Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-50283-84 April 20, 1983
DOLORES VILLAR, ROMEO PEQUITO, DIONISIO RAMOS, BENIGNO
MAMARALDO, ORLANDO ACOSTA, RECITACION BERNUS, ANSELMA ANDAN,
ROLANDO DE GUZMAN and RITA LLAGAS, petitioners,
vs.
THE HON. AMADO G. INCIONG, as Deputy Minister of the Ministry of Labor,
AMIGO MANUFACTURING INCORPORATED and PHILIPPINE ASSOCIATION OF
FREE LABOR UNIONS (PAFLU), respondents.
Aniceto Haber for petitioners.
Roberto T. Neri for respondents.

GUERRERO, J.:
Petition for review by certiorari to set aside the Order dated February 15, 1979 of
respondent Deputy Minister Amado G. Inciong affirming the Decision of the OIC of
Regional Office No. 4 dated October 14, 1978 which jointly resolved RO4-Case No. TIV-3549-T and RO4-Case No. RD 4-4088-77-T.
The facts are as follows:
Petitioners were members of the Amigo Employees Union-PAFLU, a duly registered
labor organization which, at the time of the present dispute, was the existing bargaining
agent of the employees in private respondent Amigo Manufacturing, Inc. (hereinafter
referred to as Company). The Company and the Amigo Employees Union-PAFLU had a
collective bargaining agreement governing their labor relations, which agreement was
then about to expire on February 28, 1977. Within the last sixty (60) days of the CBA,
events transpired giving rise to the present dispute.
On January 5, 1977, upon written authority of at least 30% of the employees in the
company, including the petitioners, the Federation of Unions of Rizal (hereinafter
referred to as FUR) filed a petition for certification election with the Med-Arbiter's Office,

Regional Office No. 4 of the Ministry of Labor and Employment. The petition was,
however, opposed by the Philippine Association of Free Labor Unions (hereinafter
referred to as PAFLU) with whom, as stated earlier, the Amigo Employees Union was at
that time affiliated. PAFLU's opposition cited the "Code of Ethics" governing interfederation disputes among and between members of the Trade Unions Congress of the
Philippines (hereinafter referred to as TUCP). Consequently, the Med-Arbiter indorsed
the case to TUCP for appropriate action but before any such action could be taken
thereon, the petitioners disauthorized FUR from continuing the petition for certification
election for which reason FUR withdrew the petition.
On February 7, 1977, the same employees who had signed the petition filed by FUR
signed a joint resolution reading in toto as follows:
Sama-Samang Kapasiyahan
1. TUMIWALAG bilang kasaping Unyon ng Philippine Association of Free
Labor Unions (PAFLU) at kaalinsabay nito, inaalisan namin ang PAFLU ng
kapangyarihan na katawanin kami sa anumang pakikipagkasundo (CBA)
sa Pangasiwaan ng aming pinapasukan at kung sila man ay nagkasundo
o magkakasundo sa kabila ng pagtitiwalag na ito, ang nasabing
kasunduan ay hindi namin pinagtitibay at tahasang aming
itinatakwil/tinatanggihan;
2. BINABAWI namin ang aming pahintulot sa Federation of Unions of
Rizal (FUR) na katawanin kami sa Petition for Certification Election (RO4MED Case No. 743-77) at/o sa sama-samang pakikipagkasundo sa aming
patrons;
3. PANATILIHIN na nagsasarili (independent) ang aming samahan,
AMIGO EMPLOYEES' UNION, alinsunod sa Artikulo 240 ng Labor Code;
4. MAGHAIN KAAGAD ang aming Unyong nagsasarili, sa pamumuno ng
aming pangsamantalang Opisyal na kinatawan, si Ginang DOLORES
VILLAR, ng Petition for Certification Election sa Department of Labor, para
kilalanin ang aming Unyong nagsasarili bilang Tanging kinatawan ng mga
manggagawa sa sama-samang pakikipagkasundo (CBA);
5. BIGYAN ng kopya nito ang bawa't kinauukulan at ang mga
kapasiyahang ito ay magkakabisa sa oras na matanggap ng mga
kinauukulan ang kani-kanilang sipi nito. 1

Immediately thereafter or on February 9, 1977, petitioner Dolores Villar, representing

herself to be the authorized representative of the Amigo Employees Union, filed a
petition for certification election in the Company before Regional Office No. 4, with the
Amigo Employees Union as the petitioner. The Amigo Employees Union-PAFLU
intervened and moved for the dismissal of the petition for certification election filed by
Dolores Villar, citing as grounds therefor, viz: (a) the petition lacked the mandatory
requisite of at least 30% of the employees in the bargaining unit; (2) Dolores Villar had
no legal personality to sign the petition since she was not an officer of the union nor is
there factual or legal basis for her claim that she was the authorized representative of
the local union; (3) there was a pending case for the same subject matter filed by the
same individuals; (4) the petition was barred by the new CBA concluded on February
15, 1977; (5) there was no valid disaffiliation from PAFLU; and (6) the supporting
signatures were procured through false pretenses.
Finding that the petition involved the same parties and causes of action as the case
previously indorsed to the TUCP, the Med-Arbiter dismiss the petition filed by herein
petitioner Villar, which dismissal is still pending appeal before the Bureau of Labor
Relations.
In the meantime, on February 14, 1977, the Amigo Employees Union- PAFLU called a
special meeting of its general membership. A Resolution was thereby unanimously
approved which called for the investigation by the PAFLU national president, pursuant
to the constitution and by-laws of the Federation, of all of the petitioners and one Felipe
Manlapao, for "continuously maligning, libelling and slandering not only the incumbent
officers but even the union itself and the federation;" spreading 'false propaganda' that
the union officers were 'merely appointees of the management', and for causing
divisiveness in the union.
Pursuant to the Resolution approved by the Amigo Employees Union- PAFLU, the
PAFLU, through its national President, formed a Trial Committee to investigate the local
union's charges against the petitioners for acts of disloyalty inimical to the interest of the
local union, as well as directing the Trial Committee to subpoena the complainants
(Amigo Employees Union-PAFLU) and the respondents (herein petitioners) for
investigation, to conduct the said investigation and to submit its findings and
recommendations for appropriate action.
And on the same date of February 15, 1977, the Amigo Employees Union- PAFLU and
the Company concluded a new CBA which, besides granting additional benefits to the
workers, also reincorporated the same provisions of the existing CBA, including the
union security clause reading, to wit:

ARTICLE III
UNION SECURITY WITH RESPECT TO PRESENT MEMBERS
All members of the UNION as of the signing of this Agreement shall
remain members thereof in good standing. Therefore, any members who
shall resign, be expelled, or shall in any manner cease to be a member of
the UNION, shall be dismissed from his employment upon written request
of the UNION to the Company. 2
Subsequently, petitioners were summoned to appear before the PAFLU
Trial Committee for the aforestated investigation of the charges filed
against them by the Amigo Employees Union-PAFLU. Petitioners,
however, did not attend but requested for a "Bill of Particulars" of the
charges, which charges were stated by the Chairman of the committee as
follows:
1. Disaffiliating from PAFLU and affiliating with the Federation of Unions of
Rizal (FUR).
2. Filling petition for certification election with the Bureau of Labor
Relations and docketed as Case No. R04-MED-830-77 and authorizing a
certain Dolores Villar as your authorized representative without the official
sanction of the mother Federation- PAFLU.
3. Maligning, libelling and slandering the incumbent officers of the union
as well as of the PAFLU Federation.
4. By spreading false propaganda among members of the Amigo
Employees Union-PAFLU that the incumbent union officers are 'merely
appointees' of the management.
5. By sowing divisiveness instead of togetherness among members of the
Amigo Employees Union-PAFLU.
6. By conduct unbecoming as members of the Amigo Employees UnionPAFLU which is highly prejudicial to the union as well as to the PAFLU
Federation.
All these charges were formalized in a resolution of the incumbent officers
of the Amigo Employees Union-PAFLU dated February 14, 1977. 3

Not recognizing PAFLU's jurisdiction over their case, petitioners again refused to
participate in the investigation rescheduled and conducted on March 9, 1979. Instead,
petitioners merely appeared to file their Answer to the charges and moved for a
dismissal.
Petitioners contend in their Answer that neither the disaffiliation of the Amigo Employees
Union from PAFLU nor the act of filing the petition for certification election constitute
disloyalty as these are in the exercise of their constitutional right to self-organization.
They further contended that PAFLU was without jurisdiction to investigate their case
since the charges, being intra-union problems within the Amigo Employees UnionPAFLU, should be conducted pursuant to the provisions of Article XI, Sections 2, 3, 4
and 5 of the local union's constitution and by-laws.
The complainants, all of whom were the then incumbent officers of the Amigo
Employees Union-PAFLU, however, appeared and adduced their evidence supporting
the charges against herein petitioners.
Based on the findings and recommendations of the PAFLU trial committee, the PAFLU
President, on March 15, 1977, rendered a decision finding the petitioners guilty of the
charges and disposing in the last paragraph thereof, to wit,
Excepting Felipe Manlapao, the expulsion from the AMIGO EMPLOYEES
UNION of all the other nine (9) respondents, Dionisio Ramos, Recitation
Bernus, Dolores Villar, Romeo Dequito, Rolando de Guzman, Anselma
Andan, Rita Llagas, Benigno Mamaradlo and Orlando Acosta is hereby
ordered, and as a consequence the Management of the employer, AMIGO
MANUFACTURING, INC. is hereby requested to terminate them from their
employment in conformity with the security clause in the collective
bargaining agreement. Further, the Trial Committee is directed to
investigate Felipe Manlapao when he shall have reported back for duty. 4
Petitioners appealed the Decision to the PAFLU, citing the same grounds as before, and
in addition thereto, argued that the PAFLU decision cannot legally invoke a CBA which
was unratified, not certified, and entered into without authority from the union general
membership, in asking the Company to terminate them from their employment. The
appeal was, likewise, denied by PAFLU in a Resolution dated March 28, 1977.
After denying petitioner's appeal, PAFLU on March 28, 1977 sent a letter to the
Company stating, to wit,

We are furnishing you a copy of our Resolution on the Appeal of the

respondent in Administrative Case No. 2, Series of 1977, Amigo
Employees Union-PAFLU vs. Dionisio Ramos, et al.
In view of the denial of their appeal and the Decision of March 15, 1977
having become final and executory we would appreciate full cooperation
on your part by implementing the provision of our CBA on security clause
by terminating the respondents concerned from their employment. 5
This was followed by another letter from PAFLU to the Company dated April 25, 1977,
reiterating the demand to terminate the employment of the petitioners pursuant to the
security clause of the CBA, with a statement absolving the Company from any liability or
damage that may arise from petitioner's termination.
Acting on PAFLU's demand, the Company informed PAFLU that it will first secure the
necessary clearances to terminate petitioners. By letter dated April 28, 1977, PAFLU
requested the Company to put petitioners under preventive suspension pending the
application for said clearances to terminate the petitioners, upon a declaration that
petitioners' continued stay within the work premises will "result in the threat to the life
and limb of the other employees of the company." 6
Hence, on April 29, 1977, the Company filed the request for clearance to terminate the
petitioners before the Department of Labor, Regional Office No. 4. The application,
docketed as RO4-Case No. 7-IV-3549-T, stated as cause therefor, "Demand by the
Union Pursuant to the Union Security Clause," and further, as effectivity date,
"Termination-upon issuance of clearance; Suspension-upon receipt of notice of workers
concerned." 7 Petitioners were then informed by memorandum dated April 29, 1977 that
the Company has applied for clearance to terminate them upon demand of PAFLU, and
that each of them were placed under preventive suspension pending the resolution of
the said applications. The security guard was, likewise, notified to refuse petitioners
entry into the work premises. 8
In an earlier development, on April 25, 1977, or five days before petitioners were placed
under preventive suspension, they filed a complaint with application for preliminary
injunction before the same Regional Office No. 4, docketed as RO4-Case No. RD-44088-77-T, praying that after due notice and hearing, "(1) A preliminary injunction be
issued forthwith to restrain the respondents from doing the act herein complained of,
namely: the dismissal of the individual complainants from their employment; (2) After
due hearing on the merits of the case, an Order be entered denying and/or setting aside
the Decision dated March 15, 1977 and the Resolution dated March 28, 1977, issued by
respondent Onofre P. Guevara, National President of respondent PAFLU; (3) The

Appeal of the individual complainants to the General Membership of the complainant

AMIGO EMPLOYEES UNION, dated March 22, 1977, pursuant to Sections 2, 3, 4 & 5,
Article XI in relation of Section 1, Article XII of the Union Constitution and By-Laws, be
given due course; and (4) Thereafter, the said preliminary injunction be made
permanent, with costs, and with such further orders/reliefs that are just and equitable in
the premises." 9
In these two cases filed before the Regional Office No. 4, the parties adopted their
previous positions when they were still arguing before the PAFLU trial committee.
On October 14, 1977, Vicente Leogardo, Jr., Officer-in-Charge of Regional Office No. 4,
rendered a decision jointly resolving said two cases, the dispositive portion of which
states, to wit,
IN VIEW OF THE FOREGOING, judgment is hereby rendered granting the
application of the Amigo Manufacturing, Inc., for clearance to terminate the
employment of Dolores D. Villar, Dionisio Ramos, Benigno Mamaraldo,
Orlando Acosta, Recitacion Bernus, Anselma Andan, Rolando de
Guzman, and Rita Llagas. The application of oppositors, under RO4-Case
No. RD-4-4088-77, for a preliminary injunction to restrain the Amigo
Manufacturing, Inc. from terminating their employment and from placing
them under preventive suspension, is hereby DISMISSED. 10
Not satisfied with the decision, petitioners appealed to the Office of the Secretary of
Labor. By Order dated February 15, 1979, the respondent Amado G. Inciong, Deputy
Minister of Labor, dismissed their appeal for lack of merit. 11
Hence, the instant petition for review, raising the following issues:
A. Is it not error in both constitutional and statutory law by the respondent
Minister when he affirmed the decision of the RO4-Officer-in-Charge
allowing the preventive suspension and subsequent dismissal of
petitioners by reason of the exercise of their right to freedom of
association?
B. Is it not error in law by the respondent Minister when he upheld the
decision of the RO4 OIC which sustained the availment of the respondent
PAFLU's constitution over that of the local union constitution in the
settlement of intra-union dispute?

C. Is it not error in law amounting to grave abuse of discretion by the

Minister in affirming the conclusion made by the RO4 OIC, upholding the
legal applicability of the security clause of a CBA over alleged offenses
committed earlier than its conclusion, and within the 60-day freedom
period of an old CBA? 12
The main thrust of the petition is the alleged illegality of the dismiss of the petitioners by
private respondent Company upon demand of PAFLU which invoked the security clause
of the collective bargaining agreement between the Company and the local union,
Amigo Employees Union-PAFLU. Petitioners contend that the respondent Deputy
Minister acted in grave abuse of discretion when he affirmed the decision granting the
clearance to terminate the petitioners and dismissed petitioners' complaint, and in
support thereof, allege that their constitutional right to self-organization had been
impaired. Petitioner's contention lacks merit.
It is true that disaffiliation from a labor union is not open to legal objection. It is implicit in
the freedom of association ordained by the Constitution. 13 But this Court has laid down
the ruling that a closed shop is a valid form of union security, and such provision in a
collective bargaining agreement is not a restriction of the right of freedom of association
guaranteed by the Constitution. 14
In the case at bar, it appears as an undisputed fact that on February 15, 1977, the
Company and the Amigo Employees Union-PAFLU entered into a Collective Bargaining
Agreement with a union security clause provided for in Article XII thereof which is a
reiteration of the same clause in the old CBA. The quoted stipulation for closed-shop is
clear and unequivocal and it leaves no room for doubt that the employer is bound, under
the collective bargaining agreement, to dismiss the employees, herein petitioners, for
non- union membership. Petitioners became non-union members upon their expulsion
from the general membership of the Amigo Employees Union-PAFLU on March 15,
1977 pursuant to the Decision of the PAFLU national president.
We reject petitioners' theory that their expulsion was not valid upon the grounds
adverted to earlier in this Decision. That PAFLU had the authority to investigate
petitioners on the charges filed by their co-employees in the local union and after finding
them guilty as charged, to expel them from the roll of membership of the Amigo
Employees Union-PAFLU is clear under the constitution of the PAFLU to which the local
union was affiliated. And pursuant to the security clause of the new CBA, reiterating the
same clause in the old CBA, PAFLU was justified in applying said security clause. We
find no abuse of discretion on the part of the OIC of Regional Office No. 4 in upholding
the validity of the expulsion and on the part of the respondent Deputy Minister of Labor

in sustaining the same. We agree with the OIC's decision, pertinent portion of which
reads:
Stripped of non-essentials, the basic and fundamental issue in this case
tapers down to the determination of WHETHER OR NOT PAFLU HAD
THE AUTHORITY TO INVESTIGATE OPPOSITORS AND,
THEREAFTER, EXPEL THEM FROM THE ROLL OF MEMBERSHIP OF
THE AMIGO EMPLOYEES UNION-PAFLU.
Recognized and salutary is the principle that when a labor union affiliates
with a mother union, it becomes bound by the laws and regulations of the
parent organization. Thus, the Honorable Secretary of Labor, in the case
of Amador Bolivar, et al. vs. PAFLU, et al., NLRC Case No. LR-133 & MC476, promulgated on December 3, 1973, declaredWhen a labor union affiliates with a parent organization or mother union,
or accepts a charter from a superior body, it becomes subject to the laws
of the superior body under whose authority the local union functions. The
constitution, by-laws and rules of the parent body, together with the
charter it issues pursuant thereto to the subordinate union, constitute an
enforceable contract between the parent body and the subordinate union,
and between the members of the subordinate union inter se. (Citing Labor
Unions, Dangel and Shriber, pp. 279-280).
It is undisputable that oppositors were members of the Amigo Employees
Union at the time that said union affiliated with PAFLU; hence, under the
afore-quoted principle, oppositors are bound by the laws and regulations
of PAFLU.
Likewise, it is undeniable that in the investigation of the charges against
them, oppositors were accorded 'due process', because in this jurisdiction,
the doctrine is deeply entrenched that the term 'due process' simply
means that the parties were given the opportunity to be heard. In the
instant case, ample and unmistakable evidence exists to show that the
oppositors were afforded the opportunity to present their evidence, but
they themselves disdained or spurned the said opportunity given to them.
PAFLU, therefore, correctly and legally acted when, pursuant to its
Constitution and By-Laws, it conducted and proceeded with the
investigation of the charges against the oppositors and found them guilty
of acts prejudicial and inimical to the interests of the Amigo Employees

