MARIWASA SIAM CERAMICS, INC. v.

SECRETARY OF DOLE, CHIEF OF THE BUREAU OF

LABOR RELATIONS, DOLE, REGIONAL DIRECTOR OF DOLE REGIONAL OFFICE
NUMBER IV-A & SAMAHAN NG MGA MANGGAGAWA SA MARIWASA SIAM CERAMICS,
INC. (SMMSC-INDEPENDENT)| 21 December 2009 | J. Nachura
Short Version: Mariwasa wanted to disqualify SMMSC-Independent as an active labor
union for violating Art. 234 (union registration requirements) and Art. 239 (grounds
for cancellation of union registration) of the Labor Code. SC held that the
respondent union complied with the 20% requirement because at the time of the
filing of the petition, the union composed more than 20% of the employees of
petitioner, and did not commit fraud nor misrepresentation which would warrant the
cancellation of their registration since the fact that two signatures appeared twice
does not warrant such fraud or misrepresentation.
Nature: Petition for review on certiorari under Rule 45 of the Rules of Court, seeking
to annul CA Decision dated 20 December 2007 and its Resolution dated 6 June
2008.
Characters in this case:
-Petitioner(s): Mariwasa is the employer of the respondent union.
-Respondent(s): SMMSC-Independent is the respondent union, composed of
employees of petitioner.
: Chief of the Bureau of Labor Relations maintained the union as valid.
: Regional Director of Dole Regional Office IV-A approved the unions
registration application.
Facts
4 May 2005: SMMSC-Independent was issued a Certificate of Registration as a
legitimate labor organization by DOLE Region IV-A.
14 June 2005: Mariwasa filed a Petition for Cancellation of Union Registration
against SMMSC-Independent, claiming that the latter violated Article 234 of
the Labor Code for not complying with the 20% requirement 1, and that it
committed massive fraud and misrepresentation in violation of Article 239 of
the same code (Grounds for cancellation of Union Registration).
26 August 2005: the Regional Director of DOLE IV-A issued an Order granting
the petition, revoking the registration of SMMSC-Independent, and delisting it
from the roster of active labor unions.
SMMSC-Independent appealed to the Bureau of Labor Relations (BLR) which
granted the appeal, maintaining SMMSC-Independent in the roster of
legitimate labor organizations.
1 Art. 234c, LC: Requirements of Registration- In case the applicant is an
independent union, the names of all its members comprising at least 20% of all
employees in the bargaining unit where it seeks to operate.
1

MR filed by Mariwasa was denied by BLR. CA denied certiorari for lack of

merit.
Issue: Did SMMSC-Independent fail to comply with the 20% requirement and commit
massive fraud and misrepresentation, deeming its delisting from the roster of active
labor unions valid? NO.
Dispositive: Petition DENIED. CA AFFIRMED.
Ruling:
Mariwasa insists SMMSC-Independent failed to comply with the 20% union
membership requirement for its registration as a legitimate labor organization
because of the disaffiliation of 102 employees from the total number of union
members. These employees executed affidavits recanting their union
membership.
o Affidavit reproduced below for reference:
Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado bilang Rank
& File sa Mariwasa Siam Ceramics, Inc., Bo. San Antonio, Sto. Tomas, Batangas,
matapos na makapanumpa ng naaayon sa batas ay malaya at kusang loob na
nagsasaad ng mga sumusunod:
1.Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa sa
Mariwasa Siam Ceramics, Inc. o SMMSC-Independent sa kabila ng aking pagaalinlangan[;]
2.Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at handa
ako[ng] tumalikod sa anumang kasulatan na aking nalagdaan sa kadahilanan na
hindi angkop sa aking pananaw ang mga mungkahi o adhikain ng samahan. aIcSED
SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan ngayong ika-____
ng ______, 2005 dito sa Lalawigan ng Batangas, Bayan ng Sto. Tomas.
____________________
Nagsasalaysay

Evidently, the affidavits were written and prepared in advance, and the pro
forma affidavits were ready to be filled out with the employees' names and
signatures.
The first common allegation in the affidavits: declaration that the affiant was
forced and deceived into joining the union. However, it does not mention the
identity of the people who allegedly forced and deceived the affiant into
2

joining the union, much less the circumstances that constituted such force
and deceit. The second allegation shows affiants regret in joining the union
and his desire to abandon the same.
La Suerte Cigar and Cigarette Factory v. Director of the Bureau of Labor
Relations: withdrawals made before the filing of the petition are presumed
voluntary unless there is convincing proof to the contrary, whereas
withdrawals made after the filing of the petition are deemed involuntary.
o WHY?
Before filing of petition- names of employees supporting petition
are held in secret to opposite party thus withdrawal or retraction
shows voluntariness.
After filing of petition- employees supporting petition become
known to the opposite party since their names are attached to
the petition once filed. Opposite party may use foul means for
such employees to withdraw their support.
Why the union is still valid
o Recantations validity are suspect: Recantations were made after the
petition was filed, thus the employees subject were known.
o At the time of the union's application for registration, the affiants were
members of the union and they comprised more than the required 20%
membership for purposes of registration as a labor union. Article 234 of
the Labor Code merely requires a 20% minimum membership during
the application for union registration and does not require such
throughout its existence.
o For the purpose of de-certifying a union, it must be shown that there
was misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto; the minutes of ratification; or, in connection with the election
of officers, the minutes of the election of officers, the list of voters, or
failure to submit these documents together with the list of the newly
elected-appointed officers and their postal addresses to the BLR.
SMMSC-Independent asserts that it had a total of 173 union
members at the time it applied for registration. Two names were
repeated in the list and had to be deducted, but the total would
still be 171 union members. Further, out of the four names
alleged to be no longer connected with Mariwasa, only two
names should be deleted from the list since Diana Motilla and
T.W. Amutan resigned from Mariwasa after the union's
registration had already been granted. Thus, the total union
membership at the time of registration was 169. Since the total
number of rank-and-file employees at that time was 528, 169
employees would be equivalent to 32% of the total rank-and-file
workers complement.
3

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

STA. LUCIA EAST COMMERCIAL

CORPORATION
vs. HON. SECRETARY OF LABOR
AND
EMPLOYMENT and STA. LUCIA
EAST
COMMERCIAL CORPORATION
WORKERS
ASSOCIATION (CLUP LOCAL
CHAPTER),
G.R. No. 162355 August 14, 2009
CARPIO, J.:
On 2001, Confederated Labor Union of
the
Philippines (CLUP) instituted a petition
for
certification election among the
regular rankandfile employees of Sta. Lucia East
Commercial Corporation (THE
CORPORATION)
and its Affiliates. The affiliate
companies
included in the petition were SLE
Commercial,
SLE Department Store, SLE Cinema,
Robsan East
Trading, Bowling Center, Planet Toys,
Home
Gallery and Essentials.
On August 2001, Med-Arbiter Bactin
ordered

the dismissal of the petition due to

inappropriateness of the bargaining
unit.
Later CLUP in its local chapter under
THE
CORPORATION reorganized itself and
reregistered
as CLUP-Sta. Lucia East Commercial
Corporation Workers Association
(herein THE
UNION), limiting its membership to the
rankandfile employees of Sta. Lucia East
Commercial Corporation.
On the same date, THE UNION or THE
UNION
filed the instant petition for
certification
election. It claimed that no
certification election
has been held among them within the
last 12
months prior to the filing of the
petition, and
while there is another union registered
covering
the same employees, namely
Samahang
Manggawa sa SLEC [SMSLEC], it has
not been
recognized as the exclusive bargaining
agent of
4

[THE CORPORATIONs] employees.

On November 2001, THE
CORPORATION or THE
CORPORATION filed a motion to
dismiss the
petition. It averred that it has
voluntarily
recognized SMSLEC as the exclusive
bargaining
agent of its regular rank-and-file
employees,
and that collective bargaining
negotiations
already commenced between them.
THE
CORPORATION argued that the petition
should
be dismissed for violating the one year
and
negotiation bar rules under the
Omnibus Rules
Implementing the Labor Code.
The CBA between SMSLEC and the
corporation
was ratified by its rank-and-file
employees and
registered with DOLE.
In the meantime, on December 2001,
the union
filed its Opposition to THE
CORPORATIONS
Motion to Dismiss questioning the
validity of
the voluntary recognition of [SMSLEC]
by [THE
CORPORATION] and their consequent
negotiations and execution of a CBA.
According
to [THE UNION], the voluntary
recognition of
[SMSLEC] by [THE CORPORATION]
violated the
requirements for voluntary
recognition, i.e.,

non-existence of another labor

organization in
the same bargaining unit. It pointed
out that
the time of the voluntary recognition
on 20 July
2001, appellants registration which
covers the
same group of employees covered by
Samahang
Manggagawa sa Sta. Lucia East
Commercial,
was existing and has neither been
cancelled or
abandoned.
The Med-Arbiters Ruling
Med-Arbiter Bactin dismissed THE
UNIONs
petition for direct certification on the
ground of
contract bar rule. The prior voluntary
recognition of SMSLEC and the CBA
between
THE CORPORATION and SMSLEC bars
the filing
of THE UNIONs petition for direct
certification
THE UNION raised the matter to the
Secretary.
The Ruling of the Secretary of
Labor and
Employment
The Secretary held that the
subsequent
negotiations and registration of a CBA
executed
by THE CORPORATION with SMSLEC
could not
bar THE UNIONs petition. THE UNION
constituted a registered labor
organization at
the time of THE CORPORATIONs
voluntary
recognition of SMSLEC.
5

THE CORPORATION then filed a

petition for
certiorari before the appellate court.
The Ruling of the Appellate Court
The appellate court affirmed the ruling
of the
Secretary
Issue: Whether THE CORPORATIONs
voluntary
recognition of SMSLEC was done while
a
legitimate labor organization was in
existence in
the bargaining unit.
Held: The petition has no merit.
Legitimate Labor Organization
Article 212(g) of the Labor Code
defines a labor
organization as "any union or
association of
employees which exists in whole or in
part for
the purpose of collective bargaining or
of
dealing with employers concerning
terms and
conditions of employment." Upon
compliance
with all the documentary
requirements, the
Regional Office or Bureau shall issue in
favor of
the applicant labor organization a
certificate
indicating that it is included in the
roster of
legitimate labor organizations.6 Any
applicant
labor organization shall acquire legal
personality and shall be entitled to the
rights
and privileges granted by law to
legitimate

labor organizations upon issuance of

the
certificate of registration.7
Bargaining Unit
The concepts of a union and of a
legitimate
labor organization are different from,
but
related to, the concept of a bargaining
unit.
A bargaining unit is a "group of
employees of a
given employer, comprised of all or
less than all
of the entire body of employees,
consistent
with equity to the employer, indicated
to be the
best suited to serve the reciprocal
rights and
duties of the parties under the
collective
bargaining provisions of the law."
The fundamental factors in
determining the
appropriate collective bargaining unit
are: (1)
the will of the employees (Globe
Doctrine); (2)
affinity and unity of the employees
interest,
such as substantial similarity of work
and
duties, or similarity of compensation
and
working conditions (Substantial Mutual
Interests Rule); (3) prior collective
bargaining
history; and (4) similarity of
employment status.
(eto yung important) The UNIONS
initial
problem was that they constituted a
legitimate
6

labor organization representing a

nonappropriate
bargaining unit. However, The
union subsequently re-registered as
THE
UNION, limiting its members to the
rank-andfile
of THE CORPORATION. THE
CORPORATION
cannot ignore the union was a
legitimate labor
organization at the time of THE
CORPORATIONs
voluntary recognition of SMSLEC. THE
CORPORATION and SMSLEC cannot, by
themselves, decide whether CLUP-THE
CORPORATION and its Affiliates
Workers Union
represented an appropriate bargaining
unit.
The inclusion in the union of
disqualified
employees is not among the grounds
for

cancellation of registration, unless

such
inclusion is due to misrepresentation,
false
statement or fraud under the
circumstances
The union having been validly issued a
certificate of registration, should be
considered
as having acquired juridical
personality which
may not be attacked collaterally. The
proper
procedure for THE CORPORATION is to
file a
petition for cancellation of certificate
of
registration of CLUP-THE
CORPORATION and its
Affiliates Workers Union and not to
immediately commence voluntary
recognition
proceedings with SMSLEC.

