LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings,

Bars to Certification Election

SAN MIGUEL CORPORATION V. HON. LAGUESMA, NORTH LUZON MAGNOLIA SALES LABOR UNION GR No. 100485 September 21, 1994 QUICK SUMMARY SMC is opposing thecertification election of the Union. SMC insists that each sales office for each geographic area should be a separate bargaining unit and should not be included in 1 collective union. SC ruled that the North Luzon union represented an appropriate bargaining unit FACTS: North Luzon Magnolia Sales Labor Union (Union) filed with the DOLE a petition for certification election among all the regular sales personnel of Magnolia Dairy Products in the North Luzon Sales Area. SMC opposed the petition and questioned the appropriateness of the bargaining unit sought to be represented. SMC claimed that its bargaining history in its sales offices, plants and warehouses is to have a separate bargaining unit for each sales office. The petition was heard on with SMC being represented by Atty. Batalla. Atty. Batalla withdrew petitioner's opposition to a certification election and agreed to consider all the sales offices in northern Luzon as one bargaining unit. The union won the election. Mediator-Arbiter Benalfre J. Galang certified respondent union as the sole and exclusive bargaining agent for all the regular sales personnel in all the sales offices of Magnolia Dairy Products in the North Luzon Sales Area. SMC appealed to the Secretary of Labor. It claimed that Atty. Batalla was only authorized to agree to the holding of certification elections subject to the following conditions: (1) there would only be one general election; (2) in this general election, the individual sales offices shall still comprise separate bargaining units. Undersecretary Laguesma denied SMC's appeal and affirmed the Order of the MedArbiter. Hence this petition for certiorari. ISSUES: (1) whether or not respondent union represents an appropriate bargaining unit, (2) whether or not petitioner is bound by its lawyer's act of agreeing to consider the sales personnel in the north Luzon sales area as one bargaining unit. RATIO: Petitioner claims that in issuing the impugned Orders, public respondent disregarded its collective bargaining history which is to have a separate bargaining unit for each sales office. It insists that its prior collective bargaining history is the most persuasive criterion in determining the appropriateness of the collective bargaining unit. There is no merit in the contention. Union represents an appropriate bargaining Unit A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." -1ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. Contrary to petitioner's assertion, this Court has categorically ruled that the existence of a prior collective bargaining history is neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit. Indeed, the test of grouping is mutuality or commonality of interests. The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and working conditions as evinced by the type of work they perform. In the case at bench, respondent union sought to represent the sales personnel in the various Magnolia sales offices in northern Luzon. There is similarity of employment status for only the regular sales personnel in the north Luzon area are covered. They have the same duties and responsibilities and substantially similar compensation and working conditions. The commonality of interest among he sales personnel in the north Luzon sales area cannot be gainsaid. In fact, in the certification election held on November 24, 1990, the employees concerned accepted respondent union as their exclusive bargaining agent. Clearly, they have expressed their desire to be one. Petitioner cannot insist that each of the sales office of Magnolia should constitute only one bargaining unit. What greatly militates against this position is the meager number of sales personnel in each of the Magnolia sales office in northern Luzon. Even the bargaining unit sought to be represented by respondent union in the entire north Luzon sales area consists only of approximately fifty-five (55) employees. Surely, it would not be for the best interest of these employees if they would further be fractionalized. The adage "there is strength in number" is the very rationale underlying the formation of a labor union. SMC Bound by Act of Atty. Batalla Anent the second issue, petitioner claims that Atty. Batalla was merely a substitute lawyer for Atty. Christine Ona, who got stranded in Legaspi City. Atty. Batalla was allegedly unfamiliar with the collective bargaining history of its establishment. Petitioner claims it should not be bound by the mistake committed by its substitute lawyer. We are not persuaded. As discussed earlier, the collective bargaining history of a company is not decisive of what should comprise the collective bargaining unit. Insofar as the alleged "mistake" of the substitute lawyer is concerned, we find that this mistake was the direct result of the negligence of petitioner's lawyers. It will be noted that Atty. Ona was under the supervision of two (2) other lawyers, Attys. Jacinto de la Rosa, Jr. and George C. Nograles. There is nothing in the records to show that these two (2) counsels were likewise unavailable at that time. Instead of deferring the hearing, petitioner's counsels chose to proceed therewith. Indeed, prudence dictates that, in such case, the lawyers allegedly actively involved in SMC's labor case should have adequately and sufficiently briefed the substitute lawyer with respect to the matters involved in the case and the specific limits of

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
his authority. Unfortunately, this was not done in this case. The negligence of its lawyers binds petitioner. As held by this Court in the case of Villa Rhecar Bus v. De la Cruz: . . . As a general rule, a client is bound by the mistakes of his counsel. Only when the application of the general rule would result in serious injustice should an exception thereto be called for. In the case at bench, petitioner insists that each of the sales offices in northern Luzon should be considered as a separate bargaining unit for negotiations would be more expeditious. Petitioner obviously chooses to follow the path of least resistance. It is not, however, the convenience of the employer that constitutes the determinative factor in forming an appropriate bargaining unit. Equally, if not more important, is the interest of the employees. In choosing and crafting an appropriate bargaining unit, extreme care should be taken to prevent an employer from having any undue advantage over the employees' bargaining representative. Our workers are weak enough and it is not our social policy to further debilitate their bargaining representative. In sum, we find that no arbitrariness or grave abuse of discretion can be attributed to public respondents certification of respondent union as the sole and exclusive bargaining agent of all the regular Magnolia sales personnel of the north Luzon sales area. DISPOSITIVE PORTION WHEREFORE, premises considered, the challenged Resolution and Order of public respondent are hereby AFFIRMED in toto, there being no showing of grave abuse of discretion or lack of jurisdiction. Another registered labor union, the ALL UP Workers union, intervened in the certification election proceeding. The membership of the union is composed of both academic and nonacademic personnel and it aims to untie all UP rank-and-file employees in one union. UP manifested that there should be 2 unions: one for academic, the other for non-academic or administrative, personnel considering the dichotomy of interests, conditions and rules governing these employee groups. The director said that there is no sufficient evidence to justify a separate grouping for the academic and non-academic personnel; that Sec 9 of EO 180 states the appropriate organizational unit shall be the employer unit consisting of rank-and-file employees, unless circumstances otherwise require; that the rules implementing the said EO says that for purposes of registration, an appropriate organizational unit may refer to State universities, colleges, GOCCs with original charters; that the general intent of the EO was not to fragmentize the employer uunit as can be gleaned from the definition of the term accredited employees organization in the EO which refers to a registered organization of the rank-and-file employees as defined in these rules recognized to negotiate for the employees in an organizational unit headed by an officer with sufficient authority to bind the agency, such as . . . . . . state colleges and universities. . The Director commanded that a certification election be "conducted among rank-and-file employees, teaching and non-teaching" in all four autonomous campuses of the UP (Diliman, LB, Manila, Visayas). UP manifested that certain employees be excuded from the organizational unit. It argued that those instructors holding the positions of Assistant Prof, Associate Prof, and full professor are considered high level employees (therefore not rank-in-file) under Sec. 3 of EO 180 which says: High-level employees whose functions are normally considered as policy-making or managerial or whose duties are of a highly confidential nature shall not be eligible to join the organization of rank-and file government employees; UP says that these 3 positions 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. Director Ferrer-Calleja of the Bureau of Labor Relations issued an order which held that professors, associate professors, and assistant professors of UP are considered rank and file employees; that they should join with the non-academic and non-teaching employees of the UP in only one labor organization. She reasoned that the policy-making powers of the Council are limited to academic matters, namely, prescribing courses of study and rules of discipline, fixing student admission and graduation requirements, recommending to the Board of Regents the conferment of degrees, and disciplinary power over students. The policy-determining functions contemplated in the definition of a high-level employee pertain to managerial, executive, or organization policies, such as hiring, firing, and disciplining of employees, salaries, teaching/working hours, other monetary and non-monetary benefits, and other terms and conditions of employment. They are the usual issues in collective bargaining negotiations so that whoever wields these powers would be placed in a situation of conflicting interests if he were allowed to join the union of rank-and-file employees. UP appeals to the SC to declare the order void. -2ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

UP vs FERRER CALLEJA G.R. No. 96189 July 14, 1992 QUICK SUMMARY: UP Personnel (academic and non-academic) wants a certification election to be conducted. UP says no problem but there should be 2 unions representing the collective bargaining unit: one for academic and another for non-academic. Calleja says there is no reason for separate grouping, and therefore, she commanded the holding of a cert. election for one union who shall represent the academic and non-academic personnel. UP says that 3 professorial positions (Associate, Assistant, Full) should be excluded from the rank-and-file employees as they are considered high-level personnel exercising policymaking functions. The SC says that these positions are not high-level personnel (thus they are rank in file), however there should be 2 unions representing the unit since there is a dichotomy of interests. FACTS: The Organization of Non-Academic Personnel of UP, a registered labor union, filed a petition with the Bureau of Labor Relations a petition for a holding of certification election among the non-academic employees of UP. UP stated its non-objection to the election.

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
ISSUES: 1) WON professors, associate professors and assistant professors are "high-level employees" 2) WON there should be one collecting bargaining unit among the non-academic and academic personnel considering the dichotomy of interests, conditions and rules existing between them? RATIO: 1) No. They are not high level employees. It is the University Academic Personnel Committee, composed of deans, the assistant for academic affairs and the chief of personnel, which formulates the policies, rules and standards respecting selection, compensation and promotion of members of the academic staff. The departmental and college academic personnel committees' functions are purely recommendatory in nature, subject to review and evaluation by the University Academic Personnel Board. In Franklin Baker Company of the Philippines vs. Trajano, this Court ruled that the power to recommend, in order to qualify an employee as a supervisor or managerial employee "must not only be effective but the exercise of such authority should not be merely of a routinary or clerical nature but should require the use of independent judgment." Where such recommendatory powers, as in the case at bar, are subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, are not effective and not an exercise of independent judgment as required by law. Significantly, the personnel actions that may be recommended by the departmental and college academic personnel committees must conform with the general guidelines drawn up by the university personnel academic committee. This being the case, the members of the departmental and college academic personnel committees are not unlike the chiefs of divisions and sections of the National Waterworks and Sewerage Authority whom this Court considered as rank-and-file employees in National Waterworks & Sewerage Authority vs. NWSA Consolidated Unions, because "given ready policies to execute and standard practices to observe for their execution, . . . they have little freedom of action, as their main function is merely to carry out the company's orders, plans and policies." The power or prerogative pertaining to a high-level employee "to effectively recommend such managerial actions, to formulate or execute management policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees" is exercised to a certain degree by the university academic personnel board/committees and ultimately by the Board of Regents in accordance with Section 6 of the University Charter. Another factor that militates against petitioner's espousal of managerial employment status for all its professors through membership in the departmental and college academic personnel committees is that not all professors are members thereof. Membership and the number of members in the committees are provided as follows: Sec. 2. Membership in Committees. Membership in committees may be made either through appointment, election, or by some other means as may be determined by the faculty and other academic personnel of a particular department or college. Sec. 3. Number of Members. In addition to the Chairman, in the case of a department, and the Dean in the case of a college, there shall be such number of members representing the faculty and academic personnel as will afford a fairly representative, deliberative and manageable group that can handle evaluation of personnel actions. Neither can membership in the University Council elevate the professors to the status of high-level employees. Although the University Council (composed of the 3 classes of professors) have the power to prescribe the courses of study and rules of discipline (and among others), it is subject to the approval of the Board of Regents. It is readily apparent that the policy-determining functions of the University Council are subject to review, evaluation and final approval by the Board of Regents. The Council's power of discipline is likewise circumscribed by the limits imposed by the Board of Regents. What has been said about the recommendatory powers of the departmental and college academic personnel committees applies with equal force to the alleged policy-determining functions of the University Council. Even assuming arguendo that UP professors discharge policy-determining functions through the University Council, still such exercise would not qualify them as high-level employees within the context of E.O. 180. As correctly observed by private respondent, "Executive Order No. 180 is a law concerning public sector unionism. It must therefore be construed within that context. Within that context, the University of the Philippines represents the government as an employer. 'Policy-determining' refers to policydetermination in university mattes that affect those same matters that may be the subject of negotiation between public sector management and labor. The reason why 'policydetermining' has been laid down as a test in segregating rank-and-file from management is to ensure that those who lay down policies in areas that are still negotiable in public sector collective bargaining do not themselves become part of those employees who seek to change these policies for their collective welfare." The policy-determining functions of the University Council refer to academic matters, i.e. those governing the relationship between the University and its students, and not the University as an employer and the professors as employees. It is thus evident that no conflict of interest results in the professors being members of the University Council and being classified as rank-and-file employees. 2) No. They should not be join in a single bargaining unit. A "bargaining unit" has been defined as a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. Our labor laws do not however provide the criteria for determining the proper collective bargaining unit. Case law fortunately furnishes some guidelines.Under these precedents, there are various factors which must be satisfied and considered in determining the proper constituency of a bargaining unit. No one particular factor is itself decisive of the -3ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
determination. The weight accorded to any particular factor varies in accordance with the particular question or questions that may arise in a given case. What are these factors? Rothenberg mentions a good number, but the most pertinent to our case are: (1) will of the employees (Globe Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal probationary employees. . . . Also these factors may also be considered: the history, extent and type of organization of employees; the history of their collective bargaining; the history, extent and type of organization of employees in other plants of the same employer, or other employers in the same industry; the skill, wages, work, and working conditions of the employees; the desires of the employees; the eligibility of the employees for membership in the union or unions involved; and the relationship between the unit or units proposed and the employer's organization, management, and operation. . . . The basic test in determining the appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . . . The Court further explained that "(t)he test of the grouping is community or mutuality of interests. And this is so because 'the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights' (Rothenberg on Labor Relations, 490)." Since then, the "community or mutuality of interests" test has provided the standard in determining the proper constituency of a collective bargaining unit. In Alhambra Cigar & Cigarette Manufacturing Company, et al. vs. Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting that the employees in the administrative, sales and dispensary departments of a cigar and cigarette manufacturing firm perform work which have nothing to do with production and maintenance, unlike those in the raw lead (malalasi), cigar, cigarette, packing (precintera) and engineering and garage departments, authorized the formation of the former set of employees into a separate collective bargaining unit. The ruling in the Democratic Labor Association case, supra, was reiterated in Philippine Land-Air-Sea Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees were barred from joining the union of the permanent and regular employees. In the case at bar, the University employees may, as already suggested, quite easily be categorized into two general classes: one, the group composed of employees whose functions are non-academic, i.e., janitors, messengers, typists, clerks, receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics, plumbers; and two, the group made up of those performing academic functions, i.e., full professors, associate professors, assistant professors, instructors who may be judges or government executives and research, extension and professorial staff. Not much reflection is needed to perceive that the community or mutuality of interests which justifies the formation of a single collective bargaining unit is wanting between the academic and non-academic personnel of the university. It would seem obvious that teachers would find very little in common with the University clerks and other non-academic employees as regards -4ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN responsibilities and functions, working conditions, compensation rates, social life and interests, skills and intellectual pursuits, cultural activities, etc. On the contrary, the dichotomy of interests, the dissimilarity in the nature of the work and duties as well as in the compensation and working conditions of the academic and non-academic personnel dictate the separation of these two categories of employees for purposes of collective bargaining. The formation of two separate bargaining units, the first consisting of the rank-and-file nonacademic personnel, and the second, of the rank-and-file academic employees, is the setup that will best assure to all the employees the exercise of their collective bargaining rights. These special circumstances, i.e., the dichotomy of interests and concerns as well as the dissimilarity in the nature and conditions of work, wages and compensation between the academic and non-academic personnel, bring the case at bar within the exception contemplated in Section 9 of Executive Order No. 180. It was grave abuse of discretion on the part of the Labor Relations Director to have ruled otherwise, ignoring plain and patent realities. DISPOSITIVE PORTION: WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it declares the professors, associate professors and assistant professors of the University of the Philippines as rank-and-file employees. The Order of August 7, 1990 is MODIFIED in the sense that the non-academic rank-and-file employees of the University of the Philippines shall constitute a bargaining unit to the exclusion of the academic employees of the institution i.e., full professors, associate professors, assistant professors, instructors, and the research, extension and professorial staff, who may, if so minded, organize themselves into a separate collective bargaining unit; and that, therefore, only said nonacademic rank-and-file personnel of the University of the Philippines in Diliman, Manila, Los Baos and the Visayas are to participate in the certification election.

