Labrel Reviewer

1 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304

PART ONE

LABOR RELATIONS POLICY: FORMULATION AND HISTORICAL DEVELOPMENT

1987 CONSTITU TION

ARTICLE IIDeclaration of Principles and State PoliciesSECTION 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.SECTION 10. The State shall promote social justice in all phases of national development.SECTION 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

ARTICLE IIIBill of RightsSECTION 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

ARTICLE XIINational Economy and PatrimonySECTION 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.

ARTICLE XIIISocial Justice and Human RightsSECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and growth.SECTION 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

LABOR CODE

LABOR RELATIONS refers to that part of labor law which regulated the relations between employers and workers.


It dwells on the broad and dynamic relationship between the employer and employee, its ramifications and implications insofar as their respective rights and interests are concerned as well as the modes of setting and adjusting their differences and disputes and ultimately, the grounds and manner by which such relationship will be terminated.

LabRel and LabStand laws are not mutually exclusive. They are complementary to and closely interlinked with each other.

Art. 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

Art 211 actually is an amplification of the principles laid down in Art 3 of the LC w/c mandates that it is a basic policy of the State to protect labor, promote full employment, ensure equal work opportunities regardless of sex, race, creed, and regulate the relations between workers and employers. The State is further mandated to assure the rights of workers to self-organization. collective bargaining, security of tenure and just and humane conditions of work.

The relation between capital and labor is not merely contractual but is so impressed with public interest that labor contracts must yield to the common good.

Art. 211. Declaration of Policy.1. It is the policy of the State:

1. To promote and emphasize the primacy of free collective bargaining and negotiations, including

voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;

2. To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development;

3. To foster the free and voluntary organization of a strong and united labor movement;

4. To promote the enlightenment of workers concerning their rights and obligations as union members and as employees;

5. To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes;

6. To ensure a stable but dynamic and just industrial peace; and

7. To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare.

2. To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code. (As amended by Section 3, Republic Act No. 6715, March 21, 1989)


Art. 275. Tripartism and tripartite conferences.1. Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and employers shall, as

far as practicable, be represented in decision and policy-making bodies of the government.

2. The Secretary of Labor and Employment or his duly authorized representatives may, from time to time, call a national, regional, or industrial tripartite conference of representatives of government, workers and employers for the consideration and adoption of voluntary codes of principles designed to promote industrial peace based on social justice or to align labor movement relations with established priorities in economic and social development. In calling such conference, the Secretary of Labor and Employment may consult with accredited representatives of workers and employers. (As amended by Section 32, Republic Act No. 6715, March 21, 1989)

B. DEFINITIONArt. 212. Definitions.

1. "Commission" means the National Labor Relations Commission or any of its divisions, as the case may be, as provided under this Code.

2. "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor.

3. "Board" means the National Conciliation and Mediation Board established under Executive Order No. 126.

4. "Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended.

5. "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.

6. "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.

7. "Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.

8. "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof.

9. "Company union" means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.

10. "Bargaining representative" means a legitimate labor organization whether or not employed by the employer.

11. "Unfair labor practice" means any unfair labor practice as expressly defined by the Code.


12. "Labor dispute" includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.

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

14. "Voluntary Arbitrator" means any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, or one chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute.

15. "Strike" means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.

16. "Lockout" means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.

17. "Internal union dispute" includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in this Code.

18. "Strike-breaker" means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining.

19. "Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment. (As amended by Section 4, Republic Act No. 6715, March 21, 1989)

BOOK FIVE Labor RelationsRULE I: Definition of TermsSECTION 1. Definition of terms. —(u) "Internal Union Dispute" includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union, including any violation of the rights and conditions of union membership provided for in this Code.cralaw(v) "Appeal" means the elevation by an aggrieved party of any decision, order or award of a lower body to a higher body, by means of a pleading which includes the assignment of errors, memorandum of arguments in


support thereof, and the reliefs prayed for. A mere notice of appeal, therefore, does not constitute the appeal as herein defined and understood, and shall not stop the running of the period for perfecting an appeal.cralaw(w) "Perfection of an Appeal" includes the filing within the prescribed period, of the memorandum of appeal containing, among others, the assignment of error/s, the argument in support thereof, the reliefs sought and posting of the appeal bond.cralaw(x) "Certification Election" means the process of determining, through secret ballot, the sole and exclusive bargaining agent of the employees in an appropriate bargaining unit, for purposes of collective bargaining.cralaw(y) "Consent Election" means the election voluntarily agreed upon by the parties to determine the issue of majority representation of all the workers in the appropriate collective bargaining unit.cralaw(z) "Run-Off" refers to an election between the labor unions receiving the two (2) higher number of voters when a certification election which provides for three (3) or more choices results in no choice receiving a majority of the valid votes cast, where the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.cralaw(aa) "Registration of Agreement" refers to the filing of the collective bargaining agreement with the Regional Office or the Bureau accompanied by verified proof of posting and ratification and payment of fee.cralaw(bb) "Organized Establishment" refers to a firm or company where there is a recognized or certified exclusive bargaining agent.cralaw(cc) "Registration Proceedings" refer to proceedings involving the application for registration of labor organizations.cralaw(dd) "Cancellation Proceeding" is the process leading to the revocation of the registration certificate of a labor organization after due process.cralaw(ee) "Hearing Officers" are officers appointed/designated in the Regional Office and authorized to hear and decide cases under Section 2 of Republic Act No. 6715 and whose decision is appealable to the Commission.cralaw(ff) "Union Accounts Examiners" are officials in the Bureau or the Industrial Relations Division in the Regional Office empowered to audit books of accounts of the union.cralaw(gg) "Representation Officer" refer to a person duly authorized to conduct and supervise certification elections in accordance with Rule VI of this Book.cralaw(hh) "Term of Office" means the tenure of office of elected officials of a labor organization which is for a fixed period of five (5) years.cralaw(ii) "Cabo" refers to a person or group or persons or to a labor group which, in the guise of a labor organization, supplies workers to an employer, with or without any monetary or other consideration whether in the capacity of an agent of the employer or as an ostensible independent contractor.cralaw(jj) "Collective Bargaining Agreement" refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit, including mandatory provisions for grievances and arbitration machineries.cralaw(kk) "Med-Arbiter" is an official in the Regional Office authorized to hear, conciliate, mediate and decide representation cases, internal union and inter-union disputes.cralaw(ll) "Administrator" refers to the Administrator of the Philippine Overseas Employment Administration or the National Conciliation and Mediation Board as the context so indicates.

1.EMPLOYER AND EMPLOYEEArt. 212. Definitions.

1. "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.

2. "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased


as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.

FEATI UNIVERSITY v. BAUTISTA 18 SCRA 1191

FACTS: January 14, 1963: the President of Feati University Faculty Club (PAFLU) wrote a letter to Mrs. Victoria L.

Araneta, President of Feati University informing her that it registered as a labor union. January 22, 1963: PAFLU sent a letter with 26 demands in relation to their employment and requesting an

answer within 10 days from receipt thereof. Araneta answered the letters, requesting that she be given at least 30 days to study thoroughly the different phases

of the demands. Meanwhile counsel for Feati, wrote a letter to the President of PAFLU demanding proof of its majority status and designation as a bargaining representative

February 1, 1963: the President of PAFLU rejected the extension of time and filed a notice of strike with the Bureau of Labor due to Feati’s refusal to bargain collectively.

Conciliation Division of the Bureau of Labor made efforts to conciliate them but failed. February 18, 1963: PAFLU declared a strike and established picket lines in the premises of Feati resulting in the

disruption of classes in the University. March 21, 1963: the President of the Philippines certified to the Court of Industrial Relations (CIR) the dispute

between Feati and PAFLU pursuant to the provisions of Section 10 of Republic Act No. 875. 3 cases were filed with the CIR

41-IPA – PAFLU’s petition to declare in contempt of court since Feati refused to accept them back to work in violation of the return-to-work order of March 30, 1963 and has employed professors and/or instructors to take their places

1183-MC – PAFLU’s petition for certification election praying that it be certified as the sole and exclusive bargaining representative

Later withdrawn since the Case 41-IPA had already been certified by the President to the CIR and has absorbed the issues herein

V-30 – PAFLU’s complaint for indirect contempt of court filed against the administrative officials of the Feati reiterating Case 41-IPA

May 10, 1963: Feati filed before the SC a petition for certiorari and prohibition with writ of preliminary injunction which was issued upon the Feati's filing a bond of P50,000 (increased from P1,000), ordering CIR Judge Jose S. Bautista to desist and refrain from further proceeding

March 23, 1963: On the strength of the presidential certification, Judge Bautista set the case for hearing Feati, thru counsel filed a motion to dismiss the case upon the ground that the CIR has no jurisdiction

over the case, because:1. the Industrial Peace Act is NOT applicable to the University, it being an educational institution, nor to the members of the Faculty Club, they being independent contractors2. the presidential certification is violative of Section 10 of the Industrial Peace Act, as the University is not an industrial establishment and there was no industrial dispute which could be certified to the CIR

Judge Bautista denied the motion to dismiss and ordered the strikers to return immediately to work and the University to take them back under the last terms and conditions existing before the dispute arose

Without the motion for reconsideration having been acted upon by the CIR en banc, Judge Bautista set the case for hearing on the merits for May 8, 1963 but was cancelled upon Feati’s petition for certiorari alleging that Judge Jose S. Bautista acted without, or in excess of, jurisdiction, or with grave abuse of discretion, in taking cognizance of, and in issuing the questioned orders in, CIR Cases Nos. 41-IPA 1183-MC and V-30


Feati claims that it is not an employer within the contemplation of R.A. 875, because it is not an industrial establishment

Feati also claims that it is only a lessee of the services of its professors and/or instructors pursuant to a contract of services entered into between them because the University does not exercise control over their work

ISSUES: W/N Feati can be considered an employer and PAFLU as an employee to be covered by R.A. 875 and have right to unionize

HELD: YES. petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-21278 is dismissed

Section 2(c) of R.A. 875:o The term employer include any person acting in the interest of an employer, directly or indirectly, but shall not include any labor organization (otherwise than when acting as an employer) or any one acting in the capacity or agent of such labor organization.§ Congress did not intend to give a complete definition of "employer", but rather that such definition should be complementary to what is commonly understood as employer§ Act itself specifically enumerated those who are not included in the term "employer" and educational institutions are not included; hence, they can be included in the term "employer". However, those educational institutions that are not operated for profit are not within the purview of Republic Act No. 875.ü Feati realizes profits and parts of such earning is distributed as dividends to private stockholders or individuals§ It embraces not only those who are usually and ordinarily considered employees, but also those who have ceased as employees as a consequence of a labor dispute.

employee must be one who is engaged in the service of another; who performs services for another; who works for salary or wages

"workers" limited to those performing physical laboro embrace stenographers and bookkeeperso Teachers are not included

Feati controls the work of the members of its facultyo prescribes the courses or subjects that professors teach, and when and where to teacho professors' work is characterized by regularity and continuity for a fixed durationo professors are compensated for their services by wages and salaries, rather than by profitso professors and/or instructors cannot substitute others to do their work without the consent of the universityo professors can be laid off if their work is found not satisfactory

Moreover, even if university professors are considered independent contractors, still they would be covered by Rep. Act No. 875

professors, instructors or teachers of private educational institutions who teach to earn a living are entitled to the protection of our labor laws — and one such law is Republic Act No. 875.

BVRI “employer” is defined as any person or entity who employs the services of others, one for whom employees work and who pays their wages or salaries. It includes any person directly or indirectly acting in the interest of an employer. It shall refer to the enterprise where a labor organization operates or seeks to operate.

“employee” one who has been dismissed from work but the legality of the dismissal is being contested in a forum of appropriate jurisdiction.

8 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304 kinds of employees

o managerial employees is one who is vested w/ powers or prerogatives to lay down and execute management policies and/or to hire, transfer,suspend, lay-off, recall, discharge, assign or discipline employees.

o supervisory employees is one who is in the interest of the employer, effectively recommends managerial actions and the exercise of such authority is not merely routinary or clerical but requires the use of independent judgment.

o rank-and-file employees one who does not fall w/n any of the above definitions. An employee whose work has ceased as a result og, or in connection w/ any unfair labor practice is still

considered an employee, if he has not obtained any other substantially equivalent and regular employment. substantially equivalent and regular employment- essential requirement for a person whose employment has

ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, to be considered stil an “employee” that he has not obtained any other substantially equivalent and regular employment elsewhere.

2. LABOR ORGANIZATION- LEGITIMATE LABOR ORGANIZATIONArt. 212

1. "Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.

2. "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof.

AIRLINE PILOTS ASSN. ET. AL., v. CIR 76 SCRA 274FACTS: On January 2, 1971, the Air Line Pilots Association of the Philippines, represented by Ben Hur Gomez who claimed to be its President, filed a petition with the Court of Industrial Relations praying for certification as the sole and exclusive collective bargaining representative of "all the pilots now under employment by the Philippine Air Lines, Inc, and are on active flight and/or operational assignments." The petition which was docketed in the sala of Judge Joaquin M. Salvador as Case 2939-MC was opposed in the name of the same association by Felix C. Gaston (who also claimed to be its President) on the ground that the industrial court has no jurisdiction over the subject-matter o" the petition "because a certification proceeding in the Court of Industrial Relations is not the proper forum for the adjudication of the question as to who is the lawful president of a legitimate labor organization."On May 29, 1971, after hearing the petition, Judge Salvador rendered a decision certifying the —... ALPAP composed only of pilots employed by PAL with Capt. Ben Hur Gomez as its president, as the sole and exclusive Bargaining representative of all the pilots employed by PAL and are on active flights and/or operational assignments, and as such is entitled to all the rights and privileges of a legitimate labor organization, including the right to its office and its union funds.

The following circumstances were cited by Judge Salvador to justify the conclusions reached by him in his decision, namely:(a) that there has been no certification election within the Period of 12 months prior to the date the petition for certification was filed;(b) that the PAL entered into a collective bargaining agreement with ALPAP for "pilots in the employ of the Company" only for the duration of the period from February 1, 1969 to January 31, 1972:(c) that PAL pilots belonging to the Gaston, group, in defiance of court orders issued in Case 101-IPA(B) (see L-35206, infra) retired/resigned en masse from the PAL and retired/resigned accompanied this with actual acts of not reporting for work;(d) that the pilots affiliated with the Gaston group tried to then deposits and other funds from the ALPAP Cooperative Credit union on the ground that they have already retired/resigned from PAL;


(e) that some of the members of the Gaston Group joined another airline after their retirement/resignation;(f) that the Gaston group claimed before the industrial court that the order enjoining them from retiring or resigning constituted a violation of the prohibition against involuntary servitude (see L-35206, infra);(g) that the contention that the mess retirement or resignation was merely an involuntary protest by those affiliated with the Gaston group is not borne out by the evidence as, aside their aforementioned acts, the said group of pilots even filed a civil complaint against the PAL in which the cessation of their employment with PAL was strongly expressed by them.It appears that prior to the filing of the certification petition below, a general ALPAP membership meeting was held on October 30, 1970, at which 221 out of 270 members adopted a resolution amending ALPAP's constitution and by-laws by providing in a new section thereof that —Any active member who shall be forced to retire or forced to resign or otherwise terminated for union activities as solely determine' by the Association shall have the option to either continue to be and remain as an active member in good standing or to resign in writing his active membership with the Association. ...According to ALPAP (Gaston), the foregoing amendment was adopted "In anticipation on the fact that they may be forced to resign or retire because of their 'union activities.' At this period of time, PAL and ALPAP were locked in a labor dispute certified by the President to the Industrial court and docketed as Case 101-IPA(B) (see L-35206, infra).On December 12, 1970, despite a no-work-stoppage order of the industrial court, a substantial majority of ALPAP members filed letters of retirement/resignation from the PAL.Thereafter, on December 18-22, 1970, an election of ALPAP officers was held. resulting in the election of Felix C. Gaston as President by 180 votes. Upon the other hand, on December 23, 1970, about 45 pilots who did not tender their retirement or resignation the PAL gathered at the house of Atty. Morabe and elected Ben Hur Gomez as ALPAP President.On June 3, 1971, ALPAP (Gaston) filed an opposition in Case 101-IPAB to an urgent ex parte motion of the PAL to enjoin the members of ALPAP from retiring or resigning en masse It was claimed by ALPAP (Gaston) that —1. Insofar as herein oppositors are concerned, the allegations of respondent that their 'resignations' and 'retirements' are sham resignations and retirements and that 'There is no honest or genuine desire to terminate the employee relationship with PAL are completely false. Their bona fide intention to terminate their employer-employee relationship with PAL is conclusively shown by the fact that they have not sought reinstatement in or re-employment by PAL and also by the fact that they are either seeking employment in another airline company;2. Respondent in effect recognized such bona fide intention of the herein oppositors as shown by the fact that it accepted said resignations and retirements and did not initiate any contempt proceedings against them; and3. The action of herein oppositors in filing their resignations and retirements was a legitimate exercise of their legal and constitutional rights and the same, therefore, cannot be considered as a valid ground to deprive them of benefits which they had already earned including, among others, retirement benefits to which they are entitled under the provisions of an existing contract between petitioner and respondent. Such deprivation would constitute impairment of the obligations of contract.On June 15, 1971, the industrial court en banc, acting on a motion for reconsideration filed by ALPAP (Gaston) in Case 2939-MC against the decision of Judge Salvador, denied the same. The said court's resolution was then appealed to this Court (L-33705).

RULINGThis Court nonetheless finds, after a close and dispassionate study of the facts on record, that the industrial court's

conclusion, that the mentioned amendment to the ALPAP constitution and by-laws is illegal (a) because it was not adopted in accordance with the procedure prescribed and (b) because member of labor organization cannot adopt an amendment to their fundamental charter so as to include non employees (of PAL) as member, is erroneous.

Their Court cannot likewise subcribe to the restrictive interpretation made by the court below of the term "labor organization," which Section 2(e) of R.A. 875 defines as any union or association of employees which exist, in whole or in part, for the purpose of the collective bargaining or dealing with employers concerning terms and conditions of employment." The absence of the condition which the court below would attach to the statutory concept of a labor organization, as being limited to the employees of particular employer, is quite evident from the law. The emphasis of Industrial Peace Act is clearly on the purposes for which a union or association of employees established rather than that membership therein should be limited only to the employees of a particular employer. Trite to say, under Section 2(h) of R.A 875 "representative" is define as including "a legitimate labor organization or any officer or agent of such organization, whether or not employed by the employer or employee whom he represents." It cannot be overemphasized likewise that labor dispute can exist "regardless of whether the disputants stand in the proximate relation of employer and employee. (Section 2(j), R.a. 875).


In our opinion, it is perfectly within the powers and prerogatives of a labor organization, through its duly elected officers, to authorize a segment of that organization to bargain collectively with a particular employer, particularly where those constituting the segment share a common and distinguishable interest, apart from the rest of their fellow union members, on matters that directly affect the terms and conditions of their particular employment. As the circumstances pertinent to the case at bar presently stand, ALPAP (Gaston) has extended recognition to ALPAP (Gomez) to enter and conclude collective bargaining contracts with PAL. Having given ALPAP (Gomez) this authority, it would be clearly unreasonable on the part of ALPAP (Gaston) to disallow the former a certain use of the office, funds and name of ALPAP when such use is necessary or would be required to enable ALPAP (Gomez) to exercise, in a proper manner, its delegated authority to bargain collectively with PAL. Clearly, an intelligently considered adjustment of grievances and integration of the diverse and varying interests that not infrequently and, often, unavoidably permeate the membership of a labor organization, will go a long way, in achieving peace and harmony within the ranks of ALPAP. Of course, in the eventuality that the pilots presently employed by PAL and who subscribe to the leadership of Ben Hur Gomez should consider it to their better interest to have their own separate office, name and union funds, nothing can prevent them from setting up a separate labor union. In that eventuality, whatever vested rights, interest or participation they may have in the assets, including cash funds, of ALPAP as a result of their membership therein should properly be liquidated in favor of such withdrawing members of the association.

3. LABOR DISPUTEArt. 212"Labor dispute" includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.

SAN MIGUEL CORP. EMPLOYEES UNION v. BERSAMIRAThe company w/c hired the services of workers supplied by independent contractors who later signed up

as members of the bargaining union because they contended that they were already regular employees of the company by virtue of their long years of service ranging from 6 mos. to 15yrs, raised the defense of lack of EE-ER relationship between the company ans said workers, nonetheless, a labor dispute can still exist regardless of whether the disputants stand in the proximate relationship of employer and employee, provided the controversy concerns, among others, the terms and conditions of employment or a change of arrangement thereon. The existence of labor dispute is not negativated by the non-existence of EE-ER relationship.

The term employer is not imited to an employee of a particular employer. Economic issues with persons not in his actual employ.

GOLD CITY INTEGRATED PORT SERVICE INC. v. NLRC

A strike, considered as the most effective weapon of labor, 13 is defined as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. 14 A labor dispute includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employers and employees. 15

Private respondents and their co-workers stopped working and held the mass action on April 30, 1985 to press for their wages and other benefits. What transpired then was clearly a strike, for the cessation of work by concerted action resulted from a labor dispute.

11 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304TEST FOR DETERMINING LABOR DISPUTE

As We have said in Our decision, "(a) bare recital of the above facts renders undeniable the far-from-commendable efforts of petitioner to set at naught a return-to-work order. Considering that it is of a peremptory character and its execution was long overdue, the challenged actuation of respondent court had all the earmarks of legality." It is not true then that We have not resolved the issue referred to. Indeed, all that need be added here is that while it is true that labor cases, especially those involving claims for compensation due the workers, must be resolved on the basis of all material facts, and it is the inescapable duty of all parties concerned, including the court, to disregard all technical rules in barring 1 and discovering them, on the other hand, it is as important that said cases must be decided on time for the obvious reason that the claimants are not in a position to engage in any long drawn proceedings without risking either their wherewithal or their convictions. The Courts cannot leave the progress of the case to the convenience of the parties, particularly, the employer who can afford to keep it dragging. Accordingly, where the inquiry into the material facts is unreasonably delayed by unwarranted and unexplained actuations of any of the parties, no abuse of discretion is committed by the court if it deems the right of such offending party to present his factual side of the issue waived. (RCPI v. Phil Comm. GR L-37662)

C. LABOR RELATIONS POLICY

1. DISPUTE SETTLEMENT METHODOLOGY

2. COLLECTIVE BARGAINING

KIOK LOY v. NLRC

Collective bargaining which is defined as negotiations towards a collective agreement, 6 is one of the democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse "to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievance or question arising under such an agreement and executing a contract incorporating such agreement, if requested by either party.

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. 7 The mechanics of collective bargaining is set in motion only when the following jurisdictional preconditions are present, namely, (1) possession of the status of majority representation of the employees' representative in accordance with any of the means of selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions are undisputedly present in the instant case.

A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is specially true where the Union's request for a counter proposal is left unanswered. 9 Even during the period of compulsory arbitration before the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its opposition thereto. 10

The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications11 the rule had been laid down that "unfair labor practice is committed when it is shown that the respondent

12 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304employer, after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal This doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while the law does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation with an open mind and make a reasonable effort to reach a common ground of agreement

3.TRADE UNIONISM

Art. 211.

1. To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development;

2. To foster the free and voluntary organization of a strong and united labor movement;

Art. 212.

Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.

4. WORKER ENLIGHTENMENT

Art. 241 (p)

1. It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws.

Art. 277. Miscellaneous provisions.

All unions are authorized to collect reasonable membership fees, union dues, assessments and fines and other contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings. (As amended by Section 33, Republic Act No. 6715, March 21, 1989)

VICTORIAL v. INCIONG 1988

This is a matter of responsibility and of answerability. Petitioner as a union leader, must see to it that the policies and activities of the union in the conduct of labor relations are within the precepts of law and any deviation from the legal boundaries shall be imputable to the leader. He bears the responsibility of guiding the union along the path of law and to cause the union to demand what is not legally demandable, would foment anarchy which is a prelude to chaos.

Petitioner should have known and it was his duty to impart this imputed knowledge to the members of the union that employees and laborers in non- profit organizations are not covered by the provisions of the Industrial Peace Act and the Court of Industrial Relations [in the case at bar, the Court of First Instance] has no jurisdiction to entertain petitions of labor unions or organizations of said non-profit organizations for certification as the exclusive bargaining representatives of said employees and laborers. 7

INDUSTRIAL PEACE

Art. 211

To ensure a stable but dynamic and just industrial peace;

13 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304RIGHT TEST

PAL v. NLRC 1993

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

LABOR INJUNCTION

Art. 254. Injunction prohibited. No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 of this Code. (As amended by Batas Pambansa Bilang 227, June 1, 1982)

Art. 218

1. To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party: Provided, That no temporary or permanent injunction in any case involving or growing out of a labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with opportunity for cross-examination, in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only after a finding of fact by the Commission, to the effect:

1. That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained, but no injunction or temporary restraining order shall be issued on account of any threat, prohibited or unlawful act, except against the person or persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof;

2. That substantial and irreparable injury to complainant’s property will follow;

3. That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief;

4. That complainant has no adequate remedy at law; and


5. That the public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.

Art. 266. Requirement for arrest and detention. Except on grounds of national security and public peace or in case of commission of a crime, no union members or union organizers may be arrested or detained for union activities without previous consultations with the Secretary of Labor.

CALTEX FILIPINO MANAGERS AND SUPERVISORS ASSN. v. CIR 1972

The prohibition to issue labor injunctions is designed to give labor a comparable bargaining power with capital and must be liberally construed to that end (U.S. vs. Brotherhood of Locomotive Engineers, 79 F. Supp. 485,Certiorari denied, 69 S. Ct. 137, 335 U.S. 867, cause remanded on other grounds, 174 F. 2nd 160, 85 U.S. App. D.C., certiorari denied 70 S. Ct. 140, 338 U.S. 872, 94 L. Ed. 535). It is said that the prohibition creates substantive and not purely procedural law. (Oregon Shipbuilding Corporation vs. National Labor Relations Board, 49 F. Supp. 886). Within the purview of our ruling, speaking through Justice Labrador, in Social Security Employees Association (PAFLU), et al. vs. The Hon. Edilberto Soriano, et al. (G.R. No. L-20100, July 16, 1964, 11 SCRA 518, 520), there can be no injunction issued against any strike except in only one instance, that is, when a labor dispute arises in an industry indispensable to the national interest and such dispute is certified by the President of the Philippines to the Court of Industrial Relations in compliance with Sec. 10 of Republic Act No. 875. As a corollary to this, an injunction in an uncertified case must be based on the strict requirement See. 9 (d) of Republic Act No. 875; the purpose of such injunction is not to enjoin the strike itself, but only unlawful activities. To the extent, then, that the Company sought injunctive relief under Sec. 9(d) of Republic Act No.875, respondent court had jurisdiction over the Company's "Urgent Petition" dated April 26, 1965.