03. DIGITAL TELECOMMUNICATIONS PHIL., INC. VS. DIGITEL EMPLOYEES UNION (G.R.
NOS. 184903, 10OCT
2012)
By virtue of a certification election, Digitel Employees Union (Union) became the
exclusive bargaining agent of all rank and file
employees of Digitel in 1994. The Union and Digitel then commenced collective
bargaining negotiations which resulted in a
bargaining deadlock. The Union threatened to go on strike, but then the Labor
Secretary assumed jurisdiction over the dispute
and eventually directed the parties to execute a CBA.2 However, no CBA was forged
between Digitel and the Union. Some
Union members abandoned their employment with Digitel. The Union later became
dormant.
Ten (10) years thereafter or on 28 September 2004, Digitel received from Esplana,
who was President of the Union, a
letter containing the list of officers, CBA proposals and ground rules.3 Digitel was
reluctant to negotiate with the Union and
demanded that the latter Union show compliance with the provisions of the Unions
Constitution and By-laws on union
membership and election of officers.
On 4 November 2004, Esplana and his group filed a case for Preventive Mediation
before the National Conciliation and
Mediation Board based on Digitels violation of the duty to bargain. On 25 November
2004, Esplana filed a notice of strike. On
10 March 2005, the then Labor Secretary issued an Order4 assuming jurisdiction
over the labor dispute.
During the pendency of the controversy, Digitel Service, Inc. (Digiserv), a non-profit
enterprise engaged in call center
servicing, filed with the DOLE an Establishment Termination Report stating that it
will cease its business operation. The
closure affected at least 100 employees, 42 of whom are members of the herein
respondent Union.
Alleging that the affected employees are its members and in reaction to Digiservs
action, Esplana and his group filed
another Notice of Strike for union busting, illegal lock-out, and violation of the
assumption order. On 23 May 2005, the Labor
Secretary ordered the second notice of strike subsumed by the previous Assumption
Order.5
Meanwhile, on 14 March 2005, Digitel filed a petition with the Bureau of Labor
Relations (BLR) seeking cancellation of
the Unions registration. In a Decision dated 11 May 2005, the Regional Director of
the DOLE dismissed the petition for
cancellation of union registration for lack of merit. The appeal filed by Digitel with
the BLR was eventually dismissed for lack

of merit in a Resolution dated 9 March 2007.

In an Order dated 13 July 2005, the Secretary of Labor directed Digitel to commence
the CBA negotiation with the
Union and certified for compulsory arbitration before the NLRC the issue of unfair
labor practice.
In accordance with the 13 July 2005 Order of the Secretary of Labor, the unfair labor
practice issue was certified for
compulsory arbitration before the NLRC. On 31 January 2006, NLRC rendered a
Decision dismissing the unfair labor practice
charge against Digitel but declaring the dismissal of the 13 employees of Digiserv
as illegal and ordering their reinstatement.10
The Union manifested that out of 42 employees, only 13 remained, as most had
already accepted separation pay.
In view of this unfavorable decision, Digitel filed a petition on 9 June 2006 before
the Court of Appeals, challenging the
above NLRC Decision and Resolution and arguing mainly that Digiserv employees
are not employees of Digitel.
On 18 June 2008, CA partially granted the case for ULP, thus modifying the assailed
NLRC dispositions. The CA
likewise sustained the finding that Digiserv is engaged in labor-only contracting and
that its employees are actually employees
of Digitel.
Digitel filed a motion for reconsideration but was denied in a Resolution dated 9
October 2008. Hence, this petition for
review on certiorari.
ISSUES:
1) Whether Digiserv is a legitimate contractor; and
2) Whether there was a valid dismissal.
RULING:
Digiserv is a labor-only contractor. Labor-only contracting is expressly
prohibited by our labor laws. After an exhaustive
review of the records, there is no showing that first, Digiserv has substantial
investment in the form of capital, equipment or
tools. The NLRC, as echoed by the CA, did not find substantial Digiservs authorized
capital stock of P 1,000,000.00. It pointed
out that only P 250,000.00 of the authorized capital stock had been subscribed and
only P 62,500.00 had been paid up. There
was no increase in capitalization for the last 10 years.19
Moreover, in the Amended Articles of Incorporation, as well as in the General
Information Sheets for the years 1994,
2001 and 2005, the primary purpose of Digiserv is to provide manpower services. In
PCI Automation Center, Inc. v. National
Labor Relations Commission,20 the Court made the following distinction: "the
legitimate job contractor provides services while

the labor-only contractor provides only manpower. The legitimate job contractor
undertakes to perform a specific job for the
principal employer while the labor-only contractor merely provides the personnel to
work for the principal employer."
The services provided by employees of Digiserv are directly related to the business
of Digitel. It is undisputed that as
early as March 1994, the affected employees, except for two, were already
performing their job as Traffic Operator which was
later renamed as Customer Service Representative (CSR). It is equally undisputed
that all throughout their employment, their
6|Page
ByKarenS.Pascual.ALS2015
function as CSR remains the same until they were terminated effective May 30,
2005. Their long period of employment as such
is an indication that their job is directly related to the main business of DIGITEL
which is telecommunications.
Furthermore, Digiserv does not exercise control over the affected employees.
Digiserv shared the same Human
Resources, Accounting, Audit and Legal Departments with Digitel which manifested
that it was Digitel who exercised control
over the performance of the affected employees. The NLRC also relied on the letters
of commendation, plaques of appreciation
and certification issued by Digitel to the Customer Service Representatives as
evidence of control.
Considering that Digiserv has been found to be engaged in labor-only contracting,
the dismissed employees are
deemed employees of Digitel.
The affected employees were illegally dismissed. In addition to finding that
Digiserv is a labor-only contractor, records teem
with proof that its dismissed employees are in fact employees of Digitel. The NLRC
enumerated these pieces of evidence, thus:
The remaining affected employees, except for two (2), were already hired by
DIGITEL even before the existence of
DIGISERV. Likewise, the remaining affected employees continuously held the
position of Customer Service
Representative, which was earlier known as Traffic Operator, from the time they
were appointed on March 1, 1994
until they were terminated on May 30, 2005.
Further, the Certificates issued to Customer Service Representative likewise show
that they are employees of
DIGITEL, Take for example the "Service Award" issued to Ma. Loretta C. Esen, one of
the remaining affected
employees. The "Service Award" was signed by the officers of DIGITEL the VPCustomer Services Division, the VPHuman

Resources Division and the Group Head-Human Resources Division. It cannot be

gainsaid that it is only the employer that issues service award to its employees.22
As an alternative argument, Digitel maintains that the affected employees were
validly dismissed on the grounds of closure of Digiserv, a department within Digitel.
In the recent case of Waterfront Cebu City Hotel v. Jimenez,23 we referred to the
closure of a department or division of a
company as retrenchment. For a valid retrenchment, the following elements must
be present:
(1) That retrenchment is reasonably necessary and likely to prevent business losses
which, if already incurred, are not merely
de minimis, but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by the employer;
(2) That the employer served written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the intended date
of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to
one (1) month pay or at least month pay
for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good faith
for the advancement of its interest and not
to defeat or circumvent the employees right to security of tenure; and
(5) That the employer used fair and reasonable criteria in ascertaining who would
be dismissed and who would be retained
among the employees, such as status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.24
Only the first 3 elements of a valid retrenchment had been here satisfied. Indeed, it
is management prerogative to close a
department of the company. Digitels decision to outsource the call center operation
of the company is a valid reason to close down the operations of a department
under which the affected employees were employed. The fifth element regarding
the criteria to be observed by Digitel clearly does not apply because all employees
under Digiserv were dismissed.
The instant case is all about the fourth element, that is, whether or not the affected
employees were dismissed in good faith. We find that there was no good faith in the
retrenchment.
Prior to the cessation of Digiservs operations, the Secretary of Labor had issued the
first and second assumption
order. The effects of the assumption order issued by the Secretary of Labor are twofold. It enjoins an impending strike on the part of the employees and orders the
employer to maintain the status quo.
There is no doubt that Digitel defied the assumption order by abruptly closing down
Digiserv. The closure of a department is not illegal per se. What makes it unlawful is
when the closure is undertaken in bad faith. In St. John Colleges, Inc.