Union- PAFLU, to wit: that of falsely and maliciously slandering the officers
of the union; spreading false propaganda among the members of the
Amigo Employees Union-PAFLU; calling the incumbent officers as mere
appointees and robots of management; calling the union companydominated or assisted union; committing acts unbecoming of the members
of the union and destructive of the union and its members.
Inherent in every labor union, or any organization for that matter, is the
right of self-preservation. When members of a labor union, therefore, sow
the seeds of dissension and strife within the union; when they seek the
disintegration and destruction of the very union to which they belong, they
thereby forfeit their rights to remain as members of the union which they
seek to destroy. Prudence and equity, as well as the dictates of law and
justice, therefore, compelling mandate the adoption by the labor union of
such corrective and remedial measures in keeping with its laws and
regulations, for its preservation and continued existence; lest by its folly
and inaction, the labor union crumble and fall.
Correctly and legally, therefore, the PAFLU acted when, after proper
investigation and finding of guilt, it decided to remove the oppositors from
the list of members of the Amigo Employees Union-PAFLU, and thereafter,
recommended to the Amigo Manufacturing, Inc.; the termination of the
employment of the oppositors. 15
We see no reason to disturb the same.
The contention of petitioners that the charges against them being intra-union problems,
should have been investigated in accordance with the constitution and by-laws of the
Amigo Employees Union-PAFLU and not of the PAFLU, is not impressed with merit. It is
true that under the Implementing Rules and Regulations of the Labor Code, in case of
intra-union disputes, redress must first be sought within the organization itself in
accordance with its constitution and by-laws. However, it has been held that this
requirement is not absolute but yields to exception under varying circumstances. Thus,
in Kapisanan ng mga Manggagawa sa MRR vs. Hernandez, 20 SCRA 109, We held:
In the case at bar, noteworthy is the fact that the complaint was filed
against the union and its incumbent officers, some of whom were
members of the board of directors. The constitution and by-laws of the
union provide that charges for any violations thereof shall be filed before
the said board. But as explained by the lower court, if the complainants
had done so the board of directors would in effect be acting as respondent

investigator and judge at the same time. To follow the procedure indicated
would be a farce under the circumstances, where exhaustion of remedies
within the union itself would practically amount to a denial of justice or
would be illusory or vain, it will not be insisted upon, particularly where
property rights of the members are involved, as a condition to the right to
invoke the aid of a court.
The facts of the instant petition stand on all fours with the aforecited case that the
principle therein enunciated applies here as well. In the case at bar, the petitioners were
charged by the officers of the Amigo Employees Union- PAFLU themselves who were
also members of the Board of Directors of the Amigo Employees Union-PAFLU. Thus,
were the petitioners to be charged and investigated according to the local union's
constitution, they would have been tried by a trial committee of three (3) elected from
among the members of the Board who are themselves the accusers. (Section 2, Article
11, Constitution of the Local Union). Petitioners would be in a far worse position had this
procedure been followed. Nonetheless, petitioners admit in their petition that two (2) of
the six (6) charges, i.e. disaffiliation and filing a petition for certification election, are not
intra-union matters and, therefore, are cognizable by PAFLU.
Petitioners insist that their disaffiliation from PAFLU and filing a petition for certification
election are not acts of disloyalty but an exercise of their right to self-organization. They
contend that these acts were done within the 60-day freedom period when questions of
representation may freely be raised. Under the peculiar facts of the case, We find
petitioners' insistence untenable.
In the first place, had petitioners merely disaffiliated from the. Amigo Employees UnionPAFLU, there could be no legal objections thereto for it was their right to do so. But
what petitioners did by the very clear terms of their "Sama-Samang Kapasiyahan" was
to disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an act which they could
not have done with any effective consequence because they constituted the minority in
the Amigo Employees Union-PAFLU.
Extant from the records is the fact that petitioners numbering ten (10), were among the
ninety-six (96) who signed the "Sama-Samang Kapasiyahan" whereas there are two
hundred thirty four (234) union members in the Amigo Employees Union-PAFLU.
Hence, petitioners constituted a small minority for which reason they could not have
successfully disaffiliated the local union from PAFLU. Since only 96 wanted disaffiliation,
it can be inferred that the majority wanted the union to remain an affiliate of PAFLU and
this is not denied or disputed by petitioners. The action of the majority must, therefore,
prevail over that of the minority members. 16

Neither is there merit to petitioners' contention that they had the right to present
representation issues within the 60-day freedom period. It is true, as contended by
petitioners, that under Article 257 of the Labor Code and Section 3, Rule 2, Book 2 of its
Implementing Rules, questions of exclusive bargaining representation are entertainable
within the sixty (60) days prior to the expiry date of an existing CBA, and that they did
file a petition for certification election within that period. But the petition was filed in the
name of the Amigo Employees Union which had not disaffiliated from PAFLU, the
mother union. Petitioners being a mere minority of the local union may not bind the
majority members of the local union.
Moreover, the Amigo Employees Union, as an independent union, is not duly registered
as such with the Bureau of Labor Relations. The appealed decision of OIC Leogardo of
Regional Office No. 4 states as a fact that there is no record in the Bureau of Labor
Relations that the Amigo Employees Union (Independent) is registered, and this is not
disputed by petitioners, notwithstanding their allegation that the Amigo Employees
Union is a duly registered labor organization bearing Ministry of Labor Registration
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.
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).

Finally, We reject petitioners' contention that respondent Minister committed error in law
amounting to grave abuse of discretion when he affirmed the conclusion made by the
RO4 OIC, upholding the legal applicability of the security clause of a CBA over alleged
offenses committed earlier than its conclusion and within the 60-day freedom period of
an old CBA. In the first place, as We stated earlier, the security clause of the new CBA
is a reproduction or reiteration of the same clause in the old CBA. While petitioners
were charged for alleged commission of acts of disloyalty inimical to the interests of the
Amigo Employees Union-PAFLU in the Resolution of February 14, 1977 of the Amigo
Employees Union- PAFLU and on February 15, 1977 PAFLU and the Company entered
into and concluded a new collective bargaining agreement, petitioners may not escape
the effects of the security clause under either the old CBA or the new CBA by claiming
that the old CBA had expired and that the new CBA cannot be given retroactive
enforcement. To do so would be to create a gap during which no agreement would
govern, from the time the old contract expired to the time a new agreement shall have
been entered into with the union. As this Court said in Seno vs. Mendoza, 21 SCRA
1124, "without any agreement to govern the relations between labor and management
in the interim, the situation would well be productive of confusion and result in breaches
of the law by either party. "
The case of Seno vs. Mendoza, 21 SCRA 1124 mentioned previously needs further
citation of the facts and the opinion of the Court, speaking through Justice Makalintal
who later became Chief Justice, and We quote:
It appears that petitioners other than Januario T. Seno who is their
counsel, were members of the United Seamen's Union of the Philippines.
Pursuant to a letter-request of the Union stating that they 'had ceased to
be members in good standing' and citing a closed shop clause in its
bargaining agreement with respondent Carlos A. Go Thong & Co., the
latter dismissed said petitioners. Through counsel, petitioners requested
that they be reinstated to their former positions and paid their backwages,
otherwise they would picket respondents' offices and vessels. The request
was denied on the ground that the dismissal was unavoidable under the
terms of the collective bargaining agreement. ...
We, therefore, hold and rule that petitioners, although entitled to disaffiliate from their
union and form a new organization of their own, must, however, suffer the
consequences of their separation from the union under the security clause of the CBA.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed from affirming
the joint decision of the OIC of Regional Office No. 4 in RO4-Case No. T-IV-3549-T and
RO4 Case No. RD-4-4088-77-T granting clearance to terminate petitioners as well as

dismissing their complaint with application for preliminary injunction, is hereby

AFFIRMED. No costs.
SO ORDERED.
Makasiar (Chairman), Concepcion Jr., De Castro and Escolin JJ., concur.
Paulino Bugay filed against the Kapisanan Ng Mga Manggagawa Sa Manila
Railroad Company before the Court of First Instance of Manila an action for
moral damages arising out of an unfair labor practice allegedly committed by
said union which was the subject of a decision rendered by the Court of
Industrial Relations finding said union guilty as charged. This decision was
affirmed by the Supreme Court. The action for moral damages is based upon
the allegation that "having become the victim of an unfair labor practice act
by the officers of the defendant under Republic Act 875 as found by the
Court of Industrial Relations and the Supreme Court, plaintiff has suffered
moral damages for mental anguish, anxiety, social humiliation and
besmirched reputation specially among the thousands of employees of the
Manila Railroad Company, amounting to P20,000.00." Consequently, it is
prayed that judgment be rendered against defendant awarding plaintiff
damages in the aforesaid amount.
Defendant filed a motion to dismiss on the ground that the complaint does
not state facts sufficient to constitute a cause of action in that neither the
decision of the Court of Industrial Relations nor that of the Supreme Court
contain any statement that the unfair labor practice act imputed to the
defendant was false or fabricated as in fact the decision of the Supreme
Court ordering plaintiff's reinstatement was merely based on "the regularity
and validity of the proceedings and the means adopted by the union and its
officers in effecting (his) expulsion." This contention having been sustained,
the lower court dismissed the complaint with costs against plaintiff. Hence,
the present appeal. 1wph1.t
It appears that appellant was formerly an auditor of the defendant union. He
was at the same time payroll clerk of the Manila Railroad Company.
Sometime in March, 1953, he was requested by the secretary-treasurer of
the company to deliver certain documents which were in his possession
belonging to the union and in compliance therewith he delivered them
without consulting the officers of the union. Making use of these documents,
the management of the company filed with the City Fiscal of Manila against

Vicente K. Olazo, president of the union, a charge for falsification of

commercial document. The City fiscal, after proper investigation, dismissed
the charge.
Subsequently, charges for disloyalty and conduct unbecoming a union
member were preferred against appellant, and later the corresponding
investigation, appellant was expelled from the union. As a result, appellant
filed a charge for unfair labor practice against the union before the Court of
Industrial Relations which, after due hearing, rendered decision holding that
appellant's expulsion was illegal it appearing that the same has not been
approved by the majority of the chapters of the union as required by its
constitution and by-laws. Hence, the court ordered the reinstatement of
appellant as union member and the restoration to him of all his rights and
privileges. This decision was affirmed by the Supreme Court.
The finding that defendant union was guilty of the unfair labor practice
preferred against it by plaintiff, the Court of Industrial Relations made the
following comment: .
It is to be noted that both in the investigation held by the investigation
committee of the Kapisanan and in the board meeting of June 14,
1953, where the committee's report recommending expulsion was
approved, Bugay was not present. As has been pointed out earlier, the
reason for Bugay's failure to attend the investigation does not appear
of record. On the other hand, during the board meeting, the committee
of three board members assigned to summon Bugay failed to serve
notice upon him because he was then in Lucena, Quezon. Why all
these proceedings were continued by the respondents inspite of
Bugay's absence remains unexplained in the record. But one thing is
certain, whatever might be the merits of the charge filed by
respondent Olazo against him, Bugay did not have sufficient
opportunity to defend himself. Such proceedings, being violative of the
elementary rule of justice and fair play, can not give validity to any act
done pursuant thereto.
Besides, the contention that majority of the chapters voted in favor of
Bugay's expulsion is not borne by the evidence. An examination of the
chapters to the Kapisanan board of directors (Exhs. 7 to 28) shows that
all of the votes, except those of the Hondagua Chapters and
Engineering Manila Yard Chapter (Exhs. 14 and 17) were not validly

cast. Under the Kapisanan's constitution and by-laws, relied upon by

the parties, before a resolution of general application may be enforced,
and a resolution terminating union membership is one, it must receive
the sanction of majority of the chapters within ten (10) days (Section 4,
Art. VII, Kapisanan's Saligang Batas). In other words, action thereon,
whether favorable or otherwise, must be taken by the chapters within
a period of ten days from the time they receive the resolution.
According to respondent Olazo's testimony, the resolution passed on
June 14, 1953, was transmitted to the chapters on June 17, 1953. To
make it effective, the resolution had to be affirmed by the chapters on
July 1, 1953, at the latest. The additional time of four days is allowed
for transmittals made by mail. Only the two abovenamed chapters,
however, acted on the resolution within the prescribed period. For this
reason, even under the assumption that the proceedings against
Bugay were not irregular, the resolution in question never had any
valid effect on his union membership. In short, his affiliation with the
Kapisanan was never terminated. That being the case, Bugay is
entitled to all the rights and obligations appertaining to every member
of the Kapisanan. Considering that he has been unduly and
discriminatorily deprived of such rights and obligations, the Court finds,
and so holds, that the respondents, by their act and conduct, have
engaged in and are engaging in unfair labor practice in violation of
Section 4(b) (2) of the Act.
The above findings were affirmed by the Supreme Court though with some
modification.
It is now contended that because the decisions of both the Court of Industrial
Relations and the Supreme Court do not contain any intimation nor
statement to the effect that the charges filed against Paulino Bugay which
resulted in his separation from the union were "trumped up" or fabricated
but were solely based on procedural defects in the matter of his expulsion
appellant cannot ask moral damages inasmuch as there is no showing that to
effect his expulsion the officers of the union have acted in bad faith. As a
matter of fact, it is contended, he did not lose his employment as payroll
clerk in the Manila Railroad Company as a result of his expulsion, nor did he
suffer any change in his status as a consequence thereof. In effect, he was
not awarded any damages by he industrial court.

It should, however, be observed that the main basis of appellant's action is

his claim that because of the unfair labor practice committed by the officers
of defendant union as found by the Court of Industrial Relations and the
Supreme Court he has suffered moral damages because of the mental
anguish, anxiety, social humiliation and besmirched reputation he has been
subjected among the thousands of employees of the Manila Railroad
Company, which claim finds support in our new Civil Code. Thus, Article 2217
of said Code provides as follows: .
ART. 2217. Moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are
the proximate result of the defendant's wrongful act or omission.
It is true that the decisions both of the Court of Industrial Relations and the
Supreme Court do not contain any statement that the charges preferred by
the officers of the union against him which resulted in his expulsion were
"trumped up" or fabricated, or that said officers acted maliciously or in bad
faith, but the fact remains that the two courts have found that his expulsion
was illegal because of the irregularities committed in his investigation. In
effect, it was found that not only has he not been given an opportunity to
defend himself but his expulsion was not submitted to the different chapters
of the union as required by its constitution and by-laws. The result was that
because of his expulsion he was subjected to humiliation and mental anguish
with the consequent lose of his good name and reputation. This is especially
so considering that the members of the union from which he was expelled
amounted to around 20,000 more or less. It is, therefore, an error for the
lower court to hold that the complaint does not state sufficient cause of
action for the relief claimed by appellant.
With regard to the contention that this claim for moral damages should have
been included by appellant in his charge for unfair labor practice filed
against the union with the Court of Industrial Relations, suffice it to state that
the same does not come within the jurisdiction of that court. This is a matter
that has to be looked into by the regular courts.
WHEREFORE, the order appealed from is set aside. The case is remanded to
the lower court for further proceedings, with costs against defendant.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 78131 January 20, 1988
EDUARDO TANCINCO, OSCAR E. BARTOLO, DANIEL DE LEON, EDDIE POE, VIRGILIO
SAN PEDRO, MA. LUISA QUIBIN, FE MUDLONG and HENRY MADRIAGA, petitioners,
vs.
DIRECTOR PURA FERRER-CALLEJA, EDWIN LACANILAO, BOYET DALMACIO,
JOSEFINO ESGUERRA, TESSIE GATCHALIAN, LITO CUDIA and DING
PAGAYON, respondents.

GANCAYCO, J.:
This special civil action for certiorari seeks to annul the Resolution of February 12, 1987 and the
Decision of December 10, 1986 of the Bureau of Labor Relations * in BLR Case No. A922186, setting aside
the order of July 25, 1986 which decreed the inclusion and counting of the 56 segregated votes for the determination of the results of the
election of officers of Imperial Textile Mills Inc. Monthly Employees Association (ITM-MEA).

Private respondents are the prime organizers of ITM-MEA. While said respondents were
preparing to file a petition for direct certification of the Union as the sole and exclusive
bargaining agent of ITM's bargaining unit, the union's Vice-President, Carlos Dalmacio was
promoted to the position of Department Head, thereby disqualifying him for union membership.
Said incident, among others led to a strike spearheaded by Lacanilao group, respondents
herein. Another group however, led by herein petitioners staged a strike inside the company
premises. After four (4) days the strike was settled. On May 10, 1986 an agreement was
entered into by the representatives of the management, Lacanilao group and the Tancinco
group the relevant terms of which are as follows:
"1. That all monthly-paid employees shall be United under one union, the ITM
Monthly Employees Association (ITM-MEA), to be affiliated with ANGLO;
2. That the management of ITM recognizes ANGLO as the sole and exclusive
bargaining agent of all the monthly-paid employees;
3. That an election of union officers shall be held on 26 May l986, from 8:00 a.m.
to 5:00 p.m.;
4. That the last day of filing of candidacy shall be on l9 May l986 at 4:00 p.m.;

5. That a final pre-election conference to finalize the list of qualified voters shall
be held on 19 May 1986, at 5:00 p.m.;" 1
On May 19, 1986, a pre-election conference was held, but the parties failed to agree on the list
of voters. During the May 21, 1986 pre-election conference attended by MOLE officers, ANGLO
through its National Secretary, a certain Mr. Cornelio A. Sy made a unilateral ruling excluding
some 56 employees consisting of the Manila office employees, members of Iglesia ni Kristo,
non-time card employees, drivers of Mrs. Salazar and the cooperative employees of Mrs.
Salazar. Prior to the holding of the election of union officers petitioners, 2 through a letter
addressed to the Election Supervisor, MOLE San Fernando Pampanga, protested said ruling but no
action was taken. On May 26, 1986, the election of officers was conducted under the supervision of
MOLE wherein the 56 employees in question participated but whose votes were segregated without being
counted. Lacanilao's group won. Lacanilao garnered 119 votes with a margin of three (3) votes over
Tancinco prompting petitioners to make a protest. Thereafter, petitioners filed a formal protest with the
Ministry of Labor Regional Office in San Fernando, Pampanga 3 claiming that the determination of the
qualification of the 56 votes is beyond the competence of ANGLO. Private respondents maintain the
contrary on the premise that definition of union's membership is solely within their jurisdiction.

On the basis of the position papers submitted by the parties MOLE's Med Arbiter 4 issued an
order dated July 25, 1986 directing the opening and counting of the segregated votes. 5 From the said
order private respondents appealed to the Bureau of Labor Relations (BLR) justifying the
disenfranchisement of the 56 votes. Private respondents categorized the challenged voters into four
groups namely, the Manila Employees, that they are personal employees of Mr. Lee; the Iglesia ni Kristo,
that allowing them to vote will be anomalous since it is their policy not to participate in any form of union
activities; the non-time card employees, that they are managerial employees; and the employees of the
cooperative as non-ITM employees. 6 On December 10, 1986, BLR rendered a decision 7 holding the
exclusion of the 56 employees as arbitrary, whimsical, and wanting in legal basis 8 but set aside the
challenged order of July 26, 1986 on the ground that 51 ** of 56 challenged voters were not yet union members at the time
of the election per April 24, 1986 list submitted before the Bureau. 9 The decision directed among others the proclamation
of Lacanilao's group as the duly elected officers and for ITM-MEA to absorb in the bargaining unit the
challenged voters unless proven to be managerial employees. 10 Petitioners' motion for reconsideration
was likewise denied.

Dissatisfied with the turn of events narrated above petitioners elevated the case to this Court by
way of the instant petition for certiorari under Rule 65 of the Rules of Court. Petitioners allege
that public respondent director of Labor Relations committed grave abuse of discretion in
ordering the Med-Arbiter to disregard the 56 segregated votes and proclaim private respondents
as the duly elected officers of ITM-MEA whereas said respondent ruled that the grounds relied
upon by ANGLO for the exclusion of voters are arbitrary, whimsical and without legal basis.
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 payroll 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.
The Solicitor General in his manifestation agreed with petitioners that public respondent
committed a grave abuse of discretion in deciding the issue on the basis of the records of
membership of the union as of April 24, 1986 when this issue was not put forward in the appeal.
It is however the position of private respondents that since a collective bargaining agreement
(CBA) has been concluded between the local union and ITM management the determination of
the legal question raised herein may not serve the purpose which the union envisions and may
destroy the cordial relations existing between the management and the union.
We do not agree. Existence of a CBA and cordial relationship developed between the union and
the management should not be a justification to frustrate the decision of the union members as
to who should properly represent them in the bargaining unit. Neither may the inclusion and
counting of the 56 segregated votes serve to disturb the existing relationship with management
as feared by herein private respondents. Respondents themselves pointed out that petitioners
joined the negotiating panel in the recently concluded CBA. This fact alone is conclusive against
herein petitioners and hence will estop them later if ever, from questioning the CBA which
petitioners concurred with. Furthermore, the inclusion and counting of the 56 segregated votes
would not necessarily mean success in favor of herein petitioners as feared by private
respondents herein. Otherwise, could this be the very reason behind their fears why they made
it a point to nullify said votes?

WHEREFORE, premises considered, the petition for certiorari is GRANTED. The temporary
restraining order issued by this Court on May 13, 1987 is hereby made permanent. The
questioned Resolution of February 12, 1987 and the Decision of December 10, 1986 are hereby
set aside for being null and void and the Order of July 25, 1986 of the Mediator Arbiter is hereby
declared immediately executory.
Cost against private respondents.
SO ORDERED.
Teehankee, C.J., Narvasa, Cruz and Paras, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-62306 January 21, 1985
KAPISANAN NG MANGGAGAWANG PINAGYAKAP (KMP), ISAGANI GUTIERREZ,
FLORENCIA CARREON, JOSE FLORES, DENNIS ALINEA, ELADIO DE LUNA and
CRISANTO DE VILLA, petitioners,
vs.
THE HONORABLE CRESENCIANO TRAJANO, DIRECTOR OF THE BUREAU OF LABOR
RELATIONS, CATALINO SILVESTRE, and CESAR ALFARO, respondents.
Jose C. Espinas for petitioners.
Balagtas P. Ilagan for private respondents.