As to the "contempt aspect" of Case No. 1484-MC(1), the jurisdiction of respondent court over it cannot be seriously questioned it appearing that Judge Tabigne in good faith thought that his "advice" to the Association during the hearing on March 29, 1965 not to strike amounted a valid order. This is not to say, however, that respond court did not err in finding that the advice given by Judgre Tabigne during the hearing on March 29, 1965 really constituted an order which can be the basis of a contempt proceeding. For, in our opinion, what Judge Tabigne statement during said hearing should be construed what actually was — an advice. To say that it was an order would be to concede that respondent court could validly enjoin strike, especially one which is not certified in accord with Sec. 10 of Republic Act No. 875. To adopt the view of respondent court would not only set at naught the policy of the law as embodied in the said statute against issuance of injunctions, but also remove from the hands of labor unions and aggrieved employees an effective lawful weapon to either secure favorable action on their economic demand or to stop unfair labor practices on the part of their employer.

It must be liberally construed in favor of the workingman as the same invoves not merely procedural but substantive rights.

An injunction is a preservative remedy for the protection of a person’s substantive rights or interests. Pressing necessity requires that it should be resorted to only to avoid injurious consequences w/c cannot be remedied under any measure of consideration.

the law proscribes the issuance of injunctive relief only in those cases involving or growing out of a labor dispute. general rule: no temporary injunction or restraining order in any case involving or growing out of a labor

dispute shall be issued by any court or other entity. Art 254 excepts the situations contemplated in Art 218 and 264

15 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304PART TWO: RIGHT TO SELF-ORGANIZATION

BASIS OF RIGHT

CONSTITUTION

ARTICLE IIIBill of RightsSECTION 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

ARTICLE XIINational Economy and PatrimonySECTION 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant.

ARTICLE IIIBill of Rights(6) The right to form associations or societies for purposes not contrary to law shall not be abridged.

STATUTORY

Article 243. Coverage and employees right to self-organization. -All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. (As amended by Batas Pambansa Bilang 70, May 1, 1980).

Article 244. Right of employees in the public service. -Employees of government corporations established under the Corporation Code shall have the right to organize and to bargain collectively with their respective employers. All other employees in the civil service shall have the right to form associations for purposes not contrary to law. (As amended by Executive Order No. 111, December 24, 1986).

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 the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. The rank-and-file union and the supervisorsâ€™ union operating within the same establishment may join the same federation or national union. (As amended by Section 18, Republic Act No. 6715, March 21, 1989 and Section 8, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007).

Article 245-A. Effect of inclusion as members of employees outside the bargaining unit. - The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union. (Introduced as new provision by Section 9, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007).


VASSAR INDUSTRIES EMPLOYEES UNION v. ESTRELLA

In U.E. Automotive Employees and Workers Union v. Noriel, 8 reference was made to the fact that a notable feature of our Constitution is that "freedom of association is explicitly ordained; it is not merely derivative, peripheral or penumbral, as is the case in the United States. It can trace its origin to the Malolos Constitution." 9 An earlier decision, Federacion Obrera v. Noriel, 10 sets forth the scope and amplitude of such right: "Clearly, what is at stake is the constitutional right to freedom of association on the part of employees. Petitioner labor union was in the past apparently able to enlist the allegiance of the working force in the Anglo-American Tobacco Corporation. Thereafter, a number of such individuals joined private respondent labor union. That is a matter clearly left to their sole uncontrolled judgment. There is this excerpt from Pan American World Airways, Inc. v. Pan American Employees Association: "There is both a constitutional and statutory recognition that laborers have the right to form unions to take care of their interests vis-a-viz their employees. Their freedom to form organizations would be rendered nugatory if they could not choose their own leaders to speak on their behalf and to bargain for them." It cannot be otherwise, for the freedom to choose which labor organization to join is an aspect of the constitutional mandate of protection to labor. Prior to the Industrial Peace Act, there was a statute setting for the guidelines for the registration of labor unions. As implied in Manila Hotel Co. v. Court of Industrial Relations, it was enacted pursuant to what is ordained in the Constitution. Thus, in Umali v. Lovina, it was held that mandamus lies to compel the registration of a labor organization. There is this apt summary of what is signified in Philippine Land-Air-Sea Labor Union v. Court of Industrial Relations, "to allow a labor union to organize itself and acquire a personality distinct and separate from its members and to serve as an instrumentality to conclude collective bargaining agreements ... ." It is no coincidence that in the first decision of this Court citing the Industrial Peace Act, Pambujan United Mine Workers v. Samar Mining Company, the role of a labor union as the agency for the expression of the collective will affecting its members both present and prospective, was stressed. That statute certainly was much more emphatic as to the vital aspect of such a right as expressly set forth in the policy of the law. What is more, there is in such enactment this categorical provision on the right of employees to self-organization: "Employees shall have the right to self-organization and to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection." The new Labor Code is equally explicit on the matter. Thus: "The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure and just and humane conditions of work." 11

SINGER SEWING MACHINE CO. v. DRILON

The present case mainly calls for the application of the control test, which if not satisfied, would lead us to conclude that no employer-employee relationship exists. Hence, if the union members are not employees, no right to organize for purposes of bargaining, nor to be certified as such bargaining agent can ever be recognized. The following elements are generally considered in the determination of the employer-employee relationship; "(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct — although the latter is the most important element"

The Collection Agency Agreement defines the relationship between the Company and each of the union members who signed a contract. The petitioner relies on the following stipulations in the agreements: (a) a collector is designated as a collecting agent" who is to be considered at all times as an independent contractor and not employee of the Company; (b) collection of all payments on installment accounts are to be made monthly or oftener; (c) an agent is paid his compensation for service in the form of a commission of 6% of all collections made and turned over plus a bonus on said collections; (d) an agent is required to post a cash bond of three thousand pesos (P3,000.00) to assure the faithful performance and observance of the terms and conditions under the agreement; (e) he is subject to all the terms and conditions in the agreement; (f) the agreement is effective for one year from the date of its execution and renewable on a

17 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304yearly basis; and (g) his services shall be terminated in case of failure to satisfy the minimum monthly collection performance required, failure to post a cash bond, or cancellation of the agreement at the instance of either party unless the agent has a pending obligation or indebtedness in favor of the Company.

The nature of the relationship between a company and its collecting agents depends on the circumstances of each particular relationship. Not all collecting agents are employees and neither are all collecting agents independent contractors. The collectors could fall under either category depending on the facts of each case.

The Agreement confirms the status of the collecting agent in this case as an independent contractor not only because he is explicitly described as such but also because the provisions permit him to perform collection services for the company without being subject to the control of the latter except only as to the result of his work. After a careful analysis of the contents of the agreement, we rule in favor of the petitioner.

The requirement that collection agents utilize only receipt forms and report forms issued by the Company and that reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the job of collection is to be performed. The agreement itself specifically explains that receipt forms shall be used for the purpose of avoiding a co-mingling of personal funds of the agent with the money collected on behalf of the Company. Likewise, the use of standard report forms as well as the regular time within which to submit a report of collection are intended to facilitate order in office procedures. Even if the report requirements are to be called control measures, any control is only with respect to the end result of the collection since the requirements regulate the things to be done after the performance of the collection job or the rendition of the service.

The monthly collection quota is a normal requirement found in similar contractual agreements and is so stipulated to encourage a collecting agent to report at least the minimum amount of proceeds. In fact, paragraph 5, section b gives a bonus, aside from the regular commission every time the quota is reached. As a requirement for the fulfillment of the contract, it is subject to agreement by both parties. Hence, if the other contracting party does not accede to it, he can choose not to sign it. From the records, it is clear that the Company and each collecting agent intended that the former take control only over the amount of collection, which is a result of the job performed.

The respondents' contention that the union members are employees of the Company is based on selected provisions of the Agreement but ignores the following circumstances which respondents never refuted either in the trial proceedings before the labor officials nor in its pleadings filed before this Court.

1. The collection agents are not required to observe office hours or report to Singer's office everyday except, naturally and necessarily, for the purpose of remitting their collections.

2. The collection agents do not have to devote their time exclusively for SINGER. There is no prohibition on the part of the collection agents from working elsewhere. Nor are these agents required to account for their time and submit a record of their activity.

3. The manner and method of effecting collections are left solely to the discretion of the collection agents without any interference on the part of Singer.

4. The collection agents shoulder their transportation expenses incurred in the collections of the accounts assigned to them.

5. The collection agents are paid strictly on commission basis. The amounts paid to them are based solely on the amounts of collection each of them make. They do not receive any commission if they do not effect any collection even if they put a lot of effort in collecting. They are paid commission on the basis of actual collections.

18 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-03046. The commissions earned by the collection agents are directly deducted by them from the amount of collections they are able to effect. The net amount is what is then remitted to Singer." (Rollo, pp. 7-8)

If indeed the union members are controlled as to the manner by which they are supposed to perform their collections, they should have explicitly said so in detail by specifically denying each of the facts asserted by the petitioner. As there seems to be no objections on the part of the respondents, the Court finds that they miserably failed to defend their position.

A thorough examination of the facts of the case leads us to the conclusion that the existence of an employer-employee relationship between the Company and the collection agents cannot be sustained.

The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. This is consistent with the first rule of interpretation that the literal meaning of the stipulations in the contract controls (Article 1370, Civil Code; La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor, Relations, 123 SCRA 679 [1983]). No such words as "to hire and employ" are present. Moreover, the agreement did not fix an amount for wages nor the required working hours. Compensation is earned only on the basis of the tangible results produced, i.e., total collections made

METROLAB INDUSTRIES v. ROLDAN CONFESOR

This Court recognizes the exercise of management prerogatives and often declines to interfere with the legitimate business decisions of the employer. However, this privilege is not absolute but subject to limitations imposed by law. In PAL vs. NLRC, (225 SCRA 301 [1993]), we issued this reminder: ... the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was held that managements prerogatives must be without abuse of discretion ...All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by limi(ations found in law, a collective bargaining agreement, or the general principles of fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]).

3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench constitutes one of the exceptions. The Secretary of Labor is expressly given the power under the Labor Code to assume jurisdiction and resolve labor disputes involving industries indispensable to national interest. The disputed injunction is subsumed under this special grant of authority. Art. 263 (g) of the Labor Code specifically provides that: x x x (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. . . . That Metrolabs business is of national interest is not disputed. Metrolab is one of the leading manufacturers and suppliers of medical and pharmaceutical products to the country. Metrolabs management prerogatives, therefore, are not being unjustly curtailed but duly balanced with and tempered by the limitations set by law, taking into account its special character and the particular circumstances in the case at bench.

4. ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN, FORM AND ASSIST ANY LABOR ORGANIZATION; PROHIBITION EXTENDED TO CONFIDENTIAL EMPLOYEES. - Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of

19 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records.

5. ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND FILE BARGAINING UNIT; NOT TANTAMOUNT TO DISCRIMINATION. - Confidential employees cannot be classified as rank and file. As previously discussed, the nature of employment of confidential employees is quite distinct from the rank and file, thus, warranting a separate category. Excluding confidential employees from the rank and file bargaining unit, therefore, is not tantamount to discrimination.

There is no prohibition on the law or in the IRR regarding the right of supervisory employees to organize a labor organization or worker’s association of their own. They are, however, not allowed to become members of a labor union composed of rank-and-file employees.

As far as managerial employees are concerned, they are absolutely prohibited from forming, joining, or assisting any labor unions for purposes of CB.

Alien employees w/ valid working permits issued by DOLE may exercise their right to self-organization and join or assist labor unions for purposes of CB but only of they are nationals of a country w/c grants the same or similar rights to Filipino workers, as certified by the DFA or w/c has ratified either ILO convention No. 87

Any employee, whether employed for a definite period or not, shall beginning on the first day of his service, be eligible for membership in any labor organization.

Ambulant, intermittent and other workers, the self-employed, rural workers and those w/o any definite employers may form labor organizations for their mutual aid and protection and other legitimate purposes except CB.

Right to self-organization cannot be the subject of a CBA negotiation. Regardless of the challenged employees’ designations, whether they are employed as supervisors or in the confidential payrolls, if the nature of their job does not fall under the definition of “managerial” as defined in the LC, they are eligible to be members of the bargaining unit and to vote in the certification election.

Labor organizations should function and operate w/ the least intervention or interference from the govt.It is only when there exists intra-union or inter-union conflicts that labor officials should not hesitate to enforce strictly the law and regulations governing trade unions even if the course of action would curtail the so-called union autonomy and freedom from govt. interference.

EXTENT AND SCOPE OF RIGHT

REYES V. TRAJANO

Guaranteed to all employees or workers is the "right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining." This is made plain by no less than three provisions of the Labor Code of the Philippines. 2 Article 243 of the Code provides as follows: 3

ART. 243. Coverage and employees right to self-organization. — All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes or collective bargaining.Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection.

Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to "interfere with, restrain or coerce employees in the exercise of their right to self-organization." Similarly, Article 249 (a) makes it an unfair labor practice for a labor organization to "restrain or coerce employees in the exercise of their rights to self-organization . . . "

20 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The same legal proposition is set out in the Omnibus Rules Implementing the Labor Code, as amended, as might be expected Section 1, Rule II (Registration of Unions), Book V (Labor Relations) of the Omnibus Rules provides as follows; 4

Sec. 1. Who may join unions; exception. — All persons employed in commercial, industrial and agricultural enterprises, including employees of government corporations established under the Corporation Code as well as employees of religious, medical or educational institutions, whether operating for profit or not, except managerial employees, shall have the right to self-organization and to form, join or assist labor organizations for purposes of collective bargaining. Ambulant, intermittent and without any definite employers people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection.

xxx xxx xxx

The right of self-organization includes the right to organize or affiliate with a labor union or determine which of two or more unions in an establishment to join, and to engage in concerted activities with co-workers for purposes of collective bargaining through representatives of their own choosing, or for their mutual aid and protection, i.e., the protection, promotion, or enhancement of their rights and interests. 5

Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a labor organization, is subsumed in the right to join, affiliate with, or assist any union, and to maintain membership therein. The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising said right. It is self-evident that just as no one should be denied the exercise of a right granted by law, so also, no one should be compelled to exercise such a conferred right. The fact that a person has opted to acquire membership in a labor union does not preclude his subsequently opting to renounce such membership. 6

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

That the INK employees, as employees in the same bargaining unit in the true sense of the term, do have the right of self-organization, is also in truth beyond question, as well as the fact that when they voted that the employees in their bargaining unit should be represented by "NO UNION," they were simply exercising that right of self-organization, albeit in its negative aspect.

KNITJOY v. CALLEJA 214 SCRA 174

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; ONE COMPANY-ONE UNION POLICY; EXCEPTION. — The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the greater mutual benefits which the parties could derive, especially in the case of employees whose bargaining strength could undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and dissension, is not without exceptions. The present Article 245 of the Labor Code expressly allows supervisory

21 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304employees who are not performing managerial functions to join, assist or form their separate union but bars them from membership in a labor organization of the rank-and-file employees. Even Section 2(c), Rule V, Book V of the Implementing Rules and Regulations of the Labor Code, which seeks to implement the policy, also recognizes exceptions. The usual exception, of course, is where the employer unit has to give way to the other units like the craft unit, plant unit, or a subdivision thereof, the recognition of these exceptions takes into account the policy to assure employees of the fullest freedom in exercising their rights. Otherwise stated, the one company-one union policy must yield to the right of the employees to form unions or associations for purposes not contrary to law, to self-organization and to enter into collective bargaining negotiations, among others, which the Constitution guarantees.

2. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO FROM UNION OR ASSOCIATIONS; SCOPE. — The right to form a union or association or to self-organization comprehends two (2) broad notions, to wit: (a) the liberty or freedom, i.e., the absence of restraint which guarantees that the employee may act for himself without being prevented by law, and (b) the power, by virtue of which an employee may, as he pleases, join or refrain from joining an association. (Victoriano v. Elizalde Rope Workers’ Union, 59 SCRA 54).

3. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; ONE COMPANY-ONE UNION POLICY; NOT APPLICABLE WHERE EXISTING UNION COVERED ONLY ONE CLASS OF EMPLOYEES; CASE AT BAR. — in the bargaining history of KNITJOY, the CBA has been consistently limited to the regular rank-and-file employees paid on a daily or piece-rate basis. On the other hand, the rank-and-file employees paid on a monthly basis were never included within its scope. Respondent KMEU’s membership is limited to the latter class of employees, KMEU does not seek to dislodge CFW as the exclusive bargaining representative for the former. The records further disclose that in the certification solicited by TUPAS and during the elections which followed thereafter, resulting in the certification of CFW as the exclusive bargaining representative, the monthly-paid employees were expressly excluded. Thus, the negotiations between CFW and KNITJOY following such a certification could only logically refer to the rank-and-file employees paid on a daily or piece-rate basis. Clearly therefore, KNITJOY and CFW recognize that insofar as the monthly-paid employees are concerned, the latter’s constituting a separate bargaining unit with the appropriate union as sole bargaining representative, can neither be prevented nor avoided without infringing on these employees’ rights to form a union and to enter into collective bargaining negotiations. Stated differently, KNITJOY and CFW recognize the fact that the existing bargaining unit in the former is not — and has never been — the employer unit. Given this historical and factual setting, KMEU had the unquestioned and undisputed right to seek certification as the exclusive bargaining representative for the monthly-paid rank-and-file employees; both KNITJOY and CFW cannot block the same on the basis of this Court’s declaration in Bulletin Publishing Corp. v. Hon. Sanchez 15 and General Rubber and Footwear Corp. v. Bureau of Labor Relations (155 SCRA 283 [1987]) regarding the one-company-one union concept.

4. ID.; ID.; ID.; CERTIFICATION ELECTION; RESULTS THEREOF CONFINED ONLY TO THE GROUP IT REPRESENTS; CBA ENTERED DOES NOT BAR HOLDING OF ANOTHER CERTIFICATION ELECTION FOR THE OTHER GROUP; CASE AT BAR. — Considering that (a) the TUPAS solicited certification election was strictly confined to the rank-and-file employees who are paid on a daily or piece-rate basis, (b) the results of the election must also necessarily confine the certified union’s representation to the group it represents and (c) the issue of the plight of the monthly-paid employees was still pending, KNITJOY and CFW clearly acted with palpable bad faith and malice in including within the scope of the new CBA these monthly-paid employees. Thus was effected a conspiracy to defeat and suppress the right of the KMEU and its members to bargain collectively and negotiate for themselves, to impose upon the latter a contract the negotiation for which they were not even given notice of, consulted or allowed to participate in, and to oust from the BLR the pending appeal on the certification issue. In the latter case, KNITJOY and CFW are guilty of contumacious conduct. It goes without saying then that the new CBA cannot validly include in its scope or coverage the monthly-paid rank-and-file employees of KNITJOY. It does not bar the holding of a certification election to determine

22 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304their sole bargaining agent, and the negotiation for and the execution of a subsequent CBA between KNITJOY and the eventual winner in said election (Section 4, Rule V, Book V of the Rules Implementing the Labor Code).

KAMADA v. FERRER-CALLEJA

As regards petitioners battle cry of one union in one company, this Court has already laid down in Knitjoy Manufacturing, Inc. vs. Ferrer-Calleja[14] the exceptions to that policy. The Court, through Mr. Justice Hilario G. Davide, Jr., held:

1. The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the greater mutual benefits which the parties could derive, especially in the case of employees whose bargaining strength could undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and dissension, is not without exceptions.

The present Article 245 of the Labor Code expressly allows supervisory employees who are not performing managerial functions to join, assist or form their separate union but bars them from membership in a labor organization of the rank-and-file employees. It reads:

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.

This provision obviously allows more than one union in a company.

Even Section 2 (c), Rule V, Book V of the Implementing Rules and Regulations of the Labor Code, which seeks to implement the policy, also recognizes exceptions. It reads:

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:

x x x

(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; x x x. (Emphasis supplied)

The usual exception, of course, is where the employer unit has to give way to the other units like the craft unit, plant unit, or a subdivision thereof; the recognition of these exceptions takes into account the policy to assure employees of the fullest freedom in exercising their rights. (PASCUAL. C., Labor Relations Law, 1986, ed., 109) Otherwise stated, the one company-one union policy must yield to the right of the employees to form unions or associations for purposes not contrary to law, to self-organization and to enter into collective bargaining negotiations, among others, which the Constitution guarantees.(Section 8, Article III and Section 3, Article XIII, 1987 Constitution).

Moreover, the issue of which union truly represents the working force should be raised during the certification election, not during the registration period. Indeed, a certification election provides the most effective and expeditious mode to determine the real representatives of the working force in the appropriate bargaining unit.[15] It may be well to add that Section 5, Rule II, Book V[16] of the Omnibus Rules Implementing the Labor Code, enumerates the grounds for the denial of registration to local unions, and the existence of another union is not one of these grounds.

http://sc.judiciary.gov.ph/jurisprudence/1997/sep1997/104692.htm#_edn16



23 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304UNION OF SUPERVISORS v. SEC. OF LABOR

Moreover, Luna's remarks at the meeting of an official board are privileged in nature as a valid. exercise of his constitutional freedom of expression. He addressed his remarks to the body that has jurisdiction over the question of management of the assets of the Provident Fund. Luna's remarks were intended to protect the interests of the members of the Provident Fund from what he honestly believed was a risky venture on the part of the management. His protests could even be treated as union activity by the Industrial Peace Act, which assures the employees' right "to self-organization and to form, join or assist labor organizations of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid and protection ... " (Sec. 3, Rep. Act 875). This is so because Luna's membership in the PF Board of Trustees was by virtue of his being president of the RB Union of Supervisors. The Provident Fund was itself created as a result of the union's collective bargaining agreement with the bank. Luna was therefore acting out his role as protector of his constituents when he voiced out his apprehension and protests over the plan of management. It matters not that he acted singly or individually. What is important is that he had been selected by the supervisors of respondent bank to be their president and representative in the PF Board of Trustees. His actuations as such should therefore be considered as legitimate exercise of the employees' right to self-organization and as an activity for their mutual aid and protection, aside from being privileged communication protected by the constitutional guarantee on free speech. His remarks were in defense of the interest of the Provident Fund, part of which comes from the contribution of the rank and file employees. Moreover, his remarks had factual basis. As heretofore stated, the Central Bank took over the management of the respondent Republic Bank because it became distressed due to mismanagement. And his remarks were addressed to the Board of Trustee which has jurisdiction over the matter.

WORKERS WITH RIGHT TO SELF-ORGANIZATTION

ALL EMPLOYEES

ALLIANCE OF NATIONALIST, ET AL. v. SAMAHANG

There is nothing in the records which support the Deputy minister's conclusion that the petitioner is not an employee of respondent ALU. The mere fact that the respondent is a labor union does not mean that it cannot be considered an employer of the persons who work for it. Much less should it be exempted from the very labor laws which it espouses as labor organization. In case of es v. Brotherhood Labor Unity Movement in the Phillipines Zamora, , (147 SCRA 49, 54), we outlined the factors in ascertaining an employer-employee realtionship:

In determining the existence of an employer-employee relationship, the elements that are generally considered are the following : (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It is the so-called 'control test' that is the most important element (Investment Planning Corp. of the Phils. v. The Social Security System, 21 SCRA 492; Mafinco Trading Corp. v. Ople, supra, and Rosario Brothers, Inc. v. Ople, 131 SCRA 72)

In the case at bar, the Regional director correctly found that the petitioner was an employee of the respondent union as reflected in the latter's individual payroll sheets and shown by the petitioner's membership with the Social Security System (SSS) and the respondent union's share of remittances in the petitioner's favor. Even more significant, is the respondent union's act of filing a clearance application with the MOL to terminate the petitioner's services. Bautista was selected and hired by the Union. He was paid wages by the Union. ALU had the power to dismiss him as indeed it dismissed him. And definitely, the Union tightly controlled the work of Bautista as one of its organizers. There is absolutely no factual or legal basis got deputy Minister Inciong's decision.

We are, thus, constrained to reverse the findings of the respondent Deputy Minister. However, the records show that antipathy and antagonism between the petitioner and the respondent union militate against the former's reinstatement.

24 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304ALU would not want to have a union organizer whom it does not trust and who could sabotage its efforts to unionize commercial and industrial establishments. Severance pay, therefore, is more proper in order. As we have ruled in the case of Asiaworld Publishing House, Inc. v. Hon. Blas Ople, et al., (G.R. No. 56398, July 23, 1987) quoting the cast of Balaquezon EWTU v. Zamora, (97 SCRA 5,8):

It should be underscored that the backwages are being awarded on the basis of equity or in the nature of severance pay. This means that a monetary award is to be paid to the employees as an alternative to reinstatement which can no longer be effected in view of the long passage of time or because of the realities of the situation. (Emphasis supplied)

KAPATIRAN SA MEAT AND CANNING DIVISION v. CALLEJA

We find no merit in the petition. The public respondent did not err in dismissing the petitioner’s appeal in BLR Case No. A-12-389-87. This Court’s decision in Victoriano v. Elizalde Rope Workers’ Union, 59 SCRA 54, upholding the right of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to their religious beliefs, does not bar the members of that sect from forming their own union. The public respondent correctly observed that the "recognition of the tenets of the sect . . . should not infringe on the basic right of self-organization granted by the constitution to workers, regardless of religious affiliation."cralaw virtua1aw library

The fact that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day freedom period of the existing CBA, does not foreclose the right of the rival union, NEW ULO, to challenge TUPAS’ claim to majority status, by filing a timely petition for certification election on October 13, 1987 before TUPAS’ old CBA expired on November 15, 1987 and before it signed a new CBA with the company on December 3, 1987. As pointed out by Med-Arbiter Abdullah, a "certification election is the best forum in ascertaining the majority status of the contending unions wherein the workers themselves can freely choose their bargaining representative thru secret ballot." Since it has not been shown that this order is tainted with unfairness, this Court will not thwart the holding of a certification election (Associated Trade Unions [ATU] v. Noriel, 88 SCRA 96).

SUPERVISORS

TEST

FILOIL REFINERY CORP. v. FILOIL SUPERVISORY AND CONFIDENTIAL EMPLOYEES ASSN.

Petitioner's arguments go in reality to the wisdom and policy of the Industrial Peace Act which expressly grants supervisors the right to organize and bargain collectively, which are beyond the Court's power of review. Thus, the argument that "it is axiomatic in the law of self-interest that an employer must give a "better deal" to those who act in his interest and in whom he has trust and confidence. These are the supervisors and confidential employees" 9 and that "In the United States there was a move to have a part of the supervisory group to be aligned with labor. But the enactment of the Taft-Hartley Act put an end to this move." 10

So with petitioner's thesis that "(T)o then give supervisors the right to compel employers to bargain would in effect align labor and management together against stockholders and bondholders (capital) and inexorably tilt the balance of power in favor of these hitherto confliction forces. This is contrary to the nature and philosophy of free enterprise." 11 This further serves to point up the validity and rationale of the Industrial Peace Act's provision, since the supervisors and confidential employees, even though they may exercise the prerogatives of management as regards the rank and file employees are indeed employees in relation to their employer, the company which is owned by the "stockholders and bondholders (capital)" in petitioner's own words, and should therefore be entitled under the law to bargain collectively with the top management with respect to their terms and conditions of employment.