v. St. John Academy Faculty and Employees Union,26 bad faith was evidenced by
the timing of and reasons for the closure and the timing of and reasons for the
subsequent opening
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-35120 January 31, 1984
ADAMSON & ADAMSON, INC., petitioner,
vs.
THE COURT OF INDUSTRIAL RELATIONS and ADAMSON & ADAMSON
SUPERVISORY UNION (FFW),respondents.
Sycip, Salazar, Luna & Feliciano for petitioner.
Jaime D. Lauron for respondents.
GUTIERREZ, JR., J.:
Adamson and Adamson, Inc., filed this petition to set aside orders of the respondent
Court of Industrial Relations (CIR) holding that the Adamson and Adamson, Inc.
supervisory Union (FFW) can legally represent supervisors of the petitioner
corporation notwithstanding the affiliation of the lank and file union of the same
company with the same labor federation, the Federation of Free Workers.
The Adamson and Adamson, Inc. Supervisory Union (FFW) informed the petitioner
about its having organized on the same date that the Adamson and Adamson, Inc.
Salesmen Association (FFW) advised the petitioner that the rank and file salesmen
had formed their own union.
The CIR dismissed the petition in CIR Case No. 3267-MC entitled "In the Matter of
Representation of the Supervisory Employees of Adamson and Adamson, Inc.,
Petitioner " thus prompting the filing of this petition for review on certiorari.
Subsequently and during the pendency of the present petition, the rank and file
employees formed their own union, naming it Adamson and Adamson Independent
Workers (FFW).
The petitioner made a lone assignment of error, to wit:
THE RESPONDENT COURT OF INDUSTRIAL RELATIONS ERRED IN SUSTAINING THE
ELIGIBILITY OF THE RESPONDENT UNION TO REPRESENT THE PETITIONER'S
SUPERVISORY EMPLOYEES NOT-WITHSTANDING THE AFFILIATION OF THE SAID
UNION WITH THE SAME NATIONAL FEDERATION WITH WHICH THE UNIONS OF NONSUPERVISORS IN THE PETITIONER COMPANY ARE ALSO AFFILIATED.
The petitioner argues that the affiliation of the respondent union of supervisors, the
salesmen's association, and the Adamson and Adamson independent Workers Union
of rank and file personnel with the same national federation (FFW) violates Section
3 of the Industrial Peace Act, as amended, because (1) it results in the indirect
affiliation Of supervisors and rank-and-file employees with one labor organization;
(2) since respondent union and the unions of non-supervisors in the same company
are governed by the same constitution and by-laws of the national federation, in

practical effect, there is but one union; and (3) it would result in the respondent
union's losing its independence because it becomes the alter ego of the federation.
The petitioner also submits that should affiliation be allowed, this would violate the
requirement of separateness of bar units under Section 12 of the Act because only
one union will in fact represent both supervisors and rank-and-file employees of the
petitioner.
The respondents on the other hand argue that the supervisory employees of an
employer may validly join an organization of the rank-and-file employees so long as
the said rank and file employees are not under their supervision. They submit that
Adamson and Adamson Supervisory Union (FFW) is not composed of sales
supervisors and, therefore, the salesmen of the company are not under the
supervision of the supervisory employees forming the union. Respondents also
argue that even if the salesmen of the petitioner company are under the
supervision of the members of the supervisory union, the prohibition would not
apply because the salesmen and the supervisory employees of the company have
their separate and distinct labor organizations, and, as a matter of fact, their
respective unions sent separate proposal for collective bargaining agreements. They
contend that their respective labor organizations, not the FFW, will represent their
members in the negotiations as well as in the signing of their respective contracts.
Respondents further argue that the Federation of Free Workers has, as its affiliates,
supervisory as well as rank-and-file employees, and should both the supervisory and
the rank-and-file employees of a certain employer who have separate certificates of
registration affiliate with the same federation, the prohibition does not apply as the
federation is not the organization of the supervisory employees contemplated in the
law.
The issue presented involves the correct interpretation of Section 3 of Republic Act
No. 875, the Industrial Peace Act, as amended, which states:
Employees shall have the right to self-organization and to form join or assist labor
organizations of their own choosing for the purpose 6f collective bargaining through
representatives of their own and to engage in concerted activities for the purpose of
collective bargaining and other mutual aid or protection. Individuals employed as
supervisors shall not be eligible for membership in a labor organization of
employees under their supervision but may form separate organizations of their
own.
The right of employees to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining and to
engage in concerted activities for mutual aid or protection is a fundamental right of
labor that derives its existence from the Constitution. It is recognized and
implemented through the abovecited Section 3 of the Industrial Peace Act as
amended.
In interpreting the protection to labor and social justice provisions of the
Constitution and the labor laws or rules and regulations implementing the
constitutional mandates, we have always adopted the liberal approach which favors
the exercise of labor rights.

In deciding this case, we start with the recognized rule that the right of supervisory
employees to organize under the Industrial Peace Act carries certain restrictions but
the right itself may not be denied or unduly abridged. The supervisory employees of
an employer cannot join any labor organization of employees under their
supervision but may validly form a separate organization of their own. As stated
in Caltex Filipino Managers and Supervisors Association v. Court of Industrial
Relations (47 SCRA 112), it would be to attach unorthodoxy to, not to say an
emasculation of, the concept of law if managers as such were precluded from
organization. Thus, if Republic Act 875, in its Section 3, recognizes the right of
supervisors to form a separate organization of their own, albeit they cannot be
members of a labor organization of employees under their supervision, that
authority of supervisors to form a separate labor union carries with it the right to
bargain collectively with the employer. (Government Service Insurance System v.
Government Service Insurance System Supervisors' Union, 68 SCRA 418).
The specific issue before us is whether or not a supervisor's union may affiliate with
a federation with which unions of rank and-file employees of the same employer are
also affiliated. We find without merit the contentions of petitioner that if affilation
will be allowed, only one union will in fact represent both supervisors and rank-andfile employees of the petitioner; that there would be an indirect affiliation of
supervisors and rank-and-file employees with one labor organization; that there
would be emerging of two bargaining units ; and that the respondent union will
loose its independence because it becomes an alter ego of the federation.
In Elisco-Elirol Labor Union (NAFLU) v. Noriel (80 SCRA 681) and Liberty Cotton Mills
Workers Union v. Liberty Cotton Mills, Inc. (66 SCRA 512), we held :
xxx xxx xxx
... the court expressly cited and affirmed the basic principle that '(T)he locals are
separate and distinct units primarily designed to secure and maintain the equality
of bargaining power between the employer and their employee-member in the
economic struggle for the fruits of the joint productive effort of labor and capital;
and the association of the locals into the national union (as PAFLU) was in the
furtherance of the same end. These association are concensual entities capable of
entering into such legal relations with their members. The essential purpose was the
affiliation of the local unions into a common enterprise to increase by collective
action the common bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association; free to serve their own
and the common-interest of all, subject to the restraints imposed by the
Constitution and By-laws of the Association; and free also to renounce the affiliation
for mutual welfare upon the terms laid down in the agreement which brought it into
existence.
We agree with the Court of Industrial Relations when it ruled that:
xxx xxx xxx
The confusion seems to have stemmed from the prefix of FFW after the name of the
local unions in the registration of both. Nonetheless, the inclusion of FWW in the
registration is merely to stress that they are its affiliates at the time of registrations.

It does not mean that said local unions cannot stand on their own Neither can it be
construed that their personalities are so merged with the mother federation that for
one difference or another they cannot pursue their own ways, independently of the
federation. This is borne by the fact that FFW, like other federation is a legitimate
labor organization separate and distinct from its locals and affiliates and to construe
the registration certificates of the aforecited unions, along the line of the Company's
argument. would tie up any affiliates to the shoe string of the federation. ...
The Adamson and Adamson Supervisory Union and the Adamson and Adamson, Inc.,
Salesmen Association (FFW), have their own respective constitutions and by-laws.
They are separately and independently registered of each other. Both sent their
separate proposals for collective bar agreements with their employer. There could
be no employer influence on rank-and-file organizational activities nor their could be
any rank and file influence on the supervisory function of the supervisors because of
the representation sought to be proscribed.
WHEREFORE, the instant petition is DISMISSED for lack of merit. The questioned
order and the resolution en banc of the respondent Court of Industrial Relations are
AFFIRMED.

ATLAS LITHOGRAPHIC SERVICE vs. LAGUESMA (1992)

FACTS:
A petition for certification election was filed by private respondents KampilKatipunan on behalf of the supervisors union, a union where the supervisory,
administrative personnel, production, accounting and confidential employees of the
petitioner were affiliated. Petitioner opposed the petition on the ground that Kampil
Katipunan cannot represent the supervisory employees for the purpose of collective
bargaining because said Kampil Katipunan also represents the rank-and-file
employees union. The Med-Arbiter rendered a decision in favor of the private
respondent. On appeal, the Secretary of Labor affirmed the decision of the MedArbiter. Petitioner now argue that to allow the supervisory employees to affiliate
with the Kampil Katipunan is tantamount to allowing the circumvention of the
principle of the separation of unions under Art. 245 of the Labor Code.
Issue: Whether a local union of supervisory employees may be allowed to affiliate
with a national federation of labor organizations of rank-and-file employees for
purpose of CBA?
Held: NO. Petition Granted
We agree with the petitioner's contention that a conflict of interest may arise in the
areas of discipline, collective bargaining and strikes. Members of the supervisory
union might refuse to carry out disciplinary measures against their co-member rankand-file employees.

Under Article 245 of the Labor Code as amended by Rep. Act No. 6715 provides:
Art. 245. Ineligibility of managerial employees to join any labor organization: right
of supervisory employees. Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own.
The Court construes Article 245 to mean that supervisors shall not be given an
occasion to bargain together with the rank-and-file against the interests of the
employer regarding terms and conditions of work. Thus, if the intent of the law is to
avoid a situation where supervisors would merge with the rank and-file or where the
supervisors' labor organization would represent conflicting interests, then a local
supervisors' union should not be allowed to affiliate with the national federation of
union of rank-and-file employees where that federation actively participates in
union activity in the company.
057 De La Salle University Medical Center vs. Laguesma
DLSU Medical Center and College of Medicine (DLSUMCCM) vs. Hon. Bienvenido
Laguesma, Undersecretary of Labor and Employment, Rolando de la Cruz, MedArbiter, DLSU Medical Center and College of Medicine Supervisory Union
Federation of Free Workers
August 12, 1998
Mendoza, J.
Short version:
Facts: Supervisors union and rank and file union were affiliated with the same
national federation. DLSUMCCM opposed this on the ground of violation of Art. 245.
Held: The ruling in Adamson & Adamson vs. CIR holds in this case, having not met
the conditions laid down in Atlas vs. Laguesma. Both unions can be affiliated with
the same federation.
FACTS
The Federation of Free Workers (FFW), a national federation of labor unions, issued a
certificate to DLSUMCCM Supervisory Union Chapter recognizing it as a local
chapter. FFW filed on behalf of the union a petition for certification election among
the supervisory employees of DLSUMCCM. This petition was opposed by DLSUMCCM
on the grounds that several employees who signed the petition for certification
election were managerial employees and that the Union was composed of both
supervisory and rank and file employees in the company and that the act of
supervisory employees in affiliating with FFW to who the rank and file employees
are also affiliated is violative of Article 245 of the Labor Code.
This opposition was repeatedly denied. Thus, this petition for certiorari.

ISSUES:
1

Whether unions formed independently by supervisory and rank and file

employees of a company may validly affiliate with the same national
federation (YES)
Are the conditions laid down in Atlas met? (NO)

REASONING
1

Supervisory employees have the right to self-organization as do other classes

of employees save only managerial ones. The Constitution states that the
right of the people, including those employed in the public and private
sectors, to form unions, associations or societies for purposes not contrary to
law, shall not be abridged.

