categories: (1) those who 'lay down policies', such as the members of the
Board of Trustees, and (2) those who 'execute management policies (etc.)’, such as AIM's
tenure-track faculty.

xxxx

It was also grave abuse of discretion on the part of the SOLE when he opined that AIM' s
tenure-track faculty members are not managerial employees, relying on an impression that
they were subjected to rigid observance of regular hours of work as professors. x x x

xxxx

More importantly, it behooves the SOLE to deny AFA's appeal in light of the February
16, 2009 Order of Regional Director Agravante delisting AFA from the roster of
legitimate labor organizations. For, only legitimate labor organizations are given the
right to be certified as sole and exclusive bargaining agent in an establishment.

xxxx

Here, the SOLE committed grave abuse of discretion by giving due course to AFA's petition
for certification election, despite the fact that: (1) AFA's members are managerial employees;
and (2) AFA is not a legitimate labor organization. 'These facts rendered AFA ineligible, and
without any right to file a petition for certification election, the object of which is to determine
the sole and exclusive bargaining representative of qualified AIM employees.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated February 20,
2009 and Resolution dated May 4, 2009 are hereby REVERSED and SET ASIDE. The
Order dated August 30, 2007 of Mediator-Arbiter Parado is hereby REINSTATED.

SO ORDERED.21 (Emphasis in the original)

Respondent sought reconsideration, but was denied. It thus instituted a Petition for Review
on Certiorari before this Court on July 4, 2011. The Petition, docketed as G.R. No. 197089,
remains pending to date.

The Assailed Ruling of the Court of Appeals

Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or petitioner AIM's petition

for cancellation of respondent's certificate of registration, petitioner filed on May 24, 2010 a
Petition for Certiorari22before the CA, questioning the BLR's December 29, 2009 decision
and March 18, 2010 resolution. The petition, docketed as CA-G.R. SP No. 114122, alleged
that the BLR committed grave abuse of discretion in granting respondent's appeal and
affirming its certificate of registration notwithstanding that its members are managerial
employees who may not join, assist, or form a labor union or organization.

On January 8, 2013, the CA rendered the assailed Decision, stating as follows:

The petition lacks merit

xxxx

It is therefore incumbent upon the Institute to prove that the BLR committed grave abuse of
discretion in issuing the questioned Decision. Towards this end, AIM must lay the basis by
showing that any of the grounds provided under Article 239 of the Labor Code, exists, to wit:

Article 239. Grounds for cancellation of union registration. - The following may constitute
grounds for cancellation of union registration:

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

(b) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members.

Article 238 of the Labor Code provides that the enumeration of the grounds for cancellation
of union registration, is exclusive; in other words, no other grow1ds for cancellation is
acceptable, except for the three (3) grounds stated in Article 239. The scope of the grounds
for cancellation has been explained-

For the purpose of de-certifying a union such as respondent, it must be shown that there
was misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto; the minutes of ratification;
or, in connection with the election of officers, the minutes of the election of officers, the list of
voters, or failure to submit these documents together with the list of the newly elected-
appointed officers and their postal addresses to the BLR.

The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondent's
certificate of registration. The cancellation of a union's registration doubtless has an
impairing dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration under the Labor Code,
the nature of the fraud and misrepresentation must be grave and compelling enough to
vitiate the consent of a majority of union members.23

In this regard, it has also been held that:

Another factor which militates against the veracity of the allegations in the Sinumpaang
Petisyon is the lack of particularities on how, when and where respondent union perpetrated
the alleged fraud on each member. Such details are crucial for, in the proceedings for
cancellation of union registration on the ground of fraud or misrepresentation, what needs to
be established is that the specific act or omission of the union deprived the complaining
employees-members of their right to choose.24

A cursory reading of the Petition shows that AIM did NOT allege any specific act of fraud or
misrepresentation committed by AFA. What is clear is that the Institute seeks the
cancellation of the registration of AFA based on Article 245 of the Labor Code on the
ineligibility of managerial employees to form or join labor unions. Unfortunately for the
petitioner, even assuming that there is a violation of Article 245, such violation will not result
in the cancellation of the certificate of registration of a labor organization.