GOLDEN FARMS, INC. v. SECRETARY OF LABOR and THE PROGRESSIVE FEDERATION OF LABOR (PFL) G.R. No. 102130 1994 July 26 QUICK SUMMARY: The Med-Arbiter granted PFLs petition for the holding of a certification election among the monthly paid office and technical rank-and-file employees of Golden Farms. GF argues that said employees should join the existing collective bargaining unit of daily paid rank-and-file employees. The SC ruled in favor of PFL stating that the monthly paid employees and those that are daily paid do not have a commonality of interests. Hence, the monthly paid employees should have their own collective bargaining unit. FACTS: PFL filed a petition before the Med-Arbiter praying for the holding of a certification election among the monthly paid office and technical rank-and-file employees of Golden Farms (GF). GF moved to dismiss the petition on 3 grounds: 1) PFL failed to show that it was organized as a chapter within GFs establishment; 2) there was already an existing CBA between the rank-and-file employees represented by the National Federation of Labor

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
(NFL) and GF; and 3) the employees represented by PFL had allegedly been disqualified by the SC from bargaining with management in a previous case. PFL opposed GFs Motion to Dismiss stating that: 1) the monthly paid office and technical employees should be allowed to form a separate bargaining unit because they were expressly excluded from coverage in the CBA between GF and NFL; and 2) the case invoked by GF was inapplicable to the present case. In its reply, GF argued that the monthly paid office and technical employees should have joined the existing collective bargaining unit of the rank-and-file employees if they are not managerial employees. Med-Arbiter granted PFLs petition and ordered that a certification election be conducted. The Secretary of Labor affirmed. ISSUE: 1. 2. W/N the creation of an additional bargaining unit is proper. W/N PFL is disqualified from representing the office and technical employees. personnel department, cashier, and other employees holding positions with access to classified information). The monthly paid office and technical employees, accountants, and cashiers are not managerial employees for they do not participate in policy-making but are given cut out policies to execute and standard practices to observe. The discharge of their duties does not involve the use of independent judgment. 2. No, PFL is qualified. In Golden Farms, Inc., vs. Honorable Pura Ferrer-Calleja (1989), the issue brought to fore was totally different (whether or not petitioner's confidential employees, considering the nature of their work, should be included in the bargaining unit of the daily paid rankand-file employees). In this case, GFs monthly paid rank-and-file employees are being separated as a bargaining unit from its daily paid rank-and-file employees, on the ground that they have different interest to protect. The principle of res judicata is inapplicable. OTHER DOCTRINES: Finally, it is noted that it was GF that filed the motion to dismiss the petition for election. The general rule is that an employer has no standing to question a certification election since this is the sole concern of the workers. Law and policy demand that employers take a strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free from any extraneous influence of management. A labor bargaining representative, to be effective, must owe its loyalty to the employees alone and to no other. DISPOSITIVE PORTION: WHEREFORE, the petition is DISMISSED for lack of merit. With costs against petitioner. SO ORDERED.

RATIO: 1. Yes, it is proper. A "bargaining unit" has been defined as a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. The community or mutuality of interest is the essential criterion in the grouping. This is so because the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights. In the case at bench, the evidence established that the monthly paid rank-and-file employees of GF primarily perform administrative or clerical work. In contradistinction, GFs daily paid rank-and-file employees mainly work in the cultivation of bananas in the fields. It is clear that GFs monthly paid rank-and-file employees have very little in common with its daily paid rank-and-file employees in terms of duties and obligations, working conditions, salary rates, and skills. Moreover, the monthly paid rank-and-file employees have been excluded from the bargaining unit of the daily paid rank-and-file employees. This dissimilarity of interests warrants the formation of a separate and distinct bargaining unit for the monthly paid rank-and-file employees. Otherwise, said group of employees shall be denied their right to self-organization for purposes of collective bargaining. The absence of their own organization will expose them to the exploitations of management. The SC also rejected GFs contention that these monthly paid office and technical employees are managerial employees (they allegedly include those in the accounting and -5-

MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE NATIONAL RAILWAYS v. CIR August 30, 1968 G.R. No. L-28223 QUICKFACTS: Caloocan shops seeks to have new unit established, the separate and distinct from the rest of the workers under the Mechanical Department now represented by the Mechanical Department Labor Union. The Court ruled in affirmative since there is certainly a community of interest among the workers of the Caloocan Shops. Shops perform major repairs of locomotives, rolling stocks, engines, etc., while those in the Manila Shed, works on minor repairs. Heavy equipment and machineries are found in the Caloocan Shops. FACTS: Petition of the respondent "Samahan ng mga Manggagawa, etc." calling attention to the fact that there were three unions in the Caloocan shops of the Philippine National Railways: the "Samahan", the "Kapisanan ng Manggagawa sa Manila Railroad Company", and the Mechanical Department Labor Union; that no certification election had been held in the last

ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
12 months in the Caloocan shops; that both the "Samahan" and the Mechanical Department Labor Union had submitted different labor demands upon the management for which reason a certification election was needed to determine the proper collective bargaining agency for the Caloocan shop workers. The petition was opposed by the management as well as by the Mechanical Department Labor Union, the latter averring that it had been previously certified in two cases as sole and exclusive bargaining agent of the employees and laborers of the PNR'S mechanical department, and had negotiated two bargaining agreements with management in 1961 and 1963; that before the expiration of the latter, a renewal thereof had been negotiated and the contract remained to be signed; that the "Samahan" had been organized only in 21 January 1965; that the Caloocan shops unit was not established nor separated from the Mechanical Department unit; that the "Samahan" is composed mainly of supervisors who had filed a pending case to be declared non-supervisors; and that the purpose of the petition was to disturb the present smooth working labor management relations. The Court, after a cursory examination of the evidence presented made the following findings: That petitioner union is composed of workers exclusively at the Caloocan shops of the Philippine National Railways charged with the maintenance of rolling stocks for repairs; major repairs of locomotive, engines, etc. are done in the Caloocan shops while minor ones in the Manila sheds; Workers in the Caloocan shops do not leave their station unlike Manila shop workers who go out along the routes and lines for repairs; workers both in the Caloocan shops and Manila sheds are exposed to hazards occasioned by the nature of their work; that with respect to wages and salaries of employees, categories under the Job Classification and Evaluation Plan of the company apply to all workers both in the Caloocan Shops and Manila sheds; administration over employees, members of petitioner union as well as oppositor is under the Administrative Division of the company; that from the very nature of their work, members of petitioner union and other workers of the Mechanical Department have been under the coverage of the current collective bargaining agreement which was a result of a certification by this Court of the Mechanical Department Labor union, first in 1960 and later in 1963. RATIO: YES. There is certainly a community of interest among the workers of the Caloocan Shops. They are grouped in one place. They work under one or same working condition, same working time or schedule and are exposed to same occupational risk. Though evidence on record shows that workers at the Caloocan Shops perform the same nature of work as their counterparts in the Manila Shed, the difference lies in the fact that workers at the Caloocan Shops perform major repairs of locomotives, rolling stocks, engines, etc., while those in the Manila Shed, works on minor repairs. Heavy equipment and machineries are found in the Caloocan Shops. On several similar instances, this Court allowed the establishment of new and separate bargaining unit in one company, even in one department of the same company, despite the existence of the same facts and circumstances as obtaining in the case at bar In view of its findings and the history of "union representation" in the railway company, indicating that bargaining units had been formed through separation of new units from existing ones whenever plebiscites had shown the workers' desire to have their own representatives, and relying on the "Globe doctrine" (Globe Machine & Stamping Co., 3 NLRB 294) applied in Democratic Labor Union vs. Cebu Stevedoring Co., L-10321, 28 February 1958, Judge Martinez held that the employees in the Caloocan Shops should be given a chance to vote on whether their group should be separated from that represented by the Mechanical Department Labor Union, and ordered a plebiscite held for the purpose. The ruling was sustained by the Court en banc; wherefore, the Mechanical Department Labor Union appealed to this Court questioning the applicability under the circumstances of the "Globe doctrine" of considering the will of the employees in determining what union should represent them. Technically, this appeal is premature, since the result of the ordered plebiscite among the workers of the Caloocan shops may be adverse to the formation of a separate unit, in which event, as stated in the appealed order, all questions raised in this case would be rendered moot and academic. Apparently, however, the appellant Mechanical Department Labor Union takes it for granted that the plebiscite would favor separation. We find no grave abuse of discretion in the issuance of the ruling under appeal as would justify our interfering with it. Republic Act No. 875 has primarily entrusted the prosecution of its policies to the Court of Industrial Relations, and, in view of its intimate knowledge concerning the facts and circumstances surrounding the cases brought before it, this Court has repeatedly upheld the exercise of discretion of the Court of Industrial Relations in matters concerning the representation of employee groups (Manila Paper Mills Employees & Workers' Association vs. C.I.R. 104 Phil. 10; Benguet Consolidated vs. Bobok Lumber Jack Association, 103 Phil. 1150). Appellant contends that the application of the "Globe doctrine" is not warranted because the workers of the Caloocan shops do not require different skills from the rest of the workers in the Mechanical Department of the Railway Company. This question is primarily one of facts. The Industrial Court has found that there is a basic difference, in that those in the Caloocan shops not only have a community of interest and working conditions but perform major repairs of railway rolling stock, using heavy equipment and machineries -6ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

Subsequently, when the latter contract expired, negotiations for its renewal were had and at the time of the filing of this petition was already consummated, the only act remaining to be done was to affix the signatures of the parties thereto; that during the pendency of this petition, on June 14, 1965, the aforesaid collective bargaining agreement was signed between the Philippine National Railways and the Mechanical Department Labor Union sa Philippine National Railways (Manila Railroad Company). ISSUE: Whether or not a new unit should be established, the Caloocan shops, separate and distinct from the rest of the workers under the Mechanical Department now represented by the Mechanical Department Labor Union.

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
found in said shops, while the others only perform minor repairs. It is easy to understand, therefore, that the workers in the Caloocan shops require special skill in the use of heavy equipment and machinery sufficient to set them apart from the rest of the workers. In addition, the record shows that the collective bargaining agreements negotiated by the appellant union have been in existence for more than two (2) years; hence, such agreements can not constitute a bar to the determination, by proper elections, of a new bargaining representative As to the charge that some of the members of the appellee, "Samahan Ng Manggagawa", are actually supervisors, it appears that the question of the status of such members is still pending final decision; hence, it would not constitute a legal obstacle to the holding of the plebiscite. At any rate, the appellant may later question whether the votes of those ultimately declared to be supervisors should be counted. OTHER DOCRINES: The history of the collective bargaining in the Manila Railroad Company, now the Philippine National Railways shows that originally, there was only one bargaining unit in the company, represented by the Kapisanan Ng Manggagawa sa MRR. Under Case No. 237MC, this Court ordered the establishment of two additional units, the engine crew and the train crew to be represented by the Union de Maquinistas, Fogoneros, Ayudante Y Motormen and Union de Empleados de Trenes, respectively. Then in 1961, under Cases Nos. 491-MC, 494-MC and 507-MC three new separate units were established, namely, the yard crew unit, station employees unit and engineering department employees unit, respectively, after the employees concerned voted in a plebiscite conducted by the court for the separation from existing bargaining units in the company. Then again, under Case No. 763-MC, a new unit, composed of the Mechanical Department employees, was established to be represented by the Mechanical Department Labor Union. Incidentally, the first attempt of the employees of the Mechanical Department to be separated as a unit was dismissed by this Court of Case No. 488-MC. In the case of the yard crew, station employees and the Engineering Department employees, the Supreme Court sustained the order of this Court in giving the employees concerned the right to vote and decide whether or not they desire to be separate DISPOSITIVE PORTION: IN VIEW OF THE FOREGOING, the order appealed from is affirmed, with costs against appellant Mechanical Department Labor Union sa Philippine National Railways FACTS: Petitioner Philtranco Service Enterprises, Inc. is a land transportation company engaged in the business of carrying passengers and freight. The company employees included field workers consisting of drivers, conductors, coach drivers, coach stewards and mechanics and office employees like clerks, cashiers, programmers, telephone operators, etc. KASAMA KO, a registered labor organization filed a petition for certification election alleging among others that: -It desires to represent all professional, technical, administrative, and confidential employees personnel for purposes of collective bargaining; -The aforementioned employees were always expressly excluded from participating in the certification election conducted among the rank and file employees (drivers, conductors, coach drivers, coach stewards, and mechanics) and are excluded from the bargaining unit -that there exist substantial differences in the terms and conditions of employment between the above-mentioned employees, hence, the former are covered by another appropriate bargaining unit which is separate and distinct from that of the rank and file employees of respondent and; -recognized by the BLR and upheld by the SC; -supported by the signatures of more than 20% of all covered employees; that there has been no Consent Election or Certification Election held and conducted for the past (3) years prior to the filing of this petition. National Mines and Allied Workers Union (NAMAWU-MIF) filed a motion for intervention alleging that it is the bargaining agent of the workers at Philtranco and as such it has a substantial interest in the outcome of the petition. The Med-Arbiter dismissed the petition. If there are still individual members of the petitioner eligible to join a labor organization, it declared that all should be included/incorporated in the existing bargaining unit. KASAMA KO appealed to the BLR which reversed the resolution of the Med-Arbiter. MR was also denied. A TRO was ordered restraining the BLR from enforcing and/or carrying out the decision. ISSUES: 1. W/N the members are eligible to join/form a union. 2. W/N another union may be formed. RATIO: 1. No. The members of the KASAMA KO who are professional, technical, administrative and confidential personnel of PHILTRANCO performing managerial functions are not qualified to join, much less form a union. This rationalizes the exclusion of managers and confidential employees exercising managerial functions from the ambit of the collective bargaining unit. Med-Arbiter: ... managerial and confidential employees were expressly excluded within the operational ambit of the bargaining unit for the simple reason that under the law, managers are disqualified to be members of a labor organization. On the other hand, confidential workers were not included because either they were performing managerial functions and/or their duties and responsibilities were considered or may be categorized as part and parcel of management as the primary reason for their exclusion in the bargaining unit. The other categorized employees were likewise not included because parties have agreed on the fact that the aforementioned group of workers are not qualified to join a labor -7ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

PHILTRANCO v. BLR G.R. No. 85343 June 28, 1989 QUICK SUMMARY: KASAMA KO, a registered labor org. desires to represent all professional, technical, admin, and confidential employees of Philtranco who are excluded from the existing bargaining unit. NAMAWU-MIF intervened being the existing bargaining agent of Philtranco employees. These memebers of KASAMA KO are performing managerial functions, they are not qualified to join, much less form a union. Qualified members of the KASAMA KO may join the NAMAWU-MIF if they want to be union members, and to be consistent with the one-union, one-company policy of the DOLE, and the laws it enforces.

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
organization at the time the agreement was executed and that they were classified as outside the parameter of the bargaining unit. That members of the respondent union are rank and file employees qualified to form a union recognized by this Court in the case of Pantranco v. NAMAWU, is misplaced. The petition simply asked for a ruling that certain employees were performing managerial functions which was denied for lack of merit in a minute resolution. There was absolutely no discussion on the recognition of another separate rank and file union in addition to the existing bargaining unit. There is no conflict. The employees of Philtranco have been appraised and their functions evaluated. Managers by any name may not join the rank and file union. On the other hand, those who are rank and file workers may join the existing bargaining unit instead of organizing another bargaining unit and compelling the employer to deal with it. We are constrained to disallow the formation of another union. There is no dispute that there exists a labor union in the company, herein intervenor, the NAMAWU-MIF which is the collective bargaining agent of the rank and file employees in PHILTRANCO. Article 2 of the CBA between PHILTRANCO and NAMAWU-MIF - Appropriate Bargaining Unit provides: Section 1 -The appropriate bargaining unit covered by this agreement consists of all regular rank- and file employees of the company. Managerial, confidential, casuals, temporary, probationary and contractual employees as well as trainees, apprentices, security personnel and foreman are excluded from the bargaining unit and therefore, not covered by this AGREEMENT. The job description outside the bargaining unit are enumerated in the list hereto attached as Annex '1' and made an integral part hereof. The qualified members of the KASAMA KO may join the NAMAWU-MIF if they want to be union members, and to be consistent with the one-union, one-company policy of the DOLE, and the laws it enforces. 2. NO. General Rubber and Footwear Corp.: ... It has been the policy of the Bureau to encourage the formation of an employer unit 'unless circumstances otherwise require. The proliferation of unions in an employer unit is discouraged as a matter of policy unless there are compelling reasons which would deny a certain class of employees the right to selforganization for purposes of collective bargaining. This case does not fall squarely within the exception. There are no compelling reasons such as a denial to the KASAMA KO group of the right to join the certified bargaining unit or substantial distinctions warranting the recognition of a separate group of rank and file workers. NAMAWU-MIF intervened to make it clear it has no objections to qualified rank and file workers joining its union. It is natural in almost all fairly sized companies to have groups of workers discharging different functions. No company could possibly have all employees performing exactly the same work. Variety of tasks is to be expected. It would not be in the interest of sound labormanagement relations if each group of employees assigned to a specialized function or section would decide to break away from their fellow-workers and form their own separate bargaining unit. It cannot allow one unit for typists and clerks, one unit for accountants, another unit for messengers and drivers, and so on in needless profusion. The questioned decision (to where the line should be drawn) of the public respondent can only lead to confusion, discord and labor strife. The respondents state that this case is an exception to the general rule considering that substantial differences exist between the office employees or professional, technical, administrative and confidential employees vis-a-vis the field workers or drivers, conductors -8ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN and mechanics of the petitioner.The "substantial differences" in the terms and conditions of employment between the private respondent's members and the rest of the company's rank and file employees are more imagined than real. The differences alleged are not substantial or significant enough to merit the formation of another union. PHILTRANCO is a large bus company, certainly there is a commonality of interest among filing clerks, dispatchers, drivers, typists, and field men. They are all interested in the progress of their company and in each worker sharing in the fruits of their endeavors equitably and generously. Their functions mesh with one another. One group needs the other in the same way that the company needs them all. The drivers, mechanics and conductors are necessary for the company but technical, administrative and office personnel are also needed and equally important for the smooth operation of the business. There may be differences as to the nature of their individual assignments but the distinctions are not enough to warrant the formation of separate unions. Respondent has not shown that a separate bargaining unit would be beneficial to the employees concerned. Office employees also belong to the rank and file. There is an existing employer wide unit in the company represented by NAMAWU-MIF. There are no compelling reasons for the formation of another union. Med-Arbiter:... It is against the policy of the Department of Labor to dismember the already wide existing bargaining unit because of its well established goal towards a single employer wide unit which is more to the broader and greater benefit of the employees working force. The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees bargaining power with the management. To do otherwise, would be contrary, inimical and repugnant to the objectives of a strong and dynamic unionism. Let there be a unified whole rather than a divisive one, let them speak as one in a clear resonant voice unmarred by dissension towards progressive unionism. DISPOSITIVE PORTION: WHEREFORE, the decision of the BLR and the Order are hereby SET ASIDE. The resolution of the Med-Arbiter is REINSTATED. The restraining order issued by the Court is made permanent. SO ORDERED.