RELOVA, J.:
Petitioners seek to annul 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 and Employment, in BLR Case No. A-0100-82 (RO4-A-LRD-M-935-81), entitled: "Catalino Silvestre, et al., vs. Kapisanan ng Manggagawang Pinagyakap (KMP)
Labor Union and its Officers" affirming Med-Arbiter Antonio D. Cabibihan's order dated April 28,
1982, directing the said Union to hold and conduct, pursuant to its constitution and by-laws and
under the supervision of the Bureau of Labor Relations, a general membership meeting, to vote
for or against the expulsion or suspension of the herein petitioner union officers.

Records show that on June 30, 1981 a written request for accounts examination of the financial
status of the Kapisanan ng Manggagawang Pinagyakap (KMP) Labor Union (Union for brevity),
the existing labor union at Franklin Baker Company in San Pablo City, was filed by private
respondent Catalino Silvestre and thirteen (13) other employees, who are also members of the
said Union. Acting on said request, Union Account Examiner Florencio R. Vicedo of the Ministry
of Labor and Employment conducted the necessary investigation and, thereafter, submitted a
report, with the following findings:
A. Disallowed expenditures P1,278.00, as reflected in the following
breakdown:
1. January 9, 1980 Excess claim for refund P1.00
2. March 13, 1980 Payment for sound system P90.00
3. March 12, 1980 Picture taking, entrance fee in Manila Zoo with Atty. Delos
Santos P75.00
4. March 24, 1980 Payment for sound System P90.00
5. July 16, 1980 Jeep hired P264.00
6. August 30, 1980 Partial payment of traveling expenses disallowed P68.00
7. October 30, 1980 Representation expenses P180.00
8. May 31, 1981 Payment for long distance call P10.00
9. May 31, 1981 Payment for legal expenses P500.00
TOTAL............................................................. P1,278.00
B. Respondent union officers failed to keep, maintain and submit for verification
the records of union accounts for the years 1977, and 1978, 1979, or purposely
suppressed the same;
C. Respondent union officers failed to maintain segregated disbursement
receipts in accordance with the five (5) segregated union funds (general fund,
educational funds, mutual aid fund, burial assistance fund and union building
fund) for which they maintained a distinct and separate bank accounts for each.
D. The Union's constitution and by-laws is not ratified by the general membership
hence, illegal. (pp. 27-28, Rollo)

Based on the foregoing revelations, 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.
On April 28, 1982, Med-Arbiter Antonio D. Cabibihan ordered the holding of a referendum, to be
conducted under the supervision of the Bureau of Labor Relations, to decide on the issue of
whether to expel or suspend the union officers from their respective positions.
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.
On August 13, 1982, public respondent Director Trajano dismissed both appeals of petitioners
and private respondents and affirmed in toto the order of Med-Arbiter Cabibihan.
Petitioners filed a Motion for Reconsideration of the Resolution of August 13, 1982 of Public
respondent Director Trajano, reiterating their arguments in their appeal and further clarifying that

what the Union Account Officer Florencio R. Vicedo found was that the amount of P1,278.00
was not supported by official receipts and therefore should not be allowed as disbursement from
the union funds; and that he did not say that the amount was converted by them for their own
personal benefit. They, likewise, informed public respondent Director Trajano that in the general
election held on October 4, 1982, all of them, except petitioners Ambrocio dela Cruz and Eliseo
Celerio, who ran for the positions of Vice-President and member of the Board of Directors,
respectively, were elected by the overwhelming majority of the members, while private
respondents Catalino Silvestre and Cesar Alfaro who also ran for the position of Auditor, lost.
Thereafter, they moved for the dismissal of the appeal for having been rendered moot and
academic by their re-election.
On October 19, 1982, public respondent Director Trajano issued the second questioned order
denying petitioners' Motion for Reconsideration.
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 have 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.
SO ORDERED.

SECOND DIVISION
[G.R. No. 115949. March 16, 2000]

EVANGELINE J. GABRIEL, TERESITA C. LUALHATI, EVELYN SIA,

RODOLFO EUGENIO, ISAGANI MAKISIG, and DEMETRIO
SALAS, petitioners, vs. THE HONORABLE SECRETARY OF LABOR AND
EMPLOYMENT and SIMEON SARMIENTO, JESUS CARLOS MARTINEZ
III, ALBERT NAPIAL, MARVIN ALMACIN, ROGELIO MATEO, GLENN
SIAPNO, EMILIANO CUETO, SALOME ATIENZA, NORMA V. GO, JUDITH
DUDANG, MONINA DIZON, EUSEBIO ROMERO, ISAGANI MORALES,
ELISEO BUENAVENTURA, CLEMENTE AGCAMARAN, CARMELITA
NOLASCO, JOVITA FERI, LULU ACOSTA, CAROL LAZARO, NIDA
ARRIZA, ROMAN BERNARDO, DOMINGO B. MACALDO, EUGENE
PIDLAOAN, MA. SOCORRO T. ANGOB, JOSEPHINE ALVAREZ, LOURDES
FERRER, JACQUILINE BAQUIRAN, GRACIA R. ESCUADRO, KRISTINA
HERNANDEZ, LOURDES IBEAS, MACARIO GARCIA, BILLY TECSON,
ALEX RECTO III, LEBRUDO, JOSE RICAFORTE, RODOLFO MORADA,
TERESA AMADO, ROSITA TRINIDAD, JEANETTE ONG, VICTORINO LASAY, RANIEL DAYAO, OSCAR SANTOS, CRISTINA SALAVER, VICTORIA
ARINO, A.H. SAJO, MICHAEL BIETE, RED RP, GLORIA JUAT, ETHELINDA
CASILAN, FAMER DIPASUPIL, MA. HIDELISA POMER, MA. CHARLOTTE
TAWATAO, GRACE REYES, ERNIE COLINA, ZENAIDA MENDOZA,
PAULITA ADORABLE, BERNARDO MADUMBA, NESTOR NAVARRO,
EASTER YAP, ALMA LIM, FELISA YU, TIMOTEO GANASTRA, REVELITA
CARTAJENAS, ANGELITO CABUAL, ROBERTA TAN, DOMINADOR
TAPO, GRACE LIM, GADIANE JEMIE, CHRISTHDY DAUD, BENEDICTO
ACOSTA, JESUSA ACOSTA, MA. AVELINA ARYAP, EVELYN BENITEZ,
ESTERITA CHU, EVANGELINE CHU, BETTY CINCO, RICARDO
CONNEJO, MANULITO EVALO, FRANCIS LEONIDA, GREGORIO
NOBLEZA, RODOLFO RIVERAL, ELSA SIA, CLARA SUGBO, EDGARDO

TABAO, MANUEL VELOSO, MARLYN YU, ABSALON BUENA, WILFREDO

PUERTO, FLORENTINA PINGOL, MARILOU DAR, FE MORALES, MALEN
BELLO, LORENA TAMAYO, CESAR LIM, PAUL BALTAZAR, ALFREDO
GAYAGAS, DUMAGUETE EMPLOYEES, CEBU EMPLOYEES, OZAMIZ
EMPLOYEES, TACLOBAN EMPLOYEES AND ALL OTHER SOLIDBANK
UNION MEMBERS, respondents. C alrsc
DECISION
QUISUMBING, J.:
Before us is a special civil action for certiorari seeking to reverse partially the Order of
public respondent dated June 3, 1994, in Case No. OS-MA-A-8-170-92, which ruled that
the workers through their union should be made to shoulder the expenses incurred for
the professional services of a lawyer in connection with the collective bargaining
negotiations and that the reimbursement for the deductions from the workers should be
charged to the unions general fund or account.
[1]

The records show the following factual antecedents:

Petitioners comprise the Executive Board of the SolidBank Union, the duly recognized
collective bargaining agent for the rank and file employees of Solid Bank Corporation.
Private respondents are members of said union.
Sometime in October 1991, the unions Executive Board decided to retain anew the
service of Atty. Ignacio P. Lacsina (now deceased) as union counsel in connection with
the negotiations for a new Collective Bargaining Agreement (CBA). Accordingly, on
October 19, 1991, the board called a general membership meeting for the purpose. At
the said meeting, the majority of all union members approved and signed a resolution
confirming the decision of the executive board to engage the services of Atty. Lacsina
as union counsel.
As approved, the resolution provided that ten percent (10%) of the total economic
benefits that may be secured through the negotiations be given to Atty. Lacsina as
attorneys fees. It also contained an authorization for SolidBank Corporation to check-off
said attorneys fees from the first lump sum payment of benefits to the employees under
the new CBA and to turn over said amount to Atty. Lacsina and/or his duly authorized
representative.
[2]

The new CBA was signed on February 21, 1992. The bank then, on request of the
union, made payroll deductions for attorneys fees from the CBA benefits paid to the
union members in accordance with the abovementioned resolution.
On October 2, 1992, private respondents instituted a complaint against the petitioners
and the union counsel before the Department of Labor and Employment (DOLE) for

illegal deduction of attorneys fees as well as for quantification of the benefits in the
1992 CBA. Petitioners, in response, moved for the dismissal of the complaint citing litis
pendentia, forum shopping and failure to state a cause of action as their grounds. Sccal r
[3]

[4]

On April 22, 1993, Med-Arbiter Paterno Adap of the DOLE- NCR issued the following
Order:
"WHEREFORE, premises considered, the Respondents Union Officers
and Counsel are hereby directed to immediately return or refund to the
Complainants the illegally deducted amount of attorneys fees from the
package of benefits due herein complainants under the aforesaid new
CBA.
"Furthermore, Complainants are directed to pay five percent (5%) of the
total amount to be refunded or returned by the Respondent Union Officers
and Counsel to them in favor of Atty. Armando D. Morales, as attorneys
fees, in accordance with Section II, Rule VIII of Book II (sic) of the
Omnibus Rules Implementing the Labor Code."
[5]

On appeal, the Secretary of Labor rendered a Resolution dated December 27, 1993,
stating:
[6]

"WHEREFORE, the appeal of respondents Evangeline Gabriel, et. al., is

hereby partially granted and the Order of the Med-Arbiter dated 22 April
1993 is hereby modified as follows: (1) that the ordered refund shall be
limited to those union members who have not signified their conformity to
the check-off of attorneys fees; and (2) the directive on the payment of 5%
attorneys fees should be deleted for lack of basis.
SO ORDERED."

[7]

On Motion for Reconsideration, public respondent affirmed the said Order with
modification that the unions counsel be dropped as a party litigant and that the workers
through their union should be made to shoulder the expenses incurred for the attorneys
services. Accordingly, the reimbursement should be charged to the unions general
fund/account.
[8]

Hence, the present petition seeking to partially annul the above-cited order of the public
respondent for being allegedly tainted with grave abuse of discretion amounting to lack
of jurisdiction.
The sole issue for consideration is, did the public respondent act with grave abuse of
discretion in issuing the challenged order? Calrsp ped
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.
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.
[9]

[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. 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.
[11]

[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 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 we reiterated that a
written individual authorization duly signed by the employee concerned is a
condition sine qua non for such deduction.
[13]

[14]

These pronouncements are also in accord with the recent ruling of this Court in the case
of ABS-CBN Supervisors Employees Union Members vs. ABS-CBN Broadcasting
Corporation, et. al., which provides:
[15]

"Premises studiedly considered, we are of the irresistible conclusion and,

so find that the ruling in BPIEU-ALU vs. NLRC that (1)the prohibition
against attorneys fees in Article 222, paragraph (b) of the Labor
Code applies only when the payment of attorneys fees is effected
through forced contributions from the workers; and (2) that no
deduction must be take from the workers who did not sign the
check-off authorization, applies to the case under consideration."
(Emphasis ours.)
We likewise ruled in Bank of the Philippine Island Employees Union-Association Labor
Union (BPIEU-ALU) vs. NLRC,
[16]

" the afore-cited provision (Article 222 (b) of the Labor Code) as
prohibiting the payment of attorneys fees only when it is effected
through forced contributions from workers from their own funds as
distinguished from the union funds. The purpose of the provision is to
prevent imposition on the workers of the duty to individually contribute
their respective shares in the fee to be paid the attorney for his services
on behalf of the union in its negotiations with management. The
obligation to pay the attorneys fees belongs to the union and cannot
be shunted to the workers as their direct responsibility. Neither the
lawyer nor the union itself may require the individual worker to
assume the obligation to pay attorneys fees from their own
pockets. So categorical is this intent that the law makes it clear that any
agreement to the contrary shall be null and void ab initio." (Emphasis
ours.) Edp sc
From all the foregoing, we are of the considered view that public respondent did not act
with grave abuse of discretion in ruling that the workers through their union should be
made to shoulder the expenses incurred for the services of a lawyer. And accordingly

the reimbursement should be charged to the unions general fund or account. No

deduction can be made from the salaries of the concerned employees other than those
mandated by law.
WHEREFORE, the petition is DENIED. The assailed Order dated June 3, 1994, of
respondent Secretary of Labor signed by Undersecretary Bienvenido E. Laguesma is
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur. Ed p

Rollo, pp. 22-24.

Id. at 25.
[3]
Id. at 26-29.
[4]
Id. at 30-36.
[5]
Id. at 11, 201.
[6]
Id. at 201-209.
[7]
Id. at 209.
[8]
Id. at 22-24.
[9]
Id. at 18-19.
[10]
Id. at 496-499.
[11]
Holy Cross of Davao College, Inc. vs. Joaquin, 263 SCRA 358-359 (1996).
[12]
Ibid.
[13]
182 SCRA 710-711 (1990).
[14]
252 SCRA 323, 325 (1996).
[15]
G.R. No. 106518, March 11, 1999, p. 15.
[16]
171 SCRA 556, 569 (1989).
[1]
[2]

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 70067 September 15, 1986
CARLOS P. GALVADORES, ET AL., petitioners,
vs.
CRESENCIANO B. TRAJANO, Director of the Bureau of Labor Relations, MANGGAGAWA
NG KOMUNIKASYON SA PILIPINAS (FIWU), PHILIPPINE LONG DISTANCE COMPANY
(PLDT), and JOSE C. ESPINAS, respondents.
Dante A. Carandang for petitioners.
Jose C. Espinas for respondents.

RESOLUTION

MELENCIO-HERRERA, J.:
Petitioner employees of the Philippine Long Distance Telephone Company (PLDT) and
members of respondent Free Telephone Workers Union, now the Manggagawa ng
Komunikasyon sa Pilipinas (simply referred to hereinafter as the Union), question the legality of
the check-off for attorney's fees amounting to P1M, more or less, of respondent Atty. Jose C.
Espinas (hereinafter referred to as "Respondent Counsel") from the monetary benefits awarded
to PLDT employees in a deadlocked collective bargaining agreement negotiations between the
PLDT and the Union.
The case stemmed from the following facts:
Respondent Counsel has been the legal counsel of respondent Union since 1964. For his
services, he was hired on a case to case contingent fee basis. On September 7, 1983, he
received a letter from the Union President reading:
The Free Telephone Workers Union once again request you to appear as
counsel in the on going labor dispute at PLDT. In consideration of your services
therein, the union binds itself to compensate you for your fees and expenses
therein on a contingent basis. The amount shall be 10% of any improvement,
with retroactive effect, of the PLDT's last offer to the deadlock in CBA
negotiations which we know will result in a compulsory arbitration. A supporting
board resolution will later confirm the letter. 1
PLDT's "last offer" referred to on the wage increases was: P230 for the first year of the
proposed CBA; P100 for the second year; and P90 for the third year. 2
On September 9, 1983, the Minister of Labor and Employment assumed jurisdiction over all
unresolved issues in the bargaining deadlock between PLDT and the Union and proceeded to
resolve the same by compulsory arbitration.
On October 23, 1983, the Minister of Labor awarded across-the-board wage increases of P
330/month effective November 9, 1982; P155/month effective November 9, 1983, and
P155/month effective November 9, 1984, in addition to the Christmas bonus of 1/2 month pay
per employee effective December, 1983, and other fringe benefits. As will be noted, there were
improvements obtained from PLDT's "last offer."
On October 29, 1983, the Executive Board of the Union passed a resolution requesting PLDT to
deduct P115.00 per employee for the legal services extended to the Union by respondent
Counsel.

On November 2, 1983, petitioners initially numbering 600 and finally 5,258, filed a lettercomplaint before the MOLE through their authorized representative, petitioner Carlos
Galvadores assailing the imposition of P130.00 (later corrected to P155.00) per employee as
attorney's fees of respondents counsel. Annexed to the complaint were the written statements of
the employee authorizing Galvadores to act for and in their behalf. Petitioners took the position
that the attorney's fees of respondent counsel were not only unreasonable but also violative of
Article 242(o) of the Labor Code; and that he deductions cannot given legal effect by a mere
Board resolution but needs the ratification by the general membership of the Union.
Respondents Union and Counsel, on the other hand, proferred the argument that the attorney s
fees being exacted pertained to his services during compulsory arbitration proceedings and
cannot be considered as negotiation fees or attorney's fees within the context of Article 242(o)
of the Labor Code and that contrary to petitioners' claim that Respondent Counsel surfaced only
as lawyer of the Union when the employees themselves engaged in mass action to force a
solution to the deadlock in their negotiations, he appeared continuously from September 8, 1983
until the decision in the case was rendered on October 23, 1983. Petitioners proposed a
solution offering to pay P10.00 per employee, but Respondent Counsel refused.
In the meantime, on November 4, 1983, PLDT filed notice that assessment had been withheld
from the differential pay due petitioners but that the same would not be turned over to the Union
without prior MOLE authority so as not to involve management in the intra-union disagreement.
February 13, 1984, the Minister of Labor referred the dispute to the Bureau of Labor Relations
for being intra-union nature. Several hearings were held by that Bureau.
On March 22, 1984, the Union filed a Manifestation to the effect that about 6,067 members of
the Union ratified the October 29, 1983 resolution of the legislative council in a plebiscite called
for that purpose. On the basis thereof, Counsel moved for the payment of his legal fees under
the September 7, 1983 contract.
Petitioners questioned the plebiscite on the ground that Question No. 2, which reads:
Question No. 2. Do you approve of the use of P1 million (P500,000.00 to be
withdrawn from PECCI and another P500,000.00 from IBAA) from our CBA
negotiation fund together with the attorney's fees (P1 million) that was collected
and to be loaned to the MKP/FTWU as our counterpart of the seed money to
start the housing program as agreed by the PLDT management and our union
panel and included in the award of the MOLE?
was misleading and deceptive as it assumed that there was no dispute regarding the deduction
of attorney's fees from the monetary benefits awarded to PLDT employees.
On February 18, 1985, respondent Director of the Bureau of Labor Relations dismissed
petitioners' complaint for lack of merit reasoning that "the outcome of the plebiscite negates any

further question on the right of the union counsel to collect the amount of P115 from each of the
employees involved."
It is this Decision that is assailed by petitioners principally on the ground that the individual
written authorization of an the employees must first be obtained before any assessment can be
made against the monetary benefits awarded to them pursuant to Article 242(o) of the Labor
Code; and that assuming that Respondent Counsel is entitled to attorney's fees, the same
should be taken from Union funds.
In their Comment, respondents Union and Counsel argue that compulsory arbitration is a
"mandatory activity" and an exception to Article 242(o) of the Labor Code, and that the Union
members approved the questioned deduction in the plebiscite of January, 1984, under the
condition that P lM of the same would be made available for the Union's housing project.
In his Comment, the Solicitor General agrees with petitioners that the issue presented is
squarely covered by Article 222(b) of the Labor Code, as amended by P.D. No. 1691 so that
attorney's fees, if legally payable, can only be charged against Union funds.
The Court resolved to give due course.
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
The 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
ACCORDINGLY, the assailed Decision of February 18, 1985 rendered by respondent Director of
the Bureau of Labor Relations, is hereby SET ASIDE. The attorney's fees herein involved may
be charged against Union funds pursuant to Article 222(b) of the Labor Code, as may be agreed
upon between them.
SO ORDERED.
Yap (Chairman), Narvasa, Gutierrez, Jr. and Paras, JJ., concur.
Cruz, J., took no part.