It should be stressed that a Decision had already been issued by the DOLE in the
Certification Election case; and the Decision ordered the conduct of a certification election
among the faculty members of the Institute, basing its directive on the finding that the
members of AFA were not managerial employees and are therefore eligible to form, assist
and join a labor union. As a matter of fact, the certification election had already been held on
October 16, 2009, albeit the results have not yet been resolved as inclusion/exclusion
proceedings are still pending before the DOLE. The remedy available to the Institute is not
the instant Petition, but to question the status of the individual union members of the AFA in
the inclusion/exclusion proceedings pursuant to Article 245-A of the Labor Code, which
reads:

Article 245-A. Effect of inclusion as members of employees outside the bargaining unit. - The
inclusion as union members of employees outside the bargaining unit shall not be a ground
for the cancellation of the registration of the union. Said employees are automatically
deemed removed from the list of membership of said union.

Petitioner insists that Article 245-A is not applicable to this case as all AF A members are
managerial employees. We are not persuaded.

The determination of whether any or all of the members of AFA should be considered as
managerial employees is better left to the DOLE because,

It has also been established that in the determination of whether or not certain employees
are managerial employees, this Court accords due respect and therefore sustains the
findings of fact made by quasi-judicial agencies which are supported by substantial evidence
considering their expertise in their respective fields.25

From the discussion, it is manifestly clear that the petitioner failed to prove that the BLR
committed grave abuse of discretion; consequently, the Petition must fail.

WHEREFORE, the Petition is hereby DENIED. The Decision and Resolution of public

respondent Bureau of Labor Relations in BLR-A-C-19-3-6-09 (NCR-OD-0707-001) are
hereby AFFIRMED.

SO ORDERED.26 (Emphasis in the original)

Petitioner filed its Motion for Reconsideration, which was denied by the CA via its June 27,
2013 Resolution. Hence, the instant Petition.

In a November 10, 2014 Resolution,27 the Court resolved to give due course to the Petition.

Issue

Petitioner claims that the CA seriously erred in affirming the dispositions of the BLR and thus
validating the respondent's certificate of registration notwithstanding the fact that its
members are all managerial employees who are disqualified from joining, assisting, or
forming a labor organization.

Petitioner's Arguments

Praying that the assailed CA dispositions be set aside and that the DOLE-NCR Regional
Director's February 16, 2009 Order granting AIM's petition for cancellation of respondent's
certificate of registration and ordering its delisting from the roster of legitimate labor
organizations be reinstated instead, petitioner maintains in its Petition and Reply 28 that
respondent's members are all managerial employees; that the CA erred in declaring that
even if respondent's members are all managerial employees, this alone is not a ground for
cancellation of its certificate of registration; that precisely, the finding in DOLE Case No.
NCR-ODM- 0705-007, which the CA affirmed in CA-G.R. SP No. 109487, is that
respondent's members are managerial employees; that respondent's declaration that its
members are eligible to join, assist, or form a labor organization is an act of
misrepresentation, given the finding in CA-G.R. SP No. 109487 that they are managerial
employees; and that the grounds for cancellation of union registration enumerated in Article
239 of the Labor Code are not exclusive.

Respondent's Arguments

In its Comment,29 respondent maintains that the CA was right to treat petitioner’s case for
cancellation of its union registration with circumspection; that petitioner's ground for filing the
petition for cancellation is not recognized under Article 239; that petitioner's accusation of
misrepresentation is unsubstantiated, and is being raised for the first time at this stage; that
its members are not managerial employees; and that petitioner's opposition to respondent's
attempts at self-organization constitutes harassment, oppression, and violates the latter's
rights under the Labor Code and the Constitution.

Our Ruling

In Holy Child Catholic School v. Hon. Sto. Tomas,30this Court declared that "[i]n case of
alleged inclusion of disqualified employees in a union, the proper procedure for an employer
like petitioner is to directly file a petition for cancellation of the union's certificate of
registration due to misrepresentation, false statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as amended."

On the basis of the ruling in the above-cited case, it can be said that petitioner was correct in
filing a petition for cancellation of respondent's certificate of registration. Petitioner's sole
ground for seeking cancellation of respondent's certificate of registration - that its members
are managerial employees and for this reason, its registration is thus a patent nullity for
being an absolute violation of Article 245 of the Labor Code which declares that managerial
employees are ineligible to join any labor organization --- is, in a sense, an accusation that
respondent is guilty of misrepresentation for registering under the claim that its members are
not managerial employees.