25 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Petitioner's argument that the express provisions of section 3 of our Industrial Peace Act must give way to the intendment of the Taft-Hartley Act which exempts employers from the legal obligation to recognize and negotiate with supervisors is tenuous and groundless. The language of our own statute is plain and unambiguous and admits of no other interpretation.

The other principal ground of petitioner's appeal questioning the confidential employees' inclusion in the supevisors bargaining unit is equally untenable. Respondent court correctly held that since the confidential employee are very few in number and are by practice and tradition identified with the supervisors in their role as representives of management vis-a-vis the rank and file employee such identity of interest has allowed their inclusion in the bargaining unit of supervisors-managers for purposes of collective bargaining in turn as employees in relation to the company as their employer.

No arbitrariness or grave abuse of discretion can be attributed against respondent court's allowing the inclusion of the confidential employees in the supervisors' association for as admitted by petitioner itself, supra, the supervisors and confidential employees enjoy its trust and confidence. This identity of interest logically calls for their inclusion in the same bargaining unit and at the same time fulfills the law's objective of insuring to them the full benefit of their right to self-organization and to collective bargaining, which could hardly be accomplished if the respondent association's membership were to be broken up into five separate ineffective tiny units, as urged by petitioner.

TOYOTA MOTOR PHILS. CORP v. TOYOTA MOTOR PHILS. CORP. LABOR UNION,

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.[21] 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.[22] The Code itself has recognized this, in preventing supervisory employees from joining unions of rank-and-file employees.

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.

http://sc.judiciary.gov.ph/jurisprudence/1997/feb1997/121084.htm#_edn22


26 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304To determine who are supervisory and rank-and-file employees reference has to be made to Article 212 (m) of the Labor Code, as amended, as well as Section 1 (t), Rule I, Book V of the Omnibus Rules Implementing the Labor Code, as amended, viz:

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

Determining the status of supervisory and rank-and-file employees is not a hard row to hoe in labor law. The test of supervisory status as we have repeatedly ruled is whether an employee possesses authority to act in the interest of his employer, which authority should not be merely routinary or clerical in nature but requires the use of independent judgment. Corrollarily, what determines the nature ofemployment is not the employee's title, but his job description. [8]

In the instant case, the list of monthly paid employees submitted by the petitioner company contains the names of about twenty seven (27) supervisory employees, six (6) managerial employees, one (1) confidential employee and twenty six (26) office and technical employees holding various positions. The list reveals that the positions occupied by the twenty six (26) office and technical employees are in fact rank-and-file positions, i.e., A/C mechanic, draftsmen, storemen, motorpool mechanic, secretaries, accounts clerk, company nurses, industrial mechanic, boiler men, laboratory technicians, payroll clerk, welder, purchasing clerk, company drivers and electricians. It is fairly obvious that these positions cannot be considered as supervisory positions for they do not carry the authority to act in the interest of the employer or to recommend managerial actions. It is not decisive that these employees are monthly paid employees. Their mode of compensation is usually a matter of convenience and does not necessarily determine the nature and character of their job.

PAGKAKAISA NG MANGGAGAWA SA TRIUMPH v. CALLEJA

The public respondent, in its factual findings, found that the supervisory employees sought to be represented by the respondent union are not involved in policy-making and their recommendatory powers are not even instantly effective since the same are still subject to review by at least three managerial heads (department manager, personnel manager and general manager) before final action can be taken. Hence, it is evidently settled that the said employees do not possess a managerial status. The fact that their work designations are either managers or supervisors is of no moment considering that it is the nature of their functions and not the said nomenclatures or titles of their jobs which determines their statuses (see Engineering Equipment, Inc. v. National Labor Relations Commission, 133 SCRA 752 [1984] citing National Waterworks and Sewerage Authority v. NWSA Consolidated Unions, 11 SCRA 766 [1964]).

Under the old Industrial Peace Act (Republic Act No. 875), the term "supervisors" had the following definition, to wit:

Sec. 2. Definitions — As used in this Act.

xxx xxx xxx

(k) "'Supervisor" means any person having authority in the interest of an employer, to hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline, other employees, or responsibly to direct them, and to adjust their grievances, or effectively to recommend such acts if, in connection with the foregoing, the exercise of such authority is not of a merely routinary or clerical nature but requires the use of independent judgment.

http://sc.judiciary.gov.ph/jurisprudence/1998/dec1998/131248.htm#_edn8

27 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Section 3 of the same Act further provides that the supervisors as defined above shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations of their own.

With the enactment of the Labor Code (Presidential Decree No. 442 as amended,), the term "supervisor" was replaced by "managerial employee." Book V, Art. 212, subparagraph (k) of said Code reads:

(k) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered rank and file employees for purposes of this Book.

Art. 245 of the aforementioned Code prohibits managerial employees from joining, assisting or forming any labor organization. Hence, employees who had then formed supervisory unions were classified either as managerial or rank-and-file depending on their functions in their respective work assignments. (Bulletin Publishing Corp. v. Sanchez, supra.)

The recent amendments to the Labor Code contain separate definitions for managerial and supervisory employees. Section 4 of Republic Act No. 6715 states that:

Section 4, Article 212 of the Labor Code of the Philippines, as amended, is further amended to read as follows:

xxx xxx xxx

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

Section 18 of the same Act retains the provision on the ineligibility of managerial employees to join any labor organization. However, the right of supervisory employees to form their own union is revived under the said section which states, in part, to wit:

. . . 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.

Thus, the right of supervisory employees to organize under the Industrial Peace Act is once more recognized under the present amendments to the Labor Code. (see Adamson & Adamson Inc., v. The Court of Industrial Relations, 127 SCRA 268 [1984]). In the absence of any grave abuse of discretion on the part of the public respondent as to the status of the members of the respondent union, we adopt its findings that the employees sought to be represented by the respondent union are rank-and-file employees.

There is no evidence in the records which sufficiently distinguishes and clearly separates the group of employees sought to be represented by the private respondents into managerial and supervisory on one hand or supervisory and rank-and-file on the other. The respondents' pleadings do not show the distinctions in functions and responsibilities which differentiate the managers from the supervisors and sets apart the rank-and-file from either the managerial or supervisory groups. As a matter of fact, the formation of a supervisor's union was never before the Labor Arbiter and the Bureau of Labor Relations and neither is the issue before us. We, therefore, abide by the public respondent's factual findings in the absence of a showing of grave abuse of discretion.

In the case at bar, there is no dispute that the petitioner is the exclusive bargaining representative of the rank-and-file employees of Triumph International. A careful examination of the records of this case reveals no evidence that rules out

28 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304the commonality of interests among the rank-and-file members of the petitioner and the herein declared rank-and-file employees who are members of the respondent union. Instead of forming another bargaining unit, the law requires them to be members of the existing one. The ends of unionism are better served if all the rank-and-file employees with substantially the same interests and who invoke their right to self-organization are part of a single unit so that they can deal with their employer with just one and yet potent voice. The employees' bargaining power with management is strengthened thereby. Hence, the circumstances of this case impel us to disallow the holding of a certification election among the workers sought to be represented by the respondent union for want of proof that the right of said workers to self-organization is being suppressed.

Once again we enunciate that the proliferation of unions in an employer unit is discouraged as a matter of policy unless compelling reasons exist which deny a certain and distinct class of employees the right to self-organization for purposes of collective bargaining. (see General Rubber & Footwear Corporation v. Bureau of Labor Relations, 155 SCRA 283 [1987])

PAPER INDUSTRIES CORPORATION V. LAGUESMA

The petition, not being meritorious, must fail and the same should be as it is hereby dismissed.

First. In United Pepsi-Co/a Supervisory Union (UPSU) v. Laguesma,[30] we had occasion to elucidate on the term "managerial employees." Managerial employees are ranked as Top Managers, Middle Managers and First Line Managers. Top and Middle Managers have the authority to devise, implement and control strategic and operational policies while the task of First-Line Managers is simply to ensure that such policies are carried out by the rank-and- file employees of an organization. Under this distinction, "managerial employees" therefore fall in two (2) categories, namely, the "managers" per se composed of Top and Middle Managers, and the "supervisors" composed of First-Line Managers.[31] Thus, the mere fact that an employee is designated manager" does not ipso facto make him one. Designation should be reconciled with the actual job description of the employee,[32] for it is the job description that determines the nature of employment.[33] Oldmis o

In the petition before us, a thorough dissection of the job description[34] of the concerned supervisory employees and section heads indisputably show that they are not actually managerial but only supervisory employees since they do not lay down company policies. PICOP's contention that the subject section heads and unit managers exercise the authority to hire and fire[35]is ambiguous and quite misleading for the reason that any authority they exercise is not supreme but merely advisory in character. Theirs is not a final determination of the company policies inasmuch as any action taken by them on matters relative to hiring, promotion, transfer, suspension and termination of employees is still subject to confirmation and approval by their respective superior.[36] Thus, where such power, which is in effect recommendatory in character, is subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, is not effective and not an exercise of independent judgment as required by law. [37]

UNITED PEPSI COLA SUPERVISORS UNION V. LAGUESMA

Thus, the dictum in the Caltex case which allowed at least for the theoretical unionization of top and middle managers by assimilating them with the supervisory group under the broad phrase "managerial personnel," provided the lynchpin for later laws denying the right of self-organization not only to top and middle management employees but to front line managers or supervisors as well. Following the Caltex case, the Labor Code, promulgated in 1974 under martial law, dropped the distinction between the first and second sub-groups of managerial employees. Instead of treating the terms "supervisor" and "manager" separately, the law lumped them together and called them "managerial employees," as follows:

ART. 212. Definitions . . . .

http://sc.judiciary.gov.ph/jurisprudence/2000/apr2000/101738.htm#_ftn37








29 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304(k) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered rank and file employees for purposes of this Book.[22]22

The definition shows that it is actually a combination of the commonly understood definitions of both groups of managerial employees, grammatically joined by the phrase "and/or."

This general definition was perhaps legally necessary at that time for two reasons. First, the 1974 Code denied supervisors their right to self-organize as theretofore guaranteed to them by the Industrial Peace Act. Second, it stood the dictum in the Caltex case on its head by prohibiting all types of managers from forming unions. The explicit general prohibition was contained in the then Art. 246 of the Labor Code.

The practical effect of this synthesis of legal concepts was made apparent in the Omnibus Rules Implementing the Labor Code which the Department of Labor promulgated on January 19, 1975. Book V, Rule II, 11 of the Rules provided:

Supervisory unions and unions of security guards to cease operation. - All existing supervisory unions and unions of security guards shall, upon the effectivity of the Code, cease to operate as such and their registration certificates shall be deemed automatically cancelled. However, existing collective agreements with such unions, the life of which extends beyond the date of effectivity of the Code, shall be respected until their expiry date insofar as the economic benefits granted therein are concerned.

Members of supervisory unions who do not fall within the definition of managerial employees shall become eligible to join or assist the rank and file labor organization, and if none exists, to form or assist in the forming of such rank and file organization. The determination of who are managerial employees and who are not shall be the subject of negotiation between representatives of the supervisory union and the employer. If no agreement is reached between the parties, either or both of them may bring the issue to the nearest Regional Office for determination.

The Department of Labor continued to use the term "supervisory unions" despite the demise of the legal definition of "supervisor" apparently because these were the unions of front line managers which were then allowed as a result of the statutory grant of the right of self-organization under the Industrial Peace Act. Had the Department of Labor seen fit to similarly ban unions of top and middle managers which may have been formed following the dictum in Caltex, it obviously would have done so. Yet it did not, apparently because no such unions of top and middle managers really then existed.

WORKERS WITH NO RIGHT OF SELF-ORGANIZATION

MANAGERIAL AND CONFIDENTIAL EMPLOYEES

SOUTHERN PHILIPPINE FEDERATION OF LABOR V. CALLEJA

The issue raised in this petition is whether or not the public respondent committed grave abuse of discretion in allowing the 197 employees to vote in the certification election when, as alleged by the petitioner, they are disqualified by express provision of law or under the existing collective bargaining agreement.

It is maintained by the petitioner that under the Labor Code, managerial employees are excluded from forming or joining a collective bargaining unit; and under the collective bargaining agreement executed between Apex and respondent union, among those who are excluded from the bargaining unit are: a) managerial employees as defined in paragraph K, Article 212 of the Labor Code; b) those performing supervisory functions; and c) those holding confidential positions as determined by the company. Therefore, the employees holding the positions of Supervisors II and III and those in the confidential payrolls should be excluded from joining the bargaining unit and from voting in the certification election.

http://sc.judiciary.gov.ph/jurisprudence/1998/mar1998/122226.htm#_edn22

30 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Likewise, those employees who are not paying union dues should be excluded from the same since the existing CBA contains a Union shop provision.

The contentions have no merit.

Although we have upheld the validity of the CBA as the law among the parties, (see Planters Products, Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989), its provisions cannot override what is expressly provided by law that only managerial employees are ineligible to join, assist or form any labor organization (See Art. 247, Labor Code). Therefore, regardless of the challenged employees' designations, whether they are employed as Supervisors or in the confidential payrolls, if the nature of their job does not fall under the definition of "managerial" as defined in the Labor Code, they are eligible to be members of the bargaining unit and to vote in the certification election. Their right to self-organization must be upheld in the absence of an express provision of law to the contrary. It cannot be curtailed by a collective bargaining agreement.

Hence, it is important to determine whether the positions of Supervisors II and III are considered "managerial" under the law.

As defined in the Labor Code and as we have held in the case of Franklin Baker Company of the Phils. v. Trajano,(1 57 SCRA 416, 421-423, [1988]):

A managerial employee is defined as one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. (Reynolds Phil. Corp. v. Eslava, 137 SCRA [1985], citing Section 212 (K), Labor Code.)

x x x x x x x x x

The test of "supervisory" or "managerial status" depends on whether a person possesses authority to act in the interest of his employer in the matter specified in Article 212 (k) of the Labor Code and Section 1 (m) of its Implementing Rules and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. Thus, 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 (National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963]).

Furthermore, in line with the ruling of this Court, subject employees are not managerial employees because as borne by the records, they do not participate in policy making but are given ready policies to execute and standard practices to observe, thus having little freedom of action (National Waterworks and Sewerage Authority v. NWSA Consolidated, L-18938, 11 SCRA 766 [1964]).

The petitioner's motion for reconsideration before the public respondent outlined the job description of Supervisors. In the category of Supervisory II, the "General Summary" provides:

GENERAL SUMMARY:

Assists the Foreman in the effective dispatching/distribution of manpower and equipment to carry out approved work. (p. 30, Rollo)

while the first duty enumerated in the position of Supervisor III states:

1. Executes and coordinates work plans emanating from his supervisors. (p. 32, Rollo)

31 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Thus, it is clear from the above provisions that the functions of the questioned positions are not managerial in nature because they only execute approved and established policies leaving little or no discretion at all whether to implement the said policies or not. The respondent Director, therefore, did not commit grave abuse of discretion in dismissing the petitioner's appeal from the Med-Arbiter's Order to open and count the challenged ballots in denying the petitioner's motion for reconsideration and in certifying the respondent Union as the sole and exclusive bargaining representative of the rank-and-file employees of respondent Apex .

As regards the employees in the confidential payroll, the petitioner has not shown that the nature of their jobs is classified as managerial except for its allegation that they are considered by management as occupying managerial positions and highly confidential. Neither can payment or non-payment of union dues be the determining factor of whether the challenged employees should be excluded from the bargaining unit since the union shop provision in the CBA applies only to newly hired employees but not to members of the bargaining unit who were not members of the union at the time of the signing of the CBA. It is, therefore, not impossible for employees to be members of the bargaining unit even though they are non-union members or not paying union dues.

GOLDEN FARMS, INC. v. CALLEJA

Respondents relied heavily on the alleged finding of Med-Arbiter Martinez that the employees who were signatories to the petition for certification election and represented by respondent Union are actually rank-and-file workers not disqualified from entering into a collective bargaining agreement with management. In said findings of fact, Med-Arbiter Martinez singled out in her classification as rank-and-file employees the foremen of Petitioner Corporation considered from their joint affidavits and for lack of convincing proof that their supervisory designations are coupled with the actual performance of managerial functions.

Whether or not such finding is supported by the evidence is beside the point. Respondents herein do not dispute that the signatories (listed in Annex "A", page 30, Rollo) to the Petition for certification election subject of this case, were holding the positions of cashier, purchasers, personnel officers, foremen and employees having access to confidential information such as accounting personnel, radio and telegraph operators and head of various sections. It is also a fact that respondent Union is the exclusive bargaining Unit of the rank-and-file employees of petitioner corporation and that an existing CBA between petitioner corporation and the Union representing these rank-and-file employees was still enforced at the time the Union filed a petition for certification election in behalf of the aforementioned signatories. Under the terms of said CBA (Annex "E", p. 40, Rollo) it is expressly provided that:

Section 1. The COMPANY and the UNION hereby agree that the recognized bargaining unit for purposes of this agreement shall consist of regular rank-and-file workers employed by the COMPANY at the plantation presently situated at Alejal, Carmen, Davao. Consequently, all managerial personnel like, superintendents, supervisor, foremen, administrative, professional and confidential employees, and those temporary, casual, contractual, and seasonal workers are excluded from the bargaining unit and therefore, not covered by this agreement.

(p. 41, Rollo)

Respondents do not dispute the existence of said collective bargaining agreement. We must therefore respect this CBA which was freely and voluntarily entered into as the law between the parties for the duration of the period agreed upon. Until then no one can be compelled to accept changes in the terms of the collective bargaining agreement.

Furthermore, the signatories to the petition for certification election are the very type of employees by the nature of their positions and functions which We have decreed as disqualified from bargaining with management in case of Bulletin Publishing Co. Inc. vs. Hon. Augusto Sanchez, etc. (144 SCRA 628) reiterating herein the rationale for such ruling as follows: if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests or that the Union can be company- dominated with the

32 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304presence of managerial employees in Union membership. A managerial employee is defined under Art. 212 (k) of the new Labor Code as "one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definitions are considered rank-and-file employees for purposes of this Book."

This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph operators, who having access to confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is specially true in the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly excluded.

As to the company foremen, while in the performance of supervisory functions, they may be the extension or alter ego of the management. Adversely, the foremen, by their actuation, may influence the workers under their supervision to engage in slow down commercial activities or similar activities detrimental to the policy, interest or business objectives of the company or corporation, hence they also cannot join.

PIER 8 ARRASTRE, ET AL V. ROLDAN-CONFESOR

This Court has ruled on numerous occasions that the test of supervisory or managerial status is whether an employee possesses authority to act in the interest of his employer which authority is not merely routinary or clerical in nature but requires use of independent judgment. 3 What governs the determination of the nature of employment is not the employee's title, but his job description. If the nature of the employee's job does not fall under the definition of "managerial" or "supervisory" in the Labor Code, he is eligible to be a member of the rank-and-file bargaining unit.4

Foremen are chief and often especially-trained workmen who work with and commonly are in charge of a group of employees in an industrial plant or in construction work. 5 They are the persons designated by the employer-management to direct the work of employees and to superintend and oversee them. 6 They are representatives of the employer-management with authority over particular groups of workers, processes, operations, or sections of a plant or an entire organization. In the modern industrial plant, they are at once a link in the chain of command and the bridge between the management and labor. 7 In the performance their work, foremen definitely use their independent judgment and are empowered to make recommendations for managerial action with respect to those employees under their control. Foremen fall squarely under the category of supervisory employees, and cannot be part of rank-and-file unions.

Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically routinary and clerical. However, they should be differentiated from rank-and-file employees because they, are tasked with, among others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and receiving notices and such other duties as required by the legal personnel of the corporation. 8Legal secretaries therefore fall under the category of confidential employees. Thus, to them applies our holding in the case ofPhilips Industrial Development, Inv., v. NLRC, 210 SCRA 339 (1992), that:

. . . By the very functions, they assist confidential capacity to, or have access to confidential. matters of, persons to, exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them.

In Bulletin Publishing Co., Inc., vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:

33 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304. . . The rationale, for this inhibition has been stated to be, because if these managerial employees would belong to or be affiliated with Union the latter might not, be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial employees in Union membership.

In Golden Farms, Inc., vs. Ferrer-Calleja, 9 this court explicitly made this rationale applicable to confidential employees:

This rationale holds true also for confidential employees . . ., who having access to confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. . . .

We thus hold that public respondent acted with grave abuse of discretion in not excluding the four foremen and legal secretary from the bargaining unit composed of rank-and-file employees.

WORKER/MEMBER OF COOPERATIVE

COOP. RURAL BANK OF DAVAO V. FERRER-CALLEJA

Article 243 of the Labor Code 12 enumerates who are eligible to form, join, or assist labor organizations for purposes of collective bargaining, to wit —

ART. 243. Coverage and employees' right to self-organization. — All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. ....

The recognized exception to this enumeration is found in Article 245 of the same code, which provides for the ineligibility of managerial employees to join any labor reorganization, viz-

ART. 245. Ineligibility of managerial employees to join any labor organization. Managerial employees are not eligible to join, assist or form any labor organization.

From the foregoing provisions of law it would appear at first blush that all the rank and file employees of a cooperative who are not managerial employees are eligible to form, join or assist any labor organization of their own choosing for the purpose of collective bargaining.

However, under Section 2 of P.D. No. 175, a cooperative is defined to mean "organizations composed primarily of small producers and of consumers who voluntarily join together to form business enterprises which they themselves own, control, and patronize." Its creation and growth were declared as a policy of the State as a means of increasing the income and purchasing power of the low-income sector of the population in order to attain a more equitable distribution of income and wealth .

An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners. In the opinion of August 14, 1981 of the Solicitor General he correctly opined that employees of cooperatives who are themselves members of the cooperative have no right to form or join labor organizations for purposes of collective bargaining for being themselves co-owners of the cooperative. 21

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.

34 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304CENECO V. DOLE

We first rule on the alleged procedural infirmities affecting the instant case. CENECO avers that the med-arbiter has no jurisdiction to rule on the issue of withdrawal from membership of its employees in the cooperative which, it claims, is properly vested in the NEA which has control and supervision over all electric cooperatives.

From a perusal of petitioner's motion to dismiss filed with the med-arbiter, it becomes readily apparent that the sole basis for petitioner's motion is the illegality of the employees' membership in respondent union despite the fact that they allegedly are still members of the cooperative. Petitioner itself adopted the aforesaid argument in seeking the dismissal of the petition for certification election filed with the med-arbiter, and the finding made by the latter was merely in answer to the arguments advanced by petitioner. Hence, petitioner is deemed to have submitted the issue of membership withdrawal from the cooperative to the jurisdiction of the med-arbiter and it is now estopped from questioning that same jurisdiction which it invoked in its motion to dismiss after obtaining an adverse ruling thereon.

Under Article 256 of the Labor Code, to have a valid certification election at least a majority of all eligible voters in the unit must have cast their votes. It is apparent that incidental to the power of the med-arbiter to hear and decide representation cases is the power to determine who the eligible voters are. In so doing, it is axiomatic that the med-arbiter should determine the legality of the employees' membership in the union. In the case at bar, it obviously becomes necessary to consider first the propriety of the employees' membership withdrawal from the cooperative before a certification election can be had.

Lastly, it is petitioner herein who is actually questioning the propriety of the withdrawal of its members from the cooperative. Petitioner could have brought the matter before the NEA if it wanted to and. if such remedy had really been available, and there is nothing to prevent it from doing so. It would be absurd to fault the employees for the neglect or laxity of petitioner in protecting its own interests.

The argument of CENECO that the withdrawal was merely to subvert the ruling of this Court in the BATANGAS case is without merit. The case referred to merely declared that employees who are at the same time members of the cooperative cannot join labor unions for purposes of collective bargaining. However, nowhere in said case is it stated that member-employees are prohibited from withdrawing their membership in the cooperative in order to join a labor union.

NON-EMPLOYEES

ART 243 - see SINGER SEWING MACHINE CO. V. DRILOM

FIDUCIARY EMPLOYEES

see METROLAB INDUSTRIES V. CONFESOR

PARTY PROTECTED

MACTAN WORKERS UNION V. ABOITIZ

1. The terms and conditions of a collective bargaining contract constitute the law between the parties. Those who are entitled to its benefits can invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the aggrieved party has the right to go to court for redress. 6 Nor does it suffice as a defense that the claim is made on behalf of non-members of intervenor Associated Labor Union, for it is a well-settled doctrine that the benefits of a collective bargaining agreement extend to the laborers and employees in the collective bargaining unit, including those who do not belong to the chosen bargaining labor organization. 7 Any other view would be a discrimination on which the law frowns. It is appropriate that such should be the case. As was held in United Restauror's Employees and Labor Union v. Torres, 8 this Court speaking through Justice Sanchez, "the right to be the exclusive representative of all the employees in

35 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304an appropriate collective bargaining unit is vested in the labor union 'designated or selected' for such purpose 'by the majority of the employees' in the unit concerned." 9 If it were otherwise, the highly salutory purpose and objective of the collective bargaining scheme to enable labor to secure better terms in employment condition as well as rates of pay would be frustrated insofar as non-members are concerned, deprived as they are of participation in whatever advantages could thereby be gained. The labor union that gets the majority vote as the exclusive bargaining representative does not act for its members alone. It represents all the employees in such a bargaining unit. It is not to be indulged in any attempt on its part to disregard the rights of non-members. Yet that is what intervenor labor union was guilty of, resulting in the complaint filed on behalf of the laborers, who were in the ranks of plaintiff Mactan Labor Union.

SANCTIONS FOR VIOLATION OF RIGHT

Article 246. Non-abridgment of right to self-organization. â€“ It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization. Such right shall include the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives of their own choosing and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection, subject to the provisions of Article 264 of this Code. (As amended by Batas Pambansa Bilang 70, May 1, 1980).

Article 248. Unfair labor practices of employers. â€“ It shall be unlawful for an employer to commit any of the following unfair labor practice:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

(b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall with-draw from one to which he belongs;

(c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization;

(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters;

(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent;

(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code;

(g) To violate the duty to bargain collectively as prescribed by this Code;

(h) To pay negotiation or attorneyâ€™s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute; or

(i) To violate a collective bargaining agreement.

36 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations, associations or partnerships who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As amended by Batas Pambansa Bilang 130, August 21, 1981).