PHILIPPINE SCOUT VETERANS SECURITY and INVESTIGATION AGENCY vs. SECRETARY G.R. No. 92357 July 21, 1993 QUICK SUMMARY: UFW filed a certification election among the rank and file employees of three companies, collectively called PGA Security Agency. The three companies assert that being three independent entities, one certification election as sole collective bargaining agent from one union is not proper. Med-arbiter and Sec. of Labor allowed the certification election. MR was also denied. The court affirmed their decision saying that the three companies failed to rebut the evidence shown that they were indeed just one entity. Also the court said that in reality, they are not even oppositors to a certification election, but merely by-standers as held in the Tupas case. FACTS: On April 6, 1989, private respondent labor union, PGA Brotherhood Association - Union of Filipino Workers (UFW), hereinafter referred to as "the Union " filed a petition for Direct Certification/Certification Election among the rank and file employees of Philippine Scout Veterans Security and Investigation Agency (PSVSIA), GVM Security and Investigations

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
Agency, Inc. (GVM). and Abaquin Security and Detective Agency, Inc. (ASDA). These three agencies were collectively referred to by private respondent Union as the "PGA Security Agency," which is actually the first letters of the corporate names of the agencies. On April 11, 26, 1986, petitioners filed a single comment alleging therein that the said three security agencies have separate and distinct corporate personalities while PGA Security Agency is not a business or corporate entity and does not possess any personality whatsoever; the petition was unclear as to whether the rank-and-file employees mentioned therein refer to those of the three security agencies collectively and if so, the labor union cannot seek a certification election in three separate bargaining units in one petition; the labor union included in their organization "security supervisors," in violation of R.A. 6715; and though R.A. 6715 is already in effect, there were still no implementing rules therefor. On May 4, 1989, the security agencies filed a Consolidated Motion to Dismiss on the grounds that the 721 supporting signatures do not meet the 20% minimum requirement for certification election as the number of employees totals 2374 and that there are no implementing rules yet of R.A. 6715. On May 8, 1989, the Union filed an Omnibus Reply to Comment and Motion to Dismiss alleging that it is clear that it is seeking a certification election in the three agencies; that the apparent separate personalities of the three agencies were used merely to circumvent the prohibition in R.A. 5847, as amended by P.D. 11 and P.D. 100, that a security agency must not have more than 1,000 guards in its employ; that the three security agencies' administration, management and operations are so intertwined that they can be deemed to be a single entity; and that the security supervisors cannot be deemed part of management since they do not meet the definition of "supervisory employees" found in Articles 212(m), Labor Code, as amended by Section 4, R.A. No. 6715. MED ARBITER - issued an Order in favor of the labor union finding that PSVSIA, GVM and ASDA should be deemed as a single entity and bargaining unit for the purpose of union organizing and the holding of a certification election. SEC. of LABOR and EMPLOYMENT - denied the appeal for lack of merit while at the same time affirming the Med-Arbiter's Order of July 6, 1989. He also ordered the immediate conduct of a certification election. MR denied. ISSUE: WON a single certification election was proper for the three entities HELD/RATIO YES. Petitioners claim that the facts and circumstances of the case of La Campana Coffee Factory, Inc. v. Kaisahan Ng Mga Manggagawa sa La Campana which public respondent claims to be on all fours with the instant case, are very distinct from the facts and circumstance obtaining in the case at bar. As to form of business organization, in the La Campana case, only one of two (2) businesses was a corporation i.e., the La Campana -9ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN Petitioners' claim of alleged defect in the petition for certification election which although addressed to the three security agencies merely alleged that there are only 1,000 employees when the total number of employees in said security agencies is about 2,374 (PSVSIA - 1252; GVM - 807; and ASDA - 315) thereby failing to comply with the legal requirement that at least twenty percent (20%) of the employees in the bargaining unit must support the petition, betrays lack of knowledge of the amendments introduced by R.A 6715 No explanation was also given by petitioners why the security guards of one agency could easily transfer from one agency to another and then back again by simply filling-up a common pro forma slip called "Request for Transfer". Records also shows that the PSVSIA, GVM and ASDA always hold joint yearly ceremonies such as the "PGA Annual Awards Ceremony". Coffee Factory, Inc. and the other, the La Campana Gaugau Packing, is a "non-entity," being merely a business name. In the case at bar, all three (3) agencies are incorporated. Moreover, the issue involved in the instant case is one of representation while in the La Campana case, the issue involved is the validity of a demand for wage increases and other labor standards benefits. Petitioners likewise contend that it was error to hold that the three companies should be treated as one in a single bargaining unit in one petition for certification elections resulting in a violation of the right to due process of each corporation as no notice of hearing and other legal processes were served on each of said corporations. Consequently, no jurisdiction was acquired on them by the Department of Labor and Employment. Petitioners' arguments deserve scant consideration. The facts and circumstances extant in the record indicate that the Med-Arbiter and Secretaries Drilon and Torres were not mistaken in holding that the three security companies are in reality a single business entity operating as a single company called the "PGA Security Group" or "PGA Security Services Group." Factual findings of labor officials are conclusive and binding on the Court when supported by substantial evidence. In La Compana case, which respondents says is identical to this case, this Court held therein that the veil of corporate fiction of the coffee factory may be pierced to thwart the attempt to consider it part from the other business owned by the same family. Thus, the fact that one of the businesses is not incorporated was not the decisive factor that led the Court to consider the two factories as one. Moreover, we do not find any materiality in the fact that the La Campana case was instituted to demand wage increases and other labor standards benefits while this case was filed by the labor union to seek recognition as the sole bargaining agent in the establishment. If businesses operating under one management are treated as one for bargaining purposes, there is not much difference in treating such businesses also as one for the preliminary purpose of labor organizing. Indeed, the three agencies in the case at bar failed to rebut the fact that they are managed through the Utilities Management Corporation with all of their employees drawing their salaries and wages from said entity; that the agencies have common and interlocking incorporators and officers; and that the PSVSIA, GVM and ASDA employees have a single Mutual Benefit System and followed a single system of compulsory retirement.

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
which became effective on March 21, 1989, prior to the filing of the petition for certification election on April 6, 1989. Under the amendments, there is no need for the labor union to prove that at least 20% of the security guards in the three agencies supported the petition. When a duly organized union files a petition for certification election, the Med-Arbiter has the duty to automatically conduct an election. He has no discretion on the matter. The summons were clearly sent to and received by their lawyer who filed motions and pleadings on behalf of the three security agencies and who always appeared as their legal counsel. It puzzles this Court why petitioners, who claim to be separate entities, continue to be represented by one counsel even in this instant petition. Finally, except where the employer has to file a petition for certification election pursuant to Article 258 of the Labor Code because of a request to bargain collectively, it has nothing to do with a certification election which is the sole concern of the workers. Its role in a certification election has aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, as that of a mere by-stander. It has no legal standing in a certification election as it cannot oppose the petition or appeal the Med-Arbiter's orders related thereto. An employer that involves itself in a certification election lends suspicion to the fact that it wants to create a company union. Indeed, the three security agencies should not even be adverse parties in the certification election itself. We note with disapproval the title given to the petition for certification election of the Union by the Med-Arbiter and the Secretary of Labor naming the three security agencies as respondents. Such is clearly an error. While employers may rightfully be notified or informed of petitions of such nature, they should not, however, be considered parties thereto with concomitant right to oppose it. Sound policy dictates that they should maintain a strictly hands-off policy. DISPOSITIVE PORTION: WHEREFORE, finding no reversible error in the questioned decision of the Secretary of Labor, the instant petition for certiorari is hereby DISMISSED for utter lack of merit. hires. The School employs four tests to determine whether a faculty member should be classified as a foreign-hire or a local hire: What is one's domicile? Where is one's home economy? To which country does one owe economic allegiance? Was the individual hired abroad specifically to work in the School and was the School responsible for bringing that individual to the Philippines? Should the answer to any of these queries point to the Philippines, the faculty member is classified as a local hire; otherwise, he or she is deemed a foreign-hire. The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreignhires are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International School Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members" of the School, contested the difference in salary rates between foreign and local-hires. This issue, as well as the question of whether foreign-hires should be included in the appropriate bargaining unit, eventually caused a deadlock between the parties. Petitioner filed a notice of strike. The failure of the NCMB to bring the parties to a compromise prompted the DOLE to assume jurisdiction over the dispute. The DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and representation issues in favor of the School. DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for reconsideration. Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination. The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all, with nationalities other than Filipino, who have been hired locally and classified as local hires.The Acting Secretary of Labor found that these non-Filipino localhires received the same benefits as the Filipino local-hires: The compensation package given to local-hires has been shown to apply to all, regardless of race. Truth to tell, there are foreigners who have been hired locally and who are paid equally as Filipino local hires. The Acting Secretary upheld the point-of-hire classification for the distinction in salary rates: The principle "equal pay for equal work" does not find application in the present case. The international character of the School requires the hiring of foreign personnel to deal with different nationalities and different cultures, among the student population. - 10 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

INTERNATIONAL SCHOOL ALLIANCE INTERNATIONAL SCHOOL, INC. GR No. 128845 June 1, 2000

OF

EDUCATORS

V.

QUISUMBING,

QUICK SUMMARY: IS is giving foreign hires a higher salary than local hires. A case was brought against them for discrimination. During the pendency of the case, the issue of whether the foreign-hires and the local hires belonged in the same bargaining unit. SC held that they didnt because they did not share the same interests FACTS International School, Inc. (the School, for short), pursuant to Presidential Decree 732, is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. The School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
We also take cognizance of the existence of a system of salaries and benefits accorded to foreign hired personnel which system is universally recognized. We agree that certain amenities have to be provided to these people in order to entice them to render their services in the Philippines and in the process remain competitive in the international market. The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an established principle of constitutional law that the guarantee of equal protection of the laws is not violated by legislation or private covenants based on reasonable classification. A classification is reasonable if it is based on substantial distinctions and apply to all members of the same class. Verily, there is a substantial distinction between foreign hires and local hires, the former enjoying only a limited tenure, having no amenities of their own in the Philippines and have to be given a good compensation package in order to attract them to join the teaching faculty of the School. ISSUES: 1. 2. HELD: 1. 2. RATIO: The Constitution directs the State to promote "equality of employment opportunities for all." Similarly, the Labor Code provides that the State shall "ensure equal work opportunities regardless of sex, race or creed." It would be an affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and ensure equal employment opportunities, closes its eyes to unequal and discriminatory terms and conditions of employment. Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for example, prohibits and penalizes the payment of lesser compensation to a female employee as against a male employee for work of equal value. Article 248 declares it an unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage membership in any labor organization. Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7 thereof, provides: The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favourable conditions of work, which ensure, in particular: a.....Remuneration which provides all workers, as a minimum, with: i.....Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work; xxx. - 11 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN Whether the point-of-hire classification is a valid classification. Whether the foreign hires belong to their own bargaining unit No, the classification is invalid Yes, the foreign hires belong to their own bargaining unit The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. This rule applies to the School, its "international character" notwithstanding. The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-hires. The Court finds this argument a little cavalier. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. This presumption is borne by logic and human experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it is for the employer to explain why the employee is treated unfairly. The employer in this case has failed to discharge this burden. The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the distinction in salary rates without violating the principle of equal work for equal pay. While we recognize the need of the School to attract foreign-hires, salaries should not be used as an enticement to the prejudice of local-hires. The local-hires perform the same services as foreign-hires and they ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and home leave travel allowances. In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreignhires and local-hires. The practice of the School of according higher salaries to foreignhires contravenes public policy and, certainly, does not deserve the sympathy of this Court. Foreign-hires do not belong to the same bargaining unit as the local-hires. A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law."The factors in determining the appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. The basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights. It does not appear that foreign-hires have indicated their intention to be grouped together with local-hires for purposes of collective bargaining. The collective bargaining history in the

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
School also shows that these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar functions under the same working conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires. These benefits, such as housing, transportation, shipping costs, taxes, and home leave travel allowance, are reasonably related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their respective collective bargaining rights. DISPOSITIVE PORTION: WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The Orders of the Secretary of Labor and Employment dated June 10, 1996 and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they uphold the practice of respondent School of according foreign-hires higher salaries than local-hires. DLSU filed a petition for certiorari with the SC challenging the decision of the VA. In his comment, Solicitor General agreed with the voluntary arbitrators assailed decision on all points except that involving the employees of the College of St. Benilde. According to the Solicitor General, the employees of the College of St. Benilde should have been included in the bargaining unit of the rank-and-file employees of the University. The Solicitor General came to this conclusion after finding that DLSU and CSB as only one entity because the latter is but a mere integral part of the University," to wit: One of the duties and responsibilities of the CSBs Director of Academic Services is to coordinate with the Universitys Director of Admissions regarding the admission of freshmen, shiftees and transferees Some of the duties and responsibilities of the CSBs Administrative Officer are as follows: - Recommends and implements personnel policies and guidelines (in accordance with the Staff Manual) as well as pertinent existing general policies of the university as a whole. xxx. - Conducts and establishes liaison with all the offices concerned at the Main Campus as well (sic) with other government agencies on all administrative-related matters. xxx Sppedjo - Handles processing, canvassing and direct purchasing of all requisitions worth more than P10,000 or less. Coordinates and canvasses with the Main Campus all requisitions worth more than P10,000. xxx - Plans and coordinates with the Security and Safety Committee at the Main Campus the development of a security and safety program during times of emergency or occurrence of fire or other natural calamities. The significant role which the University assumes in the admission of students at the CSB is revealed in the following provisions of the CSBs Bulletin for Arts and Business Studies Department for the schoolyear 1992-1993, thus: - Considered in the process of admission for a (sic) high school graduate applicants are the following criteria: results of DLSU College Entrance Examination xxx. - Admission requirements for transferees are: xxx and an acceptable score in the DLSU admission test. xxx - Shiftees from DLSU who are still eligible to enroll may be admitted in accordance with the DLSU policy on shifting. Considering that there sometimes exist exceptional cases where a very difficult but temporary situation renders a DLSU student falling under this category a last chance to be re-admitted provided he meets the cut-off scores required in the qualifying examination administered by the university. xxx - He may not be remiss in his study obligations nor incur any violation whatsoever, as such will be taken by the University to be an indication of his loss of initiative to pursue further studies at DLSU. In such (sic) a case, he renders himself ineligible to continue studying at DLSU. DLSU thus reserves the right to the discontinuance of the studies of any enrollee whose presence is inimical to the objectives of the CSB/DLSU. Mi-so - As a college within the university, the College of St. Benilde subscribes to the De La Salle Mission. The academic programs offered at the CSB are likewise presented in the Universitys Undergraduate Prospectus for schoolyear 1992-1993. The Leave Form Request (Annex "F" of the Unions Position Paper) at the CSB requires prior permission from the University anent leaves of CSB employees, to wit: - 12 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

DE LA SALLE V. DE LA SALLE UNIVERSITY EMPLOYEES' ASSOCIATION G.R. No. 109002 April 12, 2000 QUICK SUMMARY: This case is about what kind of employees should be included in the collective bargaining unit of DLSU. Should it include the computer services workers? The Discipline employees? The employees of the college of St. Benilde? DLSU claims that the first two should not be included because they are confidential employees. As to St. Benilde, it asserts that CSB employees should not be included because CSB and DLSU have a separate juridical personality. FACTS: The association is composed of regular non-academic employees of DLSU. The union entered into a CBA with DLSU. During the freedom period, the Union entered into negotiations with DLSU. The result was unsuccessful. The voluntary arbitrator rendered a decision. On the first issue involving the scope of the bargaining unit, it ruled that the computer operators at the Computer Services Center, just like any other Computer Operators in other units, should be included as members of the bargaining unit," after finding that evidently, the Computer Operators are presently doing clerical and routinary work and had nothing to do with the setting of management policies for the University, as may be gleaned from the duties and responsibilities attached to the position and embodied in the CSC brochure. They may have, as argued by the University, access to vital information regarding the Universitys operations but they are not necessarily confidential." Regarding the discipline officers, they belong to the rank-and-file based on the nature of their job With respect to the employees of the College of St. Benilde, the voluntary arbitrator found that the College of St. Benilde has a personality separate and distinct from the University and thus, held "that the employees therein are outside the bargaining unit of the Universitys rank-and-file employees. OTHER ISSUES WERE REMOVED FOR BREVITY