THIRD DIVISION

EMILIO E. DIOKNO, VICENTE R.

ALCANTARA, ANTONIO Z. VERGARA,
JR., DANTE M. TONG, JAIME C.
MENDOZA, ROMEO M. MACAPULAY,
ROBERTO M. MASIGLAT, LEANDRO C.
ATIENZA, ROMULO AQUINO, JESUS
SAMIA, GAUDENCIO CAMIT, DANTE
PARAO, ALBERTO MABUGAT, EDGARDO
VILLANUEVA, JR., FRANCISCO ESCOTO,
EDGARDO
SEVILLA,
FELICITO
MACASAET, and JOSE Z. TULLO,
Petitioners,
- versus HON. HANS LEO J. CACDAC, in his capacity
as Director of the Bureau of Labor Relations,
DOLE,
MANILA,
MED-ARBITER
TRANQUILINO C. REYES, EDGARDO
DAYA, PABLO LUCAS, LEANDRO M.
TABILOG, REYNALDO ESPIRITU, JOSE
VITO, ANTONIO DE LUNA, ARMANDO
YALUNG,
EDWIN
LAYUG,
NARDS
PABILONA,
REYNALDO
REYES,
EVANGELINE
ESCALL,
ALBERTO
ALCANTARA, ROGELIO CERVITILLO,
MARCELINO
MORELOS,
FAUSTINO
ERMINO, JIMMY S. ONG, ALFREDO
ESCALL, NARDITO C. ALVAREZ, JAIME T.
VALERIANO,
JOHNSON
S.
REYES,
GAUDENCIO JIMENEZ, JR., GAVINO R.
VIDANES,
ARNALDO
G.
TAYAO,
BONIFACIO F. CIRUJANO, EDGARDO G.
CADVONA, MAXIMO A. CAOC, JOSE O.
MACLIT, JR., LUZMINDO D. ACORDA, JR.,
LEMUEL R. RAGASA, and GIL G. DE
VERA,
Respondents.

G.R. No. 168475

Present:
YNARESSANTIAGO, J.
Chairperson,
AUSTRIAMARTINEZ,
CHICONAZARIO, and
NACHURA, JJ.

Promulgated:
July 4, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997
Revised Rules of Civil Procedure, seeking the nullification of the Decision [1] and
Resolution[2] of the Court of Appeals in CA-G.R. SP No. 83061, dated 17 June
2004 and 10 June 2005, respectively, which dismissed petitioners Petition
for Certiorari and denied their Motion for Reconsideration thereon.
The Facts
The First Line Association of Meralco Supervisory Employees (FLAMES)
is a legitimate labor organization which is the supervisory union of
Meralco. Petitioners and private respondents are members of FLAMES.

On 1 April 2003, the FLAMES Executive Board created the Committee on

Election (COMELEC) for the conduct of its union elections scheduled on 7 May
2003.[3] The COMELEC was composed of petitioner Dante M. Tong as its
chairman, and petitioners Jaime C. Mendoza and Romeo M. Macapulay as
members. Subsequently, private respondents Jimmy S. Ong, Nardito C. Alvarez,
Alfredo J. Escall, and Jaime T. Valeriano filed their respective certificates of
candidacy. On 12 April 2003, the COMELEC rejected Jimmy S. Ongs candidacy
on the ground that he was not a member of FLAMES. Meanwhile, the certificates
of candidacy of Nardito C. Alvarez, Alfredo J. Escall, and Jaime T. Valeriano were
similarly rejected on the basis of the exclusion of their department from the scope
of the existing collective bargaining agreement (CBA). The employees assigned to
the aforesaid department are allegedly deemed disqualified from membership in
the union for being confidential employees.
On 24 April 2003, private respondents Jimmy S. Ong, Nardito C. Alvarez,
Alfredo J. Escall, Jaime T. Valeriano (Ong, et al.), and a certain Leandro M.
Tabilog filed a Petition[4] before the Med-Arbitration Unit of the Department of
Labor and Employment (DOLE). They prayed, inter alia, for the nullification of
the order of the COMELEC which disallowed their candidacy.[5] They further
prayed that petitioners be directed to render an accounting of funds with full and
detailed disclosure of expenditures and financial transactions; and that a
representative from the Bureau of Labor Relations (BLR) be designated to act as
chairman of the COMELEC in lieu of petitioner Dante M. Tong.[6]
On 30 April 2003, DOLE-NCR Regional Director Alex E. Maraan issued an
Order directing DOLE personnel to observe the conduct of the FLAMES election
on 7 May 2003.[8]
[7]

On 2 May 2003, petitioners filed a Petition[9] with the COMELEC seeking

the disqualification of private respondents Edgardo Daya, Pablo Lucas, Leandro
Tabilog, Reynaldo Espiritu, Jose Vito, Antonio de Luna, Armando Yalung, Edwin
Layug, Nards Pabilona, Reynaldo Reyes, Evangeline Escall, Alberto Alcantara,
Rogelio Cervitillo, Marcelino Morelos, and Faustino Ermino (Daya, et

al.). Petitioners alleged that Daya, et al., allowed themselves to be assisted by nonunion members, and committed acts of disloyalty which are inimical to the interest
of FLAMES. In their campaign, they allegedly colluded with the officers of the
Meralco Savings and Loan Association (MESALA) and the Meralco Mutual Aid
and Benefits Association (MEMABA) and exerted undue influence on the
members of FLAMES.
On 6 May 2003, the COMELEC issued a Decision,[10] declaring Daya, et al.,
officially disqualified to run and/or to participate in the 7 May 2003 FLAMES
elections. The COMELEC also resolved to exclude their names from the list of
candidates in the polls or precincts, and further declared that any vote cast in their
favor shall not be counted. According to the COMELEC, Daya, et al., violated
Article IV, Section 4(a)(6)[11] of the FLAMES Constitution and By-Laws (CBL) by
allowing non-members to aid them in their campaign. Their acts of solicitation for
support from non-union members were deemed inimical to the interest of
FLAMES.
On 7 May 2003, the COMELEC proclaimed the following candidates,
including some of herein petitioners as winners of the elections, to wit[12]:
NAME
Emilio E. Diokno
Vicente P. Alcantara
Antonio Z. Vergara, Jr.
Alberto L. Mabugat
Roberto D. Masiglat, Jr.
Leandro C. Atienza
Felito C. Macasaet
Edgardo R. Villanueva
Romulo C. Aquino
Jesus D. Samia
Gaudencio C. Camit
Rodante B. [Parao]
Jose Z. Tullo
Bernardo C. Sevilla
Francis B. Escoto

POSITION
President
Executive Vice President External
Executive Vice President Internal
Vice-President Organizing
Vice-President Education
Vice-President Chief Steward
Secretary
Asst. Secretary
Treasurer
Asst. Treasurer
Auditor
Asst. Auditor
Central Coordinator
North Coordinator
South Coordinator

On 8 May 2003, private respondents Daya, et al., along with Ong, et

al., filed with the Med-Arbitration Unit of the DOLE-NCR, a Petition [13] to: a)
Nullify Order of Disqualification; b) Nullify Election Proceedings and Counting of
Votes; c) Declare Failure of Election; and d) Declare Holding of New Election to
be Controlled and Supervised by the DOLE. The Petition was docketed as Case
No. NCR-OD-0304-002-LRD.
On 14 May 2003, another group led by private respondent Gaudencio
Jimenez, Jr., along with private respondents Johnson S. Reyes, Gavino R. Vidanes,
Arnaldo G. Tayao, Bonifacio F. Cirujano, Edgardo G. Cadavona, Maximo A. Caoc,
Jose O. Maclit, Jr., Luzmindo D. Acorda, Jr., Lemuel R. Ragasa and Gil G. de Vera
(Jimenez, et al.) filed a Petition with the Med-Arbitration Unit of the DOLE-NCR
against petitioners to nullify the 7 May 2003 election on the ground that the same
was not free, orderly, and peaceful. It was docketed as Case No. NCR-OD-0305004-LRD, which was subsequently consolidated with the Petition of Daya,et
al. and the earlier Petition of Ong, et al.
Meanwhile, the records show that a subsequent election was held on 30 June
2004, which was participated in and won by herein private respondents Daya, et
al. The validity of the 30 June 2004 elections was assailed by herein petitioners
before the DOLE[14] and taken to the Court of Appeals in CA-G.R. SP No. 88264
on certiorari, which case does not concern us in the instant Petition. The Court of
Appeals, in the aforesaid case, rendered a Decision [15] dated 12 January 2007,
upholding the validity of the 30 June 2004 elections, and the declaration of herein
private respondents Daya, et al., as the duly elected winners therein.
The Decision of the Med-Arbiter
On 7 July 2003, Med-Arbiter Tranquilino B. Reyes, Jr. issued a
Decision[16] in favor of private respondents, Daya, et al. However, the petition of
Jimenez, et al., was dismissed because it was premature, it appearing that the
COMELEC had not yet resolved their protest prior to their resort to the Med-

Arbiter. Finally, the Petition of Ong, et al., seeking to declare themselves asbona
fide members of FLAMES was ordered dismissed.
The Med-Arbiter noted in his decision that during a conference which was
held on 15 May 2003, the parties agreed that the issue anent the qualifications of
private respondents Ong, et al. had been rendered moot and academic.[17]
The Med-Arbiter reversed the disqualification imposed by the COMELEC
against private respondents Daya, et al. He said that the COMELEC accepted all
the allegations of petitioners against private respondents Daya, et al., sans evidence
to substantiate the same. Moreover, he found that the COMELEC erred in relying
on Article IV, Section 4(a) (6) of the CBL as basis for their disqualification. The
Med-Arbiter read the aforesaid provision to refer to the dismissal and/or expulsion
of a member from FLAMES, but not to the disqualification of a member as a
candidate in a union election. He rationalized that the COMELEC cannot
disqualify a candidate on the same grounds for expulsion of members, which
power is vested by the CBL on the Executive Board. The Med-Arbiter also held
that there was a denial of due process because the COMELEC failed to receive
private respondents Daya, et al.s motion for reconsideration of the order of their
disqualification. The COMELEC was also found to have refused to receive their
written protest in violation of the unions CBL.[18]
Lastly, the Med-Arbiter defended his jurisdiction over the case. He
concluded that even as the election of union officers is an internal affair of the
union, his office has the right to inquire into the merits and conduct of the election
when its jurisdiction is sought.[19]
The decretal portion of the Med-Arbiters Decision states, viz:
WHEREFORE, premises considered, the [P]etition to Nullify the Order of
Disqualification; Nullify Election proceedings and counting of Votes; and Declare
a Failure of Elections is hereby granted. The disqualification of [private
respondent] Ed[gardo] Daya, et al., is hereby considered as null and
void. Perforce, the election of union officers of FLAMES on May 7, 2003 is
declared a failure and a new election is ordered conducted under the supervision
of the Department of Labor and Employment.

The [P]etition to conduct an accounting of union funds and to stop the

release of funds to [petitioner] Diokno, et al., is ordered dismissed for lack of
merit.
And the Petition to Declare [private respondents] Jimmy Ong, Alfredo
[E]scall, Nardito Alvarez, and Jaime Valeriano as members of FLAMES is hereby
ordered dismissed for lack of merit.
The [P]etition to Nullify the election filed by [private respondents]
Gaudencio Jimenez, et al., is likewise ordered dismissed.[20]

Aggrieved, petitioners filed an appeal before the Director of the BLR.

The Ruling of the BLR Director

[21]

On 3 December 2003, the Director of the BLR issued a Resolution,

affirming in toto the assailed Decision of the Med-Arbiter.

Public respondent Director Hans Leo J. Cacdac ruled, inter alia, that the
COMELECs reliance on Article IV, Section 4(a) (6) of the CBL, as a ground for
disqualifying private respondents Daya, et al., was premature. He echoed the
interpretation of the Med-Arbiter that the COMELEC erroneously resorted to the
aforecited provision which refers to the expulsion of a member from the union on
valid grounds and with due process, along with the requisite 2/3 vote of the
Executive Board. Hence, the COMELEC cut short the expulsion proceedings in
disqualifying private respondents Daya, et al.[22] The BLR Director further held
that the case involves a question of disqualification on account of the alleged
commission by private respondents Daya, et al., of illegal campaign acts, which
acts were not specifically mentioned in the guidelines for the conduct of election as
issued by the COMELEC. Likewise, on the alleged refusal of private respondents
Daya, et al., to submit to the jurisdiction of the COMELEC by failing to file a
petition to nullify its order of disqualification, the BLR Director deemed the same
as an exception to the rule on exhaustion of administrative remedies. Thus:
By themselves, such acts could not be taken as repugnant of COMELECs
authority. Sensing that they were prejudiced by the disqualification order, it was

only incumbent upon [private respondents Daya, et al.] to seek remedy before a
body, which they thought has a more objective perspective over the situation. In
short, they opted to bypass the administrative remedies within the union. Such a
move could not be taken against [private respondents Daya, et al.] considering
that non-exhaustion of administrative remedies is justified in instances where it
would practically amount to a denial of justice, or would be illusory or vain, as in
the present controversy.[23]

The BLR Director disposed in this wise:

WHEREFORE, the appeal is DISMISSED for lack of merit. The Decision
of Med-Arbiter Tranquilino B. Reyes, DOLE-NCR, dated 7 July 2003 is
AFFIRMED in its entirety.
Let the records of this case be returned to the DOLE-NCR for the
immediate conduct of election of officers of the First Line Association of Meralco
Supervisory Employees (FLAMES) under the supervision of DOLE-NCR
personnel.[24]

Subsequently, petitioners sought a reversal of the 3 December

2003 Resolution, but the BLR Director issued a Resolution dated 10 February
2003,[25] refusing to reverse his earlier Resolution for lack of merit.
Petitioners elevated the case to the Court of Appeals via a Petition
for Certiorari.

The Ruling of the Court of Appeals

The Court of Appeals found petitioners appeal to be bereft of merit.
The appellate court held that the provision relied upon by the COMELEC
concerns the dismissal and/or expulsion of union members, which power is vested
in the FLAMES Executive Board, and not the COMELEC. It affirmed the finding
of the BLR Director that the COMELEC, in disqualifying private respondents
Daya, et al., committed a procedural shortcut. It held:

Without the requisite two-thirds (2/3) vote of the Executive Board dismissing
and/or expelling private respondents for acts contemplated thereunder, the
COMELEC was clearly violating the unions constitution and bylaws (sic) by
utilizing the aforequoted provision in its said May 6, 2003 decision and, in the
process, arrogating unto itself a power it did not possess. As the document
embodying the covenant between a union and its members and the fundamental
law governing the members rights and obligations, it goes without saying that the
constitution and bylaws (sic) should be upheld for as long as they are not contrary
to law, good morals or public policy.[26]

On the matter of the failure of private respondents Daya, et al. to come up

with 30 percent (30%) members support in filing the Petition to Nullify the
COMELECs Decision before the Med-Arbiter, the Court of Appeals said that the
petition did not involve the entire membership of FLAMES, so there was no need
to comply with the aforesaid requirement. Furthermore, the appellate court applied
the exception to the rule on exhaustion of administrative remedies on the
ground, inter alia, that resort to such a remedy would have been futile, illusory or
vain.[27] Indeed, the Court of Appeals emphasized that private respondents Daya, et
al., were directed by the COMELEC to file their Answer to the petition for their
disqualification only on 5 May 2003. Private respondents Daya, et al., filed their
Answer on 6 May 2003. On the same day, the COMELEC issued its Decision
disqualifying them. A day after, the 7 May 2003 election was held. The Court of
Appeals further stressed that private respondents Daya, et al.s efforts to have their
disqualification reconsidered were rebuffed by the COMELEC; hence, they were
left with no choice but to seek the intervention of the BLR, [28] which was declared
to have jurisdiction over intra-union disputes even at its own initiative under
Article 226[29] of the Labor Code.
Petitioners sought a reconsideration of the 17 June 2004 Decision of the
Court of Appeals, but the same was denied in a Resolution[30] dated 10 June 2005.
Hence, the instant Petition.
At the outset, petitioners contend that the instant Petition falls under the
exceptions to the rule that the Supreme Court is not a trier of facts. They implore
this Court to make factual determination anent the conduct of the 7 May

2003 elections. They also question the jurisdiction of the BLR on the case at bar
because of the failure of private respondents Daya, et al., to exhaust administrative
remedies within the union. It is the stance of petitioner that Article 226 [31] of the
Labor Code which grants power to the BLR to resolve inter-union and intra-union
disputes is dead law, and has been amended by Section 14 of Republic Act No.
6715, whereby the conciliation, mediation and voluntary arbitration functions of
the BLR had been transferred to the National Conciliation and Mediation Board.
Petitioners similarly assert that the 7 May 2003 election was conducted in a
clean, honest, and orderly manner, and that private respondents, some of whom are
not bona fide members of FLAMES, were validly disqualified by the COMELEC
from running in the election. They also rehashed their argument that non-members
of the union were allowed by private respondents Daya, et al., to participate in the
affair. They challenge the finding of the BLR Director that the reliance by the
COMELEC on Article IV, Section 4(a)(6) of the CBL, was premature. Petitioners
insist that the COMELEC had the sole and exclusive power to pass upon the
qualification of any candidate, and therefore, it has the correlative power to
disqualify any candidate in accordance with its guidelines.
For their part, private respondents Daya, et al., maintain that the Petition
they filed before the DOLE-NCR Med-Arbiter questioning the disqualification
order of the COMELEC and seeking the nullification of the 7 May 2003 election
involves an intra-union dispute which is within the jurisdiction of the BLR. They
further claim that the COMELEC, in disqualifying them, mistakenly relied on a
provision in the FLAMES CBL that addresses the expulsion of members from the
union, and no expulsion proceedings were held against them. Finally, they
underscore the finding of the appellate court that there was disenfranchisement
among the general membership of FLAMES due to their wrongful disqualification
which restricted the members choices of candidates. They reiterate the conclusion
of the Court of Appeals that had the COMELEC tabulated the votes cast in their
favor, there would have been, at least, a basis for the declaration that they lost in
the elections.
Issues

Petitioners attribute to the Court of Appeals several errors to substantiate

their Petition.[32] They all boil down, though, to the question of whether the Court
of Appeals committed grave abuse of discretion when it affirmed the jurisdiction of
the BLR to take cognizance of the case and then upheld the ruling of the BLR
Director and Med-Arbiter, nullifying the COMELECs order of disqualification of
private respondents Daya et al., and annulling the 7 May 2003 FLAMES elections.
The Courts Ruling
The Petition is devoid of merit.
We affirm the finding of the Court of Appeals upholding the jurisdiction of
the BLR. Article 226 of the Labor Code is hereunder reproduced, to wit:
ART. 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
nonagricultural, 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.

The amendment to Article 226, as couched in Republic Act No. 6715,

[33]
which is relied upon by petitioners in arguing that the BLR had been divested of
its jurisdiction, simply reads, thus:
Sec. 14. The second paragraph of Article 226 of the same Code is likewise
hereby amended to read as follows:
"The Bureau shall have fifteen (15) calendar days to act on labor cases
before it, subject to extension by agreement of the parties."

This Court in Bautista v. Court of Appeals,[34] interpreting Article 226 of the

Labor Code, was explicit in declaring that the BLR has the original and exclusive
jurisdiction on all inter-union and intra-union conflicts. We said that since Article
226 of the Labor Code has declared that the BLR shall have original and exclusive
authority to act on all inter-union and intra-union conflicts, there should be no
more doubt as to its jurisdiction. As defined, an intra-union conflict would refer to
a conflict within or inside a labor union, while an inter-union controversy or
dispute is one occurring or carried on between or among unions. [35] More
specifically, an intra-union dispute is defined under Section (z), Rule I of the Rules
Implementing Book V of the Labor Code, viz:
(z) Intra-Union Dispute refers to any conflict between and among union
members, and 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 cases arising from chartering or affiliation of labor organizations or
from any violation of the rights and conditions of union membership provided for
in the Code.