As held in United Pepsi-Cola Supervisory Union v. Laguesma, the framers of the

Constitution intended, by this provision, to restore the right of supervisory
employees to self-organization which had been withdrawn from them during the
period of martial law.
Conformably with the constitutional mandate, Art. 245 of the Labor Code now
provides for the right of supervisory employees to self-organization, subject to the
limitation that they cannot join an organization of rank-and-file employees:
Supervisory employees shall not be eligible for membership in a labor organization
of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
The reason for the segregation of supervisory and rank-and-file employees of a
company with respect to the exercise of the right to self-organization is the
difference in their interests. Supervisory employees are more closely identified
with the employer than with the rank-and-file employees. If supervisory and rankand-file employees in a company are allowed to form a single union, the conflicting
interests of these groups impair their relationship and adversely affect discipline,
collective bargaining, and strikes.
These consequences can obtain not only in cases where supervisory and rank-andfile employees in the same company belong to a single union but also where unions
formed independently by supervisory and rank-andfile employees of a company
are allowed to affiliate with the same national federation.
Atlas Lithographic Services Inc. v. Laguesma: To avoid a situation where supervisors
would merge with the rank-and-file or where the supervisors labor organization
would represent conflicting interests, then a local supervisors union should not be
allowed to affiliate with a national federation of unions of rank-and-file employees
where that federation actively participates in union activities in the company.
It was explained in that case however that such a situation would obtain only where
two conditions concur:

The rank-and-file employees are directly under the authority of supervisory

employees.
2 The national federation is actively involved in union activities in the company.
The presence of these 2 conditions distinguished Atlas from the case of Adamson &
Adamson, Inc. vs. CIR where it was held that:
The affiliation of two local unions in a company with the same national federation is
not by itself a negation of their independence since in relation to the employer, the
local unions are considered as the principals, while the federation is deemed to be
merely their agent. This conclusion is in accord with the policy that any limitation
on the exercise by employees of the right to self-organization guaranteed in the
Constitution must be construed strictly. Workers should be allowed the practice of
this freedom to the extent recognized in the fundamental law.
2nd question: Are the conditions laid down in Atlas met in the present
case? (Whether the rank-and-file employees of DLSUMCCM who compose a labor
union are directly under the supervisory employees whose own union is affiliated
with the same national federation (FFW) and whether such national federation is
actively involved in union activities in the company so as to make the two unions in
the same company, in reality, just one union) NO
Although DLSUMCCMSUC and another union composed of rank-and-file employees
of DLSUMCCM are indeed affiliated with the same national federation, the FFW,
DLSUMCCM has not presented any evidence showing that the rank-and-file
employees composing the other union are directly under the authority of the
supervisory employees.
The fact that the two groups of workers are employed by the same company and
the fact that they are affiliated with a common national federation are not sufficient
to justify the conclusion that their organizations are actually just one. Their
immediate professional relationship must be established.
The fact that the petition for certification election in this case was filed by the FFW
on behalf of the local union, while showing active involvement by the FFW in union
activities at the company, is by itself insufficient to justify a finding of violation of
Art. 245 since there is no proof that the supervisors who compose the local union
have direct authority over the rank-and-file employees composing the other local
union which is also affiliated with the FFW.
DISAFFILIATION OF A LABOR UNION FROM A FEDERATION
(ii) VOLKSCHEL LABOR UNION VS. BUREAU OF LABOR RELATIONS,
ASSOCIATED LABOR UNIONFOR METAL (ALUMETAL)
FACTS:
-Volkschel Labor Uniion was once affiliated with ALUMETAL.- Both Volkschel and
Alumetal entered into a CBA.-They agreed that ALUMETAL will apply payroll
deductions twice a month on the members of the UNION as membership dues and
other fees/fines, as may be duly authorized by the UNIONAND ITS MEMBERS. They
called this check-off authorization.-

Subsequently, a majority of Volkschels members decided to disaffiliate from

ALUMETAL in
order to operate on its own as an independent labor group, pursuant to *
Art. 241 of the Labor Code
. Moreover, the same want to revoke their check-off authorization in favour of
ALUMETAL.- On the other hand, ALUMETAL assailed that the disaffiliation is contrary
to law and themembers are still obliged to pay their dues.
ISSUES:
(MAIN ISSUE) Can a local union like Volkschel disaffiliate from its mother union
likeALUMETAL?2.
Should the local union still pay union membership dues even upon disaffiliation from
itsmother union?
HELD:
YES. A local union, being a separate and voluntary association, is free to serve the
interest of all its members including the freedom to disaffiliate. This right is
consistent withconstitutional guarantee of FREEDOM OF ASSOCIATION. (Art. IV, Sec.
7, Phil. Constitution)2.
NO. The obligation of an employee to pay union dues is coterminous with his
affiliation/membership.
*ART. 241 of the Labor Code
Incumbent affiliates of existing federations or national unions may disaffiliate
only for the purpose of joining a federation or national union in the industry or
region in which is properly belongs or for the purpose of operating as an
independent labor group.
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M GREENFIELD VS
RAMOS326 SCRA428 [2000]
FACTS:
Petitioner Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG) is a
localunion. Private respondent M. Greenfield is the employer of petitioner's
members. Membersof petitioner conducted a strike, which was marred by violence.
Private respondentattempted to quell the same by hiring persons for that purpose.
Thereafter, petitioners wereplaced under preventive suspension; only some of them
were eventually allowed to return towork.
Petitioners thus filed a verified complaint with the Arbitration Branch of the
DOLE,charging private respondent of ULP, in the form of union
-

busting, illegal dismissal, illegalsuspension, interference in union activities,

discrimination, threats, intimidation, coercion,violence, and oppression. Private
respondent's defense was that the strike was illegal for itwas marred by violence.
ISSUE:
WON the strike should be declared illegal on account of violence committed during
thestrike.
HELD:
No, where both parties are responsible for the violence committed during the strike,
thestrike cannot be declared illegal since the strike cannot be attributed to the
striking employeesonly. This is an exception to the general rule that the strike shall
be declared illegal where it ismarred by violence on the part of the employees.In the
case at bar, the allegation of violence committed in the course of the strike, it must
beremembered that the Labor Arbiter and the Commission found that "the parties
are agreedthat there were violent incidents . . . resulting to injuries to both sides,
the union andmanagement.
The evidence on record show that the violence cannot be attributed to
thestriking employees alone for the company itself employed hired men to
pacify the strikers.With violence committed on both sides, the
management and the employees, such violencecannot be a ground for
declaring the strike as illegal.
G.R. No. 149552
March 10, 2010
GENERAL MILLING CORPORATION, Petitioner,
vs.
ERNESTO CASIO, ROLANDO IGOT, MARIO FAMADOR, NELSON LIM,
FELICISIMO BOOC, PROCOPIO OBREGON, JR., and ANTONIO
ANINIPOK, Respondents,
and
VIRGILIO PINO, PAULINO CABREROS, MA. LUNA P. JUMAOAS, DOMINADOR
BOOC, FIDEL VALLE, BARTOLOME AUMAN, REMEGIO CABANTAN, LORETO
GONZAGA, EDILBERTO MENDOZA and ANTONIO PANILAG, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking
the reversal of the Decision1 dated March 30, 2001 and Resolution 2 dated July 18,
2001 of the Court of Appeals in CA-G.R. SP No. 40280, setting aside the Voluntary
Arbitration Award3 dated August 16, 1995 of the National Conciliation and Mediation
Board (NCMB), Cebu City, in VA Case No. AC 389-01-01-95. Voluntary Arbitrator
Alice K. Canonoy-Morada (Canonoy-Morada) dismissed the Complaint filed by
respondents Ernesto Casio, Rolando Igot, Mario Famador, Nelson Lim, Felicisimo
Booc, Procopio Obregon, Jr. and Antonio Aninipok (Casio, et al.) against petitioner

General Milling Corporation (GMC) for unfair labor practice, illegal suspension, illegal
dismissal, and payment of moral and exemplary damages.
The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 Chapter (Local 31) was
the sole and exclusive bargaining agent of the rank and file employees of GMC in
Lapu-Lapu City. On November 30, 1991, IBM-Local 31, through its officers and board
members, namely, respondents Virgilio Pino, 4 Paulino Cabreros, Ma. Luna P.
Jumaoas, Dominador Booc, Bartolome Auman, Remegio Cabantan, Fidel Valle, Loreto
Gonzaga, Edilberto Mendoza and Antonio Panilag (Pino, et al.), entered into a
Collective Bargaining Agreement (CBA) with GMC. The effectivity of the said CBA
was retroactive to August 1, 1991.5
The CBA contained the following union security provisions:
Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers employed by the
Company with the exception of those who are specifically excluded by law and by
the terms of this Agreement must be members in good standing of the Union within
thirty (30) days upon the signing of this agreement and shall maintain such
membership in good standing thereof as a condition of their employment or
continued employment.
Section 6. The Company, upon written request of the Union, shall terminate the
services of any employee/worker who fails to fulfill the conditions set forth in
Sections 3 and 4 thereof, subject however, to the provisions of the Labor Laws of
the Philippines and their Implementing Rules and Regulations. The Union shall
absolve the Company from any and all liabilities, pecuniary or otherwise, and
responsibilities to any employee or worker who is dismissed or terminated in
pursuant thereof.6
Casio, et al. were regular employees of GMC with daily earnings ranging
from P173.75 to P201.50, and length of service varying from eight to 25
years.7 Casio was elected IBM-Local 31 President for a three-year term in June 1991,
while his co-respondents were union shop stewards.
In a letter8 dated February 24, 1992, Rodolfo Gabiana (Gabiana), the IBM Regional
Director for Visayas and Mindanao, furnished Casio, et al. with copies of the
Affidavits of GMC employees Basilio Inoc and Juan Potot, charging Casio, et al. with
"acts inimical to the interest of the union." Through the same letter, Gabiana gave
Casio, et al. three days from receipt thereof within which to file their answers or
counter-affidavits. However, Casio, et al. refused to acknowledge receipt of
Gabianas letter.
Subsequently, on February 29, 1992, Pino, et al., as officers and members of the
IBM-Local 31, issued a Resolution9 expelling Casio, et al. from the union. Pertinent
portions of the Resolution are reproduced below:
Whereas, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr., Antonio Aninipok,
Mario Famador, Nelson Lim and Ernesto Casio, through Ernesto Casio have refused
to acknowledge receipt of the letter-complaint dated February 24, 1992, requiring
them to file their answer[s] or counter-affidavits as against the charge of "acts
inimical to the interest of the union" and that in view of such refusal to acknowledge
receipt, a copy of said letter complaint was dropped or left in front of E. Casio;