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
AN EMPLOYEE WHO GOES ON LEAVE WITHOUT PRIOR PERMISSION FROM THE UNIVERSITY OR WHO OVEREXTENDS THE PERIOD OF HIS APPROVED LEAVE WITHOUT SECURING AUTHORITY FROM THE UNIVERSITY, OR WHO REFUSE TO BE RECALLED FROM AN APPROVED LEAVE SHALL BE CONSIDERED ABSENT WITHOUT LEAVE AND SHALL BE SUBJECT TO DISCIPLINARY ACTION. The University officials themselves claimed during the 1990 University Athletic Association of the Philippines (UAAP) meet that the CSB athletes represented the University since the latter and the CSB comprise only one entity." ISSUE: WON these groups of employees should be included in the bargaining unit of DLSU? a. Computer operators b. Discipline Officers c. Employees of College of St. Benilde RATIO: YES. The computer operators and discipline officers are not confidential employees. On the first issue involving the classification of the computer operators assigned at the Universitys Computer Services Center and discipline officers, the University argues that they are confidential employees and that the Union has already recognized the confidential nature of their functions when the latter agreed in the parties 1986 collective bargaining agreement to exclude the said employees from the bargaining unit of rank-and-file employees. As far as the said computer operators are concerned, the University contends that " the parties have already previously agreed to exclude all positions in the Universitys Computer Services Center (CSC), which include the positions of computer operators, from the collective bargaining unit. "The University further contends that "the nature of the work done by these Computer Operators is enough justification for their exclusion from the coverage of the bargaining unit of the Universitys rank-and-file employees." According to the University, the Computer Services Center, where these computer operators work, "processes data that are needed by management for strategic planning and evaluation of systems. It also houses the Universitys confidential records and information [e.g. student records, faculty records, faculty and staff payroll data, and budget allocation and expenditure related data] which are contained in computer files and computer-generated reports. xxx xxx. Moreover, the Computer Operators are in fact the repository of the Universitys confidential information and data, including those involving and/or pertinent to labor relations. xxx xxx."[48] As to the discipline officers, the University maintains that "they are likewise excluded from the bargaining unit of the rank-and-file employees under the parties 1986 CBA. The Discipline Officers are clearly alter egos of management as they perform tasks which are inherent in management [e.g. enforce discipline, act as peace officers, secure peace and safety of the students inside the campus, conduct investigations on violations of University regulations, or of existing criminal laws, committed within the University or by University employees] xxx xxx."[49] The University also alleges that "the Discipline Officers are privy to highly confidential information ordinarily accessible only to management."[50] Manik-s SC: The Solicitor General that the express exclusion of the computer operators and discipline officers from the bargaining unit of rank-and-file employees in the 1986 collective - 13 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN bargaining agreement does not bar any re-negotiation for the future inclusion of the said employees in the bargaining unit. During the freedom period, the parties may not only renew the existing collective bargaining agreement but may also propose and discuss modifications or amendments thereto. With regard to the alleged confidential nature of the said employees functions, after a careful consideration of the pleadings filed before this Court, we rule that the said computer operators and discipline officers are not confidential employees. As carefully examined by the Solicitor General, the service record of a computer operator reveals that his duties are basically clerical and non-confidential in nature.[52] As to the discipline officers, we agree with the voluntary arbitrator that based on the nature of their duties, they are not confidential employees and should therefore be included in the bargaining unit of rank-and-file employees. NO. CSB employees should not be included. With regard to the employees of the College of St. Benilde, the Union, supported by the Solicitor General at this point, asserts that the veil of corporate fiction should be pierced, thus, according to the Union, the University and the College of St. Benilde should be considered as only one entity because the latter is but a mere integral part of the University. SC: The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St. Benilde should be excluded from the bargaining unit of the rank-and-file employees of Dela Salle University, because the two educational institutions have their own separate juridical personality and no sufficient evidence was shown to justify the piercing of the veil of corporate fiction. DISPOSITIVE PORTION: WHEREFORE, premises considered, the petitions in these consolidated cases, G.R. No. 109002 and G.R. No. 110072 are partially GRANTED. The assailed decision dated January 19, 1993 of voluntary arbitrator Buenaventura Magsalin is hereby AFFIRMED with the modification that the issue on salary increases for the second and third years of the collective bargaining agreement be REMANDED to the voluntary arbitrator for definite resolution within one month from the finality of this Decision, on the basis of the externally audited financial statements of the University already submitted by the Union before the voluntary arbitrator and forming part of the records.

ORIENTAL TIN CAN LABOR UNION V. SECRETARY ORIENTAL TIN CAN LABOR UNION V. SECRETARY G.R. No. 116779 August 28, 1998 FACTS: Oriental Tin Can and Metal Sheet Manufacturing Company, Inc. (the company) is engaged in the manufacture of tin can containers and metal sheets. On March 3, 1994, it entered into a collective bargaining agreement (CBA) with petitioner Oriental Tin Can Labor Union (OTCLU) as the existing CBA was due to expire on April 15, 1994. Four days later, 248 of the companys rank-and-file employees authorized the Federation of Free Workers (FFW) to file a petition for certification election. On March 10, 1994, however, this petition was [ repudiated via a written waiver by 115 of the signatories who, along with other employees totaling 897, ratified the CBA on the same date.

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
Armed with Charter Certificate No. IV-MEE-089, respondent Oriental Tin Can Workers Union Federation of Free Workers (OTCWU-FFW) filed a petition for certification election with the National Capital Region office of the Department of Labor and Employment (DOLE), pursuant to Article 256 of the Labor Code. Purporting to represent the regular rank-and-file employees of the company, the petition was accompanied by the authentic signatures of 25% of the employees/workers in the bargaining unit. The OTCLU filed a manifestation and motion on April 15, 1994, praying for the dismissal of the petition for certification election on the ground that it was not endorsed by at least 25% of the employees of the bargaining unit. Some of the employees who initially signed the petition had allegedly withdrawn in writing such support prior to the filing of the same. The OTCWU-FFW filed a reply to said manifestation and motion, claiming that the retraction of support for the petition was not verified under oath and, therefore, had no legal and binding effect. It further asserted that the petition had the required support of more than 25% of all the employees in the bargaining unit. For its part, the company filed a comment alleging inter alia that the new CBA was ratified by 897 out of the 1,020 rank-and-file employees within the bargaining unit. The OTCLU then filed a motion to dismiss and/or position paper reiterating its position that the petition did not comply with the 25% signature requirement and maintaining that the new CBA was a bar to a certification election. To said comment and motion to dismiss, the OTCWU-FFW filed a consolidated reply, alleging that an employer has no legal personality to oppose a petition for certification election; that there are only 882 rank and file workers in the bargaining unit and not 1,020 which included supervisors and workers hired after the filing of the petition; that those who gave their support to the filing of the petition did not withdraw or retract the same before or after the petition was filed; the Collective Bargaining Agreement (CBA) between respondent company and Forced Intervenor (OTCLU) is a sweetheart contract and concluded within the freedom period; and that additional employees gave their support to the petition after the same was filed. The company filed a rejoinder to said consolidated reply, asserting its objection to the petition for certification election because the case at bar involves a collective bargaining agreement which was ratified by 897 employees including the 245 workers who had earlier given their consent to the filing of the petition; that the benefits provided for therein are being enjoyed by the workers themselves; that a certification election would impair the said contract; that the officers of (OTCWU-FFW) were among those who ratified the CBA; and (OTCWU-FFW) failed to name the supervisors and workers hired after the filing of the petition that were allegedly included in the list of rank and file employees. In the meantime, on April 18, 1994, the DOLE issued a certificate of registration of the CBA pursuant to Article 231 of the Labor Code, as amended by Republic Act No. 6715. It showed that the CBA between the company and the OTCLU would have the force and effect of law between the parties that had complied with the requirements and standards for registration thereof. On June 1, 1994, the officers of the OTCWU-FFW walked out of their jobs, prompting the company to require them to explain in writing why no disciplinary action should be taken against them for walking out en masse. The following day, said union filed a notice of strike with the National Conciliation and Mediation Board (NCMB) grounded on the alleged - 14 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN dismissal of union members/officers. Two days later, the company directed said officers to report back to work within 48 hours, but none of them did. In an order dated June 7, 1994, Med-Arbiter Renato D. Parugo dismissed the petition for certification election for lack of merit. Noting that the petition was filed after the valid retractions were made, he concluded that by the withdrawal of support to the petition by 115 workers, the remaining 133 of the 1,020 employees were clearly less than the 25% subscription requirement. The OTCWU-FFW appealed this ruling to the Labor Secretary. On June 18, 1994, however, during the pendency of the appeal, said union staged a strike that prevented the free ingress and egress of non-striking employees, delivery trucks and other vehicles to and from the companys premises. Upon complaint of the company, the National Labor Relations Commission (NLRC) issued a writ of preliminary injunction on July 19, 1994, on the ground that the strike caused the company to incur daily losses amounting to P3.6 million. Meanwhile, on July 15, 1994, Undersecretary Bienvenido E. Laguesma, acting on the [6] appeal of the OTCWU-FFW, issued a resolution holding that: An examination of the records of this case shows that the subject CBA was concluded during the 60-day freedom period of the old CBA which expired on 15 April 1994, and registered with the Regional Office of this Department on 18 April 1994 while the petition for certification election was filed on 18 March 1994. It is therefore, crystal clear that, the present petition was filed during the freedom period and no registered CBA in the respondent establishment could be invoked (to) pose as a bar to the holding of a certification election. In other words, when the said CBA was registered there was a pending representation case. Consequently, said CBA cannot bar the election being prayed for. On the issue of whether the 25% support requirement for filing the petition for certification election had been met, Undersecretary Laguesma opined thus: Accordingly, Undersecretary Laguesma disposed of the appeal as follows: WHEREFORE, the appeal of the petitioner is hereby granted and the Order of the MedArbiter is hereby set aside. In lieu thereof, a new order is hereby issued directing the conduct of a certification election among the regular rank and file employees of the Oriental Tin Can and Metal Sheet Manufacturing, with the following as choices: 1. 2. 3. Oriental Tin Can Workers Union - Federation of Free Workers (OTCWU-FFW); Oriental Tin Can Labor Union (OTCLU); No Union.

Herein petitioners filed a motion for reconsideration of said resolution, but this was denied for lack of merit in the resolution dated August 22, 1994. From this resolution, the company and the OTCLU filed separate petitions forcertiorari before this Court. ISSUES: WON the Labor Secretary, through Undersecretary Laguesma, gravely abused his discretion in:

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
(a) ordering the conduct of a certification election even though the employees who signed the petition therefor had withdrawn their support by ratifying the CBA and even though no certification election could be conducted without the written consent of at least 25% of all the employees in the bargaining unit, (b) ruling, in effect, that the provision of Article 256 of the Labor Code takes precedence over that of Article 253 of the same Code RATIO: 1. Undersecretary Laguesma, by authority of the Secretary of the DOLE, was exercising the function of the Department to (e)nforce social and labor legislation to protect the working class and regulate the relations between the worker and his employee when he issued the resolution being assailed in the instant petition. As will be shown shortly, he was merely applying the law applicable to the appeal raised before his office. The Labor Code imposes upon the employer and the representative of the employees the duty to bargain collectively. Since the question of right of representation as between competing labor organizations in a bargaining unit is imbued with public interest, the law governs the choice of a collective bargaining representative which shall be the duly certified agent of the employees concerned. An official certification becomes necessary where the bargaining agent fails to present adequate and reasonable proof of its majority authorization and where the employer demands it, or when the employer honestly doubts [ the majority representation of several contending bargaining groups. In fact, Article 255 of the Labor Code allows the majority of the employees in an appropriate collective bargaining unit to designate or select the labor organization which shall be their exclusive representative for the purpose of collective bargaining. The designation or selection of the bargaining representative without, however, going through the process set out by law for the conduct of a certification election applies only when representation is not in issue. There is no problem if a union is unanimously chosen by a majority of the employees as their bargaining representative, but a question of representation arising from the presence of more than one union in a bargaining unit aspiring to be the employees representative, can only be resolved by holding a certification election under the supervision of the proper government authority. Given these premises, the filing of a petition for certification election by one of the two unions in the bargaining unit is enough basis for the DOLE, through its authorized official, to implement the law by directing the conduct of a certification election. It is uncontroverted that the petition for certification election in this case was filed on March 18, 1994, twenty-eight days before the expiration of the existing CBA on April 15, 1994, and well within the 60-day period provided for by the Code. The filing of a petition for certification election during the 60-day freedom period gives rise to a representation case that must be resolved even though a new CBA has been entered into within that period. This is clearly provided for in the aforequoted Section 4, Rule V, Book V of the Omnibus Rules Implementing the Labor Code. The reason behind this rule is obvious. A petition for certification election is not necessary where the employees are one in their choice of a representative in the bargaining process. Moreover, said provision of the Omnibus Rules manifests the intent of the legislative authority to allow, if not encourage, the contending unions in a bargaining unit to hold a certification election during the freedom period. Hence, the Court held in the case of Warren Manufacturing Workers Union - 15 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN (WMWU) v. Bureau of Labor Relations, that the agreement prematurely signed by the union and the company during the freedom period does not affect the petition for certification election filed by another union. 2. As regards the 25% support requirement, we concur with public respondents finding that said requisite has been met in this case. With regard to the finding that the waiver document executed by the employees was the product of duress, force and intimidation employed by the company after it learned of the petition for certification election, the following pronouncement of the Court is relevant: x x x. Even doubts as to the required 30% being met warrant (the) holding of the certification election. In fact, once the required percentage requirement has been reached, the employees withdrawal from union membership taking place after the filing of the petition for certification election will not affect the petition. On the contrary, the presumption arises that the withdrawal was not free but was procured through duress, coercion or for a valuable consideration. Hence, the subsequent disaffiliation of the six (6) employees from the union will not be counted against or deducted from the previous number who had signed up for certification elections. x x x. The support requirement is a mere technicality which should be employed in determining [21] the true will of the workers instead of frustrating the same. If the OTCLU wanted to be retained as the rank-and-file employees bargaining representative, it should have sought their vote, not engaged in legal sophistry. The selection by the majority of the employees of the union which would best represent them in [24] the CBA negotiations should be achieved through the democratic process of an election. The fear expressed by the OTCLU that granting the petition for certification election would be prejudicial to all the employees since the new CBA would run the risk of being nullified and the employees would be required to restitute whatever benefits they might have received under the new CBA, is to be dismissed as being baseless and highly speculative. The benefits that may be derived from the implementation of the CBA prematurely entered into between the OTCLU and the company shall, therefore, be in full force and effect until the appropriate bargaining representative is chosen and negotiations for a new collective bargaining agreement is thereafter concluded. A struggle between contending labor unions must not jeopardize the implementation of a CBA that is advantageous to employees DISPOSITIVE PORTION: WHEREFORE, both petitions for certiorari are hereby DISMISSED. This decision is immediately executory. Costs against petitioners.

SAMAHAN NG MGA MANGGAGAWA SA FILSYSTEMS v. Secretary OF LABOR AND EMPLOYMENT and FILSYSTEMS, INC. G.R. No. 128067 June 5, 1998 QUICK SUMMARY: SAMAFIL-NAFLU-KMU filed a petition for certification election, and it included in its petition its charter certificate showing its affiliation with NAFLU-KMU. The

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
company questioned the status of the petitioner as a legitimate labor organization on the ground of lack of proof that its contract of affiliation with the NAFLU-KMU has been submitted to the BLR within 30 days from its execution. The Court held that as a legitimate labor organization, it had the right to file a petition for certification of election independently. The failure of petitioner to prove its affiliation with NAFLU-KMU cannot affect its right to file said petition for certification election as an independent union. FACTS: Samahan ng mga Manggagawa sa Filsystems (SAMAFIL-NAFLU-KMU) is a registered labor union with Certificate of Registration No. NCR-UR-10-1575-95. On November 6, 1995, petitioner union filed a Petition for Certification Election among the rank-and-file employees of private respondent FILSYSTEMS, Inc. before the DOLE NCR. Attached as annexes to the petition are the Certificate of Registration issued by the DOLE, copies of union membership signed by 33 rank-and-file employees of respondent company, the Charter Certificate showing its affiliation with the National Federation of Labor Unions (NAFLU-KMU), the list of union officers, the certification of the union secretary of the minutes of the general membership meeting, the Books of Accounts and its Constitution and By-Laws. Private respondent questioned the status of petitioner as a legitimate labor organization on the ground of lack of proof that its contract of affiliation with the NAFLUKMU has been submitted to the BLR within 30 days from its execution. Med-Arbiter Adap dismissed the petition for certification election and ruled that petitioner, as an affiliate of NAFLU-KMU, has no legal personality on account of its failure to comply with paragraphs (a), (b) and (e) of Section 3, Rule II of the Implementing Rules of Book V of the Labor Code, viz: "A close examination of the records of the case does not reveal that the federation and the independent union have executed a contract or agreement of affiliation, nor had it shown that it has submitted its charter certificate to the Bureau of Labor Relations, within thirty (30) days from issuance of such charter certificate as amended by the rules. "In the case at bar, an independently registered union has affiliated with a federation, hence, strict compliance with the requirements embodied in Sec. 3, paragraphs A, B and E of Rule II, Book V of the Rules and Regulations implementing the Labor Code should be complied with. "Record discloses that petitioner has not shown to have executed a contract or agreement of affiliation nor has it established that is has submitted its charter certificate to the Bureau of Labor Relations (BLR) within thirty (30) days from its execution. "Thus, petitioner in this case having failed to comply with the mandatory requirement, there was no valid affiliation. Consequently, petitioner has no legal personality because the union failed to attain the status of legitimacy for failure to comply with the requirements of law." Petitioner appealed to the Office of the Secretary of Labor and Employment. It reiterated its contention that as an independently registered union, it has the right to file a petition for certification election regardless of its failure to prove its affiliation with NAFLUKMU. - 16 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN Private respondent opposed the appeal. It argued that petitioner should have filed its petition for certification election as an independently registered union and not as a union affiliated with NAFLU-KMU. Meanwhile, another union, the Filsystem Workers Union (FWU), filed a Petition for Certification Election in the same bargaining unit. The Med-Arbitration - NCR Branch granted the petition. The certification election held on April 19, 1996, was won by FWU which garnered 26 votes out of the 46 eligible voters. The FWU was certified on April 29, 1996, as the exclusive bargaining agent of all rank-and-file employees of private respondent. Private respondent filed a Motion to Dismiss Appeal of petitioner as it has become moot and academic. It also invoked Section 3, Rule V of the Implementing Rules of Book V of the Labor Code stating that "once a union has been certified, no certification election may be held within one (1) year from the date of issuance of a final certification election [result]." In opposing the Motion to Dismiss Appeal, petitioner contended that its appeal is not moot as the certification election held on April 19, 1996, was void for violating Section 10, Rule V of the Implementing Rules of Book V of the Labor Code. Petitioner further argued that the CBA executed between the FWU and the private respondent could not affect its pending representation case following Section 4, Rule V of the Implementing Rules of Book V of the Labor Code. On June 28, 1996, respondent Secretary dismissed the appeal interposed by petitioner on the ground that it has been rendered moot by the certification of FWU as the sole and exclusive bargaining agent of the rank-and-file workers of respondent company. Petitioner's Motion for Reconsideration was denied in an Order dated November 18, 1996. ISSUES: 1. W/N the public respondent committed grave abuse of discretion when he effectively affirmed the Resolution dated January 12, 1996 of the Med-Arbiter dismissing petitioner's petition for certification election for failure to prove its affiliation with NAFLU-KMU. 2. W/N the appeal filed by the petitioner was rendered moot and academic by the subsequent certification election ordered by the Med-Arbiter. RATIO: 1. Yes. Firstly, it must be underscored that petitioner is an independently registered labor union as evidenced by a Certificate of Registration issued by the DOLE. As a legitimate labor organization, petitioner's right to file a petition for certification election on its own is beyond question. Secondly, the failure of petitioner to prove its affiliation with NAFLU-KMU cannot affect its right to file said petition for certification election as an independent union. At the most, petitioner's failure will result in an ineffective affiliation with NAFLU-KMU. Still, however, it can pursue its petition for certification election as an independent union. In our rulings, we have stressed that despite affiliation, the local union remains the basic unit free to serve the common interest of all its members and pursue its own interests independently of the federation. In fine, the Med-Arbiter erred in dismissing petitioner's petition for certification election on account of its non-submission of the charter