However, the issue of whether respondent's members are managerial employees is still
pending resolution by way of petition for review on certiorari in G.R. No. 197089, which is
the culmination of all proceedings in DOLE Case No. NCR-OD-M-0705-007 -- where the
issue relative to the nature of respondent's membership was first raised by petitioner itself
and is there fiercely contested. The resolution of this issue cannot be pre-empted; until it is
determined with finality in G.R. No. 197089, the petition for cancellation of respondent's
certificate of registration on the grounds alleged by petitioner cannot be resolved. As a
matter of courtesy and in order to avoid conflicting decisions, We must await the resolution
of the petition in G.R. No. 197089.

x x x If a particular point or question is in issue in the second action, and the judgment will
depend on the determination of that particular point or question, a former judgment between
the same parties or their privies will be final and conclusive in the second if that same point
or question was in issue and adjudicated in the first suit. x x x Identity of cause of action is
not required, but merely identity of issues.31 (Citation omitted)

WHEREFORE, considering that the outcome of this case depends on the resolution of the
issue relative to the nature of respondent's membership pending in G.R. No. 197089, this
case is ordered CONSOLIDATED with G.R. No. 197089.

SO ORDERED.

MARIA LOURDES P.A. SERENO

Chief Justice
Footnotes
1
 Rollo,  Vol. l, pp. 3-31.
2
 Id. at 33-41; penned by Associate Justice Victoria Isabel A. Paredes and concurred in by Associate Justices Japar B. Dimaampao and Elihu A. Ybañez.
3
 Id. at 198-226.
4
 Id. at 43-45.
5
 Id. at 269-276.
6
 Id., Vol. II at 456-458.
7
 Id., Vol. I at 93-95.
8
 Id. at 74-91.
9
 Id. at 93-98; penned by Mediator-Arbiter Michael Angelo T. Parado.
10
 Docketed as Case No. OS-A-20-9-07.
11
 Rollo, Vol. I, pp. 131-138; penned, by authority of the Secretary, by Undersecretary Romeo C. Lagman.
12
 See CA October 22, 2010 Decision in CA-G.R. SP No. l 09487, id. at 251.
13
 Id. at 137.
14
 Id. at 139-147.
15
 Docketed as BLR-A-C-19-3-6-09.
16
 Rollo, Vol. I, pp. 172-177; penned by Officer-in-Charge Romeo M. Montefalco, Jr.
17
 ART. 239. Grounds for Cancellation of Union Registration. - The following may constitute grow1ds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list
of members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
18
 Rollo, Vol. I, pp. 196-197.
19
 Id. at 250-268; penned by Associate Justice Vicente S.E. Veloso and concurred in by Associate Justices Francisco P. Acosta and Samuel H. Gaerlan.
20
 DOLE Secretary.
21
 Rollo, Vol. I, pp. 260-267.
22
 Id. at 198-226.
23
 Citing Mariwasa Siam Ceramics, Inc. v. The Secretary of Department of labor and Employment,  623 Phil. 603 (2009), citing In Re: Petition for Cancellation of the Union Registration of Air Philippines
Flight Attendants Association, Air Philippines Corporation v. Bureau of Labor Relations,  525 Phil. 331 (2006).
24
 Citing Dong Seung Inc. v. Bureau of Labor Relations, 574 Phil. 368 (2008), citing Toyota Autoparts, Phils., Inc. v. The Director of the Bureau of Labor Relations, 363 Phil. 437 (1999).
25
 Citing A.D. Gothong Manufacturing Corporation Employees Union-ALU v. Hon. Confesor, 376 Phil. 168 (1999), citing Philippine Airlines Employees Association (PALEA) v. Hon. Ferrer-Calleja, 245 Phil.
382 (1988); Lacorte v. Hon. Inciong, 248 Phil. 232 (1988); Arica v. National Labor Relations Commission, 252 Phil. 803 (1989); A.M Greta & Co., Inc. v. National Labor Relations Commission,  257 Phil.
224 (1989).
26
 Rollo, Vol. I, pp. 37-41.
27
 Id., Vol. II at 646-647.
28
 Id. at 635-642.
29
 Id.,Vol. I at 317-37l.
30
 714 Phil. 427, 453 (2013), citing Sta. Lucia East Commercial Corporation. v. Secretary of Labor and Employment,  612 Phil. 998, 1007-1008 (2009).
31
 Heirs of Parasac v. Republic, 523 Phil. l64, 183 (2006).