Whereas, the three (3)[-]day period given to file their answer or counter-affidavit
have already lapsed prompting the union Board to investigate the charge ex parte;
Whereas, after such ex parte investigation the said charge has been more than
adequately substantiated by the affidavits/witnesses and documentary exhibits
presented.
NOW, THEREFORE, RESOLVED as it is hereby RESOLVED, that Ernesto Casio,
Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr., Antonio Aninipok, Mario
Famador and Nelson Lim be expelled as union member[s] of good standing
effectively immediately.
RESOLVED FURTHER, to furnish copy of this Resolution to the GMC Management for
their information and guidance with the recommendation as it is hereby
recommended to dismiss the above-named employees from work.
Gabiana then wrote a letter10 dated March 10, 1992, addressed to Eduardo Cabahug
(Cabahug), GMC Vice-President for Engineering and Plant Administration, informing
the company of the expulsion of Casio, et al. from the union pursuant to the
Resolution dated February 29, 1992 of IBM-Local 31 officers and board members.
Gabiana likewise requested that Casio, et al. "be immediately dismissed from their
work for the interest of industrial peace in the plant."
Gabiana followed-up with another letter 11 dated March 19, 1992, inquiring from
Cabahug why Casio, et al. were still employed with GMC despite the request of IBMLocal 31 that Casio, et al. be immediately dismissed from service pursuant to the
closed shop provision in the existing CBA. Gabiana reiterated the demand of IBMLocal 31 that GMC dismiss Casio, et al., with the warning that failure of GMC to do
so would constitute gross violation of the existing CBA and constrain the union to
file a case for unfair labor practice against GMC.
Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to
Gabianas request to terminate the employment of Casio, et al. GMC issued a
Memorandum dated March 24, 1992 terminating the employment of Casio, et al.
effective April 24, 1992 and placing the latter under preventive suspension for the
meantime.
On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed a Notice of Strike
with the NCMB-Regional Office No. VII (NCMB-RO). Casio, et al. alleged as bases for
the strike the illegal dismissal of union officers and members, discrimination,
coercion, and union busting. The NCMB-RO held conciliation proceedings, but no
settlement was reached among the parties.12
Casio, et al. next sought recourse from the National Labor Relations Commission
(NLRC) Regional Arbitration Branch VII by filing on August 3, 1992 a Complaint
against GMC and Pino, et al. for unfair labor practice, particularly, the termination of
legitimate union officers, illegal suspension, illegal dismissal, and moral and
exemplary damages. Their Complaint was docketed as NLRC Case No. RAB-VII-080639-92.13
Finding that NLRC Case No. RAB-VII-08-0639-92 did not undergo voluntary
arbitration, the Labor Arbiter dismissed the case for lack of jurisdiction, but
endorsed the same to the NCMB-RO. Prior to undergoing voluntary arbitration

before the NCMB-RO, however, the parties agreed to first submit the case to the
grievance machinery of IBM-Local 31. On September 7, 1994, Casio, et al. filed their
Complaint with Pino, the Acting President of IBM-Local 31. Pino acknowledged
receipt of the Complaint and assured Casio, et al. that they would be "seasonably
notified of whatever decision and/or action the Board may have in the instant
case."14 When the IBM-Local 31 Board failed to hold grievance proceedings on the
Complaint of Casio, et al., NCMB Voluntary Arbitrator Canonoy-Morada assumed
jurisdiction over the same. The Complaint was docketed as VA Case No. AC 389-0101-95.
Based on the Position Papers and other documents submitted by the
parties,15 Voluntary Arbitrator Canonoy-Morada rendered on August 16, 1995 a
Voluntary Arbitration Award dismissing the Complaint in VA Case No. AC 389-01-0195 for lack of merit, but granting separation pay and attorneys fees to Casio, et al.
The Voluntary Arbitration Award presented the following findings: (1) the
termination by GMC of the employment of Casio, et al. was in valid compliance with
the closed shop provision in the CBA; (2) GMC had no competence to determine the
good standing of a union member; (3) Casio, et al. waived their right to due process
when they refused to receive Gabianas letter dated February 24, 1992, which
required them to submit their answer to the charges against them; (4) the
preventive suspension of Casio, et al. by GMC was an act of self-defense; and (5)
the IBM-Local 31 Resolution dated February 29, 1992 expelling Casio, et al. as union
members, also automatically ousted them as union officers. 16 The dispositive
portion of the Voluntary Arbitration Award reads:
WHEREFORE, above premises considered, this case filed by [Casio, et al.] is hereby
ordered DISMISSED for lack of merit.
Since the dismissal is not for a cause detrimental to the interest of the company,
respondent General Milling Corporation is, nonetheless, ordered to pay separation
pay to all [Casio, et al.] within seven (7) calendar days upon receipt of this order at
the rate of one-half month per year of service reckoned from the time of their
employment until the date of their separation on March 24, 1992, thus:
Employee

Date Hired

Rate/Month
(1/2 mo/yr
of service)

Service

Total

Casio

April 24/74

P2,636.29

x 18 years =

P47,453.22

Igot

May 1980

P2,472.75

x 12 years =

P29,673.00

Famador

Feb. 1977

P2,498.92

x 15 years =

P37,483.80

Lim

Aug. 1975

P2,466.21

x 17 years =

P41,925.57

Booc

Aug. 1978

P2,498.92

x 14 years =

P34,984.88

Obregon

May 1984

P2,273.23

x 08 years =

P18,185.84

Aninipok

Sept. 1967

P2,616.01

x 25 years =

P65,400.25

The attorneys fees for [Casio, et al.s] counsel shall be ten percent (10%) of the
total amount due them; and shall be shared proportionately by all of the same
[Casio, et al.].
All other claims are hereby denied.17
Dissatisfied with the Voluntary Arbitration Award, Casio, et al. went to the Court of
Appeals by way of a Petition for Certiorari under Rule 65 of the Rules of Court to
have said Award set aside.
The Court of Appeals granted the writ of certiorari and set aside the Voluntary
Arbitration Award. The appellate court ruled that while the dismissal of Casio, et al.,
was made by GMC pursuant to a valid closed shop provision under the CBA, the
company, however, failed to observe the elementary rules of due process in
implementing the said dismissal. Consequently, Casio, et al. were entitled to
reinstatement with backwages from the time of their dismissal up to the time of
their reinstatement. Nevertheless, the Court of Appeals did not hold GMC liable to
Casio, et al. for moral and exemplary damages and attorneys fees, there being no
showing that their dismissal was attended by bad faith or malice, or that the
dismissal was effected in a wanton, oppressive, or malevolent manner, given that
GMC merely accommodated the request of IBM-Local 31. The appellate court,
instead, made Pino, et al. liable to Casio, et al., for moral and exemplary damages
and attorneys fees, since it was on the basis of the imputations and actuations of
Pino, et al. that Casio, et al. were illegally dismissed from employment. The Court of
Appeals thus decreed:
WHEREFORE, the assailed award is hereby SET ASIDE, and private respondent
General Milling Corporation is hereby ordered to reinstate [Casio, et al.] to their
former positions without loss of seniority rights, and to pay their full backwages,
solidarily with [Pino, et al.]. Further, [Pino, et al.] are ordered to indemnify each of
[Casio, et al.] in the form of moral and exemplary damages in the amounts
of P50,000.00 and P30,000.00, respectively, and to pay attorneys fees. 18
The Motion for Reconsideration of GMC was denied by the Court of Appeals in the
Resolution dated July 18, 2001.
Hence, GMC filed the instant Petition for Review, arguing that:
I
THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION WHEN IT SET ASIDE THE
AWARD OF THE VOLUNTARY ARBITRATOR, AND IN AWARDING REINSTATEMENT AND
FULL BACKWAGES TO [Casio, et al.].
II
THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT SAID THAT PETITIONER
GMC FAILED TO ACCORD DUE PROCESS TO [Casio, et al.].
III
THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION WHEN IT DID NOT ABSOLVE
PETITIONER GMC OF ANY LIABILITY AND INSTEAD RULED THAT IT WAS SOLIDARILY

LIABLE WITH THE UNION OFFICERS FOR THE PAYMENT OF FULL BACKWAGES TO
[Casio, et al.].
At this point, we take note that Pino, et al. did not appeal from the decision of the
Court of Appeals.
GMC avers that in reviewing and reversing the findings of the Voluntary Arbitrator,
the Court of Appeals departed from the principle of conclusiveness of the trial
judges findings. GMC also claims that the findings of the Voluntary Arbitrator as to
the legality of the termination from employment of Casio, et al. are well supported
by evidence. GMC further insists that before IBP-Local 31 expelled Casio, et al. from
the union and requested GMC to dismiss Casio, et al. from service pursuant to the
closed shop provision in the CBA, IBP-Local 31 already accorded Casio, et al. due
process, only that Casio, et al. refused to avail themselves of such opportunity. GMC
additionally maintains that Casio, et al. were expelled by IBP-Local 31 for "acts
inimical to the interest of the union," and GMC had no authority to inquire into or
rule on which employee-member is or is not loyal to the union, this being an internal
affair of the union. Thus, GMC had to rely on the presumption that Pino, et al.
regularly performed their duties and functions as IBP-Local 31 officers and board
members, when the latter investigated and ruled on the charges against Casio, et
al.19 GMC finally asserts that Pino, et al., the IBP-Local 31 officers and board
members who resolved to expel Casio, et al. from the union, and not GMC, should
be held liable for the reinstatement of and payment of full backwages to Casio, et
al. for the company had acted in good faith and merely complied with the closed
shop provision in the CBA.
On the other hand, Casio, et al. counters that GMC failed to identify the specific
pieces of evidence supporting the findings of the Voluntary Arbitrator. Casio, et al.
contends that to accord them due process, GMC itself, as the employer, should have
held proceedings distinct and separate from those conducted by IBM-Local 31. GMC
cannot justify its failure to conduct its own inquiry using the argument that such
proceedings would constitute an intrusion by the company into the internal affairs of
the union. The claim of GMC that it had acted in good faith when it dismissed Casio,
et al. from service in accordance with the closed shop provision of the CBA is
inconsistent with the failure of the company to accord the dismissed employees
their right to due process.
In general, in a "petition for review on certiorari as a mode of appeal under Rule 45
of the Rules of Court, the petitioner can raise only questions of law - the Supreme
Court is not the proper venue to consider a factual issue as it is not a trier of facts. A
departure from the general rule may be warranted where the findings of fact of the
Court of Appeals are contrary to the findings and conclusions of the trial court [or
quasi-judicial agency, as the case may be], or when the same is unsupported by the
evidence on record."20
Whether Casio, et al. were illegally dismissed without any valid reason is a question
of fact better left to quasi-judicial agencies to determine. In this case, the Voluntary
Arbitrator was convinced that Casio, et al. were legally dismissed; while the Court of
Appeals believed the opposite, because even though the dismissal of Casio, et al.