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
certificate and the contract of affiliation with the NAFLU-KMU with the BLR. The public respondent gravely abused his discretion in sustaining the Med-Arbiter's Resolution. 2. No. The order of the Med-Arbiter dismissing petitioner's petition for certification election was seasonably appealed. The appeal stopped the holding of any certification election. Section 10, Rule V of the Implementing Rules of Book V of the Labor Code is crystal clear and hardly needs any interpretation. Accordingly, there was an unresolved representation case at the time the CBA was entered between FWU and private respondent. Following Section 4, Rule V of the Implementing Rules of Book V of the Labor Code, such CBA cannot and will not prejudice petitioner's pending representation case or render the same moot. Finally, we bewail private respondent's tenacious opposition to petitioner's certification election petition. Such a stance is not conducive to industrial peace. Time and again, we have emphasized that when a petition for certification election is filed by a legitimate labor organization, it is good policy for the employer not to have any participation or partisan interest in the choice of the bargaining representative. While employers may rightfully be notified or informed of petitions of such nature, they should not, however, be considered parties thereto with an inalienable right to oppose it. An employer that involves itself in a certification election lends suspicion to the fact that it wants to create a company union. Thus, in Consolidated Farms, Inc. II v. Noriel, we declared that "[o]n a matter that should be the exclusive concern of labor, the choice of a collective bargaining representative, the employer is definitely an intruder. His participation, to say the least, deserves no encouragement. This Court should be the last agency to lend support to such an attempt at interference with a purely internal affair of labor. x x x [While] it is true that there may be circumstances where the interest of the employer calls for its being heard on the matter, x x x sound policy dictates that as much as possible, management is to maintain a strictly hands-off policy. For if it does not, it may lend itself to the legitimate suspicion that it is partial to one of the contending unions. That is repugnant to the concept of collective bargaining. That is against the letter and spirit of welfare legislation intended to protect labor and promote social justice. The judiciary then should be the last to look with tolerance at such efforts of an employer to take part in the process leading to the free and untrammeled choice of the exclusive bargaining representative of the workers." DISPOSITIVE PORTION: IN VIEW WHEREOF, the instant petition is GRANTED. The assailed Resolution and Order of the public respondent are set aside. The Bureau of Labor Relations is ORDERED to hold a certification election in respondent company with petitioner as a contending union. No costs. SO ORDERED. Employment in its resolution dated February 14, 1991 but, on motion of the company (HPI), the DOLE reconsidered its resolution and ordered another certification election to be held. The DOLE subsequently denied petitioner NFL's motion for reconsideration. The SC affirmed the decision of the DOLE. FACTS: A certification election was conducted among the rank-and-file employees of the Hijo Plantation, Inc. resulting in the choice of "no union." However, on July 3, 1989, on allegations that the company intervened in the election, the Director of the Bureau of Labor Relations nullified the results of the certification election and ordered a new one to be held. The new election was held under the supervision of the DOLE Regional Office in Davao City with the following results: Total Votes cast 1,012 Associated Trade Unions (ATU) RUST KILUSAN National Federation of Labor (NFL) Southern Philippines Federation of Labor SANDIGAN UFW No Union Invalid 39 5 876 4 6 15 55 13

NATIONAL FEDERATION OF LABOR (NFL) vs. THE SECRETARY OF LABOR G.R. No. 104556 March 19, 1998 QUICK SUMMARY: Petitioner NFL (National Federation of Labor) was chosen as the bargaining agent of rank-and-file employees of the Hijo Plantation Inc. (HPI) in Davao del Norte at a certification election. Protests filed by the company and three other unions against the results of the election were denied by the Department of Labor and - 17 -

The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and General Workers of the Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc. sought the nullification of the results of the certification election on the ground that it was conducted despite the pendency of the appeals filed by Hijo Labor Union and ULGWP from the order of the Med-Arbiter denying their motion for intervention. Hijo Plantation claimed that it was not informed or properly represented at the pre-election conference. It alleged that, if it was represented at all in the pre-election conference, its representative acted beyond his authority and without its knowledge. Private respondent also alleged that the certification election was marred by massive fraud and irregularities and that out of 1,692 eligible voters, 913, representing 54% of the rank-and-file workers of private respondent, were not able to vote, resulting in a failure of election. Acting Labor Secretary Dionisiodela Serna directed the Med-Arbiter, Phibun D. Pura, to investigate the company's claim that 54% of the rank-and-file workers were not able to vote in the certification election. Pura reported that a majority of the rank-and-file workers had been disenfranchised in the election because of confusion caused by the

ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
announcement of the company that the election had been postponed in view of the appeals of ULGWP and Hijo Labor Union (HLU) from the order denying their motions for intervention. In addition, the election was held on a Sunday which was a non-working day in the company. There were also irregularities committed in the conduct of the election. The total number of votes cast, as duly certified by the representation officer, did not tally with the 41-page listings submitted to the Med-Arbitration Unit. NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of the investigation conducted by Med-Arbiter Pura and so was not heard on its evidence. For this reason, the Med-Arbiter was directed by the Labor Secretary to hear interested parties. The Med-Arbiter summoned the unions. TRUST-Kilusan reiterated its petition for the annulment of the results of the certification election. Hijo Labor Union manifested that it was joining private respondent HPI's appeal, adopting as its own the documentary evidence presented by the company, showing fraud in the election. On the other hand, petitioner NFL reiterated its contention that management had no legal personality to file an appeal because it was not a party to the election but was only a bystander which did not even extend assistance in the election. Petitioner denied that private respondent HPI was not represented in the pre-election conference, because the truth was that a certain Bartolo was present on behalf of the management and he in fact furnished the DOLE copies of the list of employees, and posted in the company premises notices of the certification election. NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692 qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting to all kinds of manipulation to frustrate the election and make the "Non Union" win. DOLE upheld the certification election. With respect to claim that election could not be held in view of the pendency of the appeals of the ULGWP and Hijo Labor Union from the order of the Med-Arbiter denying their motions for intervention, the DOLE said that the motion for intervention filed by Hijo Labor Union was denied for being unseasonably filed. The same is true with the motion for intervention of ULGWP. The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive fraud and irregularities. Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been violated, first, because the NFL was not given notice of the investigation nor the chance to present its evidence to dispute this finding and, second, the Med Arbiter's report was not supported by the minutes of the proceedings nor by any record of the interviews of the 315 workers. Moreover, it was pointed out that the report did not state the names of the persons investigated, the questions asked and the answers given. The DOLE held that the report was "totally baseless." The Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-KILUSAN, HLU and the HPI and instead certified petitioner NFL as the sole and exclusive bargaining representative of the rank-and-file employees of private respondent HPI. However, on motion of HPI, the Secretary of Labor, reversed his resolution. Petitioner NFL filed a motion for reconsideration but its motion was denied in an order. Petitioner's second motion for reconsideration was likewise denied. ISSUES: 1. 2. Whether the certification election is the sole concern of the employees and the employer is a mere bystander Whether protests concerning the election should be registered and entered into the minutes of the election proceedings before it can be considered. In addition, the protest should be formalized by filing it within five (5) days. Petitioner avers that these requirements are condition precedents in the filing of an appeal. Without these requisites the appeal cannot prosper. Whether the Association of Trade Union (ATU), the Union of Filipino Workers (UFW), as well as the representation officers of the DOLE affirmed the regularity of the conduct of the election and they are now estopped from questioning the election. Whether the letter appeals were admissible. Petitioners contend that these were signed under duress.

3.

4.

HELD/RATIO: 1. What the DOLE Secretary considered in reversing its earlier rulings was not the petition of the employer but the letter-appeals that the employees sent to his office denouncing the irregularities committed during the August 20, 1989 certification election. The petition of private respondent was simply the occasion for the employees to voice their protests against the election. Private respondent HPI attached to its Supplemental Appeal filed on September 5, 1989 the affidavits and appeals of more or less 784 employees who claimed that they had been disfranchised, as a result of which they were not able to cast their votes at the August 20, 1989 election. It was the protests of employees which moved the DOLE to reconsider its previous resolution of February 14, 1991, upholding the election. Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the employer. The manner in which the election was held could make the difference between industrial strife and industrial harmony in the company. What an employer is prohibited from doing is to interfere with the conduct of the certification election for the purpose of influencing its outcome. But certainly an employer has an abiding interest in seeing to it that the election is clean, peaceful, orderly and credible. In this case, petitioner maintains that private respondent did not make any protest regarding the alleged irregularities (e.g., massive disfranchisement of employees) during the election. Hence, the appeal and motions for reconsideration of private respondent HPI should have been dismissed summarily. The complaint in this case was that a number of employees were not able to cast their votes because they were not properly notified of the date. They could not therefore have filed their protests within five (5) days. At all events, the Solicitor General states, that the protests were not filed within five (5) days, is a mere technicality which should not be allowed to prevail over the workers' welfare. As this Court stressed in LVN Pictures, Inc. v. Phil.Musicians Guild, it is essential that the employees must be accorded an opportunity to freely and intelligently determine which labor organization shall act in their behalf. The workers in this case were denied this opportunity. Not only were a substantial number of them disfranchised, there were, in addition, allegations of fraud and other irregularities which put in question the integrity of the election. Workers wrote letters and made complaints protesting the conduct of the election. The Report of Med-Arbiter Pura who investigated these allegations found the allegations of fraud and irregularities to be true. In one case this Court invalidated

2.

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LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
a certification election upon a showing of disfranchisement, lack of secrecy in the voting and bribery. The records shows that as early as August 22 and 30, 1989, employees already wrote letters/affidavits/ manifestoes alleging irregularities in the elections and disfranchisement of workers. As the Solicitor General says in his Comment, these affidavits and manifestoes, which were attached just 16 days after the election. It is not true therefore that the employees slept on their rights. As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were prepared by private respondent HPI and employees were merely asked to sign them, suffice it to say that this is plain speculation which petitioner has not proven by competent evidence.As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases. The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier letters of the workers already gave details of what they had witnessed during the election, namely the open balloting (with no secrecy), and the use of NFL vehicles for polling precinct. These letters sufficiently give an idea of the irregularities of the certification election. Similarly, the letters containing the signatures of those who were not able to vote are sufficient. They indicate that the writers were not able to vote because they thought the election had been postponed, especially given the fact that the two unions had pending appeals at the time from orders denying them the right to intervene in the election. holding of a certification election on two grounds: first, that the respondent union, being "in the process of registration" had no legal personality to file the same as it was not a legitimate labor organization as of the date of the filing of the petition; and second, that the union was composed of both rank-and-file and supervisory employees in violation of law. Attached to the position paper was a list of union members and their respective job classifications, indicating that many of the signatories to the petition for certification election occupied supervisory positions and were not in fact rank-and-file employees. The Med-Arbiter, Paterno D. Adap, dismissed respondent union's petition for certification election for lack of merit and found that the labor organization's membership was composed of supervisory and rank-and-file employees in violation of Article 245 of the Labor Code, and that at the time of the filing of its petition, respondent union had not even acquired legal personality yet. Office of the Secretary of Labor: set aside the Med-Arbiter's Order of March 3, 1993, and directed the holding of a certification election among the regular rank-and-file employees of Toyota Motor Corporation. He held that petitioner-appellant was already a legitimate labor organization at the time of the filing of the petition on 26 November 1992. Records show that on 24 November 1992 or two (2) days before the filing of the said petition, it was issued a certificate of registration. Med-Arbiter should have not dismissed the petition for certification election based on the ground that the proposed bargaining unit is a mixture of supervisory and rank-and-file employees, hence, violative of Article 245 of the Labor Code as amended. the mere allegation of respondent-appellee that there are about 42 supervisory employees in the proposed bargaining unit should have not caused the dismissal of the instant petition. Said issue could very well be taken cared of during the pre-election conference where inclusion/exclusion proceedings will be conducted to determine the list of eligible voters.

3.

4.

DISPOSITIVE PORTION: WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary of Labor and Employment are AFFIRMED.

TOYOTA V. TOYOTA LABOR UNION G.R. No. 121084 February 19, 1997 QUICK SUMMARY: There are two types of employees/members of the organization in this case, Level 4 & Level 5 employees. Under the job description for level five employees, such personnel all engineers having a number of personnel under them, not only oversee production of new models but also determine manpower requirements, thereby influencing important hiring decisions at the highest levels. A supervisory employee occupying a level five position would therefore find it difficult to objectively identify the exact manpower requirements dictated by production demands. As respondent union's membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. FACTS: On November 26, 1992, the Toyota Motor Philippines Corporation Labor Union (TMPCLU) filed a petition for certification election with the Department of Labor, NCR, for all rank-andfile employees of the Toyota Motor Corporation. In response, petitioner filed a Position Paper on February 23, 1993 seeking the denial of the issuance of an Order directing the - 19 -

Not satisfied with the decision of the Office of the Secretary of Labor, petitioner filed a Motion for Reconsideration of the Resolution of March 3, 1993, reiterating its claim that as of the date of filing of petition for certification election, respondent TMPCLU had not yet acquired the status of a legitimate labor organization as required by the Labor Code, and that the proposed bargaining unit was inappropriate. Ruling on the MR: the public respondent, on July 13, 1994 set aside its earlier resolution and remanded the case to the Med-Arbiter concluding that the issues raised by petitioner both on appeal and in its motion for reconsideration were factual issues requiring further hearing and production of evidence. Med-Arbiter Brigida C. Fodrigon submitted her findings on September 28, 1994, stating the following: [T]he controvertible fact is that petitioner could not have been issued its Certificate of Registration on November 24, 1992 when it applied for registration only on November 23,

ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
1992 as shown by the official receipt of payment of filing fee. As Enrique Nalus, Chief LEO, this office, would attest in his letter dated September 8, 1994 addressed to Mr. Porfirio T. Reyes, Industrial Relations Officer of Respondent company, in response to a query posed by the latter, "It is unlikely that an application for registration is approved on the date that it is filed or the day thereafter as the processing course has to pass thought routing, screening, and assignment, evaluation, review and initialing, and approval/disapproval procedure, among others, so that a 30-day period is provided for under the Labor Code for this purpose, let alone opposition thereto by interested parties which must be also given due course." Another evidence which petitioner presented . . . is the "Union Registration 1992 Logbook of IRD" . . . and the entry date November 25, 1992 as allegedly the date of the release of the registration certificate . . . On the other hand, respondent company presented . . . a certified true copy of an entry on page 265 of the Union Registration Logbook showing the pertinent facts about petitioner but which do not show the petitioner's registration was issued on or before November 26, 1992. Further citing other pieces of evidence presented before her, the Med-Arbiter concluded that respondent TMPCLU could not have "acquire[d] legal personality at the time of the filing of (its) petition." On April 20, 1996, the public respondent issued a new Resolution, "directing the conduct of a certification election among the regular rank-and-file employees of the Toyota Motor Philippines Corporation. Petitioner's motion for reconsideration was denied by public respondent in his Order dated July 14, 1995. ISSUES: 1. 2. WON the inclusion of the prohibited mix of rank-and file and supervisory employees in the roster of members and officers of the union cannot be cured by a simple inclusion-exclusion proceeding; and that WON the respondent union had no legal standing at the time of the filing of its petition for certification election production, facilities and equipment, and lay-out processes. He also oversees other sections in the production process (e.g. assembly, welding, painting)." While there may be a genuine divergence of opinion as to whether or not union members occupying Level 4 positions are supervisory employees, it is fairly obvious, from a reading of the Labor Code's definition of the term that those occupying Level 5 positions are unquestionably supervisory employees. Supervisory employees, as defined above, are those who, in the interest of the employer, effectively recommend managerial actions if the exercise of such authority is not merely routinary or clerical in nature but require the use of independent judgment. Under the job description for level five employees, such personnel all engineers having a number of personnel under them, not only oversee production of new models but also determine manpower requirements, thereby influencing important hiring decisions at the highest levels. This determination is neither routine nor clerical but involves the independent assessment of factors affecting production, which in turn affect decisions to hire or transfer workers. The use of independent judgment in making the decision to hire, fire or transfer in the identification of manpower requirements would be greatly impaired if the employee's loyalties are torn between the interests of the union and the interests of management. A supervisory employee occupying a level five position would therefore find it difficult to objectively identify the exact manpower requirements dictated by production demands. This is precisely what the Labor Code, in requiring separate unions among rank-and-file employees on one hand, and supervisory employees on the other, seeks to avoid. The rationale behind the Code's exclusion of supervisors from unions of rank-and-file employees is that such employees, while in the performance of supervisory functions, become the alter ego of management in the making and the implementing of key decisions at the sub-managerial level. Certainly, it would be difficult to find unity or mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory employees. And this is so because the fundamental test of a bargaining unit's acceptability is whether or not such a unit will best advance to all employees within the unit the proper exercise of their collective bargaining rights. The Code itself has recognized this, in preventing supervisory employees from joining unions of rank-and-file employees. 2. YES. In the case at bar, as respondent union's membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election. The foregoing discussion, therefore, renders entirely irrelevant, the technical issue raised as to whether or not respondent union was in possession of the status of a legitimate labor organization at the time of filing, when, as petitioner vigorously claims, the former was still at the stage of processing of its application for recognition as a legitimate labor organization. The union's composition being in violation of the Labor Code's prohibition of unions composed of supervisory and rank-and-file employees, it could not possess the requisite personality to file for recognition as a legitimate labor organization. In any case, - 20 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