The controversy in the case at bar is an intra-union dispute. There is no

question that this is one which involves a dispute within or inside FLAMES, a
labor union. At issue is the propriety of the disqualification of private respondents
Daya, et al., by the FLAMES COMELEC in the 7 May 2003 elections. It must
also be stressed that even as the dispute involves allegations that private
respondents Daya, et al., sought the help of non-members of the union in their
election campaign to the detriment of FLAMES, the same does not detract from
the real character of the controversy. It remains as one which involves the
grievance over the constitution and bylaws of a union, and it is a controversy
involving members of the union. Moreover, the non-members of the union who
were alleged to have aided private respondents Daya, et al., are not parties in the
case. We are, therefore, unable to understand petitioners persistence in placing the
controversy outside of the jurisdiction of the BLR. The law is very clear. It
requires no further interpretation. The Petition which was initiated by private
respondents Daya, et al., before the BLR was properly within its cognizance, it
being an intra-union dispute. Indubitably, when private respondents Daya, et

al., brought the case to the BLR, it was an invocation of the power and authority of
the BLR to act on an intra-union conflict.
After having settled the jurisdiction of the BLR, we proceed to determine if
petitioners correctly raised the argument that private respondents Daya, et
al., prematurely sought the BLRs jurisdiction on the ground that they failed to
exhaust administrative remedies within the union. On this matter, we affirm the
findings of the Court of Appeals which upheld the application by the BLR Director
of the exception to the rule of exhaustion of administrative remedies.
In this regard, this Court is emphatic that before a party is allowed to seek
the intervention of the court, it is a pre-condition that he should have availed of all
the means of administrative processes afforded him. Hence, if a remedy within the
administrative machinery can still be resorted to by giving the administrative
officer concerned every opportunity to decide on a matter that comes within his
jurisdiction when such remedy should be exhausted first before the courts judicial
power can be sought. The premature invocation of courts judicial intervention is
fatal to ones cause of action.[36]
Verily, there are exceptions to the applicability of the doctrine. [37] Among
the established exceptions are: 1) when the question raised is purely legal; 2) when
the administrative body is in estoppel; 3) when the act complained of is patently
illegal; 4) when there is urgent need for judicial intervention; 5) when the claim
involved is small; 6) when irreparable damage will be suffered; 7) when there is no
other plain, speedy, and adequate remedy; 8) when strong public interest is
involved; 9) when the subject of the proceeding is private land; 10) in quo
warranto proceedings;[38] and 11) where the facts show that there was a violation
of due process.[39] As aptly determined by the BLR Director, private respondents
Daya, et al., were prejudiced by the disqualification order of the
COMELEC. They endeavored to seek reconsideration, but the COMELEC failed
to act thereon.[40] The COMELEC was also found to have refused to receive their
written protest.[41] The foregoing facts sustain the finding that private respondents
Daya, et al., were deprived of due process. Hence, it becomes incumbent upon
private respondents Daya, et al., to seek the aid of the BLR. To insist on the

contrary is to render their exhaustion of remedies within the union as illusory and
vain.[42] These antecedent circumstances convince this Court that there was proper
application by the Med-Arbiter of the exception to the rule of exhaustion of
administrative remedies, as affirmed by the BLR Director, and upheld by the Court
of Appeals.
We cannot accept, and the Court of Appeals rightfully rejected, the
contention of petitioners that the private respondents Daya, et al.s complaint filed
before the Med-Arbiter failed to comply with the jurisdictional requirement
because it was not supported by at least thirty percent (30%) of the members of the
union. Section 1 of Rule XIV of the Implementing Rules of Book V mandates the
thirty percent (30%) requirement only in cases where the issue involves the entire
membership of the union, which is clearly not the case before us. The issue is
obviously limited to the disqualification from participation in the elections by
particular union members.
Having resolved the jurisdictional cobwebs in the instant case, it is now apt
for this Court to address the issue anent the disqualification of private respondents
and the conduct of the 7 May 2003 elections.
On this matter, petitioners want this Court to consider the instant case as an
exception to the rule that the Supreme Court is not a trier of facts; hence,
importuning that we make findings of fact anew. It bears stressing that in a
petition for review oncertiorari, the scope of this Courts judicial review of
decisions of the Court of Appeals is generally confined only to errors of law,
[43]
and questions of fact are not entertained. We elucidated on our fidelity to this
rule, and we said:
Thus, only questions of law may be brought by the parties and passed
upon by this Court in the exercise of its power to review. Also, judicial review by
this Court does not extend to a reevaluation of the sufficiency of the evidence
upon which the proper labor tribunal has based its determination.[44]

It is aphoristic that a re-examination of factual findings cannot be done

through a petition for review on certiorari under Rule 45 of the Rules of Court

because as earlier stated, this Court is not a trier of facts; it reviews only questions
of law.[45] The Supreme Court is not duty-bound to analyze and weigh again the
evidence considered in the proceedings below.[46] This is already outside the
province of the instant Petition for Certiorari. While there may be exceptions to
this rule, petitioners miserably failed to show why the exceptions should be applied
here. With greater force must this rule be applied in the instant case where the
factual findings of the Med-Arbiter were affirmed by the BLR Director, and then,
finally, by the Court of Appeals. The findings below had sufficient bases both in
fact and in law. The uniform conclusion was that private respondents Daya, et
al., were wrongfully disqualified by the COMELEC; consequently, the FLAMES
election should be annulled.
On the issue of disqualification, there was a blatant misapplication by the
COMELEC of the FLAMES CBL. As has been established ad nauseam, the
provision[47] relied upon by the COMELEC in disqualifying private respondents
Daya, et al., applies to a case of expulsion of members from the union.
In full, Article IV, Section 4 (a) (6) of the FLAMES CBL, provides, to wit:
Section 4(a). Any member may be DISMISSED and/or EXPELLED from
the UNION, after due process and investigation, by a two-thirds (2/3) vote of the
Executive Board, for any of the following causes:
xxxx
(6) Acting in a manner harmful to the interest and welfare of
the UNION and/or its MEMBERS.[48]

We highlight five points, thus:

First, Article IV, Section 4(a)(6) of the FLAMES CBL, embraces
exclusively the case of dismissal and/or expulsion of members from the
union. Even a cursory reading of the provision does not tell us that the same is to
be automatically or directly applied in the disqualification of a candidate from
union elections, which is the matter at bar. It cannot be denied that the COMELEC
erroneously relied on Article IV, Section 4(a)(6) because the same does

not contemplate the situation of private respondents Daya, et al. The latter are not
sought to be expelled or dismissed by the Executive Board. They were brought
before the COMELEC to be disqualified as candidates in the 7 May
2003 elections.
Second, the aforecited provision evidently enunciates with clarity the
procedural course that should be taken to dismiss and expel a member from
FLAMES. The CBL is succinct in stating that the dismissal and expulsion of a
member from the union should be after due process and investigation, the same to
be exercised by two-thirds (2/3) vote of the Executive Board for any of the
causes[49] mentioned therein. The unmistakable directive is that in cases of
expulsion and dismissal, due process must be observed as laid down in the CBL.
Third, nevertheless, even if we maintain a lenient stance and consider the
applicability of Article IV, Section 4(a)(6) in the disqualification of private
respondents Daya, et al., from the elections of 7 May 2003, still, the
disqualification made by the COMELEC pursuant to the subject provision was a
rank disregard of the clear due process requirement embodied therein. Nowhere do
we find that private respondents Daya, et al. were investigated by the Executive
Board. Neither do we see the observance of the voting requirement as regards
private respondents Daya, et al. In all respects, they were denied due process.
Fourth, the Court of Appeals, the BLR Director, and the Med-Arbiter
uniformly found that due process was wanting in the disqualification order of the
COMELEC. We are in accord with their conclusion. If, indeed, there was a
violation by private respondents Daya, et al., of the FLAMES CBL that could be a
ground for their expulsion and/or dismissal from the union, which in turn could
possibly be made a ground for their disqualification from the elections, the
procedural requirements for their expulsion should have been observed. In any
event, therefore, whether the case involves dismissal and/or expulsion from the
union or disqualification from the elections, the proper procedure must be
observed. The disqualification ruled by the COMELEC against private
respondents Daya, et al., must not be allowed to abridge a clear procedural policy
established in the FLAMES CBL. If we uphold the COMELEC, we are

countenancing a clear case of denial of due process which is anathema to the

Constitution of thePhilippines which safeguards the right to due process.
Fifth, from another angle, the erroneous disqualification of private
respondents Daya, et al., constituted a case of disenfranchisement on the part of the
member-voters of FLAMES. By wrongfully excluding them from the 7 May
2003 elections, the options afforded to the union members were clipped. Hence,
the mandate of the union cannot be said to have been rightfully determined. The
factual irregularities in the FLAMES elections clearly provide proper bases for the
annulment of the union elections of 7 May 2003.
On a final note, as it appears that the question of the qualifications of private
respondents Ong, et al. had been rendered moot and academic,[50] we do not find
any reason for this Court to rule on the matter. As borne out by the records, the
question had been laid to rest even when the case was still before the Med-Arbiter.
[51]

WHEREFORE, the Petition is DENIED. The Decision of the Court of

Appeals dated 17 June 2004, and its Resolution dated 10 June 2005 in CA-G.R. SP
No. 83061 are AFFIRMED. Costs against petitioners.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MA.
ALICIA AUSTRIA-MARTINEZ ANTONIO
EDUARDO
NACHURA
Associate Justice
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.

REYNATO S. PUNO

B.

Chief Justice

[1]

[2]
[3]

[4]
[5]
[6]
[7]
[8]

Penned by Associate Justice Rebecca de Guia-Salvador with Associate Justices Salvador J. Valdez, Jr.,
and Aurora Santiago-Lagman, concurring. Rollo, pp. 62-72.
Id. at 74-75.
According to Section 5, Article V of the FLAMES Constitution and By-Laws, the OFFICERS of
the UNION shall hold office for a period of three (3) years from the date of their election until their
successors shall have been duly elected and qualified; provided that they remain members of the UNION in
good standing. Id. at 83.
Id. at 88-103.
Id. at p. 100.
Id.
Id. at 105.
DOLE personnel were assigned to the following precincts, to wit:
a) Head Office Ortigas
b) Manila Sector
c) Pasig Sector
d) Balintawak Sector
e) Valenzuela Sector

f)
g)
h)
i)
j)
k)
[9]
[10]
[11]

[12]
[13]
[14]

[15]

[16]
[17]

[18]

[19]
[20]
[21]
[22]
[23]
[24]

Alabang Sector
Plaridel Sector
Rizal Sector
Sta. Rosa Sector
Dasmarinas Sector
San Pablo Sector. Id.
Id. at 106-113.
Id. at 121-128.
Section 4.
(a) Any member may be DISMISSED and/or EXPELLED from the UNION, after due process and
investigation, by a two-thirds (2/3) vote of the Executive Board for any of the following causes:
xxxx
6. Acting in a manner harmful to the interest and welfare of the UNION and/or its MEMBERS.
Rollo, p. 129.
Id. at 130.
From the Decision dated 12 January 2007 of the Court of Appeals in CA-G.R. SP No. 88264, it can be
gleaned that on 4 October 2004, Med-Arbiter Tranquilino C. Reyes proclaimed private respondents
Daya, et al. as the duly elected winners. On appeal, BLR Director Hans Leo J. Cacdac affirmed the MedArbiter and upheld the validity of the30 June 2004 election, as well as the propriety of the proclamation of
private respondents Daya, et al., as officers-elect of FLAMES. Id. at 420.
Penned by Associate Justice Lucas P. Bersamin with Associate Justices Martin S. Villarama, Jr., and
Lucenito N. Tagle, concurring; id. at 417-435.
Id. at 170-183.
Id. at 176, 179. Notwithstanding his statement in the Decision dated 7 July 2003, that the parties had
agreed in a conference on 15 May 2003 that the qualifications of private respondents Ong, et al. became
moot and academic, the Med-Arbiter proceeded to rule that Jimmy S. Ong is not a member of FLAMES as
he was assigned to the Accounting Department which had been excluded from the bargaining unit per
Addendum to the 1998 CBA. The Med-Arbiter said that Ongs transfer to a department not excluded from
the bargaining unit per the 2002 CBA as well as the deduction from his salary of union dues did not
automatically make him a member of FLAMES. It was not shown that he filed an application for
membership nor was the same approved by the union president. Moreover, the Med-Arbiter stressed that
private respondents Alfredo J. Escall, Nardito C. Alvarez, and Jaime T. Valeriano are disqualified from
FLAMES membership because they belong to departments excluded from the bargaining unit pursuant to
2002 CBA. The group of Ong, et al. were found to have no corresponding right to inquire into the funds of
the union.
The Med-Arbiter in his Decision, cited Article IX, Section 1 of the FLAMES CBL, which provides,
thus:
Section 1.
xxxx
(c) In the event of any election protest or questions, the COMELEC shall rule [on] such protest or
questions regarding the conduct of the election provided that the protest or questions must be submitted in
writing within twenty-four (24) hours from the time that the last ballot has been officially opened. The
COMELEC has three (3) days to decide the protest or question.
Id. at 181.
Id. at 183.
Penned by Director Hans Leo J. Cacdac; id. at 209-216.
Id. at 214.
Id. at 216.
Id.

[25]
[26]
[27]

[28]
[29]

[30]
[31]
[32]
[33]

[34]
[35]
[36]

[37]
[38]
[39]

[40]
[41]
[42]
[43]
[44]
[45]
[46]

Id. at 217-220.
Id. at 69.
The Court of Appeals expounded in this wise, thus:
Although the rule had, likewise, been long-settled that redress must first be sought within the union itself,
in accordance with its constitution and bylaws (sic), before a case should be elevated to the jurisdiction of
labor agencies, said requirement had been traditionally held inapplicable under the following
circumstances, to wit: (a) when resort to the remedy would be futile, illusory or vain; (b) when the remedy
applied for was not acted upon for an unreasonable length of time; (c) when the relief sought was simply
for damages; (d) when the act complained of is contrary to the constitution and bylaws (sic); (e) when the
issue is purely a question of law; and (f) when due process was not observed. Id. at 71.
Id. at 70.
ART. 226. BUREAU OF LABOR RELATIONS. The Bureau of Labor Relations and the
Labor Relations Division 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 labormanagement relations in all workplaces whether agricultural or nonagricultural, 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.
Id. at 74.
Supra note 29.
Id. at 367.
Entitled AN ACT TO EXTEND PROTECTION TO LABOR, STRENGTHEN THE
CONSTITUTIONAL RIGHTS OF WORKERS TO SELF-ORGANIZATION, COLLECTIVE
BARGAINING AND PEACEFUL CONCERTED ACTIVITIES, FOSTER INDUSTRIAL PEACE AND
HARMONY, PROMOTE THE PREFERENTIAL USE OF VOLUNTARY MODES OF SETTLING
LABOR DISPUTES, AND REORGANIZE THE NATIONAL LABOR RELATIONS COMMISSION,
AMENDING FOR THESE PURPOSES CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO.
442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES,
APPROPRIATING FUNDS THEREFOR ANDFOR OTHER PURPOSES.
G.R. 123375, 28 February 2005, 452 SCRA 406, 420.
Id.
Metro Drug Distribution, Inc. v. Metro Drug Corporation Employees Association-Federation of Free
Workers, G.R. No. 142666, 26 September 2005, 471 SCRA 45, 58, citingAmbil, Jr. v. Commission on
Elections, G.R. No. 143398, 25 October 2000, 344 SCRA 372.
Morcal v. Lavia, G.R. No. 166753, 29 November 2005, 476 SCRA 508, 512-513.
Id.
Verceles v. Bureau of Labor Relations-Department of Labor and Employment-national Capital
Region, G.R. No. 153322, 15 February 2005, 451 SCRA 338, 349.
Id. at 175.
Id.
Rollo, p. 216.
Gerlach v. Reuters Limited, Phils., G.R. No. 148542, 17 January 2005, 448 SCRA 535, 544-545.
Id.
Umpoc v. Mercado, G.R. No. 158166, 21 January 2005, 449 SCRA 220, 235.
Id.

[47]

Article IV, Section 4(a)(6) of the FLAMES CBL.

[48]

Rollo, p. 82 and its dorsal page.

[49]

[50]
[51]

(1) Non-payment of dues and other monetary obligations for a reasonable period of time, subject to the
provisions of Article X;
(2) Joining or forming another UNION;
(3) Violation of any provision of the Constitution, By-laws, rules and regulations of the UNION;
(4) Willfull (sic) violation of any provision of the Collective Bargaining Agreement (CBA);
(5) Urging or advocating that a member start an action in any court of justice against the UNION or any of
its officers, without first exhausting all internal remedies open to him or available in accordance with the
constitution and by-laws of the UNION;
(6) Acting in a manner harmful to the interest and welfare of the UNION and/or its MEMBERS; id.
Supra note 17.
Id.

THIRD DIVISION
EMPLOYEES UNION OF BAYER
PHILS., FFW and JUANITO S.
FACUNDO, in his capacity as
President,
Petitioners,

- versus -

G.R. No. 162943

Present:
CARPIO MORALES, J.,
Chairperson,
BRION,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.

BAYER
PHILIPPINES,
INC.,
DIETER
J.
LONISHEN
Promulgated:
(President),ASUNCION AMISTOS
O (HRD Manager), AVELINA
December 6, 2010
REMIGIO
AND
ANASTACIA
VILLAREAL,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
VILLARAMA, JR., J.:
This petition for review on certiorari assails the Decision[1] dated December
15, 2003 and Resolution[2] dated March 23, 2004 of the Court of Appeals (CA) in
CA-G.R. SP No. 73813.

Petitioner Employees Union of Bayer Philippines [3] (EUBP) is the exclusive

bargaining agent of all rank-and-file employees of Bayer Philippines (Bayer), and
is an affiliate of the Federation of Free Workers (FFW). In 1997, EUBP, headed by
its president Juanito S. Facundo (Facundo), negotiated with Bayer for the signing
of a collective bargaining agreement (CBA). During the negotiations, EUBP
rejected Bayers 9.9% wage-increase proposal resulting in a bargaining deadlock.
Subsequently, EUBP staged a strike, prompting the Secretary of the Department of
Labor and Employment (DOLE) to assume jurisdiction over the dispute.
In November 1997, pending the resolution of the dispute, respondent Avelina
Remigio (Remigio) and 27 other union members, without any authority from their
union leaders, accepted Bayers wage-increase proposal. EUBPs grievance
committee questioned Remigios action and reprimanded Remigio and her
allies. On January 7, 1998, the DOLE Secretary issued an arbitral award ordering
EUBP and Bayer to execute a CBA retroactive to January 1, 1997 and to be made
effective until December 31, 2001. The said CBA[4] was registered on July 8,
1998 with the Industrial Relations Division of the DOLE-National Capital Region
(NCR).[5]
Meanwhile, the rift between Facundos leadership and Remigios group
broadened. On August 3, 1998, barely six months from the signing of the new
CBA, during a company-sponsored seminar,[6] Remigio solicited signatures from
union members in support of a resolution containing the decision of the signatories
to: (1) disaffiliate from FFW, (2) rename the union as Reformed Employees Union
of Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws for the
union, (4) abolish all existing officer positions in the union and elect a new set of
interim officers, and (5) authorize REUBP to administer the CBA between EUBP
and Bayer.[7] The said resolution was signed by 147 of the 257 local union
members. A subsequent resolution was also issued affirming the first resolution.[8]
A tug-of-war then ensued between the two rival groups, with both seeking
recognition from Bayer and demanding remittance of the union dues collected
from its rank-and-file members. On September 8, 1998, Remigios splinter group
wrote Facundo, FFW and Bayer informing them of the decision of the majority of

the union members to disaffiliate from FFW.[9] This was followed by another letter
informing Facundo, FFW and Bayer that an interim set of REUBP executive
officers and board of directors had been appointed, and demanding the remittance
of all union dues to REUBP. Remigio also asked Bayer to desist from further
transacting with EUBP. Facundo, meanwhile, sent similar requests to
Bayer[10] requesting for the remittance of union dues in favor of EUBP and
accusing the company of interfering with purely union matters.[11] Bayer responded
by deciding not to deal with either of the two groups, and by placing the union
dues collected in a trust account until the conflict between the two groups is
resolved.[12]
On September 15, 1998, EUBP filed a complaint for unfair labor practice
(first ULP complaint) against Bayer for non-remittance of union dues. The case
was docketed as NLRC-NCR-Case No. 00-09-07564-98.[13]
EUBP later sent a letter dated November 5, 1998 to Bayer asking for a
grievance conference.[14] The meeting was conducted by the management
on November 11, 1998, with all REUBP officers including their lawyers
present. Facundo did not attend the meeting, but sent two EUBP officers to inform
REUBP and the management that a preventive mediation conference between the
two groups has been scheduled on November 12, 1998 before the National
Conciliation and Mediation Board (NCMB).[15]
Apparently, the two groups failed to settle their issues as Facundo again sent
respondent Dieter J. Lonishen two more letters, dated January 14,
1999[16] and September 2, 1999,[17] asking for a grievance meeting with the
management to discuss the failure of the latter to comply with the terms of their
CBA. Both requests remained unheeded.
On February 9, 1999, while the first ULP case was still pending and despite
EUBPs repeated request for a grievance conference, Bayer decided to turn over
the collected union dues amounting to P254,857.15 to respondent Anastacia
Villareal, Treasurer of REUBP.