Article 249. Unfair labor practices of labor organizations. - It shall be unfair labor practice for a labor organization, its officers, agents or representatives:

(a) To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership;

(b) To cause or attempt to cause an employer to discriminate against an employee, including discrimination against an employee with respect to whom membership in such organization has been denied or to terminate an employee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members;

(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the employees;

(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of an exaction, for services which are not performed or not to be performed, including the demand for fee for union negotiations;

(e) To ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue in collective bargaining or any other dispute; or

(f) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers, members of governing boards, representatives or agents or members of labor associations or organizations who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As amended by Batas Pambansa Bilang 130, August 21, 1981).

ART. 288. Penalties. - Except as otherwise provided in this Code, or unless the acts complained of hinge on a question of interpretation or implementation of ambiguous provisions of an existing collective bargaining agreement, any violation of the provisions of this Code declared to be unlawful or penal in nature shall be punished with a fine of not less than One Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos (P10,000.00) or imprisonment of not less than three months nor more than three years, or both such fine and imprisonment at the discretion of the court.

In addition to such penalty, any alien found guilty shall be summarily deported upon completion of service of sentence.chanroblesvirtuallawlibrary

Any provision of law to the contrary notwithstanding, any criminal offense punished in this Code, shall be under the concurrent jurisdiction of the Municipal or City Courts and the Courts of First Instance. (As amended by Section 3, Batas Pambansa Bilang70).

ART. 289. Who are liable when committed by other than natural person. - If the offense is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership, association or entity.

37 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304PART III- LABOR ORGANIZATION

POLICY

ART 211 (B) (C)

LABOR ORGANIZATION

ART 211 (G)

DEFINITION

see AIRLINE PILOTS ASSN. OF THE PHIL V. CIR

LOCAL UNION

BVRI (h) "Local Union" means any labor organization operating at the enterprise level.

NATIONALUNION/FEDERATION

BVRI (i) "National Union/Federation" means any labor organization with at least ten (10) locals or chapters each of which must be a duly recognized collective bargaining agent.

LEGITIMATE LABOR ORGANIZATION

ART. 212 H

DOLE REGISTRATION BASIS

CEBU SEAMAN’S ASSN., INC V. FERRER-CALLEJA

Article 226 of the Labor Code vests upon the Bureau of Labor Relations and Labor Relations Division the original and exclusive authority and jurisdiction to act on all inter-union and intra-union disputes. Therefore, the Med-Arbiter originally, and the Director on appeal, correctly assumed jurisdiction over the controversy.

Under the principles of administrative law in force in this jurisdiction, decisions of administrative officers shall not be disturbed by courts, except when the former acted without or in excess of their jurisdiction or with grave abuse of discretion.

PROGRESSIVE DEVELOPMENT CORP. V. SEC. OF DOLE

Meanwhile, Article 212(h) defines a legitimate labor organization as "any labor organization duly registered with the DOLE and includes any branch or local thereof." (Emphasis supplied) Rule I, Section 1 (j), Book V of the Implementing Rules likewise defines a legitimate labor organization as "any labor organization duly registered with the DOLE and includes any branch, local or affiliate thereof.

when does a branch, local or affiliate of a federation become a legitimate labor organization?

Ordinarily, a labor organization acquires legitimacy only upon registration with the BLR. Under Article 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:

38 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304(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 meeting and the list of the workers who participated in such meetings;

(c) The names of all its members comprising at least twenty 20% percent of all the employees in the bargaining unit where it seek to operate;

(d) If the applicant has been in existence for one or more years, copies , of its annual financial reports; and

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

And under Article 235 (Action on Application)

The Bureau shall act on all applications for registration within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president.

Moreover, section 4 of Rule II, Book V of the Implementing Rules requires that the application should be signed by at least twenty percent (20%) of the employees in the appropriate bargaining unit and be accompanied by a sworn statement of the applicant union that there is no certified bargaining agent or, where there is an existing collective bargaining agreement duly submitted to the DOLE, that the application is filed during the last sixty (60) days of the agreement.

MIXED MEMBERSHIP

TOYOTA MOTOR PHIL, CORP. V. TOYOTA MOTOR PHILS. CORP. LABOR UNION

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.

COMPANY UNION

ART 212 (i) "Company union" means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.

UNION RATIONALE

GUIJARNO V. CIR

1. The authoritative doctrine that a closed-shop provision in a collective bargaining agreement is not to be given a retroactive effect so as to preclude its being applied to employees already in the service, is traceable, as set forth in the opening paragraph of this opinion, to the leading case of Confederated Sons of Labor v. Anakan Lumber Co. 18 decided in April of 1960. In discussing the particular stipulation in the contract, it was made clear in the opinion of the then Justice, later Chief Justice, Concepcion: "In order that an employer may be deemed bound, under a collective bargaining agreement, to dismiss employees for non-union membership, the stipulation to this effect must be so clear and

39 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304unequivocal as to leave no room for doubt thereon. An undertaking of this nature is so harsh that it must be strictly construed, and doubts must be resolved against the existence of "closed shop"." 19 Less than a year later, to be more precise, on January 28, 1961, in Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial Relations, 20 this Court, speaking through Justice Gutierrez David, went further. Thus: "The closed-shop agreement authorized under sec. 4, subsec. a(4) of the Industrial Peace Act above quoted should however, apply to persons to be hired or to employees who are not yet members of any labor organization. It is inapplicable to those already in the service who are members of another union. To hold otherwise, i. e., that the employees in a company who are members of a minority union may be compelled to disaffiliate from their union and join the majority or contracting union, would render nugatory the right of all employees to self-organization and to form, join or assist labor organizations of their own choosing, a right guaranteed by the Industrial Peace Act (sec. 3, Rep. Act No. 875) as well as by the Constitution (Art. III, sec. 1[6])." 21 Thereafter, in Kapisanan Ng Mga Mangagagawa Ng Alak v. Hamilton Distillery Company, 22 this Court, again speaking through the former, minced no words in characterizing a stipulation that would allow a dismissal of those already employed as "null and void." 23 In 1967, this time already elevated to his position as head of the Court, Chief Justice Concepcion in Salunga v. Court of Industrial Relations 24 did stress that while "generally, a state may not compel ordinary voluntary associations to admit thereto any given individual, because membership therein may be accorded or withheld as a matter of privilege, the rule is qualified in respect of labor unions holding a monopoly in the supply of labor, either in a given locality, or as regards a particular employer with which it has a closed-shop agreement. ... ." 25 He continued: "Consequently, it is well settled that such unions are not entitled to arbitrarily exclude qualified applicants for membership, and a closed-shop provision would not justify the employer in discharging, or a union in insisting upon the discharge of, an employee whom the union thus refuses to admit to membership, without any reasonable ground therefor. Needless to say, if said unions may be compelled to admitnew members, who have the requisite qualifications, with more reason may the law and the courts exercise the coercive power when the employee involved is a long standing union member, who, owing to provocations of union officers, was impelled to tender his resignation, which he forthwith withdrew or revoked. Surely, he may, at least, invoke the rights of those who seek admission for the first time, and can not arbitrarily be denied re-admission." 26

Nothing can be clearer therefore than that this Court looks with disfavor on a provision of this character being utilized as an excuse for the termination of employment. To complete the picture, mention should be made ofElegance, Inc. v. Court of Industrial Relations, 27 where this Court, through the present Acting Chief Justice Makalintal, harked back to Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial Relations 28 to stress the point of non-retroactivity. What should be immediately apparent, but unfortunately respondent Court seemed to have closed its eyes to it, is that when the decision was rendered by the trial judge on November 2, 1967 and affirmed with the Court sitting en bancon January 22, 1968, the controlling doctrine to which deference ought to have been paid was that petitioners should not have been dismissed.

2. Nor is there anything unusual in this Court's adherence with remarkable consistency to such a basic doctrine. The obligation was categorically imposed on the State, under the 1935 Constitution, to "afford protection to labor, especially to working women and minors ... ." 29 That is to carry out the purpose implicit in one of the five declared principles, namely, the promotion of social justice "to insure the well-being and economic security of all the people ... ." 30 It is then the individual employee, as a separate, finite human being, with his problems and his needs, who must be attended to. He is the beneficiary of the concern thus made manifest by the fundamental law. The present Constitution is even more explicit on the matter. The principle that the State shall promote social justice is categorically based on the concept of insuring "the dignity, welfare, and security of all the people." 31 Insofar as the provision on the State affording protection to labor is concerned, it is further required to "promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work." 32 Where does that leave a labor union, it may be asked. Correctly understood, it is nothing but the means of assuring that such fundamental objectives would be achieved. It is the instrumentality through which an individual laborer who is helpless as against a powerful employer may, through concerted effort and activity, achieve the goal of economic

40 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304well-being. That is the philosophy underlying the Industrial Peace Act. 33 For, rightly has it been said that workers unorganized are weak; workers organized are strong. Necessarily then, they join labor unions. To further increase the effectiveness of such organizations, a closed-shop has been allowed. 34 It could happen, though, that such a stipulation which assures further weight to a labor union at the bargaining table could be utilized against minority groups or individual members thereof. There are indications that such a deplorable situation did so manifest itself here. Respondent Court, it would appear, was not sufficiently alert to such a danger. What is worse, it paid no heed to the controlling doctrine which is merely a recognition of a basic fact in life, namely, that power in a collectivity could be the means of crushing opposition and stifling the voices of those who are in dissent. The right to join others of like persuasion is indeed valuable. An individual by himself may feel inadequate to meet the exigencies of life or even to express his personality without the right to association being vitalized. It could happen though that whatever group may be in control of the organization may simply ignore his most-cherished desires and treat him as if he counts for naught. The antagonism between him and the group becomes marked. Dissatisfaction if given expression may be labeled disloyalty. In the labor field, the union under such circumstances may no longer be a haven of refuge, but indeed as much of a potential foe as management itself. Precisely with the Anakan doctrine, such an undesirable eventuality has been sought to be minimized, if not entirely avoided. There is no justification then, both as a matter of precedent and as a matter of principle, for the decision reached by respondent Court.

HEIRS OF CRUZ V CIR

FACTS:June 21, 1952, the Santiago Labor Union, composed of workers of the Santiago Rice Mill, a business enterprises engaged in the, buying. and milling of palay at Santiago, Isabela, and owned and operated by King Hong Co., Inc., filed before the respondent Court of Industrial Relations (CIR) cases for petition for overtime pay, premium pay for night, Sunday and holiday work, and for reinstatement of workers illegally laid off. CIR favored the union by a split decision of 3-2 vote. The case reached the Supreme Court but the SC still favored the union. The SC remanded the records for enforcement by respondent CIR. In examination of books, said CIR’s Chief Examiner filed his Partial Report regarding the computation of the benefits rendered in the case in favor of the Union.

Petitioners claim that in this computation of the Examiner did not, include the claims of 70 other laborers whose total claims (for back wages), at the rate of P6,300.00 each and would be P441,000.00. Therefore, the correct. grand total amount due the laborers would be 864,756.74.

The trial judge took no action on the latest Urgent Motion of the union, wherein it emphasized that respondent, with Court’s action rejecting its appeal, no longer had any excuse for refusing to comply with the deposit Order. Instead, an unscheduled conference was called and held on October 31, 1963 in the chambers of the trial judge, and attended by representatives of respondent firm, including their counsels of record and the President of the union and 8 directors of the union. Four of these nine union representatives, including the union president himself, had no claims or awards whatever under the judgment. Said union officials were not assisted by counsel, as petitioner Mary Concepcion, counsel of record of the union, was not present, not having been notified of the conference.

In this conference respondent firm made again the same offer to settle and quitclaim the judgment in favor of the union members for the same amount of P110,000.00, which offer had already been ‘rejected by the union at the earlier conference held on June 25, 1963. But this time, respondent and the directors of the union decided to settle the case amicably with the payment by the firm of the same amount of P110,000.00 which was deposited with the Court’s disbursing officer “immediately upon the signing of the settlement which will be prepared by the respondent firm through its counsel.”

One of the union director together with 49 of its members questioned the amicable settlement that took place. They claim that the Board of Directors did not have any express authority of the members of the Santiago Labor Union to enter into

41 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304any compromise for the sum of P110,000.00, that it was tainted by apparent bad faith on the part of the President of the Union, that the amount of P110,000.00 is unconscionable, considering, that the total claims of the members of the union is more than P400,000.00.

ISSUE:

Whether the amicable settlement is valid.

RULING:NO. Petitioners were not accorded due process of law. The union was deprived of the assistance of its counsel. The lack or due deliberation and caution in the trial judge’s instant approval of the settlement is seen from the stipulations therein that the union thereby waived and quitclaimed any and all claims which it may have against the respondent, as well as the claim of each and every one of the members of the union against respondent, when precisely the authority of the union board members to enter into any such compromise or settlement was under express challenge by petitioner Magalpo, a board member herself which the trial judge completely disregarded.

Petitioners were deprived of the formal conference on the and of their right to be assisted by the union counsel as expressly requested, so that a fair hearing could be accorded petitioners and an opportunity afforded them to air their serious charges of bad faith and lack authority against the Union leadership. Certainly, all these serious questions and charges made by petitioners could have been threshed out and verified, if the formal conference had been held with the presence of union counsel.

The transcript of the conference is deficient and does not reflect the actual discussions and proceedings. This is to be deplored, for in a matter of such great importance, especially where the union officials were unassisted by counsel in an unscheduled conference, care should be taken by the trial judge that the proceedings are faithfully recorded.

We find the forcing through of the settlement arbitrary, unfair and unconscionable.

Another reason for striking down the settlement is the lack of any express or specific authority of the president and majority. of the union board of directors to execute the same and scale down the estimated P423,756.74 judgment liability of respondent firm in favor of the individual union members to P110,000.00. On the contrary, petitioner board member Magalpo timely challenged the authority or the union board to execute any such settlement, expressly informing the trial judge that the union had specifically appointed an entity in Manila, the “CREAM, Inc.,” as its attorney in-fact and “exclusive authorized representative for the evaluation, adjustment and -liquidation or its claim against respondent. These union members have repudiated the former union president, Maylem and his board of directors, for having betrayed the union members, and the new union leadership.The authority of the union, to execute a settlement of the judgment award in favor of the individual union members, cannot be presumed but must be expressly granted.

Just as this Court has stricken down unjust exploitation of laborers by oppressive employers, so will it strike down their unfair treatment by their own unworthy leaders. The Constitution enjoins the State to afford protection to labor. Fair dealing is equally demanded of unions as well as of employers in their dealings with employees. The union has been evolved as an organization of collective strength for the protection of labor against the unjust exactions of capital, but equally important is the requirement of fair dealing between the union and its members, which is fiduciary in nature, and arises out of two factors: “one is the degree of dependence of the individual employee on the union organization; the other, a corollary of the first, is the comprehensive power vested in the union with respect to the individual.” The union may, be considered but the agent of its members for the purpose of securing for them fair and just wages and good working conditions and is subject to the obligation of giving the members as its principals all information relevant to union and labor matters entrusted to it.

42 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The union leadership in the case at bar was recreant in its duty towards the union members in apparently having failed to disclose to the union members the full situation of their judgment credit against respondent, to wit, that they were in the advantageous position of being able to require enforcement of the respondent court’s P200,000.00-deposit order, and in presuming that it had authority to waive and quitclaim the estimated P423,756.74-judgment credit of the union members for the unconscionable amount of P110,000.00, which had already been previously rejected by the workers. Respondent firm could not claim that it dealt in good faith with the union officials, for it hastily executed the purported settlement notwithstanding the serious charges of bad faith against the union leadership, and the non-holding of the scheduled conference where the union leaders, at their express request, could be duly assisted by union counsel.

The interests of the individual worker can be better protected on the whole by a strong union aware of its moral and legal obligations to represent the rank and file faithfully and secure for them the best wages and working terms and conditions in the process of collective bargaining. As has been aptly pointed out, the will of the majority must prevail over that of the minority in the process, for “under the philosophy of collective responsibility, an employer who bargains in good faith should be entitled to rely upon the promises and agreements of the union representatives with whom he must deal. under the compulsion of, law and contract. The ‘collective bargaining process should be carried on between parties who can mutually respect and rely upon the authority of each other.” Where, however, collective bargaining process is not involved, and what is at stake are back wages already earned by the individual workers by way of overtime, premium and differential pay, and final judgment has been rendered in their favor, as in the present case, the real parties in interest with direct material interest, as against the union which has only served as a vehicle for collective action to enforce their just claims, are the individual workers themselves. Authority of the union to waive or quitclaim all or part of the judgment award in favor of the individual workers cannot be lightly presumed but must be expressly granted, and the employer, as judgment debtor, must deal in all good faith with the union as the agent of the individual workers. The Court in turn should certainly verify and assure itself of the fact and extent of the authority of the union leadership to execute any compromise or settlement of the judgment on behalf of the individual workers who are the real judgment creditors.

The settlement in the case at bar was precipitately approved without verification of the union boards authority to execute the compromise settlement and that there was no such authority.

WHEREFORE, the respondent Court’s Orders are hereby declared null and void and set aside.

UNITED SEAMEN’S UNION OF THE PHIL. V. DAVAO SHIPOWNERS ASSN.

A labor organization is wholesome if it serves its legitimate purpose of promoting the interests of labor without unnecessary labor disputes. That is why it is given personality and recognition in concluding collective bargaining agreements. But if it is made use of as a subterfuge, or as a means to subvert valid commitments, it defeats its own purpose, for it tends to undermine the harmonious relations between management and labor. The situation does not deserve any approving sanction from the Court.

PHOENIX IRON AND STEEL CORP V. SEC OF LABOR

n the case of union registration, the rationale for requiring that the submitted documents and papers be certified under oath by the secretary or treasurer, as the case may be, and attested to by the president is apparent. The submission of the required documents (and payment of P50.00 registration fee) becomes the Bureau's basis for approval of the application for registration. Upon approval, the labor union acquires legal personality and is entitled to all the rights and privileges granted by the law to a legitimate labor organization. The employer naturally needs assurance that the union it is dealing with is a bona-fide organization, one which has not submitted false statements or misrepresentations to the Bureau. The inclusion of the certification and attestation requirements will in a marked degree allay these apprehensions of management. Not only is the issuance of any false statement and misrepresentation a ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is also a ground for a criminal charge of perjury.

43 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The certification and attestation requirements are preventive measures against the commission of fraud. They likewise afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or to use the union for dubious ends.

In the case of union affiliation with a federation, the documentary requirements are found in Rule II, Section 3 (e), Book V of the Implementing Rules, which we again quote as follows: "(c) The local or chapter of a labor federation or national union shall have and maintain a constitution and by-laws, set of officers and books of accounts. For reporting purposes, the procedure governing the reporting of independently registered unions, federations or national unions shall be observed" (emphasis supplied).

Since the "procedure governing the reporting of independently registered unions" refers to the certification and attestation requirements contained in Article 235, paragraph 2, it follows that the constitution and by-laws, set of officers and books of accounts submitted by the local and chapter must likewise comply with these requirements. The same rationale for requiring the submission of duly subscribed documents upon union registration exists in the case of union affiliation. Moreover, there is greater reason to exact compliance with the certification and attestation requirements because, as previously mentioned, several requirements applicable to independent union registration are no longer required in the case of the formation of a local or chapter. The policy of the law in conferring greater bargaining power upon labor unions must be balanced with the policy of providing preventive measures against the commission of fraud. 7

Compared with what happened in the Progressive case, this situation before us now is even worse. There are no books of account filed before the BLR, the constitution, by-laws and the list of members who supposedly ratified the same were not attested to by the union president, and the constitution and by-laws were not verified under oath.

PROTECTION TECHNOLOGY INC. V SEC OF LABOR

The principal issue here posed is whether books of account, consisting of ledgers, journals and other accounting books, form part of the mandatory documentation requirements for registration of a newly organized union affiliated with a federation, or a local or chapter of such a federation, as a legitimate labor organization.

The above issue was addressed several years ago and answered in the affirmative by this Court in Progressive Development Corporation v. Secretary, DOLE. 17 There, the Court said:

In the case of union affiliation with a federation, the documentary requirements are found in Rule II Section 3(e), Book V of the Implementing Rules, which we again quote as follows:

(c) The local or chapter of a labor federation or national union shall have and maintain a constitution and by-laws, set of officers and books of accounts. For reporting purposes, the procedure governing the reporting of independently registered unions, federations or national unions shall be observed.

Since the "procedure governing the reporting of independently registered unions" refers to the certification and attestation requirements contained in Article 235, paragraph 2, it follows that the constitution and by-laws, set of officers and books of accounts submitted by the local and chapter must likewise comply with these requirements. The same rationale for requiring the submission of duly subscribed documents upon union registration exists in the case of union affiliation. Moreover, there is greater reason to exact compliance with the certification and attestation requirements because, as previously mentioned, several requirements applicable to independent union registration are no longer required in the case of the formation of a local or chapter. The policy of the law in conferring greater bargaining power upon labor unions must be balanced with the policy of providing preventive measures against the commission of fraud.

A local or chapter therefore becomes a legitimate labor organization only upon submission of the following to the BLR:

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

44 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-03042) The constitution and by-laws, a statement on the set of officers and the books of accounts all of which are certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by its president.

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

In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the required documentsunder oath is fatal to its acquisition of a legitimate status.

xxx xxx xxx 18

(Emphasis partly in the original and partly supplied.)

Non-submission of such books of account certified by and attested to by the appropriate officer is a ground which the employer can invoke legitimately to oppose a petition for certification election filed by the local or chapter concerned.

Although the federation with which the Union is affiliated submitted documents purporting to show that the latter had offered books of account to support its (the Union's) application for registration as a legitimate labor organization, what had been actually submitted to the BLR by the Union was a mere "financial statement," 19 a generous description considering the sheet of paper in fact submitted by the Union.

Books of account are quite different in their essential nature from financial statements. In generally accepted accounting practice, the former consist of journals, ledgers and other accounting books (which are registered with the Bureau of Internal Revenue) containing a record of individual transactions wherein monies are received and disbursed by an establishment or entity; entries are made on such books on a day-to-day basis (or as close thereto as is possible). Statements of accounts or financial reports, upon the other hand, merely summarize such individual transactions as have been set out in the books of account and are usually prepared at the end of an accounting period, commonly corresponding to the fiscal year of the establishment or entity concerned. 20Statements of account and financial reports do not set out or repeat the basic data (i.e., the individual transactions) on which they are based and are, therefore, much less informative sources of cash flow information. Books of account are kept and handled by bookkeepers (employees) of the company or agency; financial statements may be audited statements, i.e., prepared by external independent auditors (certified public accountants).

It is immaterial that the Union, having been organized for less than a year before its application for registration with the BLR, would have had no real opportunity to levy and collect dues and fees from its members which need to be recorded in the books of account. Such accounting books can and must be submitted to the BLR, even if they contain no detailed or extensive entries as yet. The point to be stressed is that the applicant local or chapter must demonstrate to the BLR that it is entitled to registered status because it has in place a system for accounting for members' contributions to its fund even before it actually receives dues or fees from its members. The controlling intention is to minimize the risk of fraud and diversion in the course of the subsequent formation and growth of the Union fund.

The public respondent Undersecretary thus acted arbitrarily in disregarding the plain terms of the Omnibus Implementing Rules (Section 3(e), Rule III Book V, Omnibus Rules Implementing the Labor Code), and as well the rule laid down by this court in the Progressive Development Corporation case. The statutory and regulatory provisions defining the requirements of registration of legitimate labor organizations are an exercise of the overriding police power of the State, designed for the protection of workers against potential abuse by unions and federations of unions that recruit them. 21 This purpose is obviously defeated if the registration requirements are relaxed arbitrarily by the very officials supposed to administer such requirements and registered status extended to an organization not entitled to such status, as in the case at bar.


SAN MIGUEL FOODS INC. V. LAGUESMA

Petitioner asserts that IBM at SMFI is not a legitimate labor organization notwithstanding the fact that it is a local or chapter of the IBM Federation. This is so because under Article 234 of the Labor Code, any labor organization shall acquire legal personality upon the issuance of the Certificate of Registration by the Bureau of Labor Relations.

We do not agree.

I

Article 212(h) of the Labor Code defines a legitimate labor organization as any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof.

It is important to determine whether or not a particular labor organization is legitimate since legitimate labor organizations have exclusive rights under the law which cannot be exercised by non-legitimate unions, one of which is the right to be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining. These rights are found under Article 242 of the Labor Code, to wit:

ART. 242. Rights of legitimate organizations.--A legitimate labor organization shall have the right:

(a) To act as the representative of its members for the purpose of collective bargaining;

(b) To be certiified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining;

(c) To be furnished by the employer, upon written request, with his annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation;

(d) To own property, real or personal, for the use and benefit of the labor organization and its members;

(e) To sue and be sued in its registered name; and

(f) To undertake all other activities designed to benefit the organization and its members, including cooperative, housing welfare and other projects not contrary to law.

x x x x x x x x x."

The pertinent question, therefore, must be asked: When does a labor organization acquire legitimacy?

Ordinarily, a labor organization attains the status of legitamacy only upon the issuance in its name of a Certificate of Registration by the Bureau of Labor Relations pursuant to Articles 234 and 235 of the Labor Code, viz.:

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;

46 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304(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.

ART. 235. Action on application. -- The Bureau shall act on all applications for registration within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president.

The foregoing procedure is not the only way by which a labor union may become legitimate, however. When an unregistered union becomes a branch, local or chapter of a federation, some of the aforementioned requirements for registration are no longer required.[8] Section 3, Rule II, Book V of the Implementing Rules of the Labor Code governs the procedure for union affiliation, the relevant portions of which provide:

Sec. 3. Union Affiliation: Direct Membership with National Union. An affiliate of a labor federation or national union may be a local or chapter thereof or an independently registered union.

(a) The labor federation or national union concerned shall issue a chapter certificate indicating the creation or establishment of a local or chapter, copy of which shall be submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such charter certificate.

(b) An independently registered union shall be considered an affiliate of a labor federation or national union after submission to the Bureau of the contract or agreement of affiliation within thirty (30) days after its execution.

x x x x x x x x x

(e) The local or chapter of a labor federation or national union shall have and maintain a constitution and by-laws, set of officers and book of accounts. For reporting purposes, the procedure governing the reporting of independently registered unions, federations or national unions shall be observed.

Paragraph (a) refers to a local or chapter of a federation which did not undergo the rudiments of registration while paragraph (b) refers to an independently registered union which affiliated with a federation. Implicit in the foregoing differentiation is the fact that a local or chapter need not be independently registered. By force of law (in this case, Article 212 [h]), such local or chapter becomes a legitimate labor organization upon compliance with the aforementioned provisions of Section 3[9] (a) and (e), without having to be issued a Certificate of Registration in its favor by the BLR.