was made by GMC pursuant to a valid closed shop provision in the CBA, the
company still failed to observe the elementary rules of due process. The Court is
therefore constrained to take a second look at the evidence on record considering
that the factual findings of the Voluntary Arbitrator and the Court of Appeals are
contradictory.
There are two aspects which characterize the concept of due process under the
Labor Code: one is substantive whether the termination of employment was based
on the provision of the Labor Code or in accordance with the prevailing
jurisprudence; the other is procedural the manner in which the dismissal was
effected.21
After a thorough review of the records, the Court agrees with the Court of Appeals.
The dismissal of Casio, et al. was indeed illegal, having been done without just
cause and the observance of procedural due process.
In Alabang Country Club, Inc. v. National Labor Relations Commission, 22 the Court
laid down the grounds for which an employee may be validly terminated, thus:
Under the Labor Code, an employee may be validly terminated on the following
grounds: (1) just causes under Art. 282; (2) authorized causes under Art. 283; (3)
termination due to disease under Art. 284, and (4) termination by the employee or
resignation under Art. 285.
Another cause for termination is dismissal from employment due to the
enforcement of the union security clause in the CBA. x x x. (Emphasis ours.)
"Union security" is a generic term, which is applied to and comprehends "closed
shop," "union shop," "maintenance of membership," or any other form of agreement
which imposes upon employees the obligation to acquire or retain union
membership as a condition affecting employment. There is union shop when all new
regular employees are required to join the union within a certain period as a
condition for their continued employment. There is maintenance of membership
shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership
as a condition for continued employment until they are promoted or transferred out
of the bargaining unit or the agreement is terminated. A closed shop, on the other
hand, may be defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person may be employed
in any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which the employees in interest are a
part.23
Union security clauses are recognized and explicitly allowed under Article 248(e) of
the Labor Code, which provides that:
Art. 248. Unfair Labor Practices of Employers. x x x
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and
conditions of employment in order to encourage or discourage membership in any
labor organization. Nothing in this Code or in any other law shall stop the parties

from requiring membership in a recognized collective bargaining agent as a

condition for employment, except those employees who are already members of
another union at the time of the signing of the collective bargaining agreement.
(Emphasis supplied.)
It is State policy to promote unionism to enable workers to negotiate with
management on an even playing field and with more persuasiveness than if they
were to individually and separately bargain with the employer. For this reason, the
law has allowed stipulations for "union shop" and "closed shop" as means of
encouraging workers to join and support the union of their choice in the protection
of their rights and interest vis--vis the employer. 24
Moreover, a stipulation in the CBA authorizing the dismissal of employees are of
equal import as the statutory provisions on dismissal under the Labor Code, since "a
CBA is the law between the company and the union and compliance therewith is
mandated by the express policy to give protection to labor." 25
In terminating the employment of an employee by enforcing the union security
clause, the employer needs only to determine and prove that: (1) the union security
clause is applicable; (2) the union is requesting for the enforcement of the union
security provision in the CBA; and (3) there is sufficient evidence to support the
decision of the union to expel the employee from the union. These requisites
constitute just cause for terminating an employee based on the union security
provision of the CBA.26
There is no question that in the present case, the CBA between GMC and IBM-Local
31 included a maintenance of membership and closed shop clause as can be
gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by written request, can ask
GMC to terminate the employment of the employee/worker who failed to maintain
its good standing as a union member.
It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional
Director for Visayas and Mindanao, twice requested GMC, in the letters dated March
10 and 19, 1992, to terminate the employment of Casio, et al. as a necessary
consequence of their expulsion from the union.
It is the third requisite that there is sufficient evidence to support the decision of
IBM-Local 31 to expel Casio, et al. which appears to be lacking in this case.
The full text of the individual but identical termination letters, 27 served by GMC on
Casio, et al., is very revealing. They read:
To: [Employees Name]
From: Legal Counsel
Subject: Dismissal Upon Union Request Thru
CBA Closed Shop Provision
The company is in receipt of two letters dated March 10, 1992 and March 19, 1992
respectively from the union at the Mill in Lapulapu demanding the termination of
your employment pursuant to the closed shop provision of our existing Collective
Bargaining Agreement. It appears from the attached resolutions that you have been
expelled from union membership and has thus ceased to become a member in good
standing. The resolutions are signed by the same officers who executed and signed

our existing CBA, copies of the letters and resolutions are enclosed hereto for your
reference.
The CBA in Article II provides the following:
Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers employed by the
Company with the exception of those who are specifically excluded by law and by
the terms of this Agreement must be members in good standing of the Union within
thirty (30) days upon the signing of this agreement and shall maintain such
membership in good standing thereof as a condition of their employment or
continued employment.
Section 6. The Company, upon written request of the Union, shall terminate the
services of any employee/worker who fails to fulfill the conditions set forth in
Sections 3 and 4 thereof, subject however, to the provisions of the Labor Laws of
the Philippines and their Implementing Rules and Regulations. The Union shall
absolve the Company from any and all liabilities, pecuniary or otherwise, and
responsibilities to any employee or worker who is dismissed or terminated in
pursuant thereof.
The provisions of the CBA are clear enough. The termination of employment on the
basis of the closed shop provision of the CBA is well recognized in law and in
jurisprudence.
There is no valid ground to refuse to terminate. On the other hand as pointed out in
the unions strongly demanding letter dated March 19, 1992, the company could be
sued for unfair labor practice. While we would have wanted not to accommodate the
unions request, we are left with no other option. The terms of the CBA should be
respected. To refuse to enforce the CBA would result in the breakdown of industrial
peace and the end of harmonious relations between the union and management.
The company would face the collective anger and enmity of its employees who are
union members.
In the light of the unions very insistent demand, verbal and in writing and to avoid
the union accusation of "coddling" you, and considering the explicitly mandatory
language of the closed shop provision of the CBA, the company is constrained to
terminate your employment, to give you ample time to look and find another
employment, and/or exert efforts to become again a member of good standing of
your union, effective April 24, 1992.
In the meantime, to prevent serious danger to the life and property of the company
and of its employees, we are placing you under preventive suspension beginning
today.
It is apparent from the aforequoted letter that GMC terminated the employment of
Casio, et al. relying upon the Resolution dated February 29, 1992 of Pino, et al.
expelling Casio, et al. from IBM-Local 31; Gabianas Letters dated March 10 and 19,
1992 demanding that GMC terminate the employment of Casio, et al. on the basis of
the closed shop clause in the CBA; and the threat of being sued by IBM-Local 31 for
unfair labor practice. The letter made no mention at all of the evidence supporting
the decision of IBM-Local 31 to expel Casio, et al. from the union. GMC never alleged
nor attempted to prove that the company actually looked into the evidence of IBM-

Local 31 for expelling Casio, et al. and made a determination on the sufficiency
thereof. Without such a determination, GMC cannot claim that it had terminated the
employment of Casio, et al. for just cause.
The failure of GMC to make a determination of the sufficiency of evidence
supporting the decision of IBM-Local 31 to expel Casio, et al. is a direct consequence
of the non-observance by GMC of procedural due process in the dismissal of
employees.
As a defense, GMC contends that as an employer, its only duty was to ascertain that
IBM-Local 31 accorded Casio, et al. due process; and, it is the finding of the
company that IBM-Local 31 did give Casio, et al. the opportunity to answer the
charges against them, but they refused to avail themselves of such opportunity.
This argument is without basis.
The Court has stressed time and again that allegations must be proven by sufficient
evidence because mere allegation is definitely not evidence. 28 Once more, in Great
Southern Maritime Services Corporation. v. Acua, 29the Court declared:
Time and again we have ruled that in illegal dismissal cases like the present one,
the onus of proving that the employee was not dismissed or if dismissed, that the
dismissal was not illegal, rests on the employer and failure to discharge the same
would mean that the dismissal is not justified and therefore illegal. Thus, petitioners
must not only rely on the weakness of respondents evidence but must stand on the
merits of their own defense. A party alleging a critical fact must support his
allegation with substantial evidence for any decision based on unsubstantiated
allegation cannot stand as it will offend due process. x x x. (Emphasis supplied.)
The records of this case are absolutely bereft of any supporting evidence to
substantiate the bare allegation of GMC that Casio, et al. were accorded due
process by IBM-Local 31. There is nothing on record that would indicate that IBMLocal 31 actually notified Casio, et al. of the charges against them or that they were
given the chance to explain their side. All that was stated in the IBM-Local 31
Resolution dated February 29, 1992, expelling Casio, et al. from the union, was that
"a copy of the said letter complaint [dated February 24, 1992] was dropped or left in
front of E. Casio."30 It was not established that said letter-complaint charging Casio,
et al. with acts inimical to the interest of the union was properly served upon Casio,
that Casio willfully refused to accept the said letter-notice, or that Casio had the
authority to receive the same letter-notice on behalf of the other employees
similarly accused. Its worthy to note that Casio, et al. were expelled only five days
after the issuance of the letter-complaint against them. The Court cannot find proof
on record when the three-day period, within which Casio, et al. was supposed to file
their answer or counter-affidavits, started to run and had expired. The Court is
likewise unconvinced that the said three-day period was sufficient for Casio, et al. to
prepare their defenses and evidence to refute the serious charges against them.
Contrary to the position of GMC, the acts of Pino, et al. as officers and board
members of IBM-Local 31, in expelling Casio, et al. from the union, do not enjoy the
presumption of regularity in the performance of official duties, because the
presumption applies only to public officers from the highest to the lowest in the

service of the Government, departments, bureaus, offices, and/or its political

subdivisions.31
More importantly, in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills,
Inc.,32 the Court issued the following reminder to employers:
The power to dismiss is a normal prerogative of the employer. However, this is not
without limitations. The employer is bound to exercise caution in terminating the
services of his employees especially so when it is made upon the request of a labor
union pursuant to the Collective Bargaining Agreement. x x x. Dismissals must not
be arbitrary and capricious. Due process must be observed in dismissing an
employee because it affects not only his position but also his means of livelihood.
Employers should therefore respect and protect the rights of their employees, which
include the right to labor. x x x.1avvphi1
The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. Greenfield v.
Ramos33 that:
While respondent company may validly dismiss the employees expelled by the
union for disloyalty under the union security clause of the collective bargaining
agreement upon the recommendation by the union, this dismissal should not be
done hastily and summarily thereby eroding the employees right to due process,
self-organization and security of tenure. The enforcement of union security clauses
is authorized by law provided such enforcement is not characterized by
arbitrariness, and always with due process. Even on the assumption that the
federation had valid grounds to expel the union officers, due process requires that
these union officers be accorded a separate hearing by respondent company.
(Emphases supplied.)
The twin requirements of notice and hearing constitute the essential elements of
procedural due process. The law requires the employer to furnish the employee
sought to be dismissed with two written notices before termination of employment
can be legally effected: (1) a written notice apprising the employee of the particular
acts or omissions for which his dismissal is sought in order to afford him an
opportunity to be heard and to defend himself with the assistance of counsel, if he
desires, and (2) a subsequent notice informing the employee of the employers
decision to dismiss him. This procedure is mandatory and its absence taints the
dismissal with illegality.34
Irrefragably, GMC cannot dispense with the requirements of notice and hearing
before dismissing Casio, et al. even when said dismissal is pursuant to the closed
shop provision in the CBA. The rights of an employee to be informed of the charges
against him and to reasonable opportunity to present his side in a controversy with
either the company or his own union are not wiped away by a union security clause
or a union shop clause in a collective bargaining agreement. An employee is entitled
to be protected not only from a company which disregards his rights but also from
his own union the leadership of which could yield to the temptation of swift and
arbitrary expulsion from membership and hence dismissal from his job. 35
In the case at bar, Casio, et al. did not receive any other communication from GMC,
except the written notice of termination dated March 24, 1992. GMC, by its own