Aggrieved by the said development, EUBP lodged a complaint [18] on March

4, 1999 against Remigios group before the Industrial Relations Division of the
DOLE praying for their expulsion from EUBP for commission of acts that
threaten the life of the union.
On June 18, 1999, Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed
the first ULP complaint for lack of jurisdiction. [19] The Arbiter explained that the
root cause for Bayers failure to remit the collected union dues can be traced to the
intra-union conflict between EUBP and Remigios group[20] and that the charges
imputed against Bayer should have been submitted instead to voluntary arbitration.
[21]
EUBP did not appeal the said decision.[22]
On December 14, 1999, petitioners filed a second ULP complaint against
herein respondents docketed as NLRC-RAB-IV Case No. 12-11813-99-L. Three
days later, petitioners amended the complaint charging the respondents with unfair
labor practice committed by organizing a company union, gross violation of the
CBA and violation of their duty to bargain. [23] Petitioners complained that Bayer
refused to remit the collected union dues to EUBP despite several demands sent to
the management.[24] They also alleged that notwithstanding the requests sent to
Bayer for a renegotiation of the last two years of the 1997-2001 CBA between
EUBP and Bayer, the latter opted to negotiate instead with Remigios group.[25]
On even date, REUBP and Bayer agreed to sign a new CBA. Remigio
immediately informed her allies of the managements decision.[26]
In response, petitioners immediately filed an urgent motion for the issuance
of a restraining order/injunction[27] before the National Labor Relations
Commission (NLRC) and the Labor Arbiter against respondents. Petitioners
asserted their authority as the exclusive bargaining representative of all rank-andfile employees of Bayer and asked that a temporary restraining order be issued
against Remigios group and Bayer to prevent the employees from ratifying the
new CBA. Later, petitioners filed a second amended complaint [28] to include in its
complaint the issue of gross violation of the CBA for violation of the contract bar

rule following Bayers decision to negotiate and sign a new CBA with Remigios
group.
Meanwhile, on January 26, 2000, the Regional Director of the Industrial
Relations Division of DOLE issued a decision dismissing the issue on expulsion
filed by EUBP against Remigio and her allies for failure to exhaust reliefs within
the union and ordering the conduct of a referendum to determine which of the two
groups should be recognized as union officers.[29] EUBP seasonably appealed the
said decision to the Bureau of Labor Relations (BLR). [30] On June 16, 2000, the
BLR reversed the Regional Directors ruling and ordered the management of Bayer
to respect the authority of the duly-elected officers of EUBP in the administration
of the prevailing CBA.[31]
Unfortunately, the said BLR ruling came late since Bayer had already signed
a new CBA[32] with REUBP on February 21, 2000. The said CBA was eventually
ratified by majority of the bargaining unit.[33]
On June 2, 2000, Labor Arbiter Waldo Emerson R. Gan dismissed EUBPs
second ULP complaint for lack of jurisdiction. [34] The Labor Arbiter explained the
dismissal as follows:
All told, were it not for the fact that there were two (2) [groups] of
employees, the Union led by its President Juanito Facundo and the members who
decided to disaffiliate led by Ms. Avelina Remigio, claiming to be the rightful
representative of the rank and file employees, the Company would not have acted
the way it did and the Union would not have filed the instant case.
Clearly then, as the case involves intra-union disputes, this Office is bereft
of any jurisdiction pursuant to Article 226 of the Labor Code, as amended, which
provides pertinently in part, thus:
Bureau of Labor Relations The Bureau of Labor
Relations and the Labor Relations Divisions in the regional offices
of the Department of Labor and Employment 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.
Specifically, with respect to the union dues, the authority is the case of
Cebu Seamens Association[,] Inc. vs. Ferrer-Calleja, (212 SCRA 51), where the
Supreme Court held that when the issue calls for the determination of which
between the two groups within a union is entitled to the union dues, the same
cannot be taken cognizance of by the NLRC.
xxxx
WHEREFORE, premises considered, the instant complaint is hereby
DISMISSED on the ground of lack of jurisdiction.
SO ORDERED.[35]

On June 28, 2000, the NLRC resolved to dismiss[36] petitioners motion for a
restraining order and/or injunction stating that the subject matter involved an intraunion dispute, over which the said Commission has no jurisdiction.[37]
Aggrieved by the Labor Arbiters decision to dismiss the second ULP
complaint, petitioners appealed the said decision, but the NLRC denied the appeal.
[38]
EUBPs motion for reconsideration was likewise denied.[39]
Thus, petitioners filed a Rule 65 petition to the CA. On December 15, 2003,
the CA sustained both the Labor Arbiter and the NLRCs rulings. The appellate
court explained,
A cursory reading of the three pleadings, to wit: the Complaint (Vol. I,
Rollo, p[p]. 166-167); the Amended Complaint (Vol. I, Rollo[,] pp. 168-172) and
the Second Amended Complaint dated March 8, 2000 (Vol. II, Rollo, pp. 219-225)
will readily show that the instant case was brought about by the action of the
Group of REM[I]GIO to disaffiliate from FFW and to organized (sic) REUBP
under the tutelage of REM[I]GIO and VILLAREAL. At first glance of the case at
bar, it involves purely an (sic) inter-union and intra-union conflicts or disputes
between EUBP-FFW and REUBP which issue should have been resolved by the
Bureau of Labor Relations under Article 226 of the Labor Code. However, since
no less than petitioners who admitted that respondents committed gross violations
of the CBA, then the BLR is divested of jurisdiction over the case and the issue
should have been referred to the Grievance Machinery and Voluntary Arbitrator
and not to the Labor Arbiter as what petitioners did in the case at bar. x x x
xxxx

Furthermore, the CBA entered between BAYER and EUBP-FFW [has] a

life span of only five years and after the said period, the employees have all the
right to change their bargaining unit who will represent them. If there exist[s] two
opposing unions in the same company, the remedy is not to declare that such act is
considered unfair labor practice but rather they should conduct a certification
election provided [that] it should be conducted within 60 days of the so[-]called
freedom period before the expiration of the CBA.
WHEREFORE, premises considered, this Petition is DENIED and the
assailed Decision dated September 27, 2001 as well as the Order dated June 21,
2002, denying the motion for reconsideration, by the National Labor Relations
Commission, First Division, in NLRC Case No. RAB-IV-12-11813-99-L, are
hereby AFFIRMED in toto. Costs against petitioners.
SO ORDERED.[40]

Undaunted, petitioners filed this Rule 45 petition before this Court. Initially,
the said petition was denied for having been filed out of time and for failure to
comply with the requirements provided in the 1997 Rules of Civil Procedure, as
amended.[41] Upon petitioners motion, however, we decided to reinstate their
appeal.
The following are the issues raised by petitioners, to wit:
I.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS, IN

ARRIVING AT THE DECISION PROMULGATED ON 15 DECEMBER
2003 AND RESOLUTION PROMULGATED ON 23 MARCH 2004,
DECIDED THE CASE IN ACCORDANCE WITH LAW AND
JURISPRUDENCE; AND

II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS, IN

ARRIVING AT THE DECISION PROMULGATED ON 15 DECEMBER
2003 AND RESOLUTION PROMULGATED ON 23 MARCH 2004,
GRAVELY ABUSE[D] ITS DISCRETION IN ITS FINDINGS AND
CONCLUSION THAT:
THE ACTS OF ABETTING OR ASSISTING IN THE
CREATION OF ANOTHER UNION, NEGOTIATING OR
BARGAINING WITH SUCH UNION, WHICH IS NOT THE
SOLE AND EXCLUSIVE BARGAINING AGENT, VIOLATING
THE DUTY TO BARGAIN COLLECTIVELY, REFUSAL TO
PROCESS GRIEVABLE ISSUES IN THE GRIEVANCE
MACHINERY AND/OR REFUSAL TO DEAL WITH THE SOLE
AND EXCLUSIVE BARGAINING AGENT ARE ACTS

CONSTITUTING OR TANTAMOUNT TO UNFAIR LABOR

PRACTICE.[42]

Respondents Bayer, Lonishen and Amistoso, meanwhile, identify the issues

as follows:
I.

WHETHER OR NOT THE UNIFORM FINDINGS OF THE COURT OF

APPEALS, THE NLRC AND THE LABOR ARBITER ARE BINDING
ON THIS HONORABLE COURT;

II.

WHETHER OR NOT THE LABOR ARBITER AND THE NLRC HAVE

JURISDICTION OVER THE INSTANT CASE;

III.

WHETHER OR NOT THE INSTANT CASE INVOLVES AN INTRAUNION DISPUTE;

IV. WHETHER OR NOT RESPONDENTS COMPANY, LONISHEN AND

AMISTOSO COMMITTED AN ACT OF UNFAIR LABOR PRACTICE;
AND
V.

WHETHER OR NOT THE INSTANT CASE HAS BECOME MOOT AND

ACADEMIC.[43]

Essentially, the issue in this petition is whether the act of the management of
Bayer in dealing and negotiating with Remigios splinter group despite its validly
existing CBA with EUBP can be considered unfair labor practice and, if so,
whether EUBP is entitled to any relief.
Petitioners argue that the subject matter of their complaint, as well as the
subsequent amendments thereto, pertain to the unfair labor practice act of
respondents Bayer, Lonishen and Amistoso in dealing with Remigios splinter
union. They contend that (1) the acts of abetting or assisting in the creation of
another union is among those considered by the Labor Code, as amended,
specifically under Article 248 (d)[44] thereof, as unfair labor practice; (2) the act of
negotiating with such union constitutes a violation of Bayers duty to bargain
collectively; and (3) Bayers unjustified refusal to process EUBPs grievances and
to recognize the said union as the sole and exclusive bargaining agent are
tantamount to unfair labor practice.[45]

Respondents Bayer, Lonishen and Amistoso, on the other hand, contend that
there can be no unfair labor practice on their part since the requisites for unfair
labor practice i.e., that the violation of the CBA should be gross, and that it
should involve violation in the economic provisions of the CBA were not
satisfied. Moreover, they cite the ruling of the Labor Arbiter that the issues raised
in the complaint should have been ventilated and threshed out before the voluntary
arbitrators as provided in Article 261 of the Labor Code, as amended.
[46]
Respondents Remigio and Villareal, meanwhile, point out that the case should
be dismissed as against them since they are not real parties in interest in the ULP
complaint against Bayer,[47] and since there are no specific or material acts imputed
against them in the complaint.[48]
The petition is partly meritorious.
An intra-union dispute refers to any conflict between and among union
members, including grievances arising from any violation of the rights and
conditions of membership, violation of or disagreement over any provision of the
unions constitution and by-laws, or disputes arising from chartering or
disaffiliation of the union.[49] Sections 1 and 2, Rule XI of Department Order No.
40-03, Series of 2003 of the DOLE enumerate the following circumstances as
inter/intra-union disputes, viz:
RULE XI
INTER/INTRA-UNION DISPUTES AND
OTHER RELATED LABOR RELATIONS DISPUTES
SECTION 1. Coverage. - Inter/intra-union disputes shall include:
(a)

cancellation of registration of a labor organization filed by its

members or by another labor organization;

(b)

conduct of election of union and workers association

officers/nullification of election of union and workers association
officers;

(c)

audit/accounts examination of union or workers association funds;

(d)

deregistration of collective bargaining agreements;

(e)

validity/invalidity of union affiliation or disaffiliation;

(f)

validity/invalidity
membership;

of

acceptance/non-acceptance

for

union

(g)

validity/invalidity of impeachment/expulsion of union and workers

association officers and members;

(h)

validity/invalidity of voluntary recognition;

(i)

opposition to application for union and CBA registration;

(j)

violations of or disagreements over any provision in a union or

workers association constitution and by-laws;

(k)

disagreements over chartering or registration of labor organizations

and collective bargaining agreements;

(l)

violations of the rights and conditions of union or workers

association membership;

(m)

violations of the rights of legitimate labor organizations, except

interpretation of collective bargaining agreements;

(n)

such other disputes or conflicts involving the rights to selforganization, union membership and collective bargaining
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers association.

SECTION 2. Coverage. Other related labor relations disputes shall

include any conflict between a labor union and the employer or any individual,
entity or group that is not a labor organization or workers association. This
includes: (1) cancellation of registration of unions and workers associations; and
(2) a petition for interpleader.

It is clear from the foregoing that the issues raised by petitioners do not fall
under any of the aforementioned circumstances constituting an intra-union dispute.
More importantly, the petitioners do not seek a determination of whether it is the
Facundo group (EUBP) or the Remigio group (REUBP) which is the true set of
union officers. Instead, the issue raised pertained only to the validity of the acts of
management in light of the fact that it still has an existing CBA with EUBP. Thus
as to Bayer, Lonishen and Amistoso the question was whether they were liable for
unfair labor practice, which issue was within the jurisdiction of the NLRC. The
dismissal of the second ULP complaint was therefore erroneous.
However, as to respondents Remigio and Villareal, we find that petitioners
complaint was validly dismissed.

Petitioners ULP complaint cannot prosper as against respondents Remigio

and Villareal because the issue, as against them, essentially involves an intra-union
dispute based on Section 1 (n) of DOLE Department Order No. 40-03. To rule on
the validity or illegality of their acts, the Labor Arbiter and the NLRC will
necessarily touch on the issues respecting the propriety of their disaffiliation and
the legality of the establishment of REUBP issues that are outside the scope of
their jurisdiction. Accordingly, the dismissal of the complaint was validly made,
but only with respect to these two respondents.
But are Bayer, Lonishen and Amistoso liable for unfair labor practice? On
this score, we find that the evidence supports an answer in the affirmative.
It must be remembered that a CBA is entered into in order to foster stability
and mutual cooperation between labor and capital. An employer should not be
allowed to rescind unilaterally its CBA with the duly certified bargaining agent it
had previously contracted with, and decide to bargain anew with a different group
if there is no legitimate reason for doing so and without first following the proper
procedure. If such behavior would be tolerated, bargaining and negotiations
between the employer and the union will never be truthful and meaningful, and no
CBA forged after arduous negotiations will ever be honored or be relied upon.
Article 253 of the Labor Code, as amended, plainly provides:
ART. 253. Duty to bargain collectively when there exists a collective
bargaining agreement. Where there is a collective bargaining agreement, the
duty to bargain collectively shall also mean that neither party shall terminate
or modify such agreement during its lifetime. However, either party can serve a
written notice to terminate or modify the agreement at least sixty (60) days prior
to its expiration date. It shall be the duty of both parties to keep the status quo and
to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is reached by
the parties. (Emphasis supplied.)

This is the reason why it is axiomatic in labor relations that a CBA entered
into by a legitimate labor organization that has been duly certified as the exclusive
bargaining representative and the employer becomes the law between them.
Additionally, in the Certificate of Registration [50] issued by the DOLE, it is
specified that the registered CBA serves as the covenant between the parties and

has the force and effect of law between them during the period of its duration.
Compliance with the terms and conditions of the CBA is mandated by express
policy of the law primarily to afford protection to labor [51] and to promote industrial
peace. Thus, when a valid and binding CBA had been entered into by the workers
and the employer, the latter is behooved to observe the terms and conditions
thereof bearing on union dues and representation.[52] If the employer grossly
violates its CBA with the duly recognized union, the former may be held
administratively and criminally liable for unfair labor practice.[53]
Respondents Bayer, Lonishen and Amistoso, contend that their acts cannot
constitute unfair labor practice as the same did not involve gross violations in the
economic provisions of the CBA, citing the provisions of Articles 248 (1) and
261[54] of theLabor Code, as amended.[55] Their argument is, however, misplaced.
Indeed, in Silva v. National Labor Relations Commission,[56] we explained
the correlations of Article 248 (1) and Article 261 of the Labor Code to mean that
for a ULP case to be cognizable by the Labor Arbiter, and for the NLRC to
exercise appellate jurisdiction thereon, the allegations in the complaint must
show prima facie the concurrence of two things, namely: (1) gross violation of the
CBA; and (2) the violation pertains to the economic provisions of the CBA.[57]
This pronouncement in Silva, however, should not be construed to apply to
violations of the CBA which can be considered as gross violations per se, such as
utter disregard of the very existence of the CBA itself, similar to what happened in
this case. When an employer proceeds to negotiate with a splinter union despite the
existence of its valid CBA with the duly certified and exclusive bargaining agent,
the former indubitably abandons its recognition of the latter and terminates the
entire CBA.
Respondents cannot claim good faith to justify their acts. They knew that
Facundos group represented the duly-elected officers of EUBP. Moreover, they
were cognizant of the fact that even the DOLE Secretary himself had recognized
the legitimacy of EUBPs mandate by rendering an arbitral award ordering the
signing of the 1997-2001 CBA between Bayer and EUBP. Respondents were
likewise well-aware of the pendency of the intra-union dispute case, yet they still

proceeded to turn over the collected union dues to REUBP and to effusively deal
with Remigio. The totality of respondents conduct, therefore, reeks with antiEUBP animus.
Bayer, Lonishen and Amistoso argue that the case is already moot and
academic following the lapse of the 1997-2001 CBA and their renegotiation with
EUBP for the 2006-2007 CBA. They also reason that the act of the company in
negotiating with EUBP for the 2006-2007 CBA is an obvious recognition on their
part that EUBP is now the certified collective bargaining agent of its rank-and-file
employees.[58]
We do not agree. First, a legitimate labor organization cannot be construed to
have abandoned its pending claim against the management/employer by returning
to the negotiating table to fulfill its duty to represent the interest of its members,
except when the pending claim has been expressly waived or compromised in its
subsequent negotiations with the management. To hold otherwise would be
tantamount to subjecting industrial peace to the precondition that previous claims
that labor may have against capital must first be waived or abandoned before
negotiations between them may resume. Undoubtedly, this would be against public
policy of affording protection to labor and will encourage scheming employers to
commit unlawful acts without fear of being sanctioned in the future.
Second, that the management of Bayer decided to recognize EUBP as the
certified collective bargaining agent of its rank-and-file employees for purposes of
its 2006-2007 CBA negotiations is of no moment. It did not obliterate the fact that
the management of Bayer had withdrawn its recognition of EUBP and supported
REUBP during the tumultuous implementation of the 1997-2001 CBA. Such act
of interference which is violative of the existing CBA with EUBP led to the filing
of the subject complaint.
On the matter of damages prayed for by the petitioners, we have held that as
a general rule, a corporation cannot suffer nor be entitled to moral damages. A
corporation, and by analogy a labor organization, being an artificial person and
having existence only in legal contemplation, has no feelings, no emotions, no
senses; therefore, it cannot experience physical suffering and mental

anguish. Mental suffering can be experienced only by one having a nervous

system and it flows from real ills, sorrows, and griefs of life all of which cannot
be suffered by an artificial, juridical person.[59] A fortiori, the prayer for exemplary
damages must also be denied.[60] Nevertheless, we find it in order to award (1)
nominal damages in the amount of P250,000.00 on the basis of our ruling in De La
Salle University v. De La Salle University Employees Association (DLSUEANAFTEU)[61] and Article 2221,[62]and (2) attorneys fees equivalent to 10% of the
monetary award. The remittance to petitioners of the collected union dues
previously turned over to Remigio and Villareal is likewise in order.
WHEREFORE, the petition for review on certiorari is PARTLY
GRANTED. The Decision dated December 15, 2003and the Resolution
dated March 23, 2004 of the Court of Appeals in CA-G.R. SP No. 73813
are MODIFIED as follows:
1)

Respondents Bayer Phils., Dieter J. Lonishen and Asuncion Amistoso

are found LIABLE for Unfair Labor Practice, and are
hereby ORDERED to remit to petitioners the amount of P254,857.15
representing the collected union dues previously turned over to Avelina
Remigio and Anastacia Villareal. They are likewise ORDERED to pay
petitioners nominal damages in the amount of P250,000.00 and
attorneys fees equivalent to 10% of the monetary award; and

2)

The complaint, as against respondents Remigio and Villareal.

is DISMISSED due to the lack of jurisdiction of the Labor Arbiter and
the NLRC, the complaint being in the nature of an intra-union dispute.