The cases of Lopez Sugar Corporation v. Secretary of Labor and Employment,[10] Phoenix Iron and Steel Corporation v. Secretary of Labor and Employment,[11] and Protection Technology, Inc. v. Secretary, Department of Labor and Employment,[12] all going back to our landmark holding in Progressive Development Corporation v. Secretary, Department of Labor and Employment,[13] unequivocably laid down the rule, thus:

A local or chapter therefore becomes a legitimate labor organization only upon submission of the following to the BLR:

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

http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/116172.htm#_edn13






47 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-03042) The constitution and by-laws, a statement on the set of officers, and the books of accounts all of which are certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by its president.

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

Corollarily, the satisfaction of all these requirements by the local or chapter shall vest upon it the status of legitimacy with all its concomitant statutory privileges, one of which is the right to be certified as the exclusive representative of all the employees in an appropriate bargaining unit.

In the case at bench, public respondent Bienvenido E. Laguesma, in affirming the finding of the Med-Arbiter that IBM at SMFI is a legitimate labor organization,[14] made the following material pronouncements amply supported by the records:

[t]he resolution of the issue raised by the respondent on whether or not petitioner is a legitimate labor organization will depend on the documents submitted by the petitioner in the second petition.

A close scrutiny of the records shows that at the time of the filing of the subject petition on 24 September 1993 by the petitioner Ilaw at Buklod ng Manggagawa, for and in behalf of its local affiliate IBM at SMFI-CEBU B-MEG, the latter has been clothed with the status and/or character of a legitimate labor organization. This is so, because on 19 July 1993, petitioner submitted to the Bureau of Labor Relations (BLR), this Department, the following documents: charter certificate, constitution and by-laws, names and addresses of the union officers and a certification of the unions secretary on the non-availability of the unions Books of Accounts. Said documents (except the charter certificate) are certified under oath and attested to by the local unions secretary and President, respectively

ACTION OR DENIAL OF APPLICATION AND REMEDY

ART. 236- Denial of registration; appeal. The decision of the Labor Relations Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of notice thereof.

BVRIV S5&6

SECTION 5. Where to file motion for intervention. — The motion for intervention in certification election proceedings shall be filed before the Med-Arbiter assigned to the case. The mere filing of said motion, however, will not suspend the holding of the certification election without an order issued by the Med-Arbiter.cralaw

SECTION 6. Procedure. — Upon receipt of a petition, the Regional Director shall assign the case to a Med-Arbiter for appropriate action. The Med-Arbiter, upon receipt of the assigned petition, shall have twenty (20) working days from submission of the case for resolution within which to dismiss or grant the petition.cralaw

In a petition filed by a legitimate organization involving an unorganized establishment, the Med-Arbiter shall immediately order the conduct of a certification election.cralaw

In a petition involving an organized establishment or enterprise where the majority status of the incumbent collective bargaining union is questioned through a verified petition by a legitimate labor organization, the Med-Arbiter shall immediately order the certification election by secret ballot if the petition is filed during the last sixty (60) days of the collective bargaining agreement and supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit. Any petition filed before or after the sixty-day freedom period shall be dismissed outright. The twenty-five percent (25%) requirement shall be satisfied upon the filing of the petition, otherwise the petition shall be dismissed.cralaw


48 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The sixty-day freedom period based on the original collective bargaining agreement shall not be affected by any amendment, extension or renewal of the collective bargaining agreement for purposes of certification election.cralaw

The decision calling for the conduct of an election shall contain the following:

(a) Names of the contending unions;

(b) Name of the employer;

(c) Description of the bargaining unit, and

(d) List of eligible voters which shall be based on the payroll three (3) months prior to the filing of the petition for certification election.cralaw

The certification election shall be held within twenty (20) calendar days from receipt of the order by the parties.cralaw

see VASSAR INDUSTRIES EMPLOYEES UNION V. ESTRELLA

EFFECT ON FREEDOM OF ASSOCIATION

VILLAR V INCIONG

Moreover, the Amigo Employees Union, as an independent union, is not duly registered as such with the Bureau of Labor Relations. The appealed decision of OIC Leogardo of Regional Office No. 4 states as a fact that there is no record in the Bureau of Labor Relations that the Amigo Employees Union (Independent) is registered, and this is not disputed by petitioners, notwithstanding their allegation that the Amigo Employees Union is a duly registered labor organization bearing Ministry of Labor Registration Certification No. 5290-IP dated March 27, 1967. But the independent union organized after the "Sama-Samang Kapasiyahan" executed February 7, 1977 could not have been registered earlier, much less March 27, 1967 under Registration Certificate No. 5290-IP. As such unregistered union, it acquires no legal personality and is not entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration. Article 234 of the New Labor Code specifically provides:

Art. 234. Requirements of Registration.—Any applicant labor organization, association, or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration. ....

In Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40, We had occasion to interpret Section 23 of R.A. No. 875 (Industrial Peace Act) requiring of labor unions registration by the Department of Labor in order to qualify as "legitimate labor organization," and We said:

The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of assembly and association guaranteed in the Bill of Rights is devoid of factual basis. The registration prescribed in paragraph (b) of said section 17 is not a limitation to the right of assembly or association, which may be exercised with or without said registration. The latter is merely a condition sine qua non for the acquisition of legal personality by labor organizations, associations or unions and the possession of the 'rights and privileges granted by law to legitimate labor organizations.' The Constitution does not guarantee these rights and privileges, much less said personality, which are mere statutory creations, for the possession and exercise of which registration is required to protect both labor and the public against abuses, fraud, or impostors who pose as organizers, although not truly accredited agents of the union they purport to represent. Such requirement is a valid exercise of the police power, because the activities in which labor organizations, associations and union or workers are engaged affect public interest, which should be protected.

49 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Simply put, the Amigo Employees Union (Independent) Which petitioners claim to represent, not being a legitimate labor organization, may not validly present representation issues. Therefore, the act of petitioners cannot be considered a legitimate exercise of their right to self-organization. Hence, We affirm and reiterate the rationale explained in Phil Association of Free Labor Unions vs. Sec. of Labor case, supra, in order to protect legitimate labor and at the same time maintain discipline and responsibility within its ranks.

The contention of petitioners that the new CBA concluded between Amigo Employees Union-PAFLU and the Company on February 15, 1977 containing the union security clause cannot be invoked as against the petitioners for offenses committed earlier than its conclusion, deserves scant consideration. We find it to be the fact that the union security clause provided in the new CBA merely reproduced the union security clause provided in the old CBA about to expire. And since petitioners were expelled from Amigo Employees Union-PAFLU on March 28, 1982 upon denial of their Motion for Reconsideration of the decision expelling them, the CBA of February 15, 1977 was already applicable to their case. The "closed-shop provision" in the CBA provides:

All members of the UNION as of the signing of this Agreement shall remain members thereof in good standing. Therefore, any members who shall resign, be expelled, or shall in any manner cease to be a member of the UNION, shall be dismissed from his employment upon written request of the UNION to the Company. (Art. III)

A closed-shop is a valid form of union security, and a provision therefor in a collective bargaining agreement is not a restriction of the right of freedom of association guaranteed by the Constitution. (Manalang, et al. vs. Artex Development Co., Inc., et al., L-20432, October 30, 1967, 21 SCRA 561). Where in a closed-shop agreement it is stipulated that union members who cease to be in good standing shall immediately be dismissed, such dismissal does not constitute an unfair labor practice exclusively cognizable by the Court of Industrial Relations. (Seno vs. Mendoza, 21 SCRA 1124).

RIGHTS OF LEGITIMATE LABOR ORGANIZATION

Article 242. Rights of legitimate labor organizations. A legitimate labor organization shall have the right:

To act as the representative of its members for the purpose of collective bargaining;

To be certified as the exclusive representative of all the employees in an appropriate bargaining unit for purposes of collective bargaining;

To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation;

To own property, real or personal, for the use and benefit of the labor organization and its members;

To sue and be sued in its registered name; and

To undertake all other activities designed to benefit the organization and its members, including cooperative, housing, welfare and other projects not contrary to law.

Notwithstanding any provision of a general or special law to the contrary, the income and the properties of legitimate labor organizations, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments. The exemptions provided herein may be withdrawn only by a special law expressly repealing this provision. (As amended by Section 17, Republic Act No. 6715, March 21, 1989)

50 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304EFFECT OF REGISTRATION

The resolution of this issue hinges on the determination of factual matters which certainly is not within the ambit of the present petition for certiorari. Besides, the contention is without any legal basis at all; it is purely speculative and bereft of any documentary support. Petitioner itself even admitted the existence of an agreement but argued that its provisions were not being implemented nor adhered to at all. Suffice it to mention that the filing of the petition for certification election is not the panacea to this allegedly anomalous situation. Violations of collective bargaining agreements constitute unfair labor practice as provided for under Art. 248, par. (i), of the Labor Code. In consonance thereto, Art. 261 equips petitioner with the proper and appropriate recourse

-Art. 261. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement x x x Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provision of such agreement.

The CBA entered into between FORMEY and KAMAPI stipulates among others

Article IX - GRIEVANCE PROCEDURE

Sec. 1. Any complaint, grievance, difficulty, disagreement or dispute arising out of any section taken (sic) by the Company and/or by the Union concerning the interpretation of the terms and conditions of the agreement and/or which may arise regarding (sic) the terms and conditions of employment shall be settled in the manner provided for under this Article.

Sec. 2. The Company and the Union agree to create and establish a Grievance Committee composed of two (2) representatives from the Company and two (2) from the Union to receive complaint, grievance or dispute from the workers and/or from the Company with the view to settle it amicably.

Sec. 3. In case a complaint or grievance has been filed by either the Union or the Company, the grievance committee shall discuss the same and have (sic) to settle it. If after the meeting of the grievance committee no satisfactory settlement is reached the matter shall be referred to the top officers of the Union and the Company for the settlement of the said grievance or dispute.

Sec. 4. Within five (5) days from the time the top officers of the Union and the Company has (sic) failed to reach an amicable settlement of the grievance or dispute, the same shall be submitted for voluntary arbitration. The arbitrator or arbitrators shall be chosen by lottery and the union and the Company shall avail (sic) the list of arbitrators of the Honorable Bureau of Labor Relations.

Sec. 5. The mutually agreed or chosen arbitrator shall proceed to try and hear the case and for (sic) the reception of evidence and to call witnesses to testify and after the submission of the case by both parties an award or order shall be issued in accordance with the rules and guidelines promulgated by the Honorable Department of Labor and Employment based on the pertinent laws and established jurisprudence.The expenses of the arbitration proceedings shall be borned (sic) equally by the Company and the Union.[19]

By filing the petition for certification election it is clear that KAPATIRAN did not avail of the abovementioned grievance procedure.

It is further argued that the CBA has no binding force since it was entered into by KAMAPI as a federation and not by the local union. Perusal of the agreement proves the contention flawed. The signatories for KAMAPI consisted of its national


51 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304president and of the duly elected officers of the local union. Thus the fact that KAMAPI was particularly mentioned as the bargaining party without specifying the local union cannot strip it of its authority to participate in the bargaining process. The local union maintains its separate personality despite affiliation with a larger national federation. [20]

The doctrine laid down in Progressive Development Corporation[21] is a mere clarification of the principle enunciated in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.[22]Both cases have provided that the mother union acting for and in behalf of its affiliate ha(s) the status of an agent while the local union remained the basic unit of the association free to serve the common interest of all its members subject only to the restraints imposed by the Constitution and By-Laws of the association. Nonetheless, the facts and principles laid down in both cases do not jibe squarely with the case at bench. The controversy in Progressive Development Corporation[23] centered on the requirements before a local or chapter of a federation may file a petition for certification election and be certified as the sole and exclusive bargaining agent, while in Liberty Cotton Mills Workers[24] the issue involved was the disaffiliation of the local union from the federation The question of whether there was a valid and existing CBA, which is the question being resolved in the case at bench, was never raised in the two cited cases since it was already an accepted fact that the CBA was validly executed and existing.

Anent the Urgent Motion to Dismiss[25] filed by KAMAPI on the ground that the instant petition had become moot and academic due to the cancellation by the Bureau of Labor Relations of NWBs certificate of registration and its consequent delisting from the roll of labor federations, suffice it to state that at this juncture we cannot properly rule on the issue considering that KAMAPI has not proven that the decision of the Bureau of Labor Relations has become final and executory taking into account KAPATIRANs filing of a motion for reconsideration with the Bureau. This notwithstanding, Sec. 9, Rule II, Book V of the Omnibus Rules Implementing the Labor Cose requires that an appeal be filed with the Bureau, or in case of cancellation by the Bureau, with the Secretary of Labor and Employment whose decision shall become final and no longer subject of appeal.

FURUSAWA RUBBER PHIL V. SEC. OF LABOR

The main contention of petitioner is that FEU-IND is not a legitimate labor organization so that, under the law, it could not file a petition for certification election. The basis of this argument is the failure of the petitioning union to submit an original copy of its certificate of registration.

We cannot sustain petitioner. We agree with respondent Secretary of Labor and Employment that FEU-IND is a legitimate labor organization. As such, it enjoys all the rights and privileges recognized by law.[2] The fact that FEU-IND has been issued Certificate of Registration No. RO-400-9502-UR-003 by Regional Office No. 14 of the Department of Labor and Employment (DOLE) is sufficient proof of its legitimacy. The presentation of the xerox copy of the certificate of registration to support its claim of being a duly registered labor organization instead of the submission of the original certificate is not a fatal defect and does not in any way affect its legitimate status as a labor organization conferred by its registration with DOLE.The issuance of the certificate of registration evidently shows that FEU-IND has complied with the requirements of Art. 234 of the Labor Code. The requirements for registration being mandatory, they are complied with before any labor organization, association or group of unions or workers acquires legal personality and be entitled to the rights and privileges granted by law to legitimate labor organizations.

One of the rights of a legitimate labor organization is to represent its members in collective bargaining agreements; [3] also, to be certified as the exclusive representative of all employees in an appropriate unit for purposes of collective bargaining. [4] Hence the petition of FEU-IND, as a legitimate labor organization, for certification election may rightfully be granted.[5]

FEU-IND filed a petition for certification election precisely to determine the will of the employees for purposes of collective bargaining. Basically, a petition for certification election is principally the concern of the workers. [6] The only












52 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304exception is where the employer has to file a petition for certification election so that it can bargain collectively as mandated by Art. 258 of the Labor Code. Thereafter, the role of the employer in the certification process ceases. It becomes merely a by-stander. In one case this court ruled that since the petition for certification election was filed by a legitimate labor organization under Art. 258 of the Labor Code, the employer should not have involved itself in the process. [7]

To circumvent the law on the fundamental right of the workers to self-organization would render such constitutional provision meaningless. Section 3, Art. XIII, of the 1987 Constitution underscores the right of the workers to organize with others or to join any labor organization which he believes can assist and protect him in the successful pursuit of his daily grind. The choice is his. Any attempt on the part of management or employers to curtail or stifle this right of the workers will be deemed unconstitutional and considered as unfair labor practice on the part of management. Briefly, this right to self-organization is a fundamental right - to give the workers the freedom to form or join any labor organization voluntarily without fear of suppression or reprisal from management. PD No. 828 encourages trade unionism to supplement and strengthen the exercise of the workers' right to self-organization.

We find no merit in the petition. The issue on the legitimacy of the petitioning union should be settled in its favor. The submission of a xerox copy of the unions certificate of registration to prove its legitimacy is sufficient, hence, the Med-Arbiter correctly granted the petition for certification election. As it been held in a long line of cases, a certification proceeding is not a litigation in the sense that the term is ordinarily understood, but an investigation of a fact-finding and non- adversarial character. It is not covered by the technical rules of evidence. Thus, as provided in Art. 221 of the Labor Code, proceedings before the National Labor Relations Commission are not covered by the technical rules of evidence and procedure. The court hasalready construed Art. 221 of the Labor Code in favor of allowing the NLRC or the labor arbiter to decide the case on the basis of position papers and other documents submitted without resorting to technical rules of evidence as observed in regular courts of justice.[12] Indeed, the technical rules of evidence do not apply if the decision to grant the petition proceeds from an examination of its sufficiency as well as a careful look into the arguments contained in position papers and other documents. In this regard, the factual findings of the Med-Arbiter appear to be supported by substantial evidence, hence, we must accord them great weight and respect.

Under the premises, or at the very least, when conflicting interests of labor and capital are to be weighed on the scales of social justice, the heavier influence of the latter should be balanced by sympathy and compassion which the law must accord the underprivileged worker. This is only in keeping with the constitutional mandate that the State shall afford full protection to labor.

EFFECT OF NON-REGISTRATION

TROPICAL HUT EMPLOYEE UNION V. TROPICAL HUT FOOD MARKET, INC.,

The union security clause in the CBA cannot be used to justify the dismissal of the employees who voted for the disaffiliation of the local union from the federation. More so in a case where the CBA imposes dismissal only in case employees are expelled from the union for their act of joining another federation for forming another union or if they failed or refused to maintain membership therein. However, in a situation where it does not involve the withdrawal of merely some employees from the union but the whole union itself withdraws from the federation with w/c it was affiliated, there can be no violation of the union security clause in the CBA, and consequently, there exists no sufficient basis to terminate the employment of said employees.

PROGRESSIVE DEVELOPMENT CORP. V. SEC OF DOLE

But when an unregistered union becomes a branch, local or chapter of a federation, some of the aforementioned requirements for registration are no longer required. The provisions governing union affiliation are found in Rule II, Section 3, Book V of the Implementing Rules, the relevant portions of which are cited below:



53 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Sec. 3. Union affiliation; direct membership with national union. — An affiliate of a labor federation or national union may be a local or chapter thereof or an independently registered union.

a) The labor federation or national union concerned shall issue a charter certificate indicating the creation or establishment of a local or chapter, copy of which shall be submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such charter certificate.

b) An independently registered union shall be considered an affiliate of a labor federation or national union after submission to the Bureau of the contract or agreement of affiliation within thirty (30) days after its execution.

xxx xxx xxx

e) The local or chapter of a labor federation or national union shall have and maintain a constitution and by laws, set of officers and books and accounts. For reporting purposes, the procedure governing the reporting of independently registered unions, federations or national unions shall be observed.

Paragraph (a) refers to the local or chapter of a federation which did not undergo the rudiments of registration while paragraph (b) refers to an independently registered union which affiliated with a federation. Implicit in the foregoing differentiation is the fact that a local or chapter need not be independently registered. By force of law (in this case, Article 212[h]); such local or chapter becomes a legitimate labor organization upon compliance with the aforementioned provisions of Section 3.

Thus, several requirements that are otherwise required for union registration are omitted, to wit:

(1) The requirement that the application for registration must be signed by at least 20% of the employees in the appropriate bargaining unit;

2) The submission of officers' addresses, principal address of the labor organization, the minutes of organizational meetings and the list of the workers who participated in such meetings;

3) The submission of the minutes of the adoption or ratification of the constitution and by the laws and the list of the members who participated in it.

Undoubtedly, the intent of the law in imposing lesser requirements in the case of the branch or local of a registered federation or national union is to encourage the affiliation of a local union with the federation or national

LAKAS NG MANGGAGAWANG MAKABAYAN V. MARCELO

Firstly, LAKAS cannot bring any action for and in behalf of the employees who were members of MUEWA because, as intimated earlier in this Decision, the said local union was never an affiliate of LAKAS. What appears clearly from the records is that it was Augusto Carreon and his followers who joined LAKAS, but then Augusto Carreon was not the recognized president of MUEWA and neither he nor his followers can claim any legitimate representation of MUEWA. Apparently, it is this split faction of MUEWA, headed by Augusta Carreon, who is being sought to be represented by LAKAS. However, it cannot do so because the members constituting this split faction of MUEWA were still members of MUEWA which was on its own right a duly registered labor union. Hence, any suit to be brought for and in behalf of them can be made only by MUEWA, and not LAKAS. It appearing then that Augusta Carreon and his cohorts did not disaffiliate from MUEWA nor signed any individual affiliation with LAKAS, LAKAS bears no legal interest in representing MUEWA or any of its members.

Nor will the lower court's opinion be availing with respect to the complaining employees belonging to UNWU and MFWU. Although it is true, as alleged by LAKAS, that when it filed the charge on December 26, 1967, the officers of the

54 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304movant unions were not yet then the officers thereof, nevertheless, the moment MFWU and UNWU separated from and disaffiliated with 'LAKAS to again exercise its rights as independent local unions, registered before as such, they are no longer affiliates of LAKAS, as what transpired here. Naturally, there would no longer be any reason or occasion for LAKAS to continue representing them. Notable is the fact that the members purportedly represented by LAKAS constitute the mere minority of the movant unions, as may be inferred from the allegations of the movant unions as well as the counter-allegations of LAKAS filed below. As such, they cannot prevail or dictate upon the will of the greater majority of the unions to which they still belong, it appearing that they never disaffiliated from their unions; or stated in another way, they are bound by the action of the greater majority.4

In NARIC Workers' Union vs. CIR, 5 We ruled that, "(a) labor union would go beyond the limits of its legitimate purposes if it is given the unrestrained liberty to prosecute any case even for employees who are not members of any union at all. A suit brought by another in representation of a real party in interest is defective." Under the uncontroverted facts obtaining herein, the aforestated ruling is applicable, the only difference being that, here, a labor federation seeks to represent members of a registered local union never affiliated with it and members of registered local unions which, in the course of the proceedings before the industrial court, disaffiliated from it.

CANCELLATION OF UNION CERTIFICATE REGISTRATION

Article 238. Cancellation of registration; appeal. The certificate of registration of any legitimate labor organization, whether national or local, shall be cancelled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of the requirements herein prescribed.

[The Bureau upon approval of this Code shall immediately institute cancellation proceedings and take such other steps as may be necessary to restructure all existing registered labor organizations in accordance with the objective envisioned above.] (Repealed by Executive Order No. 111, December 24, 1986)

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

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

Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto;

Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election;

Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself;

Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any activity prohibited by law;

Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law;

Asking for or accepting attorney’s fees or negotiation fees from employers;

Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members;

55 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and

Failure to comply with requirements under Articles 237 and 238.

BVRXIV S1-3

SECTION 1. Penalties. — Any person violating any of the provisions of Article 264 of the Code shall be punished by a fine of not less than one thousand (P1,000.00) pesos nor more than ten thousand (P10,000.00) pesos and/or imprisonment for not less than three months nor more than three years, or both such fine and imprisonment, at the discretion of the court. Prosecution under this provision shall preclude prosecution for the same act under the Revised Penal Code and vice versa.cralaw

SECTION 2. Frivolous or dilatory appeal. — To discourage frivolous or dilatory appeals, the Office of the President, the Secretary of Labor, the Bureau or the Commission shall impose reasonable penalties, including fines or censures upon erring parties.cralaw

SECTION 3. Enforcement of decisions, orders and awards. — To ensure compliance with decisions, orders and awards, the Labor Arbiters or the Med-Arbiters may take any measure under existing laws, decrees, and general orders, as may be necessary, including the imposition of administrative fines which shall not be less than P500 nor more than P10,000 against the erring parties.

BVRXV S1&5

SECTION 1. Decision of Commission. — The decision of the Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties.cralaw

ALLIANCE OF DEMOCRATIC LABOR ORGANIZATION V. LAGUESMA

While, in general, administrative agencies exercising quasi-judicial powers, like the Department of Labor and Employment, are free from the rigidity of certain procedural requirements, they are nonetheless bound by law and practice to observe the fundamental and essential requirements of due process in justiciable cases presented before them. [6]

These essential requirements of due process were laid down in the landmark case of Ang Tibay vs. Court of Industrial Relations, et al.,[7] as follows:

The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can, injusticiable cases coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character. There are cardinal primary rights which must be respected even in proceedings of this character:

(1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. In the language of Chief Justice Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play.

(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. x x x In the language of this Court in Edwards vs. McCoy, 22 Phil., 598, the right to adduce evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration.



56 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304(3) While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a nullity, a place when directly attached. (Edwards vs. McCoy, supra.) x x x

(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O.G. 1 335), but the evidence must be substantial. x x x Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. x x x But this assurance of a desirable flexibility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. x x x Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them.

(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision.

7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the Parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it.

The most basic tenet of due process is the right to be heard, and as applied in administrative proceedings, an opportunity to explain ones side.[8] Such opportunity was denied petitioner in this case.

The public respondent and his subaltern, the Director of the Bureau of Labor Relations, should have learned their lessons when the latters resolution dated November 16, 1989cancelling petitioners registration due precisely to absence of due process was reversed by the then Secretary of Labor whose decision was, in effect, affirmed by this Court. However, instead of taking a lesson in due process, said director - this time abetted by public respondent - violated again the same fundamental principle.

After petitioner submitted its objections to the admission of the documentary evidence of CLASS, the BLR director should have first ruled on their admissibility. However, without ruling on said offer and without setting the case for reception of petitioners evidence, the said official proceeded to render judgment affirming its earlier (but already ruled as improper) decision to cancel the registration of ADFLO. This is a gross violation of petitioners right to due process.

Under Section 1, Article II of our Constitution, (n)o person shall be deprived of life, liberty or property without due process of law x x x and under Article 238 of the Labor Code, (t)he certificate of registration of any legitimate labor organization, whether national or local, shall be cancelled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of the requirements herein prescribed. (italics supplied)

The cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it loses - as a rule - its rights under the Labor Code. Under the circumstances, petitioner was indisputably entitled to be heard before a judgment could be rendered cancelling its certificate of registration. In David vs. Aguilizan,[9] it was held that a decision rendered without any hearing is null and void.

NUBE V. MINISTER OF LABOR

s it proper to order a certification election despite the pendency of the petition to cancel herein petitioner union's certificate of registration?



57 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The Court rules in the affirmative. The pendency of the petition for cancellation of the registration certificate of herein petitioner union is not a bar to the holding of a certification election. The pendency of the petition for cancellation of the registration certificate of petitioner union founded on the alleged illegal strikes staged by the leaders and members of the intervenor union and petitioner union should not suspend the holding of a certification election, because there is no order directing such cancellation (cf. Dairy Queen Products Company of the Philippines, Inc. vs. Court of Industrial Relations, et al. No. L-35009, Aug. 31, 1977). In said Dairy Queen case, one of the issues raised was whether the lower court erred and concomitantly committed grave abuse of discretion in disregarding the fact that therein respondent union's permit and license have been cancelled by the then Department of Labor and therefore could not be certified as the sole and exclusive bargaining representative of the rank and file employees of therein petitioner company.

While the rationale of the decision was principally rested on the subsequent rescission of the decision ordering the cancellation of the registration certificate of the respondent union, thereby restoring its legal personality and an the rights and privileges accorded by law to a legitimate organization, this Court likewise declared: "There is no showing, however, that when the respondent court issued the order dated December 8, 1971, certifying the Dairy Queen Employees Association CCLU as the sole and exclusive bargaining representative of all regular rank and file employees of the Dairy Queen Products Company of the Philippines, Inc., for purposes of collective bargaining with respect to wages, rates of pay, hours of work and other terms and conditions for appointment, the order of cancellation of the registration certificate of the Dairy Queen Employees Association-CC-1,U had become final" 78 SCRA 444-445. supra, emphasis supplied).