RATIO: 1. YES. It is the petitioner's contention that forty-two (42) of the respondent union's members, including three of its officers, occupy supervisory positions. In its position paper dated February 22, 1993, petitioner identified fourteen (14) union members occupying the position of Junior Group Chief II and twenty-seven (27) members in level five positions. Their respective job-descriptions are quoted below: LEVEL 4 (JUNIOR GROUP CHIEF II) He is responsible for all operators and assigned stations, prepares production reports related to daily production output. He oversees smooth flow of production, quality of production, availability of manpower, parts and equipments. He also coordinates with other sections in the Production Department. LEVEL 5 He is responsible for overseeing initial production of new models, prepares and monitors construction schedules for new models, identifies manpower requirements for

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
the factual issue, albeit ignored by the public respondent's assailed Resolution, was adequately threshed out in the Med-Arbiter's September 28, 1994 Order. The holding of a certification election is based on clear statutory policy which cannot be circumvented. Its rules, strictly construed by this Court, are designed to eliminate fraud and manipulation. As we emphasized in Progressive Development Corporation v. Secretary, Department of Labor and Employment, the Court's conclusion should not be interpreted as impairing any union's right to be certified as the employees' bargaining agent in the petitioner's establishment. Workers of an appropriate bargaining unit must be allowed to freely express their choice in an election where everything is open to sound judgment and the possibility for fraud and misrepresentation is absent. OTHER DOCTRINES: The purpose of every certification election is to determine the exclusive representative of employees in an appropriate bargaining unit for the purpose of collective bargaining. A certification election for the collective bargaining process is one of the fairest and most effective ways of determining which labor organization can truly represent the working forceIn determining the labor organization which represents the interests of the workforce, those interests must be, as far as reasonably possible, homogeneous, so as to genuinely reach the concerns of the individual members of a labor organization. According to Rothenberg, an appropriate bargaining unit is a group of employees of a given employer, composed of all or less than the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer indicate to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of law This in mind, the Labor Code has made it a clear statutory policy to prevent supervisory employees from joining labor organizations consisting of rank-and-file employees as the concerns which involve members of either group are normally disparate and contradictory. Article 245 provides: ART. 245 Ineligibility of managerial employees to join any labor organization; right of supervisory employees. -- Managerial Employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. DISPOSITIVE PORTION: WHEREFORE, the petition is GRANTED. The assailed Resolution dated April 20, 1995 and Order dated July 14, 1995 of respondent Secretary of Labor are hereby SET ASIDE. The Order dated September 28, 1994 of the Med-Arbiter is REINSTATED.

TOYOTA LABOR UNION v. TOYOTA MOTOR G.R. No. L-135806 August 8, 2002 QUICK SUMMARY: TMPCLU filed an application for certification election but it was dismissed by the Med-Arbiter because at that time, its membership included supervisory and rank-and file employees. TMPCLU claims that it was a legitimate labor organization because it was already issued a certificate of registration 2 days before it filed its application. The court ruled that TMPCLU could not have acquired legal personality because of the composition of its members was in direct violation of Art. 245 of the Labor Code. TMPCLU had no valid certificate of registration and therefore no legal personality to file the petition for certification election and in the absence of any attempt on its part to rectify the legal infirmity, likewise the disputed Petition-in-Intervention. FACTS: On 24 April 1997 respondent TMPCEWU filed a Petition for Certification Election before the Med-Arbitration Unit of the DOLE-National Capital Region (DOLE-NCR) seeking to represent the rank-and-file employees of the manufacturing division from Levels 1 to 4 of Toyota Motor Philippines Corp. (TMPC). On 13 May 1997, while the case was pending hearing, petitioner TMPCLU claiming to be the legitimate labor organization, filed a Motion to Intervene with Opposition to the Certification Election praying that it be allowed to intervene and, thereafter, the petition by TMPCEWU be denied for lack of merit. It claimed that the petition was premature due to an earlier resolution by the Secretary of Labor ordering the conduct of a certification election among the rank-and-file employees of TMPC represented by petitioner which was the subject of certiorari proceedings before the Supreme Court and still awaiting final resolution at the time; and, that the collective bargaining unit which respondent TMPCEWU sought to represent violated the "single or employer" unit policy since it excluded the rank-and-file employees in the other divisions and departments in respondent TMPC. In its motion petitioner TMPCLU outlined the antecedent events prior to the TMPCEWU's filing of its Petition for Certification Election on 24 April 1997: On 26 November 1992 it (TMPCLU) filed a petition for certification election before Med-Arbiter Adap, docketed as NCR-OD-M-9211-053; On 8 March 1993 Med-Arbiter Adap dismissed TMPCLU's petition on the ground that the labor organization's membership was composed of supervisory and rank-and-file employees in violation of Art. 245 of the Labor Code, and that at the time of the filing of its petition, TMCPLU had not even acquired legal personality yet; On appeal, the Secretary of Labor, in a Resolution dated 9 November 1993 signed by Undersecretary Laguesma, set aside the Med-Arbiter's Order and directed the holding of a certification election among the regular rank-and-file employees of TMPC. In setting aside the assailed order, the Office of the Secretary argued that:

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LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
Contrary to the allegation of herein respondent-appellee, petitioner-appellant was already a legitimate labor organization at the time of the filing of the petition on 26 November 1992. Records show that on 24 November 1992 or 2 days before the filing of the said petition, it was issued a certificate of registration. Acting on TMPC's motion for reconsideration the Secretary of Labor set aside his earlier resolution and ordered the remand of the case to the Med-Arbiter concluding that the issues raised by TMPC both on appeal and its motion for reconsideration were factual issues requiring further hearing and production of evidence; Pursuant to the order abovementioned, the Med-Arbiter on 28 September 1994 dismissed TMPCLU's petition for certification election for failure of petitioner to acquire legal personality at the time of the filing of the said petition; The motion for reconsideration filed by TMPCLU before the Secretary of Labor, which was treated as an appeal from the order of the Med-Arbiter dated 28 September 1994, was granted and the said order was set aside. In lieu thereof, a new order was issued giving due course to the petition and directing the conduct of a certification election among the rank-and-file employees of TMPC; The Secretary of Labor, in his order dated 14 July 1995, denied for lack of merit the motion for reconsideration filed by TMPC; The Secretary of Labor issued a new resolution directing the conduct of a certification election among the rank-and-file employees of TMPC; and TMPC lodged a special civil action for certiorari before the Supreme Court assailing the 20 April 1996 Resolution of the Secretary of Labor; and on 19 February 1997, the Supreme Court set aside the assailed Resolution of the Secretary of Labor and reinstated the Order of the Med-Arbiter dated 28 September 1994. In its decision, the Supreme Court ruled that since TMPCLU's membership list contained the names of at least 27 supervisory employees in Level Five positions, "the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election." At the time respondent TMPCEWU filed its Petition for Certification Election the decision of the Supreme Court had not ripened into a final and executory judgment. Thus petitioner invoked as among the grounds for opposition thereto in its Motion to Intervene with Opposition to the Petition for Certification Election that the "pending proceeding before the Supreme Court may be said to be a pre-judicial question which should be resolved first before the instant petition can prosper." On 2 July 1997, the Med-Arbiter ordered the provisional dismissal of TMPCEWU's Petition for Certification Election pending a final ruling by the Supreme Court on the Petition for Certification Election. On 3 June 1997 the decision of the Supreme Court dated 19 February 1997 became final and executory. In view of respondent TMPCEWU's revival of its Petition for Certification Election, petitioner also filed on 30 October 1997 its Petition-in-Intervention alleging that (a) it was representing only the rank-and-file employees; (b) it enjoys the support of the regular rank-and-file workers at large in TMPC, an unorganized establishment, and not only among the rankand-file employees in the manufacturing division thereof; (c) while respondent TMPCEWU professed itself as a legitimate labor organization, there was serious doubt on such claim inasmuch as there was a pending petition for the cancellation of its certification of registration on the ground of fraud; (d) respondent TMPCEWU's representation of the rankand-file employees, Levels 1 to 4, within the manufacturing division only to the exclusion of those in the other departments and divisions violated the "single or employer" unit policy; and, (e) the establishment of the proposed bargaining unit in the manufacturing division - 22 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN composed of employees from Levels 1 to 4, should respondent's petition be allowed, would induce the proliferation of unions in a single employer. The Med-Arbiter rendered a decision dismissing for lack of merit TMPCEWU's Petition for Certification Election, since it failed to include all rank-and-file employees from Levels 1 to 4 in other departments of TMPC in violation of the "one-union in one-company" policy and likewise dismissing TMPCLU's Petition-in-Intervention for lack of legal personality. Anent the issue on whether TMPCLU has the legal personality to file the Petition-in-Intervention, the Med-Arbiter explained thus The uncontroverted fact in this case is that at the time intervenor TMPCLU filed its application for registration and subsequently thereafter was issued a certificate of registration on November 24, 1992, its union membership is (sic) composed of supervisory and rank-and-file employees. From this we could infer that the registration certificate issued by the Department of Labor and Employment is void ab initio because at the time of the issuance the constitution of intervenor union TMPCLU is (sic) a mixture of supervisory and rank-and-file employees as per finding of fact of Med-Arbiter Paterno Adap in his Order dated March 8, 1993. Petitioner appealed to the Secretary of Labor contending that contrary to the finding of the Med-Arbiter it had the legal personality to intervene in the certification election proceedings as shown by its Certificate of Registration No. NCR-UR-11-996-92. In a Resolution dated 5 June 1998, the Secretary of Labor justified his affirmance of the Med-Arbiter's decision in this wise On the first ground raised on appeal, it is true that the employer is a mere by-stander during the conduct of a certification election. Prior to the election, however, the employer is not precluded from ascertaining the legitimacy of the union in order that it can be assured that the union it will be dealing with is a duly registered labor organization which legally represents the bargaining unit sought to be represented. There is therefore no error in allowing the employer to question the status of appellant as in the case at bar. On the second issue, it had earlier been finally ruled by the Supreme Court (G.R. No 121084) involving herein employer and appellant that since the bargaining unit of the rank-in-file which TMPCLU is seeking to represent is a mixture of supervisory employees which is prohibited under Article 245 of the Labor Code, as amended, the union prior to purging itself of supervisory employees-members, had not attained the status of a legitimate labor organization. Appellant now simply asserts that it has purged its membership of supervisory employees and therefore is now a legitimate labor organization of the rank-and-file employees. Appellant has not however shown that it registered anew because admittedly some of its officers are supervisory employees. The need to register anew is necessary and the purging by itself of its officers who are holding supervisory position is imperative. One of the requirements for registration is the submission of the list of officers. Under the circumstances obtaining, appellant has not as yet attained the status of a legitimate labor organization. It has therefore no legal authority to oppose the instant petition. ISSUE:

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
W/N petitioner had legal personality on 30 October 1997 when it filed its Petition-inIntervention. RATIO: No. To find solution to the question in the instant case, we need only refer to the earlier case of Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union and the Secretary of Labor and Employment, which sprang from a Petition for Certification Election filed by TMPCLU among the rank-and-file employees of TMPC. On 8 March 1993, however, its petition was dismissed by the Med-Arbiter for the reason that the labor organization's membership was composed of supervisory and rank-and-file employee-members. On appeal, the Secretary of Labor remanded the case to the MedArbiter upon his finding that factual issues remained unresolved. Pursuant to the order of the Secretary of Labor, the Med-Arbiter, in his decision dated 28 September 1994, dismissed TMPCLU's Petition for Certification Election on the basis of the following factual findings: (T)he (in)controvertible fact is that petitioner could not have been issued its Certificate of Registration on November 24, 1992 when it applied for registration only on November 23, 1992 as shown by the official receipt of payment of filing fee. As Enrique Nalus, Chief LEO, this office, would attest in his letter dated September 8, 1994 addressed to Mr. Porfirio T. Reyes, Industrial Relations Officer of Respondent company, in response to a query posed by the latter, "it is unlikely that an application for registration is approved on the date that it is filed or the day thereafter as the processing course had to pass through routing, screening, and assignment, evaluation, review and initialing, and approval/disapproval procedure, among others, that a 30-day period is provided for under the Labor Code for this purpose, let alone opposition thereto by interested parties which must be also given due course." Another evidence which petitioner presented is the "Union Registration 1992 Logbook of IRD" and the entry date 25 November 1992 as allegedly the date of the release of its registration certificate. On the other hand, respondent company presented a certified true copy of an entry on page 265 of the Union Registration Logbook showing the pertinent facts about petitioner but which did not show that petitioner's registration was issued on or before 26 November 1992. The Med-Arbiter also found that TMPCLU had not acquired legal personality for the reason that its composition, being a mixture of supervisory and rank-and-file employees, was in direct violation of Art. 245 of the Labor Code. Although there is a divergence of factual backdrops between Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union and the Secretary of Labor and Employment and the instant petition in the sense that in the former the filing of a Petition for Certification Election by petitioner gave rise to the controversy while the present case arose from the filing of a Petition-in-Intervention, the bottom-line issue in both cases nonetheless involves the legitimacy of petitioner TMPCLU to file petitions. We recall that in the first Toyota case, although there was no categorical pronouncement on the validity of petitioner's certificate of registration considering that we deemed it entirely irrelevant in the light of the finding that petitioner was not entirely a rank-and-file labor - 23 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN organization, we sustained however in the same decision the entire factual findings of the Med-Arbiter when we observed The foregoing discussion, therefore, renders entirely irrelevant the technical issue raised as to whether or not respondent union was in possession of the status of a legitimate labor organization at the time of filing, when, as petitioner vigorously claims, the former was still at the stage of processing of its application for recognition as a legitimate labor organization. The union's composition being in violation of the Labor Code's prohibition of unions composed of supervisory and rank-and-file employees, it could not possess the requisite personality to file for recognition as a legitimate labor organization. In any case, the factual issue, albeit ignored by the public respondents assailed Resolution, was adequately threshed out in the Med-Arbiters September 28, 1994 Order. In effect therefore, we already impressed our stamp of approval on the factual findings of the Med-Arbiter in his 28 September 1994 decision, i.e., that petitioner had no valid certificate of registration and therefore no legal personality to file the Petition for Certification Election and in the absence of any attempt on its part to rectify the legal infirmity, likewise the disputed Petition-in-Intervention. We cannot also accede to petitioner's submission that the issuance of a certificate of registration in its favor is an adequate and unassailable proof that it possesses the requisite legal personality to file a Petition for Certification Election. Not necessarily. As we emphasized in Progressive Development Corp. - Pizza Hut v. Laguesma, if a labor organizations application for registration is vitiated by falsification and serious irregularities, a labor organization should be denied recognition as a legitimate labor organization. And if a certificate of registration has been issued, the propriety of its registration could be assailed directly through cancellation of registration proceedings in accordance with Arts. 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the issuance of an order for certification election. We believe the procedural requirements to impugn the registration by petitioner were more than adequately complied with as shown in the 1997 case of Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union. DISPOSITIVE PORTION: WHEREFORE the petition is DISMISSED for lack of merit. Accordingly, the assailed Resolution dated 5 June 1998 and Order dated 10 August 1998 of the Secretary of Labor and Employment affirming the decision of the Med-Arbiter dated 24 February 1998 which dismissed both the Petition for Certification Election filed by respondent Toyota Motor Philippines Corp. Employees and Workers Union (TMPCEWU) and the Petition-inIntervention of petitioner Toyota Motor Philippines Corp. Labor Union (TMPCLU) are AFFIRMED. SO ORDERED.

TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO G.R. No.142000 JANUARY 22, 2003

INCORPORATED

V.