admission, did not conduct a separate and independent investigation to determine

the sufficiency of the evidence supporting the expulsion of Casio, et al. by IBP-Local
31. It straight away acceded to the demand of IBP-Local 31 to dismiss Casio, et al.
The very same circumstances took place in Liberty Cotton Mills, wherein the Court
held that the employer-company acted in bad faith in dismissing its workers without
giving said workers an opportunity to present their side in the controversy with their
union, thus:
While respondent company, under the Maintenance of Membership provision of the
Collective Bargaining Agreement, is bound to dismiss any employee expelled by
PAFLU for disloyalty, upon its written request, this undertaking should not be done
hastily and summarily. The company acted in bad faith in dismissing petitioner
workers without giving them the benefit of a hearing. It did not even bother to
inquire from the workers concerned and from PAFLU itself about the cause of the
expulsion of the petitioner workers. Instead, the company immediately dismissed
the workers on May 30, 1964 after its receipt of the request of PAFLU on May 29,
1964 in a span of only one day stating that it had no alternative but to comply
with its obligation under the Security Agreement in the Collective Bargaining
Agreement, thereby disregarding the right of the workers to due process, selforganization and security of tenure.36 (Emphasis ours.)
In sum, the Court finds that GMC illegally dismissed Casio, et al. because not only
did GMC fail to make a determination of the sufficiency of evidence to support the
decision of IBM-Local 31 to expel Casio, et al., but also to accord the expelled union
members procedural due process, i.e., notice and hearing, prior to the termination
of their employment
Consequently, GMC cannot insist that it has no liability for the payment of
backwages and damages to Casio, et al., and that the liability for such payment
should fall only upon Pino, et al., as the IBP-Local 31 officers and board members
who expelled Casio, et al. GMC completely missed the point that the expulsion of
Casio, et al. by IBP-Local 31 and the termination of employment of the same
employees by GMC, although related, are two separate and distinct acts. Despite a
closed shop provision in the CBA and the expulsion of Casio, et al. from IBP-Local 31,
law and jurisprudence imposes upon GMC the obligation to accord Casio, et al.
substantive and procedural due process before complying with the demand of IBPLocal 31 to dismiss the expelled union members from service. The failure of GMC to
carry out this obligation makes it liable for illegal dismissal of Casio, et al.
In Malayang Samahan ng mga Manggagawa sa M. Greenfield, 37 the Court held that
notwithstanding the fact that the dismissal was at the instance of the federation
and that the federation undertook to hold the company free from any liability
resulting from the dismissal of several employees, the company may still be held
liable if it was remiss in its duty to accord the would-be dismissed employees their
right to be heard on the matter.
An employee who is illegally dismissed is entitled to the twin reliefs of full
backwages and reinstatement. If reinstatement is not viable, separation pay is
awarded to the employee. In awarding separation pay to an illegally dismissed

employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to

one month salary for every year of service. Under Republic Act No. 6715, employees
who are illegally dismissed are entitled to full backwages, inclusive of allowances
and other benefits or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual
reinstatement but if reinstatement is no longer possible, the backwages shall be
computed from the time of their illegal termination up to the finality of the decision.
Thus, Casio, et al. are entitled to backwages and separation pay considering that
reinstatement is no longer possible because the positions they previously occupied
are no longer existing, as declared by GMC. 38
Casio, et al., having been compelled to litigate in order to seek redress for their
illegal dismissal, are entitled to the award of attorneys fees equivalent to 10% of
the total monetary award.39
WHEREFORE, the instant petition is hereby DENIED. The assailed decision of the
Court of Appeals dated March 30, 2001 in CA-G.R. SP No. 40280 is AFFIRMED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 170287
February 14, 2008
ALABANG COUNTRY CLUB, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ALABANG COUNTRY CLUB
INDEPENDENT EMPLOYEES UNION, CHRISTOPHER PIZARRO, MICHAEL
BRAZA, and NOLASCO CASTUERAS, respondents.
DECISION
VELASCO, JR., J.:
Petitioner Alabang Country Club, Inc. (Club) is a domestic non-profit corporation with
principal office at Country Club Drive, Ayala Alabang, Muntinlupa City. Respondent
Alabang Country Club Independent Employees Union (Union) is the exclusive
bargaining agent of the Club's rank-and-file employees. In April 1996, respondents
Christopher Pizarro, Michael Braza, and Nolasco Castueras were elected Union
President, Vice-President, and Treasurer, respectively.
On June 21, 1999, the Club and the Union entered into a Collective Bargaining
Agreement (CBA), which provided for a Union shop and maintenance of membership
shop.
The pertinent parts of the CBA included in Article II on Union Security read, as
follows:
ARTICLE II
UNION SECURITY
SECTION 1. CONDITION OF EMPLOYMENT. All regular rank-and-file employees, who
are members or subsequently become members of the UNION shall maintain their

membership in good standing as a condition for their continued employment by the

CLUB during the lifetime of this Agreement or any extension thereof.
SECTION 2. [COMPULSORY] UNION MEMBERSHIP FOR NEW REGULAR RANK-AND-FILE
EMPLOYEES
a) New regular rank-and-file employees of the Club shall join the UNION within five
(5) days from the date of their appointment as regular employees as a condition for
their continued employment during the lifetime of this Agreement, otherwise, their
failure to do so shall be a ground for dismissal from the CLUB upon demand by the
UNION.
b) The Club agrees to furnish the UNION the names of all new probationary and
regular employees covered by this Agreement not later than three (3) days from the
date of regular appointment showing the positions and dates of hiring.
xxxx
SECTION 4. TERMINATION UPON UNION DEMAND. Upon written demand of the
UNION and after observing due process, the Club shall dismiss a regular rank-andfile employee on any of the following grounds:
(a) Failure to join the UNION within five (5) days from the time of regularization;
(b) Resignation from the UNION, except within the period allowed by law;
(c) Conviction of a crime involving moral turpitude;
(d) Non-payment of UNION dues, fees, and assessments;
(e) Joining another UNION except within the period allowed by law;
(f) Malversation of union funds;
(g) Actively campaigning to discourage membership in the UNION; and
(h) Inflicting harm or injury to any member or officer of the UNION.
It is understood that the UNION shall hold the CLUB free and harmless [sic] from any
liability or damage whatsoever which may be imposed upon it by any competent
judicial or quasi-judicial authority as a result of such dismissal and the UNION shall
reimburse the CLUB for any and all liability or damage it may be
adjudged.1 (Emphasis supplied.)
Subsequently, in July 2001, an election was held and a new set of officers was
elected. Soon thereafter, the new officers conducted an audit of the Union funds.
They discovered some irregularly recorded entries, unaccounted expenses and
disbursements, and uncollected loans from the Union funds. The Union notified
respondents Pizarro, Braza, and Castueras of the audit results and asked them to
explain the discrepancies in writing.2
Thereafter, on October 6, 2001, in a meeting called by the Union, respondents
Pizarro, Braza, and Castueras explained their side. Braza denied any wrongdoing
and instead asked that the investigation be addressed to Castueras, who was the
Union Treasurer at that time. With regard to his unpaid loans, Braza claimed he had
been paying through monthly salary deductions and said the Union could continue
to deduct from his salary until full payment of his loans, provided he would be
reimbursed should the result of the initial audit be proven wrong by a licensed
auditor. With regard to the Union expenses which were without receipts, Braza
explained that these were legitimate expenses for which receipts were not issued,

e.g. transportation fares, food purchases from small eateries, and food and
transportation allowances given to Union members with pending complaints with
the Department of Labor and Employment, the National Labor Relations Commission
(NLRC), and the fiscal's office. He explained that though there were no receipts for
these expenses, these were supported by vouchers and itemized as expenses.
Regarding his unpaid and unliquidated cash advances amounting to almost PhP
20,000, Braza explained that these were not actual cash advances but payments to
a certain Ricardo Ricafrente who had loaned PhP 200,000 to the Union. 3
Pizarro, for his part, blamed Castueras for his unpaid and uncollected loan and cash
advances. He claimed his salaries were regularly deducted to pay his loan and he
did not know why these remained unpaid in the records. Nonetheless, he likewise
agreed to continuous salary deductions until all his accountabilities were paid. 4
Castueras also denied any wrongdoing and claimed that the irregular entries in the
records were unintentional and were due to inadvertence because of his voluminous
work load. He offered that his unpaid personal loan of PhP 27,500 also be deducted
from his salary until the loans were fully paid. Without admitting any fault on his
part, Castueras suggested that his salary be deducted until the unaccounted
difference between the loans and the amount collected amounting to a total of PhP
22,000 is paid.5
Despite their explanations, respondents Pizarro, Braza, and Castueras were expelled
from the Union, and, on October 16, 2001, were furnished individual letters of
expulsion for malversation of Union funds. 6 Attached to the letters were copies of
the Panawagan ng mga Opisyales ng Unyon signed by 37 out of 63 Union members
and officers, and a Board of Directors' Resolution 7 expelling them from the Union.
In a letter dated October 18, 2001, the Union, invoking the Security Clause of the
CBA, demanded that the Club dismiss respondents Pizarro, Braza, and Castueras in
view of their expulsion from the Union.8 The Club required the three respondents to
show cause in writing within 48 hours from notice why they should not be
dismissed. Pizarro and Castueras submitted their respective written explanations on
October 20, 2001, while Braza submitted his explanation the following day.
During the last week of October 2001, the Club's general manager called
respondents Pizarro, Braza, and Castueras for an informal conference inquiring
about the charges against them. Said respondents gave their explanation and
asserted that the Union funds allegedly malversed by them were even over the total
amount collected during their tenure as Union officers-PhP 120,000 for Braza, PhP
57,000 for Castueras, and PhP 10,840 for Pizarro, as against the total collection from
April 1996 to December 2001 of only PhP 102,000. They claimed the charges are
baseless. The general manager announced he would conduct a formal investigation.
Nonetheless, after weighing the verbal and written explanations of the three
respondents, the Club concluded that said respondents failed to refute the validity
of their expulsion from the Union. Thus, it was constrained to terminate the
employment of said respondents. On December 26, 2001, said respondents
received their notices of termination from the Club. 9