It is true that under Section 8, Rule II, Book V of the Labor Code, cancellation of registration certificate may be imposed on the following instances:

(a) Violation of Articles 234, 238, 239 and 240 of the Code;

(b) Failure to comply with Article 237 of the Code;

(c) Violation of any of the provisions of Article 242 of the Code; and

(d) Any violation of the provisions of this Book.

The aforementioned provisions should be read in relation to Article 273, Chapter IV, Title VIII which explicitly provides:

Art. 273. Penalties. — (a) Violation of any provision of this Title shall be punished by a fine of One Thousand Pesos [P l, 000.00] to Ten Thousand Pesos [P 10, 000.00] and/or imprisonment of one (1) year to five (5) years.

(b) Any person violating any provision of this Title shall be dealt with in accordance with General Order No. 2-A and General Order No. 49.

(c) Violation of this Title by any legitimate labor organization shall be grounds for disciplinary action including, but not limited to, the cancellation of its registration permit.

x x x x x x x x x

(emphasis supplied).

From the aforequoted provisions, We are likewise convinced that as it can be gleaned from said provisions, cancellation of the registration certificate is not the only resultant penalty in case of any violation of the Labor Code.

58 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304INTERNATIONAL ACTIVITIES OF UNION- PROHIBITION AND REGULATION

Article 269. Prohibition against aliens; exceptions. All aliens, natural or juridical, as well as foreign organizations are strictly prohibited from engaging directly or indirectly in all forms of trade union activities without prejudice to normal contacts between Philippine labor unions and recognized international labor centers: Provided, however, That aliens working in the country with valid permits issued by the Department of Labor and Employment, may exercise the right to self-organization and join or assist labor organizations of their own choosing for purposes of collective bargaining: Provided, further, That said aliens are nationals of a country which grants the same or similar rights to Filipino workers. (As amended by Section 29, Republic Act No. 6715, March 21, 1989)

Article 270. Regulation of foreign assistance.

No foreign individual, organization or entity may give any donations, grants or other forms of assistance, in cash or in kind, directly or indirectly, to any labor organization, group of workers or any auxiliary thereof, such as cooperatives, credit unions and institutions engaged in research, education or communication, in relation to trade union activities, without prior permission by the Secretary of Labor.

"Trade union activities" shall mean:

organization, formation and administration of labor organization;

negotiation and administration of collective bargaining agreements;

all forms of concerted union action;

organizing, managing, or assisting union conventions, meetings, rallies, referenda, teach-ins, seminars, conferences and institutes;

any form of participation or involvement in representation proceedings, representation elections, consent elections, union elections; and

other activities or actions analogous to the foregoing.

This prohibition shall equally apply to foreign donations, grants or other forms of assistance, in cash or in kind, given directly or indirectly to any employer or employer’s organization to support any activity or activities affecting trade unions.

The Secretary of Labor shall promulgate rules and regulations to regulate and control the giving and receiving of such donations, grants, or other forms of assistance, including the mandatory reporting of the amounts of the donations or grants, the specific recipients thereof, the projects or activities proposed to be supported, and their duration.

Article 271. Applicability to farm tenants and rural workers. The provisions of this Title pertaining to foreign organizations and activities shall be deemed applicable likewise to all organizations of farm tenants, rural workers, and the like: Provided, That in appropriate cases, the Secretary of Agrarian Reform shall exercise the powers and responsibilities vested by this Title in the Secretary of Labor.

UNION-MEMBER RELATIONS

Article 241. Rights and conditions of membership in a labor organization. The following are the rights and conditions of membership in a labor organization:

59 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;

The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and by-laws of the organization;

The members shall directly elect their officers, including those of the national union or federation, to which they or their union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirements for candidacy to any position shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds, within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989)

The members shall determine by secret ballot, after due deliberation, any question of major policy affecting the entire membership of the organization, unless the nature of the organization or force majeure renders such secret ballot impractical, in which case, the board of directors of the organization may make the decision in behalf of the general membership;

No labor organization shall knowingly admit as members or continue in membership any individual who belongs to a subversive organization or who is engaged directly or indirectly in any subversive activity;

No person who has been convicted of a crime involving moral turpitude shall be eligible for election as a union officer or for appointment to any position in the union;

No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws;

Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer or agent making the collection and entered into the record of the organization to be kept and maintained for the purpose;

The funds of the organization shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose;

Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.

Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier: Provided, That this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code: Provided, further, that failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989)

The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized

60 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization;

The treasurer of any labor organization and every officer thereof who is responsible for the account of such organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of the organization, shall render to the organization and to its members a true and correct account of all moneys received and paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made:

At least once a year within thirty (30) days after the close of its fiscal year;

At such other times as may be required by a resolution of the majority of the members of the organization; and

Upon vacating his office.

The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor.

The books of accounts and other records of the financial activities of any labor organization shall be open to inspection by any officer or member thereof during office hours;

No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members in a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president.

Other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction; and

It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws.

For this purpose, registered labor organizations may assess reasonable dues to finance labor relations seminars and other labor education activities.

Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of officers from office, whichever is appropriate. At least thirty percent (30%) of the members of a union or any member or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide any reported violation to mete the appropriate penalty.

Criminal and civil liabilities arising from violations of above rights and conditions of membership shall continue to be under the jurisdiction of ordinary courts.

Article 249. Unfair labor practices of labor organizations. It shall be unfair labor practice for a labor organization, its officers, agents or representatives:

To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership;

61 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304UST FACULTY UNION V. BITONIO

When a man joins a labor union (or almost any other democratically controlled group), necessarily a portion of his individual freedom is surrendered for the benefit of all members. He accepts the will of the majority of the members in order that he may derive the advantages to be gained from the concerted action of all. Just as the enactments of the legislature bind all of us, to the constitution and by-laws of the union (unless contrary to good morals or public policy, or otherwise illegal), which are duly enacted through democratic processes, bind all of the members. If a member of a union dislikes the provisions of the by-laws, he may seek to have them amended or may withdraw from the union; otherwise, he must abide by them. It is not the function of courts to decide the wisdom or propriety of legitimate by-laws of a trade union.

On joining a labor union, the constitution and by-laws become a part of the members contract of membership under which he agrees to become bound by the constitution and governing rules of the union so far as it is not inconsistent with controlling principles of law. The constitution and by-laws of an unincorporated trade union express the terms of a contract, which define the privileges and rights secured to, and duties assumed by, those who have become members. The agreement of a member on joining a union to abide by its laws and comply with the will of the lawfully constituted majority does not require a member to submit to the determination of the union any question involving his personal rights.[16]

The constitutional right to self-organization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is signatory.Article 3 of the Convention provides that workers organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom, free from any interference from public authorities. The freedom conferred by the provision is expansive; the responsibility imposed on union members to respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the unions CBL is the fundamental law that governs the relationship between and among the members of the union. It is where the rights, duties and obligations, powers, functions and authority of the officers as well as the members are defined. It is the organic law that determines the validity of acts done by any officer or member of the union. Without respect for the CBL, a union as a democratic institution degenerates into nothing more than a group of individuals governed by mob rule.

ADMISSION AND DISCIPLINE

SALUNGA V CIR

Although, generally, a state may not compel ordinary voluntary associations to admit thereto any given individual, because membership therein may be accorded or withheld as a matter of privilege,1 the rule is qualified in respect of labor unions holding a monopoly in the supply of labor, either in a given locality, or as regards a particular employer with which it has a closed-shop agreement.2 The reason is that

. . . The closed shop and the union shop cause the admission requirements of trade union to becomeaffected with the public interest. Likewise, a closed shop, a union shop, or maintenance of membership clauses cause the administration of discipline by unions to be affected with the public interest.3

Consequently, it is well settled that such unions are not entitled to arbitrarily exclude qualified applicants for membership, and a closed-shop provision would not justify the employer in discharging, or a union in insisting upon the discharge of, an employee whom the union thus refuses to admit to membership, without any reasonable ground therefor.4 Needless to say, if said unions may be compelled to admit new members, who have the requisite qualifications, with more reason may the law and the courts exercise the coercive power when the employee involved is a long standing union member, who, owing to provocations of union officers, was impelled to tender his resignation, which he forthwith withdrew or revoked.

http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/131235.htm#_edn16

62 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Surely, he may, at least, invoke the rights of those who seek admission for the first time, and can not arbitrarily he denied readmission.

RIGHT TO DISCIPLINE

VILLAR V INCIONG

The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of assembly and association guaranteed in the Bill of Rights is devoid of factual basis. The registration prescribed in paragraph (b) of said section 17 is not a limitation to the right of assembly or association, which may be exercised with or without said registration. The latter is merely a condition sine qua non for the acquisition of legal personality by labor organizations, associations or unions and the possession of the 'rights and privileges granted by law to legitimate labor organizations.' The Constitution does not guarantee these rights and privileges, much less said personality, which are mere statutory creations, for the possession and exercise of which registration is required to protect both labor and the public against abuses, fraud, or impostors who pose as organizers, although not truly accredited agents of the union they purport to represent. Such requirement is a valid exercise of the police power, because the activities in which labor organizations, associations and union or workers are engaged affect public interest, which should be protected.

Simply put, the Amigo Employees Union (Independent) Which petitioners claim to represent, not being a legitimate labor organization, may not validly present representation issues. Therefore, the act of petitioners cannot be considered a legitimate exercise of their right to self-organization. Hence, We affirm and reiterate the rationale explained in Phil Association of Free Labor Unions vs. Sec. of Labor case, supra, in order to protect legitimate labor and at the same time maintain discipline and responsibility within its ranks.

The contention of petitioners that the new CBA concluded between Amigo Employees Union-PAFLU and the Company on February 15, 1977 containing the union security clause cannot be invoked as against the petitioners for offenses committed earlier than its conclusion, deserves scant consideration. We find it to be the fact that the union security clause provided in the new CBA merely reproduced the union security clause provided in the old CBA about to expire. And since petitioners were expelled from Amigo Employees Union-PAFLU on March 28, 1982 upon denial of their Motion for Reconsideration of the decision expelling them, the CBA of February 15, 1977 was already applicable to their case. The "closed-shop provision" in the CBA provides:

All members of the UNION as of the signing of this Agreement shall remain members thereof in good standing. Therefore, any members who shall resign, be expelled, or shall in any manner cease to be a member of the UNION, shall be dismissed from his employment upon written request of the UNION to the Company. (Art. III)

A closed-shop is a valid form of union security, and a provision therefor in a collective bargaining agreement is not a restriction of the right of freedom of association guaranteed by the Constitution. (Manalang, et al. vs. Artex Development Co., Inc., et al., L-20432, October 30, 1967, 21 SCRA 561). Where in a closed-shop agreement it is stipulated that union members who cease to be in good standing shall immediately be dismissed, such dismissal does not constitute an unfair labor practice exclusively cognizable by the Court of Industrial Relations. (Seno vs. Mendoza, 21 SCRA 1124).

DUE PROCESS RULES

KAPISANAN NG MGA MANGGAGAWA SA MRR V. BUGAY

The CIR found that the hearing of the charges against Bugay for disloyalty, infidelity in the custody of documents, etc. by the committee designated, was held in his absence, and that this was an irregularity because the records fails to show why he failed to attend investigation. For the purposes of the present case we may even assume that since he was duly notified of the date of hearing, that was sufficient compliance with the requirements of due process. But the CIR found that when

63 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304the report of the committee finding him guilty of the charges and recommending his expulsion, was submitted to the Boards of Directors and was acted upon, Bugay was also absent for the reason that the members of the committee designated to notify him to be present failed to see him, because he was then in Lucena, Quezon (Tayabas). This to us is an irregularity. We believe that Bugay had a right to appear before the Board, question the correctness and validity of the findings of the committee, including its recommendation, and otherwise defend himself. The Board before acting on the report and recommendation of the committee, specially before approving the same and passing a resolution expelling him from the Union, should have given Bugay an opportunity to be heard.

ELECTION OFFICERS- QUALIFICATIONS, MANNER OF ELECTION, TENURE AND COMPENSATION

Article 241. Rights and conditions of membership in a labor organization. The following are the rights and conditions of membership in a labor organization:

C. The members shall directly elect their officers, including those of the national union or federation, to which they or their union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirements for candidacy to any position shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds, within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989

F. No person who has been convicted of a crime involving moral turpitude shall be eligible for election as a union officer or for appointment to any position in the union;

K. The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization;

VOTERS LIST

TANCINO V. CALLEJA

The petition is impressed with merit. The record of the case shows that public respondent categorically declared as arbitrary, whimsical and without legal basis the grounds 11 relied upon by ANGLO in disenfranchising the 56 voters in question. However, despite said finding public respondent ruled to set aside the Resolution of July 25, 1986 of the Med-Arbiter based on its own findings 12 that 51 of the 56 disenfranchised voters were not yet union members at the time of the election of union officers on May 26, 1986 on the ground that their names do not appear in the records of the Union submitted to the Labor Organization Division of the Bureau of Labor on April 24, 1986.

The finding does not have a leg to stand on. Submission of the employees names with the BLR as qualified members of the union is not a condition sine qua non to enable said members to vote in the election of union's officers. It finds no support in fact and in law. Per public respondent's findings, the April 24, 1986 list consists of 158 union members only 13 wherein 51 of the 56 challenged voters' names do not appear. Adopting however a rough estimate of a total number of union members who cast their votes of some 333 14 and excluding therefrom the 56 challenged votes, if the list is to be the basis as to who the union members are then public respondent should have also disqualified some 175 of the 333 voters. It is true that under article 242(c) of the Labor Code, as amended, only members of the union can participate in the election of union officers. The question however of eligibility to vote may be determined through the use of the applicable

64 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304payroll period and employee's status during the applicable payroll period. The payroll of the month next preceding the labor dispute in case of regular employees 15 and the payroll period at or near the peak of operations in case of employees in seasonal industries. 16

In the case before Us, considering that none of the parties insisted on the use of the payroll period-list as voting list and considering further that the 51 remaining employees were correctly ruled to be qualified for membership, their act of joining the election by casting their votes on May 26, 1986 after the May 10, 1986 agreement is a clear manifestation of their intention to join the union. They must therefore be considered ipso facto members thereof Said employees having exercised their right to unionism by joining ITM-MEA their decision is paramount. Their names could not have been included in the list of employee submitted on April 24, 1986 to the Bureau of Labor for the agreement to join the union was entered into only on May 10, 1986. Indeed the election was supervised by the Department of Labor where said 56 members were allowed to vote. Private respondents never challenged their right to vote then.

EXPULSION REMEDY

KAPISANAN, ET. AL. V. TRAJANO

private respondents filed with the Regional Office No. IV-A, Quezon City, Ministry of Labor and Employment, a petition docketed as R04-ALRD-M- 9-35-81, for the expulsion of the union officers on the ground that they committed gross violation of the Labor Code, specifically paragraphs (a), (b), (g), (h), (j) and (k) of Article 242; and, the constitution and by-laws of the Union, particularly the provisions of Sections 6 and 7 thereof.

In their Answer, the union officers denied the imputation and argued that the disallowed expenditures were made in good faith; that the same conduced to the benefit of the members; and, that they are willing to reimburse the same from their own personal funds. They likewise asserted that they should not be held accountable for the non-production of the books of accounts of the Union for the years 1977, 1978 and 1979 because they were not the officers then and not one of the former officers of the Union had turned over to them the records in question. Further, they averred that the non-ratification of the constitution and by-laws of the Union and the non-segregation of the Union funds occurred before they became officers and that they have already been correcting the same.

Petitioners appealed the said order of Med-Arbiter Cabibihan to herein public respondent Director Trajano of the Bureau of Labor Relations, Ministry of Labor, Manila, claiming that the same is not in accordance with the facts contained in the records and is contrary to law. They pointed out that the disallowed expenditures of P1,278.00 were made in good faith and not used for the personal benefit of herein union officers but, instead, contributed to the benefit of the members. On the alleged failure to maintain and submitted the books of accounts for the years 1977, 1978 and 1979, they argued that they were elected in 1980 only and, therefore, they could not be made responsible for the omissions of their predecessors who failed to turn over union records for the questioned period. Anent their alleged failure to maintain segregated disbursement receipts in accordance with the five (5) segregated funds, petitioners maintained that the same did not result to any loss of funds and such error in procedure had already been corrected. They also demonstrated that there would be a general election on October 4, 1982, at which time, both the election and the desired referendum could be undertaken to determine the membership at minimum expense. They prayed that the resolution on the issue be held in abeyance.

Private respondents, on the other hand, claimed that the Med-Arbiter erred in calling a referendum to decide the issue. They reiterated that the appropriate action should be the expulsion of the herein union officers.

Hence, this petition which We find meritorious for the following reasons:

1. If herein union officers (also petitioners) were guilty of the alleged acts imputed against them, said public respondent pursuant to Article 242 of the New Labor Code and in the light of Our ruling in Duyag vs. Inciong, 98 SCRA 522, should

65 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304have meted out the appropriate penalty on them, i.e., to expel them from the Union, as prayed for, and not call for a referendum to decide the issue;

2. The alleged falsification and misrepresentation of herein union officers were not supported by substantial evidence. The fact that they disbursed the amount of P1,278.00 from Union funds and later on was disallowed for failure to attach supporting papers thereon did not of itself constitute falsification and/or misrepresentation. The expenditures appeared to have been made in good faith and the amount spent for the purpose mentioned in the report, if concurred in or accepted by the members, are reasonable; and

3. The repudiation of both private respondents to the highly sensitive position of auditor at the October 4, 1982 election, is a convincing manifestation and demonstration of the union membership's faith in the herein officers' leadership on one hand and a clear condonation of an act they had allegedly committed.

By and large, the holding of the referendum in question has become moot and academic. This is in line with Our ruling in Pascual vs. Provincial Board of Nueva Ecija, 106 Phil. 471, which We quote:

The Court should never remove a public officer for acts done prior to his present term of office. To do otherwise would be to deprive the people of their right to elect their officers. When the people have elected a man to office, it must be assumed that they did this with knowledge of his life and character, and that they disregarded or forgave Ms faults or misconduct, if he had been guilty of any. It is not for the court, by reason of such faults or misconduct to practically overrule the will of the people.

ACCORDINGLY, the resolution and order, dated August 13 and October 19, 1982, respectively, of public respondent Director Cresenciano B. Trajano of the Bureau of Labor Relations, Ministry of Labor, Manila in BLR Case No. A-0100-82 (RO4-A-LRD-M-9-35-81) are SET ASIDE and, the petition for expulsion of herein union officers in R04-A-LRD-M-9-35-81 is hereby DISMISSED for having been rendered moot and academic by the election of herein union officers in the general membership meeting/election held on October 4, 1982.

ELECTION INVALID

RODRIGUEZ V DIR., BLR

The first involves the validity of the 1986 general elections for union officers;

The General Elections of 1986

A review of the record fails to disclose any grave abuse of discretion tainting the adjudgment of respondent Director of Labor Relations that the general elections for union officers held in 1986 were attended by grave irregularities, rendering the elections invalid. That finding must thus be sustained.

The dates for provincial elections were set for July 14 to 18, 1986. But they were in fact held on July 21 to 22, 1986, without prior notice to all voting members, and without ground rules duly prescribed therefor. The elections in Metro Manila were conducted under no better circumstances. It was held on July 25, 1986 in disregard and in defiance of the temporary restraining order properly issued by the Med-Arbiter on July 23, 1986, notice of which restraining order had been regularly served on the same date, as the proofs adequately show, on both the Union, President, Manolito Paran, and the Chairman of the Union COMELEC, Benedicto Rodriguez. Moreover, as in the case of the provincial elections, there were no ground rules or guidelines set for the Metro Manila elections. Undue haste, lack of adequate safeguards to ensure integrity of the voting, and absence of notice of the dates of balloting, thus attended the elections in the provinces and in Metro Manila. They cannot but render the proceedings void.

66 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The claim that there had been a record-breaking voter turnout of 73%, even if true, cannot purge the elections of their grave infirmities. The elections were closely contested. For example, in the presidential contest, Manolito Paran appeared to have won over Rey Sumangil by only 803 votes, and in the vice-presidential race, Eduardo de Leon won over Dominador Munar by only 204 votes. These results would obviously have been affected by the ballots of the 2,056 voters who had been unable to cast their votes because of lack of notice of actual dates of the elections.

It goes without saying that free and honest elections are indispensable to the enjoyment by employees and workers of their constitutionally protected right to self-organization. That right "would be diluted if in the choice of the officials to govern ... (union) affairs, the election is not fairly and honestly conducted," and the labor officers concerned and the courts have the duty "to see to it that no abuse is committed by any official of a labor organization in the conduct of its affairs. 3

LEGAL COUNSEL

HALILI V. CIR

Significantly Atty. Pineda's act of filing a motion with this Court on December 1, 1982 praying for authority to sell was by itself an admission on his part that he did not possess the authority to sell the property and that this Court was the proper body which had the power to grant such authority. He could not and did not even wait for such valid authority but instead previously obtained the same from the labor arbiter whom he knew was not empowered to so authorize. Under Article 224 (a) of the Labor Code, only final decisions or awards of the NLRC, the Labor Arbiter, or compulsory or voluntary arbitrators may be implemented or may be the subject of implementing orders by aforenamed body or officers.

When Atty. Espinas discovered the sale of the property, he went to Arbiter Valenzuela to look into the transaction who told him that the records of CIR Case No. 1099-V were missing. It took director Pascual Reyes of the NLRC to locate the records.

The 45% attorney's lien on the award of those union members who were no longer working and the 30% lien on the benefits of those who were still working as provided for in the alleged retainer's contract are very exorbitant and unconscionable in view of Section 11, Rule VIII of Book III which explicitly provides:

Sec. 11. Attorney's fees—Attorney's fees on any judicial or administrative proceedings for the recovery of wages shall not exceed 10% of the amount awarded. The fees may be deducted from the total amount due the winning party.

The amount of P101,856.00 which Atty. Pineda donated to the Union and which actually corresponds to 5% of the total 35% attorney's fees taken from the proceeds (p. 263, L-24864, rec.) appears improper since it amounts to a rebate or commission. This amount was subsequently treated as union miscellaneous operating expenses without the consent of the general membership.

UNION FUNDS

Art. 241 The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and by-laws of the organization;

No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws;

Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer or agent making the collection and entered into the record of the organization to be kept and maintained for the purpose;

67 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The funds of the organization shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose;

Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.

Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier: Provided, That this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code: Provided, further, that failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989)

The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization;

The treasurer of any labor organization and every officer thereof who is responsible for the account of such organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of the organization, shall render to the organization and to its members a true and correct account of all moneys received and paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made:

At least once a year within thirty (30) days after the close of its fiscal year;

At such other times as may be required by a resolution of the majority of the members of the organization; and

Upon vacating his office.

The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor.

The books of accounts and other records of the financial activities of any labor organization shall be open to inspection by any officer or member thereof during office hours;

No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members in a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president.

Other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction; and

68 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Article 274. Visitorial power. The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to inquire into the financial activities of legitimate labor organizations upon the filing of a complaint under oath and duly supported by the written consent of at least twenty percent (20%) of the total membership of the labor organization concerned and to examine their books of accounts and other records to determine compliance or non-compliance with the law and to prosecute any violations of the law and the union constitution and by-laws: Provided, That such inquiry or examination shall not be conducted during the sixty (60)-day freedom period nor within the thirty (30) days immediately preceding the date of election of union officials. (As amended by Section 31, Republic Act No. 6715, March 21, 1989)

SOURCE –PAYMENT –ATTORNEYS FEES

Article 222. Appearances and Fees.

Non-lawyers may appear before the Commission or any Labor Arbiter only:

If they represent themselves; or

If they represent their organization or members thereof.

No attorney’s fees, negotiation fees or similar charges of any kind arising from any collective bargaining agreement shall be imposed on any individual member of the contracting union: Provided, However, that attorney’s fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void. (As amended by Presidential Decree No. 1691, May 1, 1980)

PACIFIC BANKING CORP. V CLAVE

LABOR AND SOCIAL LEGISLATION; LABOR DISPUTES; APPEALS TO OFFICE OF THE PRESIDENT; NO JURISDICTION TO ADJUDICATE ON ATTORNEYS FEES WHERE APPEAL WAS WITH RESPECT TO COLLECTIVE BARGAINING AGREEMENT TERMS AND CONDITIONS; CASE AT BAR. — Where the case was appealed to the Office of the President with respect to the CBA terms and conditions, not with respect to attorney’s fees, the Presidential Executive Assistant had no jurisdiction to make an adjudication on Saavedra’s attorney’s fees. Although the fees were a mere incident, nevertheless, the jurisdiction to fix the same and to order the payment thereof was outside the pale of the Office of the President’s appellate jurisdiction. Presidential Executive Assistant Clave was right in adopting a hands-off attitude in his first resolution and holding that the payment of the fees was a question between the lawyer and the union.

2. ID.; LABOR CODE; ATTORNEY’S FEES; RECOVERY THEREOF UNDER ARTICLE III, LABOR CODE, REFERS TO A PROCEEDING FOR RECOVERY OF WAGES; CASE AT BAR. — Presidential Executive Assistant Clave should have noticed that Article III which provides for payment of attorney’s fees refers to a proceeding for the recovery of wages and not to CBA negotiations. The two are different or distinct proceedings.

3. ID.; ID.; ID.; LIABILITY THEREFOR OF UNION FUNDS IN CASE AT BAR PURSUANT TO ARTICLE 222, LABOR CODE. — The case is covered squarely by the mandatory and explicit prescription of article 222 which is another guarantee intended to protect the employee against unwarranted practices that would diminish his compensation without his knowledge and consent. (See National Power Corporation Supervisors’ Union v. National Power Corporation, L-28805, August 10, 1981, 106 SCRA 556). Other provisions of the Labor Code animated by the same intention are the following: Article 242, paragraphs (n) and (o); 288, PD 442; 291, PD 570-A; 240, PD 626; 241, PD 850. There is no doubt that lawyer Saavedra is entitled to the payment of his fees but Article 222 ordains that union funds should be used for that purpose. The amount of P345,000 does not constitute union funds. It is money of the employees. The union, not the employees, is obligated to Saavedra.

69 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304SOURCE –PAYMENT –SPECIAL ASSESSMENT

GABRIEL V. SECRETARY OF LABOR

Petitioners argue that the General Membership Resolution authorizing the bank to check-off attorneys fee from the first lump sum payment of the benefits to the employees under the new CBA satisfies the legal requirements for such assessment.[9] Private respondents, on the other hand, claim that the check-off provision in question is illegal because it was never submitted for approval at a general membership meeting called for the purpose and that it failed to meet the formalities mandated by the Labor Code.[10]

In check-off, the employer, on agreement with the Union, or on prior authorization from employees, deducts union dues or agency fees from the latters wages and remits them directly to the union.[11] It assures continuous funding for the labor organization. As this Court has acknowledged, the system of check-off is primarily for the benefit of the union and only indirectly for the individual employees.[12]

The pertinent legal provisions on check-offs are found in Article 222 (b) and Article 241 (o) of the Labor Code.