QUICK SUMMARY: THEU filed for a petition for certification of election which was opposed by THIGCI on the ground that not all the union members are rank-and-file

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
employees. The issue in the case is whether a union with members of both rank-and-file and supervisory employees is a legitimate association. The Court held that the union already acquired a certificate of registration. The inclusion in a union of disqualified members is not a ground for the cancellation of the said certificate. FACTS: October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration Unit, Regional Branch No. IV. THIGCI, in its Comment, opposed THEUs petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI. Replying to THIGCIs Comment, THEU asserted that it had complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997, on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997; and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization. Thus, the Med-Arbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, should automatically order the conduct of a certification election. DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election among the rank-and-file employees of THIGCI. The accompanying documents show that indeed petitioner union is a legitimate labor federation and its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Pursuant therefore to the provisions of Article 257 of the Labor Code, as amended, and its Implementing Rules as amended by Department Order No. 9, since the respondents establishment is unorganized, the holding of a certification election is mandatory for it was clearly established that petitioner is a legitimate labor organization. Passing on THIGCIs allegation that some of the union members are supervisory, resigned and AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in the exclusion-inclusion proceedings at the pre-election conference. As for the allegation that some of the signatures were secured through fraudulent and deceitful means, he held that it should be coursed through an independent petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-Arbiters Order and accordingly dismissed the petition for certification election on the ground that there is a clear absence of community or mutuality of interests, it finding that THEU sought to represent two separate bargaining units (supervisory employees and rank-and-file employees) as well as employees of two separate and distinct corporate entities. - 24 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda DimalipisBaldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12, 1998 setting aside the June 4, 1998 Resolution dismissing the petition for certification election. Undersecretary Dimapilis-Baldoz held that since THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary for it to acquire legitimate status, hence, the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition; that rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations, the names of alleged disqualified supervisory employees and employees of the Country Club, Inc., a separate and distinct corporation, should simply be removed from the THEUs roster of membership; and that regarding the participation of alleged resigned and AWOL employees and those whose signatures are illegible, the issue can be resolved during the inclusion-exclusion proceedings at the pre-election stage. In the Court of Appeals, the DOLE Resolution dated November 12, 1998 was affirmed. It was held that while a petition for certification election is an exception to the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship following this Courts ruling in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et al and Dunlop Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et al, petitioner failed to adduce substantial evidence to support its allegations. ISSUE: Whether or not the Court of Appeals erred in holding that supervisory employees and nonemployees could simply be removed from the corporations roster of rank-and-file membership instead of resolving the legitimacy of the Unions status. RATIO: No. The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and vice-versa, is Article 245 of the Labor Code, to wit: Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union, it does not provide what would be the effect if a rank-and-file union counts supervisory employees among its members, or vice-versa. Citing Toyota which held that a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all, and the subsequent case of Progressive Development Corp. Pizza Hut v. Ledesma which held that: The Labor Code requires that in organized and unorganized establishments, a petition for certification election must be filed by a legitimate labor

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
organization. The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization. In the case before us, the Med-Arbiter summarily disregarded the petitioners prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut was a legitimate organization, petitioner contends that, quoting Toyota, it becomes necessary . . ., anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary conveniently deferred the resolution on the serious infirmity in the membership of THEU and ordered the holding of the certification election which is frowned upon as the following ruling of this Court shows: We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union can be remedied in the pre-election conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters. Public respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest of rankand-file employees. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union, viz: x x x Clearly, based on this provision [Article 245], a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot posses any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. The petition fails. After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book IV of the Rules to Implement the Labor Code (Implementing Rules) which section reads: Sec. 5. Effect of registration. The labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot - 25 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules. The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical personality which may not be assailed collaterally. As for petitioners allegation that some of the signatures in the petition for certification election were obtained through fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election. As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as found by the court a quo, its failure to present substantial evidence that the assailed employees are actually occupying supervisory positions. DISPOSITIVE PORTION: WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to the usual pre-election conference. SO ORDERED.

NEGROS ORIENTAL ELECTRIC COOPERATIVE V. SECRETARY OF DEPARTMENT OF LABOR G.R. No. 143616 May 9, 2001 QUICK SUMMARY: A certification election filed by PACIWU-TUCP was allowed. It was challenged on the ground that the chapter has not yet acquired legal personality because of the mixed membership. The Supreme Court held in the instant case, there is no persuasive evidence to show that there are indeed supervisory and confidential employees in appellant union who under the law are disqualified to join the same. On the other issue that the union members are also cooperative members, the Court held that NORECO 1 fails to controvert the statement of the Court of Appeals that the petitioner failed to show any proof that any member of the private respondent was also a member or co-owner of the petitioner cooperative. FACTS: PACIWU-TUCP filed a petition for certification election on behalf of the NORECO 1 chapter, seeking to represent the seventy-seven (77) rank-and-file employees of NORECO 1. PACIWU-TUCP alleged in its petition that it had created a local chapter in NORECO 1 which had been duly reported to the DOLE Regional Office on December 4, 1997. It was further averred therein that NORECO 1 is an unorganized establishment, and that there is no other labor organization presently existing at the said employer establishment.

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
The Med-Arbiter dismissed the petition in an order on the ground that it has not yet acquired the status of a legitimate labor organization, because it appears in the records of this Office that the petitioner has just applied for registration and corresponding certificate has not yet been issued. The appellate court ruled that the Secretary of Labor properly treated PACIWUTUCPs Motion for Reconsideration as an appeal, and held that the said chapter is deemed to have acquired legal personality as of December 4, 1997 upon submission of the documents required under the Omnibus Rules for the creation of a local chapter. The said court also dismissed petitioners contention assailing the composition of the private respondent union. ISSUES: 1. W/N the Court of Appeals erred in deciding contrary to the Toyota Motor case. 2. W/N the Court of Appeals erred in allowing certification elections when all members of the union are members of the cooperative. RATIO: 1. No. Petitioner invokes Article 245 of the Labor Code and the ruling in Toyota Motor Philippines Corp. vs. Toyota Motor Philippines Corporation Labor Union which declare the ineligibility of managerial or supervisory employees to join any labor organization consisting of rank and file employees for the reason that the concerns which involve either group are normally disparate and contradictory. Petitioner claims that it challenged the composition of the union at the earliest possible time after the decision of the Med-Arbiter was set aside by the DOLE; and that the list of the names of supervisory or confidential employees was submitted with the petition for certiorari filed in the Court of Appeals, which did not consider the same. Petitioner further argues that the failure of the Secretary of Labor and the Court of Appeals to resolve this question constituted a denial of its right to due process. The contentions are unmeritorious. In its Resolution dated September 21, 1998, denying the Motion for Reconsideration, the Secretary of Labor categorically stated: On the fourth ground, in the cited case of Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union, 268 SCRA 573, the employer, since the beginning opposed the petition indicating the specific names of the supervisory employees and their respective job descriptions. In the instant case, movant not only belatedly raised the issue but miserably failed to support the same. Hence, between the belated and bare allegation of movant that there are supervisory and confidential employees in the union vis--vis the open and repeated declaration under oath of the union members in the minutes of their organizational meeting and the ratification of their Constitution and By-Laws that they are rank and file employees, we are inclined to give more credence to the latter. Again, in Cooperative Rural Bank of Davao City, Inc. vs. Ferrer-Calleja, supra, the Supreme Court held: the Court upholds the findings of said public respondent that no persuasive evidence has been presented to show that two of the signatories in the petition for certification election are managerial employees who under the law are disqualified from pursuing union activities. In the instant case, there is no persuasive evidence to show that - 26 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN there are indeed supervisory and confidential employees in appellant union who under the law are disqualified to join the same. The above finding was correctly upheld by the Court of Appeals, and we find no cogent basis to reverse the same. Factual issues are not a proper subject for certiorari which is limited to the issue of jurisdiction and grave abuse of discretion. It bears notice that unlike in Toyota Motor Philippines Corp. vs. Toyota Motor Philippines Corp. Labor Union where the objection that the union was composed of both rank-and-file and supervisory employees in violation of law was promptly raised in the position paper to oppose the petition for certification election, and this objection was resolved by the Med-Arbiter, this issue was belatedly raised in the case at bar and was sought to be ventilated only before the Court of Appeals in the petition for certiorari. 2. No. The argument that NORECO I is a cooperative and most if not all of members of the petitioning union are members of the cooperative was raised only in Motion for Reconsideration from the Decision of the Secretary of Labor dated July 1998. The Secretary of Labor ruled that the argument should be rejected as it was seasonably filed. Nevertheless the DOLE resolved the question in this wise: On the third ground, while movant correctly cited Cooperative Bank of Davao City, Inc. vs. Ferrer-Calleja, 165 SCRA 725, that an employee of a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining it failed to mention the proviso provided by the Supreme Court in the same decision: However, in so far as it involves cooperatives with employees who are not members or co-owners thereof, certainly such employees are entitled to exercise the rights of all workers to organization, collective bargaining, negotiations and others as are enshrined in the constitution and existing laws of the country. The questioned ruling therefore of public respondent Pura Ferrer-Calleja must be upheld in so far as it refers to the employees of petitioner who are not members or co-owners of petitioner. Not only did movant fail to show any proof that anyone of the union members are members or co-owners of the cooperative. It also declared that not all members of the petitioning union are members of the cooperative. The ruling was upheld by the appellate court thus: The petitioner is indeed correct in stating that employees of a cooperative who are members-consumers or members-owners, are not qualified to form, join or assist labor organizations for purposes of collective bargaining, because of the principle that an owner cannot bargain with himself. However, the petitioner failed to mention that the Supreme Court has also declared that in so far as it involves cooperatives with employees who are not members or co-owners thereof, certainly such employees are entitled to exercise the rights of all workers to organization, collective the the 31, not

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
bargaining, negotiations and others as are enshrined in the Constitution and existing laws of the country. The public respondent found that petitioner failed to show any proof that any member of the private respondent was also a member or co-owner of the petitioner-cooperative. Hence the members of the private respondent could validly form a labor organization. In the instant petition, NORECO 1 fails to controvert the statement of the Court of Appeals that the petitioner failed to show any proof that any member of the private respondent was also a member or co-owner of the petitioner cooperative. More important, the factual issue is not for the Court of Appeals to resolve in a petition for certiorari. Finally, the instant petition ambiguously states that NORECO1 is an electric cooperative and all the employees of the subject union are members of the cooperative, but submitted a certified list of employees who are members-co-owners of the petitioner electric cooperative. Impliedly, there are rank-and-file employees of the petitioner who are not themselves members-co-owners, or who are the ones qualified to form or join a labor organization. Again, the core issue raises a question of fact that the appellate court correctly declined to resolve in the first instance. DISPOSITIVE PORTION: WHEREFORE, the petition is DENIED for lack of merit. SO ORDERED. MED-ARBITER: Med-Arbiter Bactin found KFWUs legal personality defective and dismissed its petition for certification election finding that two of KFWUs members (chief engineers who act as foremen) were supervisory employees and are thus prohibited from joining the union of rank-and file employees. It directed the union to remove the supervisory employees from its membership to attain legitimate status. It cited two cases to support its decision: 1) the Toyota Case, where it was held that the union could not prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election. 2) the Dunlop case, where it was held that the commingling of rank-and-file employees and supervisory employees in 1 bargaining unit cannot be cured in the exclusion-inclusion proceedings at the pre-election conference. On the basis of the Med-arbiters decision, Kawashima filed a Petition for Cancellation of Charter/Union Registration of KFWU with DOLE. Meanwhile, KFWU appealed the decision of the med-arbiter with the DOLE. DOLE: DOLE reversed the Med-arbiters ruling and remanded the case to the office of origin for the immediate conduct of a certification election. It directed Kawashima to submit a certified list of current employees in the bargaining unit for the last three months prior to the issuance of the decision. The DOLE held that Med-Arbiters reliance on the decisions of the Court in Toyota and Dunlop cases was misplaced, for while Article 245 declares supervisory employees ineligible for membership in a labor organization for rank-and-file employees, the provision did not state the effect of such prohibited membership on the legitimacy of the labor organization and its right to file for certification election. Neither was such mixed membership a ground for cancellation of its registration. Section 11, Paragraph II, Rule XI of Department Order No. 9 "provides for the dismissal of a petition for certification election based on lack of legal personality of a labor organization only on the following grounds: (1) [KFWU] is not listed by the Regional Office or the Bureau of Labor Relations in its registry of legitimate labor organizations; or (2) [KFWU's] legal personality has been revoked or canceled with finality." Neither ground was found to exist. The DOLE also held that the omission by KFWU to file its books of account was not a ground for revocation of union registration or dismissal of petition for certification election. Sec. 1 Rule VI of D.O. No. 9 does not require a local or chapter like KFWU to file its books of account. CA (basically the same as with the med-arbiter): The CA reversed the DOLE decision and found the Undersecretary of Labor to have acted with GAOD in ignoring the jurisprudence on the matter. The Republic of the Philippines filed the present petition to seek closure on the following issues: - 27 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY Department of Labor and Employment (DOLE) vs. KAWASHIMA TEXTILE MFG., PHILIPPINES, INC. G.R. No. 160352 July 23, 2008 QUICK SUMMARY: The union filed a petition for certification election which the company opposed on the ground that the union was not a legitimate labor organization. The company alleged that the union was composed of both rank-and-file and supervisory employees which Art. 245 prohibits. The Supreme Court held that the co-mingling of the two kinds of employees in one labor union is not a ground for the dismissal of the petition for certification election. FACTS: Kawashima Free Workers Union-PTGWO Local Chapter No. 803 (KFWU) filed a Petition for Certification Election to be conducted in the bargaining unit composed of 145 rank-and-file employees of respondent Kawashima Textile MFG, Phil., Inc (Kawashima). Attached to its petition are a Certificate of Creation of Local/Chapter issued on January 19, 2000 by DOLE Regional Office No. IV, stating that it [KFWU] submitted to said office a Charter Certificate issued to it by the national federation Phil. Transport & General Workers Organization (PTGWO), and a Report of Creation of Local/Chapter. Respondent, Kawashima, filed a motion to dismiss the petition on the ground that KFWU did not acquire any legal personality because it was composed by a mix of rankand-file and supervisory employees in violation of Art. 245 of the LC. It also alleged that KFWUs failure to submits its books of account contravened the ruling of the Court In the case of Progressive Development Corp vs. Sec. of DOLE.

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
2. ISSUES: 1. WON a mixed membership of rank-and-file and supervisory employees in a union is a ground for the dismissal of a petition for certification election in view of the amendment brought about by D.O. 9, series of 1997, which deleted the phraseology in the old rule that "[t]he appropriate bargaining unit of the rank-and-file employee shall not include the supervisory employees and/or security guards;" 2. WON the legitimacy of a duly registered labor organization can be collaterally attacked in a petition for a certification election through a motion to dismiss filed by an employer such as Kawashima Textile Manufacturing Phils., Inc. RATIO: 1. NO. Following the courts rulings in Tagaytay Highlands Intl Golf Club Inc. V. Tagaytay Highlands Employees Union-PGTWO, mixed membership of rank-andfile and supervisory employees is not a ground for the dismissal of a petition for certification election. TAGAYTAY CASE: after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank and file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brough about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. SAN MIGUEL CORP CASE: since the 1997 Amended Omnibus Rules does not require a local or chapter to provde a list of its members, it would be improper for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual members. AIR PHILIPPINES CORP v. BLR CASE: reiterated Tagaytay; Hence, the Toyota and Dunlop cases no longer hold sway in the present altered state of the law and rules. NOTE: The reason why the rulings in the Toyota and Dunlop cases were different from the present rule (i.e. Tagaytay doctrine) is that the Toyota and Dunlop cases were promulgated prior to the 1997 rules. At that time, the rules provided that: Sec. 2. Who may file. Any legitimate labor organization or the employer, when requested to bargain collectively, may file the petition. The petition, when filed by a legitimate labor organization, shall contain, among others: xxxx (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; and provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or security guards. (Emphasis supplied) NO. Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is nonadversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it, not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election. The employers only right in the proceeding is to be notified or informed thereof.