No pronouncement as to costs.
SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice

WE CONCUR:

CONCHITA CARPIO MORALES

Associate Justice
Chairperson

ARTURO D. BRION
Associate Justice

LUCAS P. BERSAMIN
Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

AT T E S TAT I O N
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

CONCHITA CARPIO MORALES

Associate Justice
Chairperson, Third Division

C E R T I F I C AT I O N

Pursuant to Section 13, Article VIII of the 1987 Constitution and the
Division Chairpersons Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

[1]

[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[25]
[26]
[27]
[28]
[29]
[30]
[31]
[32]
[33]
[34]
[35]
[36]

Rollo, pp. 221-237. Penned by Associate Justice Mercedes Gozo-Dadole, with Associate Justices Eugenio S.
Labitoria and Rosmari D. Carandang, concurring.
Id. at 239.
With Registration No. NCR-10-165-88. See CA rollo, Vol. I, p. 183.
Rollo, pp. 31-47.
Id. at 48.
Id. at 71, 136.
Id. at 52.
Id.
Id. at 517-529.
Id. at 551-553 and 556.
Id. at 556.
Letter dated October 30, 1998. Id. at 557-558.
Id. at 531-534.
Id. at 492.
Id. at 492 and 560.
Id. at 68.
Id. at 69-73.
Docketed as Case No. OD-9903-004-IRD. See rollo, pp. 563-568.
Rollo, pp. 535-549.
Id. at 543-544.
Id. at 546-548.
Id. at 490.
Id. at 571.
Id.
Id.
Id. at 574.
Dated January 21, 2000. Id. at 575-584.
Dated March 8, 2000. Id. at 81-87.
Id. at 178.
The appeal was docketed as BLR-A-TR-13-17-2-00. See rollo, p. 176.
Rollo, p. 181.
Id. at 585-614.
Id. at 495.
Id. at 615-624.
Id. at 623-624.
Id. at 626-634.

[37]
[38]
[39]
[40]
[41]
[42]
[43]
[44]

[45]
[46]
[47]
[48]
[49]
[50]
[51]
[52]

[53]

[54]

[55]
[56]
[57]
[58]
[59]

[60]

[61]
[62]

Id. at 633.
NLRC Decision dated September 27, 2001. Id. at 185-215.
NLRC Order dated June 21, 2002. Id. at 217-219.
Id. at 234-236.
Id. at 469-470.
Id. at 782.
Id. at 731.
Article 248 (d) of the Labor Code provides:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of
the following unfair labor practices:
xxxx
(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;
xxxx
Rollo, pp. 783-790.
Id. at 734-740.
Id. at 661-663.
Id. at 675-676.
C.A. Azucena, Jr., Vol. II, THE LABOR CODE WITH COMMENTS AND CASES, 2004 ed., p. 111.
Rollo, p. 48.
Del Monte Philippines, Inc. v. Saldivar, G.R. No. 158620, October 11, 2006, 504 SCRA 192, 201.
De La Salle University v. De La Salle University Employees Association (DLSUEA-NAFTEU), G.R. No.
177283, 584 SCRA 592, 603.
Article 248 of the Labor Code provides in part:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of
the following unfair labor practices:
xxxx
(i) To violate a collective bargaining agreement.
Art. 261 of the Labor Code provides in part:
ART. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. 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 and those arising from the interpretation or enforcement of company personnel policies referred to
in the immediately preceding article. 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 as grievances under the Collective Bargaining Agreement. For purposes of this article, gross
violations of a Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply
with the economic provisions of such agreement. (Emphasis supplied.)
Rollo, pp. 499-500.
G.R. No. 110226, June 19, 1997, 274 SCRA 159.
Id. at 173.
Rollo, pp. 752-753.
Flight Attendants and Stewards Association of the Philippines v. Philippine Airlines, Inc., G.R. No.
178083, July 22, 2008, 559 SCRA 252, 294.
Article 2234 of the Civil Code provides in part:
ART. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must show that
he is entitled to moral, temperate or compensatory damages before the court may consider the question of
whether or not exemplary damages should be awarded. x x x
Supra note 52 at 604.
Article 2221 of the Civil Code provides:
ART. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated
or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. Nos. 76579-82 August 31, 1988
BENEDICTO RODRIGUEZ, etc., petitioner,
vs.
HON. DIRECTOR, BUREAU OF LABOR RELATIONS, CARLOS GALVADORES and LIVI
MARQUEZ,respondents.
G.R. No. 80504 August 31, 1988
REY C. SUMANGIL, VIRGILIO V. HERNANDEZ, et al., petitioners,
vs.
MANOLITO PARAN, ROSALINDA DE GUZMAN, FREE TELEPHONE WORKERS UNION,
PHILIPPINE LONG DISTANCE TELEPHONE CO., and HON. PURA FERRERCALLEJA, respondents.
Conrado Leao for petitioner in G.R No. 76579-82 and private respondent in G.R. No. 80504.
King Adorio Law Offices for petitioners in G.R. No. L-80504.
Potenciano Flores for private respondent Marquez in G.R. No. 76579-82.
The Solicitor General for public respondent.

NARVASA, J.:
The above entitled special civil actions of certiorari were separately instituted but have been
consolidated because they involve disputes among employees of the Philippines Long Distance
Telephone Company (PLDT), who are members of the same union, the Free Telephone
Workers Union (FTWU). The disputes concern the validity of the general elections for union
officers in 1986, and the increase of union dues adopted and put into effect by the incumbent
officers subsequent to said elections.
G.R. Nos. 76579-82: Controversy Respecting Elections of Officers
Assailed by the petitioners in G.R. No. 76579-82 are (1) the decision dated October 10, 1986 of
the Director of Labor Relations (BLR) annulling the elections of officers of the labor union above

mentioned, FTWU, and (2) the resolution dated October 30, 1986, denying their motion for
reconsideration of the decision.
The union's by-laws provide for the election of officers every three (3) years, in the month of
July. Pursuant thereto, the union's Legislative Council set the provincial elections for its officers
on July 14 to 18, 1986, and those for Metro Manila on July 25, 1986.
The same Council also quite drastically raised the fees for the filing of certificates of candidates
which had therefore ranged from P75.00 to P100.00. The filing fee for each candidate for
president of the labor organization was increased to P3,000; that for each candidate for vicepresident, secretary general, treasurer and auditor, to P2,000.00; and that for assistant
secretary, assistant treasurer and assistant auditor, to P1,000.00 each.
Bureau of Labor Relations Cases: Nos. LRD-M-7-503-86 & LRD-M-7-504-86
Although the increased fees were paid in due course by the candidates, no less than two
complaints were filed with the Bureau of Labor Relations for their invalidation as excessive,
prohibitive and arbitrary. One, docketed asCase No. LRD-M7-503-86, was presented by Rey
Sumangil, a candidate for president, and the members of his slate. The other, Case No. LRD-M7-504-86, was filed by Carlos Galvadores, also a presidential candidate, and his group.
Impleaded as respondents in both complaints were Benedicto Rodriguez, the Chairman of the
Commission on Elections of the union, and the incumbent union officers, headed by the
president, Manolito Paran. Acting on the complaints, the Med-Arbiter issued on July 8, 1986 a
restraining order against the enforcement of the new rates of fees.
Other BLR Cases: Nos. LRD-M-7-557-86 and LRD-M-7-55986
It appears that notwithstanding the cases questioning the candidates' fees, the elections for the
provinces of Visayas and Mindanao and certain areas of Luzon were nevertheless held on July
21 and 22, 1986, which are dates different from those specified by the Legislative Council (i.e.,
July 14 to 18, 1986). The validity of the elections was very shortly challenged on the ground of
lack of (1) due notice and (2) adequate ground rules. Carlos Galvadores and his fellow
candidates filed on July 22, 1986 a petition with the BLR, docketed as Case No. LRD-M-755786, praying that the Union's COMELEC be directed to promulgate ground rules for the conduct
of the provincial elections. On the day following, Livi Marquez, a candidate for vice-president,
together with other candidates in his ticket, filed another petition against the same Union
COMELEC and Manolito Paran, the union president docketed as Case No. LRD-M-7-559-86
seeking to restrain the holding of the elections scheduled on July 25, 1986 in the Metro
Manila are until (1) ground rules therefor had been formulated and made known to all members
of the labor organization, and (2) the issue of the filing fees had been finally decided. In
connection with these complaints, a temporary restraining order was issued on July 23, 1986
prohibiting the holding of elections on July 25, 1986.
The restraining order notwithstanding, the Union COMELEC proceeded with the general
elections in all the PLDT branches in Metro Manila on July 25, 1986. It then reported that as of

July 15, 1986 the number of qualified voters was 9,429 of which 6,903 actually voted, the
percentage of turn-out being 73%, and that those who obtained the highest number of votes for
the various elective positions were:
Manolito Paran President 3,030 votes Eduardo de Leon 1st Vice-President 2,185 votes Efren de
Lima 2nd Vice-President 2,806 votes Roger Rubio Secretary General 2,462 votes Virgilio Tulay
Asst. Sec. General 2,924 votes Rosalinda de Guzman Treasurer 2,659 votes Filmore Dalisay
Asst. Treasurer 2,525 votes Damiana Yalung Auditor 2,942 votes Jaime Pineda Asst. Auditor
3,082 votes
Livi Marquez and Carlos Galvadores, and their respective groups, forthwith filed separate
motions praying that the COMELEC be declared guilty of contempt for defying the temporary
restraining order, and for the nullification not only of the Metro Manila elections of July 25, 1986
but also the provincial elections of July 21 and 22, 1986.
The four (4) cases were jointly decided by Med-Arbiter Rasidali Abdullah on August 28,1986.
His judgment denied the petitions to nullify the elections, as well as the motion for contempt, but
invalidated the increase in rates of filing fees for certificates of candidacies. The judgment
accorded credence to the Union COMELEC's averment that it had not received the restraining
order on time. It took account, too, of the fact that the turn-out of voters was 73%, much higher
than the turn-out of 62% to 63% in prior elections, which fact, in the Med-Arbiter's view was a
clear manifestation of the union members' desire to go ahead with the elections and express
their will therein.
This judgment was however overturned by the Officer-in-Charge of Labor Relations, on appeal
seasonably taken. The OIC's decision, dated October 10, 1986 nullified the general elections in
the provinces and Metro Manila on the ground of (1) lack of notice to the candidates and voters,
(2) failure to disseminate the election ground rules to all parties concerned, and (3) disregard of
the temporary restraining order of the Med-Arbiter. The decision stressed the following points: 1
The undue haste with which the questioned general elections were held raises
doubts as to its validity. In its desire to conduct the elections as scheduled, the
respondents unwittingly disregarded mandatory procedural requirements. The
respondents' pretensions that the appellants were duly furnished with the ground
rules/guidelines of the general elections and that the same were properly
disseminated to the qualified voters of the union are not supported by the
records.
xxx xxx xxx
Moreover, the Union's Comelec did not follow the schedule of election outlined in
the guidelines. Specifically, the guidelines fixed the elections in VisayasMindanao on July 14, 16 and 18, 1986, in Northern Luzon, on July 16, 17, 18 and
21, 1986 and in Southern Luzon on July 16, 17 and 18, 1986 (records, pp. 6770). Surprisingly, however, the Union's Comelec conducted the elections in

Northern and Southern Luzon on July 21, and 22, 1986 and in Visayas Mindanao
on July 25, 1986 without proper notice to the appellants.
Accordingly, the unwarranted failure of the Union's Comelec to duly furnish the
appellants the guidelines and properly disseminate the same to the voters, and
the holding of the elections not in accordance with the schedule set by the
guidelines and ill open defiance of the July 23, 1986 Restraining Order,
precipitated an uncalled for confusion among the appellants' supporters
andunduly prevented them from adopting the appropriate electoral safeguards to
protect their interests. Under the circumstances, this Office is constrained to
invalidate the general elections held on July 21, 22 and 25, 1986 and declare the
results thereof null and void.
Furthermore, only 6,903 out of the 9,426 qualified voters trooped to the polls
during the July 21, 22 and 25, 1986 general elections. Considering the closeness
of the result of the elections, the 2,056 qualified voters, if they were able to cast
their votes, could have drastically altered the results of the elections. But more
important, the disenfranchisement of the remaining 27% qualified voters is a
curtailment of Trade Unionism implicitly ordained the worker's right to selforganization explicitly protected by the Constitution.
xxx xxx xxx
The submission of the respondents that they did not receive a copy of the
injunctive order is completely rebuffed by the records. It appears that the same
was received and signed by a certain Cenidoza for respondent Manolito Paran at
4:30 P.M. of July 23, 1986 and by respondent Benedicto Rodriguez himself, also
on July 23, 1986 at 4:30 P.M. In the case of Manolitao Paran, the restraining
order in question was served at his office/postal address at Rm. 310 Regina
Bldg., Escolta, Manila.
It is this decision of the BLR Officer-in-Charge which is the subject of the certiorari actions filed
in this Court by Benedicto Rodriguez, the chairman of the Union COMELEC, and docketed
as G.R. Nos. 76579-82. He claims the decision was rendered with grave abuse of discretion
considering that (a) the Med-Arbiter had found no fraud or irregularity in the elections; (b) the
election was participated in by more than 73% of the entire union membership; and (e) the
petition for nullity was not supported by 30% of the general membership.
G.R. No. 80504: Controversy Respecting Labor-Union Dues
The terms of office of the old officers (Manolito Paran, et al.) ended in August, 1986. However,
the new set of officers (headed by the same Manolito Paran) apparently could not assume office
under a new term because of the proceedings assailing the validity of the elections pending
before the Bureau of Labor Relations. What happened was that the old officers continued to
exercise the functions of their respective offices under the leadership of Manolito Paran.

On January 17, 1987, the Legislative Council of the union passed a resolution which generated
another controversy. That resolution increased the amount of the union dues from P21.00 to
P50.00 a month. It was then presented to the general membership for ratification at a
referendum called for the purpose. Rey Sumangil and his followers objected to the holding of
the referendum. When their objection went unheeded, they and their supporters, all together
numbering 829 or so, boycotted the referendum and formally reiterated their protest against it.
Subsequently the union officers announced that the referendum has resulted in a ratification of
the increased union dues.
On March 1, 1987 Manolito Paran requested the PLDT to deduct the union dues at the new,
increased rates, from the salaries of all union members and dispense with their individual written
authorizations therefor. PLDT acceded to the request and effected the check-off of the
increased dues for the payroll period from March 1 to March 15, 1987.
BLR Case No. NCR-OD-M- 7-3-206-87
Once again Rey Sumangil and his followers hide themselves off to the Bureau of Labor
Relations. They filed a petition on March 26, 1987 challenging the resolution for the increase in
union dues, docketed as BLR Case No. NCR-OD-M-73-206-87. They contended that since the
terms of the members of the Legislative Council who approved the resolution had already
expired in August, 1986, and their reelection had been nullified by the Bureau, they had no
authority to act as members of the council; consequently, it could not be said that the resolution
for the increase of union dues had been approved by 2/3 vote of the Council members, as
provided by the union constitution and by laws; hence, the resolution was void. They further
contended that there had been no valid ratification of the resolution because the plebiscite had
been "rigged,"
Once again Rey Sumangil and his group were unsuccessful in proceedings at the level of the
Med-Arbiter. The latter denied their petition on the ground of lack of support of at least 30% of
all members of the union, citing Article 242 of the Labor Code which reads as follows:
Art. 242. Rights and conditions of membership in a labor organization.
... Any violation of the above rights and conditions of membership shall be a
ground for cancellation of union registration and expulsion of officer from office,
whichever is appropriate. At least thirty percent (30%) of all 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.
Again Sumangil and his group went up on appeal to the Director of Labor Relations, before
whom they raised the issue of whether or not the petition in fact had the support of at least 30%
of the members, and said 30%-support was indeed a condition sine qua non for acquisition by
the Med-Arbiters (in the Labor Relations Division in a Regional Office of the MOLE) of
jurisdiction over the case. Again Sumangil and his followers were successful in their appeal.

On July 1, 1987 the Director of Labor Relations rendered a decision reversing that of the MedArbiter. The Director ordered the cessation of the collection of the twenty-nine peso increase
and the return of the amounts already collected. In the first place, according to her, the petition
was supported by 6,022 signatures, a number comprising more than 30% of the total
membership of the union (10,413). In the second place, the Director ruled, even assuming the
contrary, the lack of 30%-support will not preclude the BLR from taking cognizance of the
petition where there is a clear violation of the rights and conditions of union membership
because Article 226 of the Labor Code, expressly confers on it the authority to act on all intraunion and inter-union conflicts and grievances affecting labor and management relations, at the
instance of either or both parties. The provision cited reads as follows:
Art. 226. Bureau of Labor Relations. The Bureau of Labor Relations and
the Labor Relations division 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 ...
As regards Article 242 of the Labor Code, relied upon by the Med-Arbiter, the Director
expressed the view that the 30% support therein provided is not mandatory, and is not a
condition precedent to the valid presentation of a grievance before the Bureau of Labor
Relations. The Director ruled, finally, that Sumangil and the other union members had a valid
grievance calling for redress, since the record disclosed no compliance with the requirement
that the resolution for the increase of union dues be passed by at least 2/3 vote of the members
of the Legislative Council and be ratified by a majority of the entire membership at a plebiscite.
But not long afterwards, the Director reversed herself. The Manggagawa sa Komunikasyon sa
Pilipinas (MKP) with which Paran's Union, the FTWU, is affiliated, intervened in the case
and moved for reconsideration of her decision. By resolution dated October 1, 1987, the
Director set aside her decision of July 1, 1987 and entered a new one dismissing the petition of
Sumangil and company, in effect affirming the Med-Arbiter's order. The Director opined that the
intervenor (MKP) was correct in its contention that there was no 30%-membership support for
the petition, since only 829 members had signed their support therefor, as correctly found by the
Med-Arbiter, and because of this, the BLR never acquired jurisdiction over the case. According
to her: 2
The rationale for such requirement is not difficult to discern. It is to make certain
that there is a primafacie case against prospective respondents whether it be the
union or its officers and thus forestall nuisance or harassment
petitions/complaints. The requirement was intended to shield the union from
destabilization and paralyzation coming from adventurous and ambitious
members or non-members engaged in union politics under the guise of working
for the union welfare.