Article 222 (b) states:

"No attorneys fees, negotiation fees or similar charges of any kind arising from any collective bargaining negotiations or conclusions of the collective agreement shall be imposed on any individual member of the contracting union: Provided, however, that attorneys fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void." (Underscoring ours)

Article 241 (o) provides:

"Other than for mandatory activities under the Code, no special assessment, attorneys fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction." (Emphasis ours.)

Article 241 has three (3) requisites for the validity of the special assessment for unions incidental expenses, attorneys fees and representation expenses. These are: 1) authorization by a written resolution of the majority of all the members at the general membership meeting called for the purpose; (2) secretarys record of the minutes of the meeting; and (3) individual written authorization for check off duly signed by the employees concerned. Sce dp

Clearly, attorneys fees may not be deducted or checked off from any amount due to an employee without his written consent.

After a thorough review of the records, we find that the General Membership Resolution of October 19, 1991 of the SolidBank Union did not satisfy the requirements laid down by law and jurisprudence for the validity of the ten percent (10%) special assessment for unions incidental expenses, attorneys fees and representation expenses. There were no individual written check off authorizations by the employees concerned and so the assessment cannot be legally deducted by their employer.

Even as early as February 1990, in the case of Palacol vs. Ferrer-Calleja[13] we said that the express consent of employees is required, and this consent must be obtained in accordance with the steps outlined by law, which must be followed to the letter. No shortcuts are allowed. In Stellar Industrial Services, Inc. vs. NLRC[14] we reiterated that a written individual authorization duly signed by the employee concerned is a condition sine qua non for such deduction.

http://sc.judiciary.gov.ph/jurisprudence/2000/mar2000/115949.html#_ftn14






70 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304MANDATORY ACTIVITY

Art. 241 Other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction.

DEFINITION

VENGCO V. TRAJANO

It is very clear from the above-quoted provision that attorney's fees may not be deducted or checked off from any amount due to an employee without his written consent except for mandatory activities under the Code. A mandatory activity has been defined as a judicial process of settling dispute laid down by the law. (Carlos P. Galvadores, et al. vs. Cresenciano B. Trajano, Director of the Bureau of Labor Relations, et al., G.R. No. L-70067, September 15, 1986, 144 SCRA 138). In the instant case, the amicable settlement entered into by the management and the union can not be considered as a mandatory activity under the Code. It is true that the union filed a claim for emergency cost of living allowance and other benefits before the Ministry of Labor. But this case never reached its conclusion in view of the parties' agreement. It is not also shown from the records that Atty. Benjamin Sebastian was instrumental in forging the said agreement on behalf of the union members.

CBA NEGOTIATION

GALVADORES V. TRAJANO

Article 222(b) of the Labor Code provides:

Article 222. Appearance and Fees.

xxx xxx xxx

(b) No attorney's fees, negotiation fees or similar charges of any kind arising from any collective bargaining negotiations or conclusion of the collective bargaining agreement shall be imposed on any individual member of the contracting union; Provided, however, that attorney's fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void.

While Article 242 of the same Code reads:

Art. 242. Rights and conditions of membership in a labor organization. The following are the rights and conditions of membership in a labor organization:

xxx xxx xxx

(o) Other than for mandatory activities under the Code, no special assessment, attorney's fees, negotiation fees or any other extraordinary fees may be checked off "from any amount due an employee without individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction.

The Omnibus Rules Implementing the Labor Code also provide that deductions from wages of the employees may only be made by the employer in cases authorized by law, including deductions for insurance premiums advanced by the employer on behalf of the employees as well as union dues where the right to check-off is authorized in writing by the individual employee himself. 3

71 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The provisions are clear. No check-offs from any amounts due employees may be effected without individual written authorizations duly signed by the employee specifically stating the amount, purpose and beneficiary of the deduction. The required individual authorizations in this case are wanting. In fact, petitioner employees are vigorously objecting. The question asked in the plebiscite, besides not being explicit, assumed that there was no dispute relative to attorney's fees.

Contrary to respondent Union's and Counsel's stand, the benefits awarded to PLDT employees still formed part of the collective bargaining negotiations although placed already under compulsory arbitration. This is not the "mandatory activity" under the Code which dispenses with individual written authorizations for check-offs, notwithstanding its "compulsory" nature. It is a judicial process of settling disputes laid down by law. Besides, Article 222(b) does not except a CBA, later placed under compulsory arbitration, from the ambit of its prohibition. The cardinal principle should be borne in mind that employees are protected by law from unwarranted practices that diminish their compensation without their knowledge and consent. 4

UNION INFORMATION

ART. 241 It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws.

UNION OFFICER –OBLIGATION

CONTINENTAL CEMENT CORP. LABOR UNION V. CONTINENTAL CEMENT CORP.

The strikers in question did not only violate the no-strike policy of the state in regard to vital industries; instead, they repeatedly defied the orders of the Director of Labor Relations and the Minister of Labor for them to return to work. Their dismissal was recommended by the labor arbiter. However, out of compassion, the NLRC and the Minister of Labor only suspended them.

Petitioner then contends that the separation from work of the officers of the union is quite severe. The officers had the duty to guide their members to respect the law. Instead, they urged them to violate the law and defy the duly constituted authorities. Their responsibility is greater than that of the members. Their dismissal from the service is a just penalty for their unlawful acts.

It is within the power of the NLRC to order the removal of the officers of petitioner. This is provided for in the labor law.

Art. 242. 5 Rights and conditions of membership in a labor organization. — The following are the rights and conditions of membership in a labor organization:

xxx xxx xxx

(p) It shall be the duty of any labor organization and its officers to inform its members on provisions of the constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws. For this purpose, registered labor organizations may assess reasonable dues to finance labor relations seminars and other labor education activities.

Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of an officer from office, which ever is appropriate. At least 30 per cent of all the members of a union or any member or members specifically concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide any reported violation and to mete out the appropriate penalty.

72 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The officers of petitioner misinformed the members and led them into staging an illegal strike. If the NLRC is to attain the objective of the Labor Code to ensure a stable but dynamic and just industrial peace 6 the removal of undesirable labor leaders must be effected.

EMPLOYEE INDIVIDUAL RIGHTS

ALDOVINO V NLRC

The right of URFA as a legitimate labor union to represent its members is expressly guaranteed under Art. 242 of the Labor Code.[19] This right, however, does not deprive its individual members of their concomitant right to file a case in their own names, nor of their right to withdraw from any case filed by the union in their behalf. More importantly, the individual member may seasonably exercise his option to withdraw from a case filed by his union if he does not want to be bound thereby. In Philippine Land-Air-Sea Labor Union (PLASLU), Inc. v. CIR,[20] this Court ruled that only those members of the petitioning union who did not signify their intention to withdraw from the case before its trial and judgment on the merits are bound by the outcome of the case. Since it has not been shown that Aldovino and Pimentel withdrew from the case undergoing voluntary arbitration, it stands to reason that both are bound by the decision rendered thereon. This obtaining, there is no doubting the identity of parties between the arbitrated case and that brought by petitioners before the Labor Arbiter. Hence we reiterate -

With respect to the aspect of identity of parties, it has been repeatedly stressed that this requirement is satisfied if the two actions are substantially between the same parties which means that the parties in both cases need not be physically identical provided that there is privity between the parties x x x x[21]

ENFORCEMENT AND REMEDIES – PROCEDURE AND SANCTIONS

ART. 241 Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of officers from office, whichever is appropriate. At least thirty percent (30%) of the members of a union or any member or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide any reported violation to mete the appropriate penalty.

BVRULE XI

SECTION 5. Procedures. — All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the voluntary arbitrator or panel of arbitrators. Hearing may be adjourned for cause or upon agreement by the parties.cralaw

Unless the parties agree otherwise, it shall be mandatory for the voluntary arbitrator or panel of voluntary arbitrators to render an award or decision within twenty (20) calendar days from the date of submission of the dispute to voluntary arbitration.cralaw

SECTION 6. Award/Decision. — The award or decision of the voluntary arbitrator or panel of voluntary arbitrators must state in clear, concise and definite terms the facts, the law and/or contract upon which it is based. It shall be final and executory after ten (10) calendar days from the receipt of the copy of the award or decision by the parties.

BVRULE IV

ECTION 6. Procedure. — Upon receipt of a petition, the Regional Director shall assign the case to a Med-Arbiter for appropriate action. The Med-Arbiter, upon receipt of the assigned petition, shall have twenty (20) working days from submission of the case for resolution within which to dismiss or grant the petition.cralaw




73 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304In a petition filed by a legitimate organization involving an unorganized establishment, the Med-Arbiter shall immediately order the conduct of a certification election.cralaw

In a petition involving an organized establishment or enterprise where the majority status of the incumbent collective bargaining union is questioned through a verified petition by a legitimate labor organization, the Med-Arbiter shall immediately order the certification election by secret ballot if the petition is filed during the last sixty (60) days of the collective bargaining agreement and supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit. Any petition filed before or after the sixty-day freedom period shall be dismissed outright. The twenty-five percent (25%) requirement shall be satisfied upon the filing of the petition, otherwise the petition shall be dismissed.cralaw

The sixty-day freedom period based on the original collective bargaining agreement shall not be affected by any amendment, extension or renewal of the collective bargaining agreement for purposes of certification election.cralaw

The decision calling for the conduct of an election shall contain the following:

(a) Names of the contending unions;

(b) Name of the employer;

(c) Description of the bargaining unit, and

(d) List of eligible voters which shall be based on the payroll three (3) months prior to the filing of the petition for certification election.cralaw

The certification election shall be held within twenty (20) calendar days from receipt of the order by the parties.cralaw

SECTION 7. Appeal. — Any aggrieved party may appeal the order of the Med-Arbiter to the Secretary on the ground that the rules and regulations or parts thereof established by the Secretary for the conduct of election have been violated.cralaw

The appeal shall specifically state the grounds relied upon by the appellant with the supporting memorandum.cralaw

SECTION 8. Where to file appeal. — The appeal, which shall be under oath and copy furnished the appellee, shall be filed in the Regional Office where the case originated.c

UNION AFFILIATION: LOCAL AND PARENT UNION RELATIONS

AFFILIATION: PURPOSE OF; NATURE OF RELATIONS

NATURE OF RELATIONSHIP

ST. LUKE’S MEDICAL CENTER INC. V. TORRES

A duly registered local union affiliated with a national union or federation does not lose its legal personality or independence (Adamson and Adamson, Inc. vs. The Court of Industrial Relations and Adamson and Adamson Supervising Union (FFW), 127 SCRA 268 [1984]). In Elisco-Elirol Labor Union (NAFLU) vs. Noriel (180 SCRA 681 [1977]), then Justice Teehankee re-echoed the words of Justice Esguerra in Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. (66 SCRA 512 [1975]), thus:

(T)he locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee-members in the economic struggle for the fruits of the joint productive effort of

74 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304labor and capital; and the association of the locals into the national union (as PAFLU) was in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their members. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence. (at p. 688; emphasis in the original.)

Appending "AFW" to the local union's name does not mean that the federation absorbed the latter. No such merger can be construed. Rather, what is conveyed is the idea of affiliation, with the local union and the larger national federation retaining their separate personalities.

RULE – AFFILIATION

ATLAS LITHOGRAPHIC SERVICES, INC. V. LAGUESMA

We agree with the petitioner's contention that a conflict of interest may arise in the areas of discipline, collective bargaining and strikes.

Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rank-and-file employees.

In the area of bargaining, their interests cannot be considered identical. The needs of one are different from those of the other. Moreover, in the event of a strike, the national federation might influence the supervisors' union to conduct a sympathy strike on the sole basis of affiliation.

More important, the factual issues in the Adamson case are different from the present case. First, the rank-and-file employees in the Adamson case are not directly under the supervisors who comprise the supervisors' union. In the case at bar, the rank-and file employees are directly under the supervisors organized by one and the same federation.

The contemplation of the law in Sec. 3 of the Industrial Peace Act is to prohibit supervisors from joining a labor organization of employees under their supervision. Sec. 3 of the Industrial Peace Act provides:

Sec. 3 — Employees' Right to Self Organization. Employees shall have the right to self-organization and to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. Individuals employed as supervisors shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations of their own (Emphasis supplied).

This was not the consideration in the Adamson case because as mentioned earlier, the rank-and-file employees in the Adamson case were not under the supervision of the supervisors involved.

Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715 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.

75 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304The Court construes Article 245 to mean that, as in Section 3 of the Industrial Peace Act, supervisors shall not be given an occasion to bargain together with the rank-and-file against the interests of the employer regarding terms and conditions of work

Second, the national union in the Adamson case did not actively represent its local chapters. In the present case, the local union is actively represented by the national federation. In fact, it was the national federation, theKAMPIL-KATIPUNAN, which initially filed a petition for certification in behalf of the respondent union.

Thus, if the intent of the law is to avoid a situation where supervisors would merge with the rank and-file or where the supervisors' labor organization would represent conflicting interests, then a local supervisors' union should not be allowed to affiliate with the national federation of union of rank-and-file employees where that federation actively participates in union activity in the company.

The petitioner further contends that the term labor organization includes a federation considering that Art. 212 (g) mentions "any union or association of employees."

The respondent, however, argues that the phrase refers to a local union only in which case, the prohibition in Art. 245 is inapplicable to the case at bar.

The prohibition against a supervisors' union joining a local union of rank-and-file is replete with jurisprudence. The Court emphasizes that the limitation is not confined to a case of supervisors wanting to join a rank-and-file local union. The prohibition extends to a supervisors' local union applying for membership in a national federation the members of which include local unions of rank-and-file employees. The intent of the law is clear especially where, as in the case at bar, the supervisors will be co-mingling with those employees whom they directly supervise in their own bargaining unit.

Technicalities should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. (Rapid Manpower Consultants, Inc. v. NLRC, 190 SCRA 747 [1990]) What should be paramount is the intent behind the law, not its literal construction. Where one interpretation would result in mischievous consequences while another would bring about equity, justice, and the promotion of labor peace, there can be no doubt as to what interpretation shall prevail.

Finally, the respondent contends that the law prohibits the employer from interfering with the employees' right to self-organization.

There is no question about this intendment of the law. There is, however, in the present case, no violation of such a guarantee to the employee. Supervisors are not prohibited from forming their own union. What the law prohibits is their membership in a labor organization of rank-and-file employees (Art. 245, Labor Code) or their joining a national federation of rank-and-file employees that includes the very local union which they are not allowed to directly join.

In a motion dated November 15, 1991 it appears that the petitioner has knuckled under to the respondents' pressures and agreed to let the national federation KAMPIL-KATIPUNAN represent its supervisors in negotiating a collective bargaining agreement. Against the advise of its own counsel and on the basis of alleged "industrial peace", the petitioner expressed a loss of interest in pursuing this action. The petitioner is, of course, free to grant whatever concessions it wishes to give to its employees unilaterally or through negotiations but we cannot allow the resulting validation of an erroneous ruling and policy of the Department of Labor and Employment (DOLE) to remain on the basis of the petitioner's loss of interest. The December 14, 1990 order and the November 21, 1990 resolution of DOLE are contrary to law and must be declared as such.

76 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304ADAMSON V CIR

In deciding this case, we start with the recognized rule that the right of supervisory employees to organize under the Industrial Peace Act carries certain restrictions but the right itself may not be denied or unduly abridged. The supervisory employees of an employer cannot join any labor organization of employees under their supervision but may validly form a separate organization of their own. As stated in Caltex Filipino Managers and Supervisors Association v. Court of Industrial Relations (47 SCRA 112), it would be to attach unorthodoxy to, not to say an emasculation of, the concept of law if managers as such were precluded from organization. Thus, if Republic Act 875, in its Section 3, recognizes the right of supervisors to form a separate organization of their own, albeit they cannot be members of a labor organization of employees under their supervision, that authority of supervisors to form a separate labor union carries with it the right to bargain collectively with the employer. (Government Service Insurance System v. Government Service Insurance System Supervisors' Union, 68 SCRA 418).

The specific issue before us is whether or not a supervisor's union may affiliate with a federation with which unions of rank and-file employees of the same employer are also affiliated. We find without merit the contentions of petitioner that if affilation will be allowed, only one union will in fact represent both supervisors and rank-and-file employees of the petitioner; that there would be an indirect affiliation of supervisors and rank-and-file employees with one labor organization; that there would be emerging of two bargaining units ; and that the respondent union will loose its independence because it becomes an alter ego of the federation.

The Adamson and Adamson Supervisory Union and the Adamson and Adamson, Inc., Salesmen Association (FFW), have their own respective constitutions and by-laws. They are separately and independently registered of each other. Both sent their separate proposals for collective bar agreements with their employer. There could be no employer influence on rank-and-file organizational activities nor their could be any rank and file influence on the supervisory function of the supervisors because of the representation sought to be proscribed.

Elisco-Elirol Labor Union (NAFLU) v. Noriel (80 SCRA 681) and Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc. (66 SCRA 512), we held :

xxx xxx xxx

... the court expressly cited and affirmed the basic principle that '(T)he locals are separate and distinct units primarily designed to secure and maintain the equality of bargaining power between the employer and their employee-member in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association of the locals into the national union (as PAFLU) was in the furtherance of the same end. These association are concensual entities capable of entering into such legal relations with their members. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association; free to serve their own and the common-interest of all, subject to the restraints imposed by the Constitution and By-laws of the Association; and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence.

We agree with the Court of Industrial Relations when it ruled that:

xxx xxx xxx

The confusion seems to have stemmed from the prefix of FFW after the name of the local unions in the registration of both. Nonetheless, the inclusion of FWW in the registration is merely to stress that they are its affiliates at the time of registrations. It does not mean that said local unions cannot stand on their own Neither can it be construed that their personalities are so merged with the mother federation that for one difference or another they cannot pursue their own ways, independently of the federation. This is borne by the fact that FFW, like other federation is a legitimate labor

77 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304organization separate and distinct from its locals and affiliates and to construe the registration certificates of the aforecited unions, along the line of the Company's argument. would tie up any affiliates to the shoe string of the federation. ...

LOCAL UNION DISAFFLIATION

NATURE OR RIGHT OF DISAFFILIATION

VOLKSCHEL LABOR UNION V. BLR

The right of a local union to disaffiliate from its mother union is well-settled. In previous cases, it has been repeatedly held that a local union, being a separate and voluntary association, is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant. 4 This right is consistent with the Constitutional guarantee of freedom of association (Article IV, Section 7, Philippine Constitution).

Petitioner contends that the disaffiliation was not due to any opportunists motives on its part. Rather it was prompted by the federation's deliberate and habitual dereliction of duties as mother federation towards petitioner union. Employees' grievances were allegedly left unattended to by respondent federation to the detriment of the employees' rights and interests.

In reversing the Med-Arbiter's resolution, respondent Bureau declared: the Department of Labor is set on a task to restructure the labor movement to the end that the workers will unite themselves along industry lines. Carried to its complete fruition, only one union for every industry will remain to bargain collectively for the workers. The clear policy therefore even now is to conjoin workers and worker groups, not to dismember them. 5 This policy is commendable. However, we must not lose sight of the constitutional mandate of protecting labor and the workers' right to self-organization. In the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. In the case at bar, it would go against the spirit of the labor law to restrict petitioner's right to self-organization due to the existence of the CBA. We agree with the Med-Arbiter's opinion that "A disaffiliation does not disturb the enforceability and administration of a collective agreement; it does not occasion a change of administrators of the contract nor even an amendment of the provisions thereof." 6 But nowhere in the record does it appear that the contract entered into by the petitioner and ALUMETAL prohibits the withdrawal of the former from the latter.

RULE- LEGALITY ACT- DISQUALIFICATION

LIBERTY COTTON MILLS WORKERS UNION V. LIBERTY COTTON MILLS

It appears that on May 17, 1964, thirty-two (32) out of the thirty-six (36) members of the local union, Liberty Cotton Mills Union, disaffiliated themselves from respondent PAFLU in accordance with Article X, on Union Affiliation, of the local union's Constitution and By-Laws, which provides that:

Section 1. The Liberty Cotton Mills Workers Union-Paflu ... shall remain an affiliate as long as ten or more of its members evidence their desire to continue the said local union's affiliation ...

Respondent PAFLU received the resolution of disaffiliation on May 25, 1964 and immediately informed the respondent company on May 27, 1964 that the disaffiliation was null and void and that it is taking over the administration of the local union in dealing with the management. Two days later, on May 29, 1964, PAFLU advised the company that the petitioner workers, who were among those who signed the disaffiliation resolution, were expelled from their union membership in the mother federation because they were found guilty of acts unbecoming of officers and members of the union and disloyalty to the mother federation for instigating union disaffiliation, and at the same time requested for their dismissal. On May 30, 1964, the company terminated the employment of the petitioner workers pursuant to the Maintenance of Membership provision of the Collective Bargaining Agreement, the pertinent portion of which reads, as follows:

78 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304... for disloyalty to the union shall be dismissed from employment by the Company upon request in writing by the Union, which shall hold the COMPANY free from any liability arising from or caused by such dismissal.

While respondent company, under the Maintenance of Membership provision of the Collective Bargaining Agreement, is bound to dismiss any employee expelled by PAFLU for disloyalty, upon its written request, this undertaking should not be done hastily and summarily. The company acted in bad faith in dismissing petitioner workers without giving them the benefit of a hearing. It did not even bother to inquire from the workers concerned and from PAFLU itself about the cause of the expulsion of the petitioner workers. Instead, the company immediately dismiss the workers on May 30, 1964 after its receipt of the request of PAFLU on May 29, 1964 — in a span of only one day — stating that it had no alternative but to comply with its obligation under the Security Agreement in the Collective Bargaining Agreement, thereby disregarding the right of the workers to due process, self-organization and security of tenure.

Morever, even after the workers were dismissed on May 30, 1964, and had sought for a reconsideration of their dismissal the next day, respondent company stood pat on its decision and immediately denied the request for reconsideration on June 2, 1964 without any valid reason. This actuation further emphasizes respondent company's bad faith in the dismissal of the petitioner workers.

The power to dismiss is a normal prerogative of the employer. However, this is not without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement, as in the instant case. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should therefore respect and protect the rights of their employees, which include the right to labor. For as WE have already stated:

The right to labor is a constitutional as well as a statutory right. Every man has a natural right to the fruits of his own industry. A man who has been employed to undertake certain tabor and has put into it his time and effort is entitled to be protected. The right of a person to his labor is deemed to be properly within the meaning of constitutional guarantees. That is his means of livelihood He cannot be deprived of his labor or work without due process of law" (Batangas Laguna Tayabas Bus Company vs. Court of Appeals, 71 SCRA 470, 480 [1976]; Phil Education Co., Inc. vs. CIR, et al., L-7156, May 31, 1955; Philippine Movie Pictures Workers' Association vs. Premier Productions, Inc., 92 Phil. 843, 848 [1953]; 11 Am Jur., 333, pp. 1151-1153; 11 Am Jur., section 344, pp. 1168-1171; emphasis supplied).

The "scandalous haste" with which the company dismissed the workers, acceding with unusual alacrity to the request of PAFLU, and without giving them the benefit of a hearing prior to their dismissal, also supports the conclusion that there was conspiracy or connivance between the respondent company and respondent PAFLU in the dismissal of the petitioner workers.

Likewise, the records show that the disaffiliation of the local union members from the PAFLU was cause by the alleged negligence of PAFLU and its lack of concern over the pro. blems of the local union and its members, particularly its neglect in not providing the local union with a good lawyer who would attend to their ULP case against the company. This apparent laxity or negligence of PAFLU invites suspicion. The records also show that the local union members were dissatisfied with the way PAFLU negotiated the Collective Bargaining Agreement with the company because it did not fight for their demands and instead accepted the proposals of the company.

Aid furthermore, PAFLU expelled only six (6) union members, because PAFLU erroneously contends that their disaffiliation and their refusal to retract amounted to disloyalty. It was not disloyalty; it was their dissatisfaction with PAFLU that compelled them to disaffiliate. The constitutional guarantee of security of tenure of the worker and his freedom of association — to join or not to join a union — are paramount and should prevail over a contractual condition for continued union membership and over whimsical or arbitrary termination of his employment.

79 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Respondent PAFLU also overlooked the fact that only sixteen (16) out of the original thirty-two (32) signatories retracted their disaffiliation. PAFLU should have also expelled the remaining sixteen members who did not retract, instead of only the six members, if indeed their unrestricted disaffiliation were an act of disloyalty instead of dissatisfaction with the PAFLU's failure to promote and defend their interests.

PHILIPPINE SKYLANDERS, INC. V. NLRC

The mother federation w/ w/c the local union was formerly affiliated instituted a complaint for unfair labor practice against the employer (w/c refused to negotiate a CBA w/ said federation because the local union had already effectively and validly disaffiliated from it), and the local union and their respective officers because of the act of the local union in disaffiliating from the mother federation and in entering into a CBA w/ employer w/o its participation. The Supreme Court ruled that there was no such unfair labor practice commited. In the first place, the complaint for unfair labor practice was instituted against the wishes of wrokers who are members of the local union whose interests it was supposedly protecting. In the second place, the disaffiliation was held valid and, therefore. the federation ceases to have any personality to represent the local union in the CBA negotiation. The complaint for unfair labor practice lodged by the federation against the employer, the local union and their respective officers having been filed by a party w/c has no legal personality to institute the complaint, shoul have been dismissed at the first instance for failure to state a cause of action

As far as the employer is concerned, it is entirely reasonable for it to enter into a CBA with the local union w/c is now affiliated w/ the new federation. As the local union had validly severed itself from the old federation, there would be no restrictions w/c could validly hinder it from subsequently affiliating with the new federation and entering into a CBA in behalf of its members.