OTHER DOCTRINES: NOTE: The petition for certification election, in this case, was filed by KFWU on January 24, 2000. Hence, it is R.A. No. 6715 and its Rules and Regulations (as amended by D.O. No. 9, series of 1997) which applies and not R.A. No. 9481 which took effect only on June 14, 2007. R.A. 9481 (not applicable to the case but would have been the closure sought to the issues presented) Because of R.A. 9481, the following articles were inserted into the Labor Code: "Art. 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." (Emphasis supplied) "Art. 238-A. Effect of a Petition for Cancellation of Registration. - A petition for cancellation of union registration shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election. In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts." (Emphasis supplied) "Art. 258-A. Employer as Bystander. - In all cases, whether the petition for certification election is filed by an employer or a legitimate labor organization, the employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification election. The employer's participation in such proceedings shall be limited to: (1) being notified or informed of petitions of such nature; and (2) submitting the list of employees during the pre-election conference should the MedArbiter act favorably on the petition." (Emphasis supplied) 1. If there is one contant precept in our labor laws, it is that only a legitimate labor organization may exercise the right to be certified as the exclusive representative of all employees in an appropriate collective bargaining unit for purposes of collective bargaining.What has varied over the years has been the degree of

- 28 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
enforcement of this precept, as reflected in the shifting scope of administrative and judicial scrutiny of the composition of a labor organization before it is allowed to exercise the right of representation. 2. Timeline/ Evolution of the law in this case (just in case Sir asks) R.A. 875 supervisors were not eligible for membership in a labor organization of employees under their supervision but may form separate organization of their own - did not provide the effects of co-mingling on the legitimacy of the labor organization; the only instance when a labor organization loses its legitimacy is when it violates its duty to bargain collectively Lopez v. Chronicle Publication Employees Association the absence of any provision on the effect of the disqualification of one of its organizers upon the legality of the union, may be construed to confine the effect of such ineligibility only upon the membership of the supervisor. In other words, the invalidity of membership of one of the organizers does not make the union illegal, where the requirements of the law for the organization thereof, are, nevertheless, satisfied and met. Labor Code (as amended in 1974) supervisory unions and unions of security guards were ordered to cease operations. However, members of supervisory unions who do not fall within the defn of managerial employees shall become eligible to join rank-and-file employees union. The determination of who are managerial employees became a subject of negotiation between representatives of the supervisory union and the employer. If there is no agreement, the issue is brough to the nearest Regional Office for determination. Bulletin v. Sanchez supervisory employees who do not fall under the category of managerial employees may join or assit in the formation of a labor organization for rankand-file employees but may not form their own labor organization. R.A. No. 6715 (1999) managerial employees were ineligible to join, assit or form any LO while supervisory employees were still ineligible to join r-f LO but may form their own. -did not specify the effect of such co-mingling on the legitimacy of the labor union Rules and Regulations implementing R.A. 6715 provided that a legitimate labor organization petitioning for certification should not include supervisory unions and/or security guards. DISPOSITIVE PORTION: WHEREFORE, the petition is GRANTED. The December 13, 2002 Decision and October 7, 2003 Resolution of the Court of Appeals and the May 17, 2000 Order of Med-Arbiter Anastacio L. Bactin are REVERSED and SET ASIDE, while the August 18, 2000 Decision and September 28, 2000 Resolution of the Department of Labor and Employment are REINSTATED. QUICK SUMMARY: The union filed for a certification election. The company opposed it on the ground of misrepresentation, fraud, etc. The union argued that once a labor organization has filed the necessary documents and papers and the same have been certified under oath and attested to, said organization necessarily becomes clothed with the character of a legitimate labor organization. The SC ruled otherwise stating that the requirements embodied in Article 234 are intended as preventive measures against the commission of fraud. After a labor organization has filed the necessary papers and documents for registration, it becomes mandatory for the Bureau of Labor Relations to check if the requirements under Article 234 have been sedulously complied with. If its application for registration is vitiated by falsification and serious irregularities, especially those appearing on the face of the application and the supporting documents, a labor organization should be denied recognition as a legitimate labor organization. And if a certificate of recognition has been issued, the propriety of the labor organization's registration could be assailed directly through cancellation of registration proceedings in accordance with Articles 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the issuance of an order for certification election. FACTS: Petitioner Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent Union) filed a petition for certification election with the Department of Labor in behalf of the rank and file employees of the Progressive Development Corporation (Pizza Hut). Petitioner filed on August 20, 1993, a verified Motion to Dismiss the petition alleging fraud, falsification and misrepresentation in the respondent Union's registration making it void and invalid. The motion specifically alleged that: a) respondent Union's registration was tainted with false, forged, double or multiple signatures of those who allegedly took part in the ratification of the respondent Union's constitution and by-laws and in the election of its officers that there were two sets of supposed attendees to the alleged organizational meeting that was alleged to have taken place on June 26, 1993; that the alleged chapter is claimed to have been supported by 318 members when in fact the persons who actually signed their names were much less; and b) while the application for registration of the charter was supposed to have been approved in the organizational meeting held on June 27, 1993, the charter certification issued by the federation KATIPUNAN was dated June 26, 1993 or one (1) day prior to the formation of the chapter, thus, there were serious falsities in the dates of the issuance of the charter certification and the organization meeting of the alleged chapter. Petitioner filed a Petition seeking the cancellation of the Union's registration on the grounds of fraud and falsification. Motion was likewise filed by petitioner with the Med-Arbiter requesting suspension of proceedings in the certification election case until after the prejudicial question of the Union's legal personality is determined in the proceedings for cancellation of registration. The Med-Arbiter directed the holding of a certification election among petitioner's rank and file employees. It ruled that: Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labor organization in contemplation of law and shall remain as such until its very charter certificate is canceled or otherwise revoked by competent authority. The alleged misrepresentation, fraud and false statement in - 29 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT vs. LAGUESMA G.R. No. 115077 April 18, 1997

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
connection with the issuance of the charter certificate are collateral issues which could be properly ventilated in the cancellation proceedings. On appeal, Labor Undersecretary denied the same. The suggestion is made that once a labor organization has filed the necessary documents and papers and the same have been certified under oath and attested to, said organization necessarily becomes clothed with the character of a legitimate labor organization. ISSUE: W/N after the necessary papers and documents have been filed by a labor organization, recognition by the Bureau of Labor Relations merely becomes a ministerial function? RATIO: NO. Article 234 of the Labor Code provides: Art. 234. Requirements of registration. - Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings; (c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; (d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and (e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. A more than cursory reading of the aforecited provisions clearly indicates that the requirements embodied therein are intended as preventive measures against the commission of fraud. After a labor organization has filed the necessary papers and documents for registration, it becomes mandatory for the Bureau of Labor Relations to check if the requirements under Article 234 have been sedulously complied with. If its application for registration is vitiated by falsification and serious irregularities, especially those appearing on the face of the application and the supporting documents, a labor organization should be denied recognition as a legitimate labor organization. And if a certificate of recognition has been issued, the propriety of the labor organization's registration could be assailed directly through cancellation of registration proceedings in accordance with Articles 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the issuance of an order for certification election. These measures are necessary - and may be undertaken simultaneously - if the spirit behind the Labor Code's requirements for registration are to be given flesh and blood. Registration requirements specifically afford a measure of protection to - 30 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate ends. Such requirements are a valid exercise of the police power, because the activities in which labor organizations, associations and unions of workers are engaged directly affect the public interest and should be protected. Furthermore, the Labor Code itself grants the Bureau of Labor Relations a period of thirty (30) days under Article 235 within which to review all applications for registration. The thirty-day period in the aforecited provision ensures that any action taken by the Bureau of Labor Relations is made in consonance with the mandate of the Labor Code, which, it bears emphasis, specifically requires that the basis for the issuance of a certificate of registration should be compliance with the requirements for recognition under Article 234. The grounds ventilated in cancellation proceedings in accordance with Article 239 of the Labor Code constitute a grave challenge to the right of respondent Union to ask for certification election. The Med-Arbiter should have looked into the merits of the petition for cancellation before issuing an order calling for certification election. Registration based on false and fraudulent statements and documents confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper. Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no rights, particularly the right to ask for certification election in a bargaining unit. Clearly, fraud, falsification and misrepresentation in obtaining recognition as a legitimate labor organization are contrary to the Med-Arbiter's conclusion not merely collateral issues. The invalidity of respondent Union's registration would negate its legal personality to participate in certification election. Once a labor organization attains the status of a legitimate labor organization it begins to possess all of the rights and privileges granted by law to such organizations. As such rights and privileges ultimately affect areas which are constitutionally protected, the activities in which labor organizations, associations and unions are engaged directly affect the public interest and should be zealously protected. A strict enforcement of the Labor Code's requirements for the acquisition of the status of a legitimate labor organization is in order. Inasmuch as the legal personality of respondent Union had been seriously challenged, it would have been more prudent for the Med-Arbiter and public respondent to have granted petitioner's request for the suspension of proceedings in the certification election case, until the issue of the legality of the Union's registration shall have been resolved. Failure of the Med-Arbiter and public respondent to heed the request constituted a grave abuse of discretion. DISPOSITIVE PORTION: WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED and the Resolution and Order of the public respondent dated December 29, 1993 and January 24, 1994, respectively, are hereby SET ASIDE. The case is REMANDED to the Med-Arbiter to resolve with reasonable dispatch petitioner's petition for cancellation of respondent Union's registration. SO ORDERED.

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
TUPAS-WFTU V. LAGUESMA G.R. No. 102350 June 30, 1994 QUICK FACTS: The union expressed its intention to disaffiliate from WFTU and affiliate with NAFLU. PDIC filed for a petition to DOLE to order a certification election. Public respondent ordered the certification election and the employees overwhelmingly voted for NAFLU. The order for such is warranted under Art. 256. The holding of a certification election should not be barred or prevented because it is the most democratic way for employees to choose their bargaining representative. FACTS: On March 8, 1991, PDIC received a letter from the president of petitioners local chapter union. The company was informed that the union had resolved to disaffiliate from petitioner and affiliate with private respondent National Federation of Labor Unions (NAFLU). PDIC entertained reservations about the validity of the disaffiliation. It was not clear whether the unions board resolution to disaffiliate was ratified by the majority of its members. Furthermore, PDIC had received reports that some employees were coerced to support the disaffiliation. On April 24, 1991, within the 60-day freedom period, PDIC and private respondent NAFLU filed separate petitions for certification election with the DOLE. Med-Arbiter Antonio R. Cortez, on June 3, 1991, issued an Order to let a certification election be conducted among the regular rank-and-file employees of the Philippine Development and Industrial Corporation, with the following choices: 1) NAFLU 2) TUPAS, or 3) NO UNION. On October 27, 1991, a certification election was conducted among the rank-andfile workers of PDIC at Iba, Meycauayan, Bulacan. One hundred eighteen (118) of the one hundred thirty-six (136) qualified voters participated in the elections. Petitioner garnered six (6) votes, while private respondent got one hundred twelve (112). On November 5, 1991, Med-Arbiter Antonio R. Cortez issued an Order certifying private respondent as the sole and exclusive bargaining agent of all rank-and-file workers of PDIC. ISSUE: W/N public respondent committed grave abuse of discretion when it ordered the holding of certification election among the rank and file employees RATIO: No. The order for the holding of a certification election among the rank-and-file employees of PDIC finds legal warrant in Art. 256. Under said provision, the Med-Arbiter shall automatically order a certification election by secret ballot in an organized establishment such as PDIC, provided the following requisites are met: (1) that a petition questioning the majority status of the incumbent bargaining agent is filed before the DOLE within the sixtyday freedom period; (2) that such petition is verified; and (3) that the petition is supported by the written consent of at least twenty-five (25%) per cent of all employees in the bargaining unit. It is undisputed that all these requirements were met by private respondent NAFLU in its petition before the DOLE Regional Office No. 3, in San Fernando,Pampanga. It bears stressing that no obstacle must be placed to the holding of certification elections, for it is a statutory policy that should not be circumvented. We have held that whenever there is doubt as to whether a particular union represents the majority of the rank-and- file - 31 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN employees, in the absence of a legal impediment, the holding of a certification election is the most democratic method of determining the employees choice of their bargaining representative. It is the appropriate means whereby controversies and disputes on representation may be laid to rest, by the unequivocal vote of the employees themselves. Indeed, it is the keystone of industrial democracy. Art. 256 of the Labor Code cannot be supplanted by the Code of Ethics of the LACC. Said Code cannot amend or repeal a law. And, as correctly observed by the Office of the Solicitor General, it merely provides for a voluntary mechanism to settle intra-union disputes. It only applies when both parties to the dispute seek the mediation of said Committee. However, when one of the parties decides to avail of the remedy provided for under Art. 256 of our Labor Code and files the proper petition with the DOLE, jurisdiction over the dispute is exclusively acquired by and cannot be wrenched away from the MedArbiter. It is familiar learning that jurisdiction is vested by law, and not by agreement between or among the parties. Moreover, labor disputes involve public interest, and hence any private agreement on their settlement cannot prevail over what is provided for by our laws. DISPOSITIVE PORTION: IN VIEW WHEREOF, the Petition is DISMISSED for lack of merit. The Resolution dated August 15, 1991, and the Order dated October 7, 1991 of respondent Department of Labor and Employment Undersecretary Bienvenido E. Laguesma in OS-MA-A-7-212-91 is hereby AFFIRMED IN TOTO.

SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-TUCP), vs. THE SECRETARY OF LABOR, NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER AND EXPORTER CORPORATION, G.R. No. 107792 March 2, 1998 QUICK SUMMARY: In a certification election, the vote of no union won. Thereafter, the employees of Permex formed Samahang Manggagawa sa Permex (SMP) and later affiliated with the Philippine Integrated Industries Labor Union (PIILU). The union wrote Permex requesting recognition as the sole and exclusive bargaining representative of employees. Permex Producer recognized SMP-PIILU and entered into a CBA with it. The old union filed a petition for certification election but was dismissed by the Med-Arbiter. The Secretary of Labor ordered a certification election to be conducted. The new union questioned this order of the Secretary of Labor. The court affirmed the decision of the Secretary. It ruled that an employer, like Permex, cannot voluntarily recognize a union as the sole and exclusive bargaining representative of its employees. It also ruled that the contract bar rule does not apply in this case because the identity of the representative is in doubt. The petitioner entered into a CBA with Permex Producer when its status as exclusive bargaining agent of the employees had not been established yet. FACTS: A certification election was conducted among employees of respondent Permex Producer and Exporter Corporation. The results of the elections were as follows: National Federation of Labor (NFL) 235

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
No Union Spoiled Ballots Marked Ballots Challenged Ballots 466 18 9 7 represent the employees may submit the petition so that it may be directly certified as the employees' representative or a certification election may be held. The case of Ilaw at Buklod ng Manggagawa v. Ferrer-Calleja, it was ruled that: Ordinarily, in an unorganized establishment it is the union that files a petition for a certification election if there is no certified bargaining agent for the workers in the establishment. If a union asks the employer to voluntarily recognize it as the bargaining agent of the employees, as the petitioner did, it in effect asks the employer to certify it as the bargaining representative of the employees A CERTIFICATION WHICH THE EMPLOYER HAS NO AUTHORITY TO GIVE, for it is the employees' prerogative (not the employer's) to determine whether they want a union to represent them, and, if so, which one it should be. In accordance with this ruling, Permex Producer should not have given its voluntary recognition to SMP-PIILU-TUCP when the latter asked for recognition as exclusive collective bargaining agent of the employees of the company. The company did not have the power to declare the union the exclusive representative of the workers for the purpose of collective bargaining. The direct certification previously allowed under the Labor Code had been discontinued as a method of selecting the exclusive bargaining agents of the workers. Certification election is the most effective and the most democratic way of determining which labor organization can truly represent the working force in the appropriate bargaining unit of a company. Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its application for registration with the DOLE and that when petitioner signed the CBA with the company, the CBA was ratified by 542 employees. Petitioner contends that such support by the majority of the employees justifies its finding that the CBA made by it is valid and binding. But it is not enough that a union has the support of the majority of the employees. It is equally important that everyone in the bargaining unit be given the opportunity to express himself. This is especially so because, in this case, the recognition given to the union came barely ten (10) months after the employees had voted "no union" in the certification election conducted in the company. There is something dubious about the fact that just ten (10) months after the employees had voted that they did not want any union to represent them, they would be expressing support for petitioner. The doubt is compounded by the fact that in sworn affidavits some employees claimed that they had either been coerced or misled into signing a document which turned out to be in support of petitioner as its collective bargaining agent. 2. No. Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253, 253-A and 256 of the Labor Code and Book V, Rule 5, 3 of its Implementing Rules and Regulations, a petition for certification election or motion for intervention may be entertained only within 60 days prior to the date of expiration of an existing collective bargaining agreement. - 32 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN

However, some employees of Permex Producer formed a labor organization known as the Samahang Manggagawa sa Permex (SMP) which they registered with the Department of Labor and Employment. The union later affiliated with the Philippine Integrated Industries Labor Union (PIILU). Samahang Manggagawa sa Permex-Philippine Integrated Industries Labor Union (SMP-PIILU), wrote the respondent company requesting recognition as the sole and exclusive bargaining representative of employees at the Permex Producer. Permex Producer recognized SMP-PIILU and entered into a collective bargaining agreement with it. The CBA was ratified by the majority of the rank and file employees of Permex Producer. On December 13, 1991, it was certified by the DOLE. Respondent NFL filed a petition for certification election, but it was dismissed by Med-Arbiter. Respondent NFL then appealed the order to the Secretary of Labor and Employment who set aside the order of the Med-Arbiter and ordered a certification election to be conducted among the rank and file employees at the Permex Producer, with the following choices: 1. National Federation of Labor 2. Samahang Manggagawa sa Permex 3. No union Petitioner moved for reconsideration but its motion was denied. Hence, this petition. ISSUES: 1. Whether or not it was proper for Permex to voluntarily recognize SMP-PIILU as the sole and exclusive bargaining representative of employees at the Permex 2. Whether or not the contract bar rule applies in this case RATIO: 1. No. An employer cannot voluntarily recognize a union as the sole and exclusive bargaining representative of its employees. First, it is contended that petitioner has been recognized by the majority of the employees at Permex Producer as their sole collective bargaining agent. Petitioner argues that when a group of employees constituting themselves into an organization and claiming to represent a majority of the work force requests the employer to bargain collectively, the employer may do one of two things. First, if the employer is satisfied with the employees' claim the employer may voluntarily recognize the union by merely bargaining collectively with it. The formal written confirmation is ordinarily stated in the collective bargaining agreement. Second, if on the other hand, the employer refuses to recognize the union voluntarily, it may petition the Bureau of Labor Relations to conduct a certification election. If the employer does not submit a petition for certification election, the union claiming to

LABOR LAW II COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT Bargaining Unit, Bargaining Agent and Certification Election Proceedings, Bars to Certification Election
The purpose of the rule is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good faith and for the stipulated original period. Excepted from the contract-bar rule are certain types of contracts which do not foster industrial stability, such as contracts where the identity of the representative is in doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice because it does not establish the kind of industrial peace contemplated by the law. Such situation obtains in this case. The petitioner entered into a CBA with Permex Producer when its status as exclusive bargaining agent of the employees had not been established yet. DISPOSITIVE PORTION: WHEREFORE, the challenged decision and order of the respondent Secretary of Labor are AFFIRMED. SO ORDERED.

- 33 ALFONSO | ARAGONES | ATILANO | BARTOLOME | BAUTISTA | CABRALES | CASTRO | DUENAS | FERMIN | GUEVARA | MACALINO | SAMSON | TAGRA | VALLO | WILWAYCO | YAN