... As found out by the Med-Arbiter in the Office of origin all signatures except that
of 829 were obtained without the knowledge of the signatories. At this point we
cannot permit 829 members to "rock the boat." so to speak, of a union which has
at present ten thousand four hundred and thirteen (10,413) passengers.
In an effort to set aside this reversing resolution of the Labor Relations Director, Rey Sumangil
and his group have come to this Court via the instant special civil action of certiorari. In their
petition they insist that the support of 30% of the union membership is not a jurisdictional
requirement for the ventilation of their grievance before the BLR-1 and assuming the contrary,
they have proven that 3,501 workers had in fact joined in the petition, constituting 33% of the
total membership. They also emphasize the validity of their grievance, drawing attention to the
absence of the requisite 2/3 vote essential for validity of any resolution increasing the rates of
union dues, and the doubtful result of the referendum at which the resolution had allegedly been
ratified.
Three issues are thus presented to the Court in these cases. The first involves the validity of the
1986 general elections for union officers; the second, whether or not 30%-membership support
is indispensable for acquisition of jurisdiction by the Bureau of Labor Relations of a complaint for
alleged violation of rights and conditions of union members; and third, the validity of the
increase in union dues.
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.
The 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
The Matter of 30%-Support for Complaints for Violations of Union Membership Rights
The respondent Director's ruling, however, that the assent of 30% of the union membership,
mentioned in Article 242 of the Labor Code, was mandatory and essential to the filing of a
complaint for any violation of rights and conditions of membership in a labor organization (such
as the arbitrary and oppressive increase of union dues here complained of), cannot be affirmed
and will be reversed. The very article relied upon militates against the proposition. It states that
a report of a violation of rights and conditions of membership in a labor organization maybe
made by "(a)t least thirty percent (30%) of all the members of a union or any member or
members specially concerned." 4 The use of the permissive "may" in the provision at once negates the
notion that the assent of 30% of all the members is mandatory. More decisive is the fact that the provision
expressly declares that the report may be made, alternatively by "any member or members specially
concerned." And further confirmation that the assent of 30% of the union members is not a factor in the
acquisition of jurisdiction by the Bureau of Labor Relations is furnished by Article 226 of the same Labor
Code, which grants original and exclusive jurisdiction to the Bureau, and the Labor Relations Division in
the Regional Offices of the Department of Labor, over "all inter-union and intra-union conflicts, and all
disputes, grievances or problems arising from or affecting labor management relations," making no
reference whatsoever to any such 30 % support requirement. Indeed, the officials mentioned are given
the power to act "on all inter-union and intra-union conflicts (1) "upon request of either or both parties" as
well as (2) "at their own initiative." There can thus be no question about the capacity of Rey Sumangil and
his group of more than eight hundred, to report and seek redress in an intra-union conflict involving a
matter they are specially concerned, i.e., the rates of union dues being imposed on them.

These considerations apply equally well to controversies over elections. In the cases at bar, the
petition to nullify the 1986 union elections could not be deemed defective because it did not
have the assent of 30% of the union membership. The petition clearly involved an intra-union
conflict one directly affecting the right of suffrage of more than 800 union members and the
integrity of the union elections over which, as the law explicitly provides, jurisdiction could be
assumed by the Labor Relations Director or the Med-Arbiters "at their own initiative" or "upon
request of either or both parties."
The assumption of jurisdiction by the Med-Arbiter and the Labor Relations Director over the
cases at bar was entirely proper. It was in fact their duty to do so, given the facts presented to
them. So this Court has had occasion to rule: 5

The labor officials should not hesitate to enforce strictly the law and regulations
governing trade unions even if that course of action would curtail the so-called
union autonomy and freedom from government interference.
For the protection of union members and in order that the affairs of the union
may be administered honestly, labor officials should be vigilant and watchful in
monitoring and checking the administration of union affairs.
Laxity, permissiveness, neglect and apathy in supervising and regulating the
activities of union officials would result in corruption and oppression. Internal
safeguards within the union can easily be ignored or swept aside by abusive,
arrogant and unscrupulous union officials to the prejudice of the members.
It is necessary and desirable that the Bureau of Labor Relations and the Ministry
of Labor should exercise close and constant supervision over labor unions,
particularly the handling of their funds, so as to forestall abuses and penalties.
As regards the final issue concerning the increase of union dues, the respondent Director found
that the resolution of the union's Legislative Council to this effect 6 does not bear the signature of at
least two-thirds (2/3) of the members of the Council, contrary to the requirement of the union constitution
and by-laws; and that proof is wanting of proper ratification of the resolution by a majority of the general
union membership at a plebiscite called and conducted for that purpose, again in violation of the
constitution and by-laws. The resolution increasing the union dues must therefore be struck down, as
illegal and void, arbitrary and oppressive. The collection of union dues at the increased rates must be
discontinued; and the dues thus far improperly collected must be refunded to the union members or held
in trust for disposition by them in accordance with their charter and rules, in line with this Court's ruling in
a parallel situation, 7 viz:

... All amounts already collected must be credited accordingly in favor of the
respective members either for their future legal dues or other assessments or
even delinquencies, if any. And if this arrangement regarding the actual refund of
what might be excessive dues is not acceptable to the majority of the members,
the matter may be decided in a general meeting called for the purpose.
WHEREFORE, in G.R. Nos. 76579-82, the petition for certiorari is DISMISSED, no grave abuse
of discretion or other serious error having been shown in the decision of the respondent Director
of Labor Relations, said decision ordering the holding of new elections for officers of the Free
Telephone Worker Union being on the contrary in accord with the facts and the law, but in the
G.R. No. 80504, the petition for certiorari is granted, the challenged order dated October 1,
1987 is set aside, and the decision of July 1, 1987 of the Labor Relations Director reinstated,
modified only as to the treatment of the excess collections which shall be disposed of in the
manner herein indicated. Costs against petitioner in G.R. Nos. 7657982 and private
respondents (except the PLDT) in G.R. No. 80504.
Cruz, Gancayco, Grio Aquino and Medialdea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-47775 July 5, 1980
JULIAN DUYAG, ARMANDO OLIVARES, JOSE ECHEVARIA, ALEJANDRO SEVILLA and
FELIMON GUINGON,petitioners,
vs.
HON. AMANDO G. INCIONG, as Acting Director of Labor Relation CARMELO C. NORIEL,
as Director of Labor Relations, RICA R. MANALAD, HONORATO K. LEANO, EDUARDO
AMPARO and SANTOS PUERTO,respondents.

AQUINO, J.:
This case is about the removal of private respondents as union officers due to alleged
irregularities and anomalies in the administration of the affairs of the union.
On January 14, 1977, the five petitioners, who are arrastre checkers of E. Razon, Inc. in the
South Harbor, Port Area, Manila as well as bona fide members of the Associated Port Checkers
and Workers Union, filed with Regional Office No. 4 of the Department of Labor a complaint
containing several charges against the four private respondents, who, respectively, are the
president (for more than twenty years), treasurer, vice-president and auditor of the union.
The record reveals the following facts, some of which are admitted or not denied by the private
respondents, whiny the other facts are supported by substantial evidence which is summarized
in the decisions of the med-arbiter and the Director of Labor Relations:
Unauthorized increases in union dues. for arrastre checkers, the monthly union dues amount
to ten pesos, as fixed in section 2(b), article VI of the union's constitution and bylaws approved
on September 5,1969.
The monthly union dues were increased by two pesos in the resolution of September 1, 1970
and by five pesos in the resolution of March 14, 1972. However, those two resolutions are void
because they were not approved by three-fourths of all the members of the board of directors,
as required in article VII of the union's constitution and by-laws, dealing with amendments.
For March, April and May, 1973, the respondents without the benefit of any board resolution
caused to be collected an additional one peso, thus increasing the union dues to eighteen
pesos.
For April and May, 1975, the respondents caused to be collected monthly union dues amounting
to nineteen pesos or another increase of one peso.

And for the first semester of 1976, a deduction of eight pesos and fifty centavos was made from
the mid-year bonus without any board resolution authorizing such deduction. In prior years, no
deduction for union dues was made from the mid-year bonus.
The med-arbiter concluded that the increases in union dues and the deduction from the midyear bonus are void because the same were collected in contravention of the constitution and
by-laws.
Moreover, their collection was not covered by any check-off authorization nor evidenced by any
receipt and was in contravention of the Labor Code. The amounts collected were not duly
accounted for. The Labor Code provides:
ART. 242. Rights and conditions of membership in a labor organization. The
following are the rights and conditions of membership in a labor organization:
xxxxxxxxx
(g) No officer, agent or member of a labor organization shall collect any fees,
dues, or other contributions in its behalf or make any disbursement of its money
or funds unless he is duly authorized pursuant to its constitution and by-laws;
(h) Every payment of fees, dues or other contributions by a member shall be
evidenced by a receipt signed by the officer or agent making the collection and
entered into the record of the organization to be kept and maintained for the
purpose;
xxx xxx xxx
(n) 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 at a general membership meeting duly caned 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 assessments or fees.
The record shall be attested to by the president;
(o) 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
xxx xxx xxx.
The foregoing legal provisions apply squarely to the unauthorized deductions from the wages of
the arrastre checkers.
For such unauthorized collection of union dues, the responsibility of respondent Ricardo R.
Manalad, as union president, is not denied.

Withholding of union members' share in the profits amounting to P18,640.09. E. Razon, Inc.,
the arrastre operator, paid to the union on December 18. 1973 the sum of P25,684.61 as its
share of the profits (profit-share) for the period from May to October, 1973. Instead of
distributing the whole amount to the union members, the dents paid to them only P19,974 and
retained the of P5,710.61 which had not been accounted for.
The Labor Arbiter found that other amounts were withheld by the respondents from the union's
profit-shares for subsequent periods. The total amount withheld is P18,640.09 or P18.570.63,
as shown in page 8 of private respondents' memorandum.
With specific reference to the profit-share amounting to P22,559.50 paid by E. Razon, Inc. for
the period from November, 1973 to February, 1974, the respondents deposited the amount in
the account of the union's Cooperative Credit Union of which respondent Manalad was also the
president. Later, the respondents withdrew the said amount, distributed among the union
members the sum of P20,848 and withheld the balance of P1,711.50, which respondent
Manalad and the union treasurer, respondent Honorato K. Leano appropriated as follows:
Manalad Filipinas Bank and Trust Com pany, Manila Hilton Branch Chock No.
352966 dated March 22, 1975, drawn to cash................. P1.000.00
Leao Filipinos Rank and Trust Company, Manila Hilton Branch Chock No.
352967 dated March 22, 1975, drawn to cash............................ 559.50
Leao Filipinos Bank and Trust Company Manila Hilton Branch Check No.
352968 dated March 22,1975, drawn to cash............................. 152.00
TOTAL ......................................... P1, 711.50
The med-arbiter found that the modus operandi resorted to by the respondents with respect to
the profit-share amounting to P22,559.50 was followed by them as to the deductions from the
profit-shares for the other periods.
He surmised that the union officers must have deducted a considerable amount from the profitshares because they started that practice in 1966 when E. Razon, Inc. and Guacods Marine
Terminals, Inc. commenced the profit-share program
However, during the pendency of the case in this Court, the private respondents submitted a
resolution dated November 25, 1977 wherein more than ninety percent of the union members
allegedly ratified the deductions from the mid-year bonus and profit-shares and authorized
future deductions (pp. 921 and 1615-6, Rollo).
Although the said resolution rendered this aspect of the case moot, it cannot obliterate the
violations of the constitution and by-laws and the Labor Code already committed by
respondents Manalad and Leano The deduction of union dues from the mid-year bonus and the
withholding of part of the profit-shares were illegal and improper at the time they were made.
Disbursements exceeding P500 which were not authorized by the board of directors. Section
4(d), article IV of the union's constitution and by-laws provides that the board of directors may
"authorize and approve all disbursements from union fund where the amount involved is more

than P500 and without that authorization or approval in due form, no such disbursements will be
allowed by the Treasurer
Respondent Manalad made the following disbursements of union funds in an amount exceeding
P500 without the requisite authorization of the board of directors:

Evidence

Date

Amount
disbursed

Annex S

March 26,
1969

P1,400.00

Annex T

June 1,
1970

1,000.00

Annexes U
to W

July 13,
August 6

3,111.40

and Sept.
24, 1971

Annexes
Y,X,Z

March 5 and
30

and Z I and
AA

April 10,
May 18

to CC

Aug. 30,
Sept. 20

and Dec.

7,028.00

31, 1973

Annex D

Dec. 6,
1974

1,000.00

Annex R

June 12,
1976

900.00

Respondents Manalad and Leao, also without prior board authorization, withdrew on twentythree occasions union funds in the aggregate sum of P43,026.80 deposited in Savings Account
No. 5953 of the Manila Hilton Branch of the Filipinos Bank and Trust Company (Annexes GG to
GG-22).
The sum of P3,500 was paid to respondent Amparo pursuant to a resolution dated July 12, 1971
which was approved by only six members of the board of directors, instead of fourteen
members, as required in the constitution and by-laws of the union.
Maladministration of welfare fund. Respondent Manalad allowed the application of the funds
of the union's Welfare Plan to the following extraneous purposes:
1. On March 31, and April 6 and 14, 1973, the sum of P5,000 was taken from the
Pacific Memorial Plan collections and loaned to the union's Cooperative Credit
Union, Inc.
2. On October 7, 1973, the sum of P1,500 was loaned to the same cooperative
for organizational expenses.
3. On August 7, 1971, the sum of P200 was taken from the welfare fund for
advance representation expenses of Manalad.
4. On December 18, 1971, the sum of P1,600 was taken from the welfare fund to
cover cash advances to Marcelino Melegrito to be repaid upon the release of his
credit union loan on March 8, 1973.
According to the complainants, those disbursements were not authorized by the board of
directors.
Respondents Manalad, Amparo and Puerto approved the payment of retirement benefits
amounting to (1) P3,500 to Miguel de Leon on June 21, 1976; (2) P7,000 to Eduardo Topacio on
July 30, 1976 and (3) P7,000 to Roberto Victoria on August 4, 1976.

According to the complainants, the three employees did not deserve retirement benefits
because they had been dismissed for prolonged absences and they had ceased to be members
of the Welfare Plan.
Membership in another union. Respondents Manalad, Amparo and Puerto are also officers of
the Philippine Technical Clerical Commercial Employees Association, another labor union.
Their membership in the latter union is manifestly violative of section 9, article III of the
constitution and by-laws of the arrastre checkers' union which provides that an elected officer
shall be deemed disqualified if he becomes a member of another organization.
In this connection, the complainants presented evidence to prove that because of that
interlocking stewardship of the arrastre checkers' union and the other union, the respondents
improperly channeled to the latter funds of the arrastre checkers' union.
Thus, on December 17, 1976 and March 29, June 9 and August 31, 1976, Manalad approved
payments by the arrastre checkers' union to the other union of the sums of P1,000, P250 and
P1,250.
Conflict of interest on the part of Manalad. Respondent Manalad organized a family
corporation known as the Comet Integrated Stevedoring Services, Inc. whose rank-and-file
employees are also members of the arrastre checkers' union. Thus, Manalad has functioned in
the dual capacity of labor leader and employer, not to mention the fact that he is also an officer
of another labor union, PTCCEA.
As head of the arrastre checkers' union, he issued customs passes for the checkers of his
family-owned stevedoring firm to facilitate their rendition of services to some shipping
companies.
The complainants contend that such a situation has involved Manalad in a conflict of interest: if
he favors his stevedoring firm, he is bound to jeopardize the interests of the arrastre checkers'
union of which he is the president.
Under these facts, the med-arbiter in his decision of August 29, 1977 ordered the removal of the
private respondents as officers of the union and directed them to reimburse to the members
thereof the amounts illegally collected from them.
The private respondents appealed to the Director of Labor Relations who in his decision of
November 9, 1977 reversed the is not necessary and that the five com tsn have the right and
personality to institute the proceeding for the removal of the respondents, to recover the
amounts illegally collective or decision of the med-arbiter.
The Director held that resort to intra-union remedies is not necessary and that the five
complainants have the rights and personality to institute the proceedings for the removal of the
respondents, to recover the amount illegally collected orwithheld from them and to question
illegal disbursements and expenditure of union funds.
However, the Director ruled that the power to remove the union officers rests in the members
and that the Bureau of Labor Relations generally has nothing to do with the tenure of union
officers which "is a political question".

The Director further ruled that his office has jurisdiction to look into the charge of illegal
disbursements of union funds. He directed the Labor Organization Division of the Bureau to
examine the books of account and financial records of the union and to submit a report on such
examination.
The motions for reconsideration filed by the parties were denied by the Undersecretary of Labor
in his resolution of January 25, 1978 (he was then Acting Director of Labor Relations). He ruled
that the expulsion of union officers is the prerogative of the members of the union.
That decision of the Director is assailed in these special civil actions of certiorari and prohibition
filed on February 10, 1978. The petitioners pray that the four union officers be expelled.
The case has been simplified by the admission of the private respondents in page 13 of their
memorandum that the Bureau of Labor Relations has unquestionably the power to remove
erring union officers under the last paragraph of Article 242 of the Labor Code.
That paragraph provides that any violation of the rights and conditions of union membership as
enumerated in paragraphs (a) to (p) of Article 242, "shall be a ground for cancellation of union
registration or expulsion of officer from office, whichever is appropriate. At least thirty percent
(30%) of all the members of a union or any member or members specially concerned may
report such violation to the Bureau (of labor Relations). The Bureau shall have the power to
hear and decide any reported violation to mete the appropriate penal
Nevertheless, the private respondents qualify their admission with the opinion that the Bureau of
Labor Relations should remove the guilty union officers only when the members could not do so
under the union's constitution and by-laws and that the removal should be subject to review by
the Minister of Labor.
The Office of the Solicitor General, as amicus curiae, has taken the unqualified stand that the
Bureau is empowered to expel from the union any officer found guilty of violating any of the
rights and conditions of union membership specified in article 242.
In this appeal, the Director of Labor Relations maintains his view that the power of removal
belongs to the union members, since the power to choose the officers belongs to them, and that
the med-arbiter and the Director should simply assist the union members in enforcing its
constitution and by-laws.
We hold that the Labor Arbiter did not err in removing the respondents as union officers. The
membership of Manalad and Puerto in another union is a sufficient ground for their removal
under the constitution and by-laws of the union. In Manalad's case, his organization of a familyowned corporation competing with. the union headed by him renders it untenable that he should
remain as union president.
We hold further that Med Puerto and Leano violated the rights and conditions of membership in
the union within the meaning of Article 242. Hence, on that ground their expulsion from office is
also justified.
The petitioners are entitled to the refund of the union dues illegally collected from them. The
union should be the proper refund.

The Director of Labor Relations erred in holding that, as a matter of policy, the tenure of union
office being a "political question is, generally, a matter outside his Bureau's jurisdiction and
should be pa upon by the union members themselves.
After hearing and even without submitting the matter to the union members, e union officials
may be removed by the Director of Labor decisions as clearly provided him "we 242.
The Director should apply the law and not make policy considerations prevail over its clear
intent and meaning. "The majority of the laws need no interpretation or construction. They
require only application, and if there were more application and less construction, there would
be more stability in the law, and more people would know what the law is." Lizarraga Hermanos
vs. Yap Tico 24 Phil. 504, 513).
The labor officials should not hesitate to enforcement strictly the law and regulations governing
trade unions even if that course of action would curtail the so-called union autonomy and
freedom from government interference.
For the protection of union members and in order that the affairs of the union may be
administered honestly, labor officials should be vigilant and watchful in monitoring and checking
the administration of union affairs.
Laxity, permissiveness, neglect and apathy in supervising and regulating the activities of union
officials would result in corruption and oppression. Internal safeguards within the union can
easily be ignored or swept aside by abusive, arrogant and unscrupulous union officials to the
prejudice of the members.
It is necessary and desirable that the Bureau of Labor Relations and the Ministry of Labor
should exercise close and constant supervision over labor unions, particularly the handling of
their funds, so as to forestall abuses and venalities.
Hence, the Director acted correctly in ordering an examination of the books and records of the
union. The examination should include a verification of the charge that the petty loans extended
by the union to its members were usurious and that the fee for the issuance of cheeks is
unwarranted since the loans were made in cash.
WHEREFORE, (1) that portion of the decision of the med-arbiter, removing respondents
Manalad, Leano and Puerto as union officers, is affirmed. (Respondent Amparo is no longer an
officer of the union.)
(2) We also affirm that portion of the decision of the Director of Labor Relations, directing the
Bureau's Labor Organization Division to examine the books of accounts and records of the
Associated Port Checkers and Workers Union and to submit a report on such examination
within a reasonable time.
(3) We declare that the five petitioners are entitled to a refund of the union dues illegally
collected from them. The Director of Labor Relations is ordered to require the union to make the
refund within twenty days from notice to his counsel of the entry of judgment in this case. Costs
against the private respondents.
SO ORDERED.

Concepcion Jr. Abad Santos and De Castro, JJ., concur.

___________________