MINORITY DISAFFILIATION

PHIL. LABOR ALLIANCE COUNCIL V BLR

It is indisputable that the present controversy would not have arisen if there were no mass disaffiliation from petitioning Union. Such a phenomenon is nothing new in the Philippine labor movement.21 Nor is it open to any legal objection. It is implicit in the freedom of association explicitly ordained by the Constitution.22 There is then the incontrovertible right of any individual to join an organization of his choice. That option belongs to him. A workingman is not to be denied that liberty. 23 He may be, as a matter of fact, more in need of it if the institution of collective bargaining as an aspect of industrial democracy is to succeed. No obstacle that may possible thwart the desirable objective of militancy in labor's struggle for better terms and conditions is then to be placed on his way. Once the fact of disaffiliation has been demonstrated beyond doubt, as in this case, a certification election is the most expeditious way of determining which labor organization is to be the exclusive bargaining representative. It is as simple as that. There is relevance to this excerpt from a recent decision, Philippine Association of Free Labor Unions v. Bureau of Labor Relations: 24 "Petitioner thus appears to be woefully lacking in awareness of the significance of a certification election for the collective bargaining process. It is the fairest and most effective way of determining which labor organization can truly represent the working force. It is a fundamental postulate that the will of the majority, if given expression in an honest election with freedom on the part of the voters to make their choice, is controlling. No better device can assure the institution of industrial democracy with the two parties to a business enterprise, managment and labor, establishing a regime of self-rule. As was pointed out by Chief Justice Castro in Rivera v. San Miguel Brewery Corporation, Inc., "a collective bargaining agreement is the law of the plant." To the same effect is this explicit pronouncement in Mactan Workers Union v. Aboitiz: 'The terms and conditions of a collective bargaining contract constitute the law between the parties.' What could be aptly stressed then, as was done inCompania Maritima v. Compania Maritima Labor Union, is "the primacy to which the decision reached by the employees themselves is entitled." Further, it was therein stated: 'That is in the soundest tradition of industrial democracy. For collective bargaining implies that instead of a unilateral imposition by management, the terms and conditions of employment should be the subject of negotiation between it and labor. Thus the two parties

80 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304indispensable to the economy are supposed to take care of their respective interests. Moreover, the very notion of industrial self-rule negates the assumption that what is good for either party should be left to the will of the other. On the contrary, there is an awareness that labor can be trusted to promote its welfare through the bargaining process. To it then must be left the choice of its agent for such purpose.' To paraphrase an observation of the recently retired Chief Justice Makalintal in Seno v. Mendoza, it is essential that there be an agreement to govern the relations between labor marked by confusion, with resulting breaches of the law by either party. There is, it would appear, a decidedly unsympathetic approach to the institution of collective bargaining at war with what has so often and so consistently decided by this Tribunal."

In the order of April 8, 1975, it was specifically pointed out; "In the instant case, it is not disputed that the collective bargaining agreement certified by the National Labor Relations Commission was not ratified by the majority of the employees within the bargaining unit. This is defective. It is blatant non-observance of the basic requirement necessary to certification. To allow it to remain uncorrected would allow circumvention of what the law specifically ordained. We cannot countenance irregularities of the highest order to exist in our very own eyes to be perpetuated. With respect to the complaint of the confirmation of disaffiliation of the members of respondent Philippine Labor Alliance counsel the same should be resolved in the most expedient and simple method of determining the exclusive bargaining representative — the holding of a certification election." 30 In the order denying the motion for reconsideration dated July 31, 1975, it was first noted: "On January 20, 1975, FFW and 848 Orion employees filed with the Bureau a petition for the annulment of the 1974 collective bargaining agreement and for the confirmation of the disaffiliation of the 848 employees from PLAC and their affiliation with FFW. The petition alleged among others, that the new agreement was concluded about ten months before the expiry date of the old purposely to defeat the right of the covered employees to choose their bargaining representative at the proper time appointed by law. It appears, indeed, that there qqqas no urgency. for the premature renegotiations considering that the new agreement provides for a 50-centavo salary increase effective yet on January 1, 1976." 31 Then, there was further clarification of the decision reached as to the holding of a certification election being the appropriate mode of solving the dispute: "With the decertification of the collective agreement, the representation issue comes back to the fore. Petitioner wants this resolved by ruling on the affiliation and disaffiliation of the union, The Bureau holds, however, that certification election can better reolve the issue. parenthetically, it should be stated that a certification election can still be held even if the collective agreement were certified, considering the peculiar facts of the case. Good policy and equity demand that when an agreement is renegotiated before the appointed 60-day period, its certification must still give way to any representation issue that may be raised within 60-day perio

PERIOD

ALLIANCE OF NATIONALIST UNION V SAMAHANG, ET AL 1996

Petitioner ANGLO wants to impress on us that the disaffiliation was invalid for two reasons, namely: that the procedural requirements for a valid disaffiliation were not followed; and that it was made in violation of P.D. 1391.

Anent the first ground, we reiterate the rule that all employees enjoy the right to self-organization and to form and join labor organizations of their own choosing for the purpose of collective bargaining. This is a fundamental right of labor and derives its existence from the Constitution. In interpreting the protection to labor and social justice provisions of the Constitution and the labor laws, rules or regulations, we have always adopted the liberal approach which favors the exercise of labor rights.[2]

This Court is not ready to bend this principle to yield to a mere procedural defect, to wit: failure to observe certain procedural requirements for a valid disaffiliation. Non-compliance with the procedure on disaffiliation, being premised on purely technical grounds cannot rise above the fundamental right of self- organization.[3]

We quote, with approval, the findings of herein public respondent, that:

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81 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304"x x x the resolution of the general membership ratifying the disaffiliation action initiated by the Board, substantially satisfies the procedural requirements for disaffiliation. No doubt was raised on the support of the majority of the union members on the decision to disaffiliate."[4]

This, to our mind, is clearly supported by the evidence. ANGLO's alleged acts inimical to the interests of respondent union have not been sufficiently rebutted. It is clear under the facts that respondent union's members have unanimously decided to disaffiliate from the mother federation and ANGLO has nothing to offer in dispute other than the law prohibiting the disaffiliation outside the freedom period.

In the same wise, We find no ground for ruling against the validity of the disaffiliation in the light of recent jurisprudential rules.

Although P.D. 1391 provides:

"Item No. 6. No petition for certification election, for intervention and disaffiliation shall be entertained or given due course except within the 60-day freedom period immediately preceding the expiration of a collective bargaining agreement,"

said law is definitely not without exceptions. Settled is the rule that a local union has the right to disaffiliate from its mother union when circumstances warrant.[5] Generally, a labor union may disaffiliate from the mother union to form a local or independent union only during the 60-day freedom period immediately preceding the expiration of the CBA. However, even before the onset of the freedom period, disaffiliation may be carried out when there is a shift of allegiance on the part of the majority of the members of the union.[6]

PART IV. APPROPRIATE BARGAINING UNIT

4.01 LAW AND DEFINITION

Article 255. Exclusive bargaining representation and workers’ participation in policy and decision-making. The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989)

BELYCA CORP. V. CALLEJA

The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256 of the Code provides:

Art. 256. Exclusive bargaining representative.—The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employee shall have the right at any time to present grievances to their employer.




82 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer, comprised of all or less than all of 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 the law (Rothenberg in Labor Relations, p. 482).

This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective bargaining unit.

Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's 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 and probationary employees".

Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial court's conclusion that two separate bargaining units should be formed in dealing with respondent company, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Otherwise stated, temporary employees should be treated separately from permanent employees. But more importantly, this Court laid down the test of proper grouping, which is community and mutuality of interest.

Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra Employees' Association 107 Phil. 28 [1960]) where the employment status was not at issue but the nature of work of the employees concerned; the Court stressed the importance of the second factor otherwise known as the substantial-mutual-interest test and found no reason to disturb the finding of the lower Court that the employees in the administrative, sales and dispensary departments perform work which has nothing to do with production and maintenance, unlike those in the raw leaf, cigar, cigarette and packing and engineering and garage departments and therefore community of interest which justifies the format or existence as a separate appropriate collective bargaining unit.

Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the employees concerned was again challenged, the Court reiterating the rulings, both in Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra and Alhambra Cigar and Cigarette Co. et al. v. Alhambra Employees' Association (supra) held that among the factors to be considered are: employment status of the employees to be affected, that is the positions and categories of work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties.

In any event, whether importance is focused on the employment status or the mutuality of interest of the employees concerned "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 (Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra)

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS V. QUISIMBING

That public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy against these evils. The Constitution[8] in the Article on Social Justice and Human Rights exhorts Congress to "give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequalities." The very broad Article 19 of the Civil Code requires every person, "in the exercise of his rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe honesty and good faith."

We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires.

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83 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304A 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."[29] 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.[30] 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.[31]

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 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.

STA. LUCIA EAST COMMERCIAL CORP. V. SECRETARY OF LABOR

Article 212(g) of the Labor Code defines a labor organization as any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment. Upon compliance with all the documentary requirements, the Regional Office or Bureau shall issue in favor of the applicant labor organization a certificate indicating that it is included in the roster of legitimate labor organizations.[6] Any applicant labor organization 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.[7]

Bargaining Unit

The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a bargaining unit. We explained the concept of a bargaining unit in San Miguel Corporation v. Laguesma,[8]where we stated that:

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, indicated to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.

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 petitioners 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.

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However, employees in two corporations cannot be treated as a single bargaining unit even if the businesses of the two corporations are related.[9]

A Legitimate Labor Organization Representing

An Inappropriate Bargaining Unit

CLUP-SLECC and its Affiliates Workers Unions initial problem was that they constituted a legitimate labor organization representing a non-appropriate bargaining unit. However, CLUP-SLECC and its Affiliates Workers Union subsequently re-registered as CLUP-SLECCWA, limiting its members to the rank-and-file of SLECC. SLECC cannot ignore that CLUP-SLECC and its Affiliates Workers Union was a legitimate labor organization at the time of SLECCs voluntary recognition of SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether CLUP-SLECC and its Affiliates Workers Union represented an appropriate bargaining unit.

The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) to (c) of Article 239 of the Labor Code.[10] THUS, CLUP-SLECC AND ITS AFFILIATES WORKERS UNION, HAVING BEEN VALIDLY ISSUED A CERTIFICATE OF REGISTRATION, SHOULD BE CONSIDERED AS HAVING ACQUIRED JURIDICAL PERSONALITY WHICH MAY NOT BE ATTACKED COLLATERALLY. THE PROPER PROCEDURE FOR SLECC IS TO FILE A PETITION FOR CANCELLATION OF CERTIFICATE OF REGISTRATION[11]OF CLUP-SLECC AND ITS AFFILIATES WORKERS UNION AND NOT TO IMMEDIATELY COMMENCE VOLUNTARY RECOGNITION PROCEEDINGS WITH SMSLEC.

4.02 DETERMINATION OF APPROPRIATE BARGAINING UNIT

FACTORS – UNIT DETERMINATION

IN GENERAL

UP V. FERRER-CALLEJA

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.

Be that as it may, does it follow, as public respondent would propose, that all rank-and-file employees of the university are to be organized into a single collective 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,




85 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. 28

Our labor laws do not however provide the criteria for determining the proper collective bargaining unit. Section 12 of the old law, Republic Act No. 875 otherwise known as the Industrial Peace Act, simply reads as follows: 29

Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. — The labor organization designated or selected for the purpose of collective bargaining by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of all the employees in such unit for the purpose of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment; Provided, That any individual employee or group of employees shall have the right at any time to present grievances to their employer.

Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the Labor Code with minor changes, no guidelines were included in said Code for determination of an appropriate bargaining unit in a given case. 30 Thus, apart from the single descriptive word "appropriate," no specific guide for determining the proper collective bargaining unit can be found in the statutes.

Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section 9, is that "(t)he appropriate organizational unit shall be the employer unit consisting of rank-and-file employees, unless circumstances otherwise require." Case law fortunately furnishes some guidelines.

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)." Hence, in that case, the Court upheld the trial court's conclusion that two separate bargaining units should be formed, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores.

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; 32 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. 33 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 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

86 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304bargaining units, the first consisting of the rank-and-file non-academic personnel, and the second, of the rank-and-file academic employees, is the set-up 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.

HISTORY

SAN MIGUEL CORP V. LAGUESMA

In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out.

It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests.

This Court finds the contention of the petitioner meritorious.

An appropriate bargaining unit may be defined as a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.[24]

A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining.[25]

It is readily seen that the employees in the instant case have community or mutuality of interest, which is the standard in determining the proper constituency of a collective bargaining unit.[26] It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.

In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the Mandate of the Constitution.[27]

The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial.Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-academic rank and file employees of the University of the Philippines inDiliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative

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87 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304CORPORATE ENTITIES

INDOPHIL TEXTILE MILLS WORKERS UNION V. CALICA

In the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic, alleging that the creation of the corporation is a devise to evade the application of the CBA between petitioner Union and private respondent Company. While we do not discount the possibility of the similarities of the businesses of private respondent and Acrylic, neither are we inclined to apply the doctrine invoked by petitioner in granting the relief sought. The fact that the businesses of private respondent and Acrylic are related, that some of the employees of the private respondent are the same persons manning and providing for auxilliary services to the units of Acrylic, and that the physical plants, offices and facilities are situated in the same compound, it is our considered opinion that these facts are not sufficient to justify the piercing of the corporate veil of Acrylic.

In the same case of Umali, et al. v. Court of Appeals (supra), We already emphasized that "the legal corporate entity is disregarded only if it is sought to hold the officers and stockholders directly liable for a corporate debt or obligation." In the instant case, petitioner does not seek to impose a claim against the members of the Acrylic.

Furthermore, We already ruled in the case of Diatagon Labor Federation Local 110 of the ULGWP v. Ople (supra) that it is grave abuse of discretion to treat two companies as a single bargaining unit when these companies are indubitably distinct entities with separate juridical personalities.

Hence, the Acrylic not being an extension or expansion of private respondent, the rank-and-file employees working at Acrylic should not be recognized as part of, and/or within the scope of the petitioner, as the bargaining representative of private respondent.

All premises considered, the Court is convinced that the public respondent Voluntary Arbitrator did not commit grave abuse of discretion in its interpretation of Section l(c), Article I of the CBA that the Acrylic is not an extension or expansion of private respondent.

SAN MIGUEL CORP. EMPLOYEES UNIN v. CONFESSOR

LABOR AND SOCIAL LEGISLATION; LABOR CODE; COLLECTIVE BARGAINING AGREEMENT; TERM OF REPRESENTATION ASPECT FIXED TO FIVE YEARS; ALL OTHER ASPECTS, THREE YEARS. - Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act No. 6715 (the Herrera-Veloso Law) which took effect on March 21, 1989. This new provision states that the CBA has a term of five (5) years instead of three years, before the amendment of the law as far as the representation aspect is concerned. All other provisions of the CBA shall be negotiated not later than three (3) years after its execution. The representation aspect refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining unit concerned. All other provisions simply refers to the rest of the CBA, economic as well as non-economic provisions, except representation.

ARTICLE 253-A OF THE LABOR CODE, CONSTRUED. The framers of the law wanted to maintain industrial peace and stability by having both management and labor work harmoniously together without any disturbance. Thus, no outside union can enter the establishment within five (5) years and challenge the status of the incumbent union as the exclusive bargaining agent. Likewise, the terms and conditions of employment (economic and non-economic) can not be questioned by the employers or employees during the period of effectivity of the CBA. The CBA is a contract between the parties and the parties must respect the terms and conditions of the agreement. Notably, the framers of the law did not give a fixed term as to the effectivity of the terms and conditions of employment. It can be gleaned from their discussions that it was left to the parties to fix the period.

88 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-03044. LABOR AND SOCIAL LEGISLATION; LABOR CODE; COLLECTIVE BARGAINING AGREEMENT; TERM OF NON-REPRESENTATION PROVISION IS THREE YEARS. The issue as to the term of non-representation provisions of the CBA need not belabored especially when we take note of the Memorandum of the Secretary of Labor dated February 24, 1994 which was mentioned in the Resolution of Undersecretary Bienvenido Laguesma on January 16, 1995 in the certification election case involving the SMC employees. In said memorandum, the Secretary of Labor had occasion to clarify the term of the renegotiated terms of the CBA vis-a-vis the term of the bargaining agent, to wit: As a matter of policy the parties are encourages (sic) to enter into a renegotiated CBA with a term which would coincide (sic) with the aforesaid five (5) year term of the bargaining representative. In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of three (3) years or one which does not coincide with the said 5-year term, and said agreement is ratified by majority of the members in the bargaining unit, the subject contract is valid and legal and therefore, binds the contracting parties. The same will however not adversely affect the right of another union to challenge the majority status of the incumbent bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA. Thus, we do not find any grave abuse of discretion on the part of the Secretary of Labor in ruling that the effectivity of the renegotiated terms of the CBA shall be for three (3) years.

5. ID.; ID.; EMPLOYMENT; TRANSFORMATION OF COMPANIES, MANAGEMENT PREROGATIVE AND BUSINESS JUDGMENT. Undeniably the transformation of the companies was a management prerogative and business judgment which the courts can not look into unless it is contrary to law, public policy or morals. Neither can we impute any bad faith on the part of SMC so as to justify the application of the doctrine of piercing the corporate veil.

6. ID.; ID.; COLLECTIVE BARGAINING AGREEMENT; OPERATING DIVISIONS OF THE COMPANY WHICH BECAME SEPARATE AND DISTINCT NO LONGER BELONG TO A SINGLE BARGAINING UNIT. Ever mindful of the employees interests, management has assured the concerned employees that they will be absorbed by the new corporations without loss of tenure and retaining their present pay and benefits according to the existing CBAs. They were advised that upon the expiration of the CBAs, new agreements will be negotiated between the management of the new corporations and the bargaining representatives of the employees concerned. Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical personalities. Thus, they can not belong to a single bargaining unit as held in the case of Diatagon Labor Federation Local 110 of the ULGWP v. Ople. Petitioner-unions attempt to include the employees of Magnolia and SMFI in the SMC bargaining unit so as to have a bigger mass base of employees has, therefore, no more valid ground.

MANAGEMENT

PHIL. SCOUTS VETERANS, ET AL V. TORRES

Petitioners insist that there are three (3) corporations in this petition, each of which has a separate and distinct corporate personality of its own with separate registrations with the Securities and Exchange Commission (SEC) and different Articles of Incorporation and By-Laws; with separate sets of corporate officers and directors; and no common business address except for GVM and ASDA which are located at 1957 España corner Craig Streets, Sampaloc, Manila.

The public repondent noted the following circumstances in the La Campana case similar to the case at bar, as indicative of the fact that the La Campana Coffee Factory and La Campana Gaugau Packing were in reality only one business with two trade names: (1) the two factories occupied the same address, wherein they had their principal place of business; (2) their signboards, advertisements, packages of starch, delivery truck and delivery forms all use one appellation, "La Campana Starch and Coffee Factory"; (3) the workers in either company received their pay from a single cashier, and (4) the workers in one company could easily transfer to the other company, and vice-versa. 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

89 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304case 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.

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". In emergencies, all PSVSIA Detachment Commanders were instructed in a memorandum dated November 10, 1988 to get in touch with the officers not only of PSVSIA but also of GVM and ASDA. All of these goes to show that the security agencies concerned do not exist and operate separately and distinctly from each other with different corporate directions and goals. On the contrary, all the cross-linking of the three agencies' command, control and communication systems indicate their unitary corporate personality. Accordingly, the veil of corporate fiction of the three agencies should be lifted for the purpose of allowing the employees of the three agencies to form a single labor union. As a single bargaining unit, the employees therein need not file three separate petitions for certification election. All of these could be covered in a single petition.

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 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. This is clearly the mandate of Article 257 of the Labor Code, as amended by Section 24 of R.A. 6715, which now reads:

Art. 257. Petitions in unorganized establishments. — In any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor organization.

The designation of the three agencies collectively as "PGA Security Agency" and the service of summons to the management thereof at 82 E. Rodriguez Avenue, Quezon City did not render the petition defective. Labor Secretary Franklin Drilon correctly noted the fact that the affidavits executed separately and under oath by the three managers of the three security agencies indicated their office address to be at PSVSIA Center II, E. Rodriguez Sr. Blvd., Quezon City. Besides, even if there was improper service of summons by the Med-Arbiter, the three (3) security agencies voluntarily submitted themselves to the jurisdiction of the labor authorities. 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.

90 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304TEST

GOLDEN FARMS INC. V. SEC OF LABOR

The monthly paid office and technical rank-and-file employees of petitioner Golden Farms enjoy the constitutional right to self-organization and collective bargaining. 4 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. 5 The community or mutuality of interest is therefore the essential criterion in the grouping. "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.' 6

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

UNIT SEVERANCE AND GLOBE DOCTRINE

INDUSTRAL/CRAFT UNIONS

MECHANICAL DEPARTMENT LABOR UNION V. CIR

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 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 (PLDT Employees' Union vs. Philippine Long Distance Telephone Co., 51 Off. Gaz., 4519).

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

91 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304legal 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.

Whether or not the agreement negotiated by the appellant union with the employer, during the pendency of the original petition in the Court of Industrial Relations, should be considered valid and binding on the workers of the Caloocan shops is a question that should be first passed upon by the Industrial Court.

SIZE OF UNIT AND EFFECT ON SELF-ORGANIZATION

UNIT SCOPE AND SELF-ORGANIZATION

FILOIL REFINERY CORP. V. FILOIL SUPERVISORY ET. AL.

Petitioner's contentions are untenable, prescinding from the fact of its failure to appeal in due course respondent court's en banc resolution of September 7, 1965 upholding the right of the supervisors and confidential employees to organize respondent association and to compel petitioner to negotiate and bargain collectively with it. Petitioner's argument that since supervisors form part of management, to allow them to bargain collectively would be tantamount to management bargaining with itself may be a well-turned phrase but ignores the dual status of a supervisor as a representative of management and as an employee.

If indeed the supervisor is absolutely undistinguishable from management, then he would be beyond removal or dismissal, for as respondent association counters, "how can management remove or dismiss itself?"

As stated for the Court by the now Chief Justice in AG & P Co. of Manila, Inc. vs. C.I.R., 8 section 3 of the Industrial Peace Act "explicitly provides that "employees" — and this term includes supervisors — "shall have the right to self-organization, and to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining through representations of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection" and that "individuals employed as supervisors ... may form separate organizations of their own". Indeed, it is well settled that "in relation to his employer," a foreman or supervisor "is an employee within the meaning of the Act" ... For this reason, supervisors are entitled to engage in union activities and any discrimination against them by reason thereof constitutes an unfair labor practice."

Petitioner's arguments go in reality to the wisdom and policy of the Industrial Peace Act which expressly grants supervisors the right to organize and bargain collectively, which are beyond the Court's power of review. Thus, the argument that "it is axiomatic in the law of self-interest that an employer must give a "better deal" to those who act in his interest and in whom he has trust and confidence. These are the supervisors and confidential employees" 9 and that "In the United States there was a move to have a part of the supervisory group to be aligned with labor. But the enactment of the Taft-Hartley Act put an end to this move." 10

So with petitioner's thesis that "(T)o then give supervisors the right to compel employers to bargain would in effect align labor and management together against stockholders and bondholders (capital) and inexorably tilt the balance of power in favor of these hitherto confliction forces. This is contrary to the nature and philosophy of free enterprise." 11 This further serves to point up the validity and rationale of the Industrial Peace Act's provision, since the supervisors and confidential employees, even though they may exercise the prerogatives of management as regards the rank and file employees are indeed employees in relation to their employer, the company which is owned by the "stockholders and bondholders (capital)" in petitioner's own words, and should therefore be entitled under the law to bargain collectively with the top management with respect to their terms and conditions of employment.

92 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304Petitioner's argument that the express provisions of section 3 of our Industrial Peace Act must give way to the intendment of the Taft-Hartley Act which exempts employers from the legal obligation to recognize and negotiate with supervisors is tenuous and groundless. The language of our own statute is plain and unambiguous and admits of no other interpretation.

The other principal ground of petitioner's appeal questioning the confidential employees' inclusion in the supevisors bargaining unit is equally untenable. Respondent court correctly held that since the confidential employee are very few in number and are by practice and tradition identified with the supervisors in their role as representives of management vis-a-vis the rank and file employee such identity of interest has allowed their inclusion in the bargaining unit of supervisors-managers for purposes of collective bargaining in turn as employees in relation to the company as their employer.

No arbitrariness or grave abuse of discretion can be attributed against respondent court's allowing the inclusion of the confidential employees in the supervisors' association for as admitted by petitioner itself, supra, the supervisors and confidential emplyees enjoy its trust and confidence. Thisidentity of interest logically calls for their inclusion in the same bargaining unit and at the same time fulfills the law's objective of insuring to them the full benefit of their right to self-organization and to collective bargaining, which could hardly be accomplished if the respondent association's membership were to be broken up into five separate ineffective tiny units, as urged by petitioner.

SUPERVISOR UNIT

NEGROS ORIENTAL ELECTRIC CORP. V. SECRETARY OF LABOR

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 there are indeed supervisory and confidential employees in appellant union who under the law are disqualified to join the same.[8]

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.

Indeed, the Court of Appeals cannot be expected to go over the list of alleged supervisory employees attached to the petition before it and to pass judgment in the first instance on the nature of the functions of each employee on the basis of the job description pertaining to him. As appropriately observed by the said court, the determination of such factual issues is vested in the appropriate Regional Office of the Department of Labor and Employment and pursuant to the doctrine of primary jurisdiction, the Court should refrain from resolving such controversies. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence.[9]

The petitioner questions the remedy suggested by the Court of Appeals i.e., to file a petition for cancellation of registration before the appropriate Regional Office arguing that the membership of supervisory employees in the rank-

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93 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304and-file is not one of the grounds for cancellation of registration under the Omnibus Rules. Whether the inclusion of the prohibited mix of rank-and-file and supervisory employees in the roster of officers and members of the union can be cured by cancellation of registration under Article 238 et seq. of the Labor Code vis--vis Rule VIII of the Omnibus Rules, or by simple inclusion-exclusion proceedings in the pre-election conference,[10] the fact remains that the determination of whether there are indeed supervisory employees in the roster of members of the rank-and-file union has never been raised nor resolved by the appropriate fact finding body, and the petition for certiorari filed in the Court of Appeals cannot cure the procedural lapse. It bears notice that unlike in Toyota Motor Philippines Corp. vs. Toyota Motor Philippines Corp. Labor Union[11] 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. Time and again, this Court has ruled that factual matters are not proper subjects for certiorari.[12]

The above observations are in point with respect to the last assigned error challenging the inclusion of members of the cooperative in the union. The argument that NORECO I is a cooperative and most if not all of the members of the petitioning union are members of the cooperative was raised only in the Motion for Reconsideration from the Decision of the Secretary of Labor dated July 31, 1998. The Secretary of Labor ruled that the argument should be rejected as it was not 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.[13]

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 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.[14]

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






94 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-0304union 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

EFFECT PRIOR AGREEMENT

NON-PARTIES EFFECT

DE LA SALLE V. DE LA SALLE 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. xxx xxx."[46] 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. xxx xxx."[47] 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

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. [51]

The Universitys arguments on the first issue fail to impress us. The Court agrees with 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 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.








95 | L A B O R R E L A T I O N S R E V I E W E R A T T Y . D A N N Y G U T I E R R E ZSAGSAGAT-2014-03044.03 DETERMINING AGENCY

Article 226. Bureau of Labor Relations. The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor, shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces, whether agricultural or non-agricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration.

The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension by agreement of the parties. (As amended by Section 14, Republic Act No. 6715, March 21, 1989).

Article 255. Exclusive bargaining representation and workers’ participation in policy and decision-making. The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989)

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