Respondents Pizarro, Braza, and Castueras challenged their dismissal from the Club
in an illegal dismissal complaint docketed as NLRC-NCR Case No. 30-01-00130-02
filed with the NLRC, National Capital Region Arbitration Branch. In his January 27,
2003 Decision,10 the Labor Arbiter ruled in favor of the Club, and found that there
was justifiable cause in terminating said respondents. He dismissed the complaint
for lack of merit.
On February 21, 2003, respondents Pizarro, Braza, and Castueras filed an Appeal
docketed as NLRC NCR CA No. 034601-03 with the NLRC.
On February 26, 2004, the NLRC rendered a Decision 11 granting the appeal,
the fallo of which reads:
WHEREFORE, finding merit in the Appeal, judgment is hereby rendered declaring
the dismissal of the complainants illegal. x x x Alabang Country Club, Inc. and
Alabang Country Club Independent Union are hereby ordered to reinstate
complainants Christopher Pizarro, Nolasco Castueras and Michael Braza to their
former positions without loss of seniority rights and other privileges with full
backwages from the time they were dismissed up to their actual reinstatement.
SO ORDERED.
The NLRC ruled that there was no justifiable cause for the termination of
respondents Pizarro, Braza, and Castueras. The commissioners relied heavily on
Section 2, Rule XVIII of the Rules Implementing Book V of the Labor Code. Sec. 2
provides:
SEC. 2. Actions arising from Article 241 of the Code. - Any action arising from the
administration or accounting of union funds shall be filed and disposed of as an
intra-union dispute in accordance with Rule XIV of this Book.
In case of violation, the Regional or Bureau Director shall order the responsible
officer to render an accounting of funds before the general membership and may,
where circumstances warrant, mete the appropriate penalty to the erring officer/s,
including suspension or expulsion from the union. 12
According to the NLRC, said respondents' expulsion from the Union was illegal since
the DOLE had not yet made any definitive ruling on their liability regarding the
administration of the Union's funds.
The Club then filed a motion for reconsideration which the NLRC denied in its June
20, 2004 Resolution.13
Aggrieved by the Decision and Resolution of the NLRC, the Club filed a Petition for
Certiorari which was docketed as CA-G.R. SP No. 86171 with the Court of Appeals
(CA).
The CA Upheld the NLRC Ruling
that the Three Respondents were Deprived Due Process
On July 5, 2005, the appellate court rendered a Decision, 14 denying the petition and
upholding the Decision of the NLRC. The CA's Decision focused mainly on the Club's
perceived failure to afford due process to the three respondents. It found that said
respondents were not given the opportunity to be heard in a separate hearing as
required by Sec. 2(b), Rule XXIII, Book V of the Omnibus Rules Implementing the
Labor Code, as follows:

SEC. 2. Standards of due process; requirements of notice.-In all cases of

termination of employment, the following standards of due process shall be
substantially observed:
For termination of employment based on just causes as defined in Article 282 of the
Code:
xxxx
(b) A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to respond to
the charge, present his evidence or rebut the evidence presented against him.
The CA also said the dismissal of the three respondents was contrary to the doctrine
laid down in Malayang Samahan ng mga Manggagawa sa M. Greenfield v.
Ramos (Malayang Samahan), where this Court ruled that even on the assumption
that the union had valid grounds to expel the local union officers, due process
requires that the union officers be accorded a separate hearing by the employer
company.15
In a Resolution16 dated October 20, 2005, the CA denied the Club's motion for
reconsideration.
The Club now comes before this Court with these issues for our resolution,
summarized as follows:
1. Whether there was just cause to dismiss private respondents, and whether they
were afforded due process in accordance with the standards provided for by the
Labor Code and its Implementing Rules.
2. Whether or not the CA erred in not finding that the NLRC committed grave abuse
of discretion amounting to lack or excess of jurisdiction when it ruled that
respondents Pizarro, Braza, and Castueras were illegally expelled from the Union.
3. Whether the case of Agabon vs. NLRC17 should be applied to this case.
4. Whether that in the absence of bad faith and malice on the part of the Club, the
Union is solely liable for the termination from employment of said respondents.
The main issue is whether the three respondents were illegally dismissed and
whether they were afforded due process.
The Club avers that the dismissal of the three respondents was in accordance with
the Union security provisions in their CBA. The Club also claims that the three
respondents were afforded due process, since the Club conducted an investigation
separate and independent from that conducted by the Union.
Respondents Pizarro, Braza, and Castueras, on the other hand, contend that the
Club failed to conduct a separate hearing as prescribed by Sec. 2(b), Rule XXIII,
Book V of the implementing rules of the Code.
First, we resolve the legality of the three respondents' dismissal from the Club.
Valid Grounds for Termination
Under the Labor Code, an employee may be validly terminated on the following
grounds: (1) just causes under Art. 282; (2) authorized causes under Art. 283; (3)
termination due to disease under Art. 284; and (4) termination by the employee or
resignation under Art. 285.

Another cause for termination is dismissal from employment due to the

enforcement of the union security clause in the CBA. Here, Art. II of the CBA on
Union security contains the provisions on the Union shop and maintenance of
membership shop. There is union shop when all new regular employees are required
to join the union within a certain period as a condition for their continued
employment. There is maintenance of membership shop when employees who are
union members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the
agreement is terminated.18 Termination of employment by virtue of a union security
clause embodied in a CBA is recognized and accepted in our jurisdiction. 19 This
practice strengthens the union and prevents disunity in the bargaining unit within
the duration of the CBA. By preventing member disaffiliation with the threat of
expulsion from the union and the consequent termination of employment, the
authorized bargaining representative gains more numbers and strengthens its
position as against other unions which may want to claim majority representation.
In terminating the employment of an employee by enforcing the union security
clause, the employer needs only to determine and prove that: (1) the union security
clause is applicable; (2) the union is requesting for the enforcement of the union
security provision in the CBA; and (3) there is sufficient evidence to support the
union's decision to expel the employee from the union. These requisites constitute
just cause for terminating an employee based on the CBA's union security provision.
The language of Art. II of the CBA that the Union members must maintain their
membership in good standing as a condition sine qua non for their continued
employment with the Club is unequivocal. It is also clear that upon demand by the
Union and after due process, the Club shall terminate the employment of a regular
rank-and-file employee who may be found liable for a number of offenses, one of
which is malversation of Union funds.20
Below is the letter sent to respondents Pizarro, Braza, and Castueras, informing
them of their termination:
On October 18, 2001, the Club received a letter from the Board of Directors of the
Alabang Country Club Independent Employees' Union ("Union") demanding your
dismissal from service by reason of your alleged commission of act of dishonesty,
specifically malversation of union funds. In support thereof, the Club was furnished
copies of the following documents:
1. A letter under the subject "Result of Audit" dated September 14, 2001 (receipt of
which was duly acknowledged from your end), which required you to explain in
writing the charges against you (copy attached);
2. The Union's Board of Directors' Resolution dated October 2, 2001, which
explained that the Union afforded you an opportunity to explain your side to the
charges;
3. Minutes of the meeting of the Union's Board of Directors wherein an
administrative investigation of the case was conducted last October 6, 2001; and

4. The Union's Board of Directors' Resolution dated October 15, 2001 which resolved
your expulsion from the Union for acts of dishonesty and malversation of union
funds, which was duly approved by the general membership.
After a careful evaluation of the evidence on hand vis--vis a thorough assessment
of your defenses presented in your letter-explanation dated October 6, 2001 of
which you also expressed that you waived your right to be present during the
administrative investigation conducted by the Union's Board of Directors on October
6, 2001, Management has reached the conclusion that there are overwhelming
reasons to consider that you have violated Section 4(f) of the CBA, particularly on
the grounds of malversation of union funds. The Club has determined that you were
sufficiently afforded due process under the circumstances.
Inasmuch as the Club is duty-bound to comply with its obligation under Section
4(f) of the CBA, it is unfortunate that Management is left with no other recourse
but to consider your termination from service effective upon your receipt thereof.
We wish to thank you for your services during your employment with the Company.
It would be more prudent that we just move on independently if only to maintain
industrial peace in the workplace.
Be guided accordingly.21
Gleaned from the above, the three respondents were expelled from and by the
Union after due investigation for acts of dishonesty and malversation of Union
funds. In accordance with the CBA, the Union properly requested the Club, through
the October 18, 2001 letter22 signed by Mario Orense, the Union President, and
addressed to Cynthia Figueroa, the Club's HRD Manager, to enforce the Union
security provision in their CBA and terminate said respondents. Then, in compliance
with the Union's request, the Club reviewed the documents submitted by the Union,
requested said respondents to submit written explanations, and thereafter afforded
them reasonable opportunity to present their side. After it had determined that
there was sufficient evidence that said respondents malversed Union funds, the
Club dismissed them from their employment conformably with Sec. 4(f) of the CBA.
Considering the foregoing circumstances, we are constrained to rule that there is
sufficient cause for the three respondents' termination from employment.
Were respondents Pizarro, Braza, and Castueras accorded due process before their
employments were terminated?
We rule that the Club substantially complied with the due process requirements
before it dismissed the three respondents.
The three respondents aver that the Club violated their rights to due process as
enunciated in Malayang Samahan,23 when it failed to conduct an independent and
separate hearing before they were dismissed from service.
The CA, in dismissing the Club's petition and affirming the Decision of the NLRC,
also relied on the same case. We explained in Malayang Samahan:
x x x Although this Court has ruled that union security clauses embodied in the
collective bargaining agreement may be validly enforced and that dismissals
pursuant thereto may likewise be valid, this does not erode the fundamental
requirements of due process. The reason behind the enforcement of union security

clauses which is the sanctity and inviolability of contracts cannot override one's
right to due process.24
In the above case, we pronounced that while the company, under a maintenance of
membership provision of the CBA, is bound to dismiss any employee expelled by the
union for disloyalty upon its written request, this undertaking should not be done
hastily and summarily. The company acts in bad faith in dismissing a worker without
giving him the benefit of a hearing.25 We cautioned in the same case that the power
to dismiss is a normal prerogative of the employer; however, this power has a
limitation. The employer is bound to exercise caution in terminating the services of
the employees especially so when it is made upon the request of a labor union
pursuant to the CBA. Dismissals must not be arbitrary and capricious. Due process
must be observed in dismissing employees because the dismissal affects not only
their positions but also their means of livelihood. Employers should respect and
protect the rights of their employees, which include the right to labor. 26
The CA and the three respondents err in relying on Malayang Samahan, as its ruling
has no application to this case. In Malayang Samahan, the union members were
expelled from the union and were immediately dismissed from the company without
any semblance of due process. Both the union and the company did not conduct
administrative hearings to give the employees a chance to explain themselves. In
the present case, the Club has substantially complied with due process. The three
respondents were notified that their dismissal was being requested by the Union,
and their explanations were heard. Then, the Club, through its President, conferred
with said respondents during the last week of October 2001. The three respondents
were dismissed only after the Club reviewed and considered the documents
submitted by the Union vis--vis the written explanations submitted by said
respondents. Under these circumstances, we find that the Club had afforded the
three respondents a reasonable opportunity to be heard and defend themselves.
On the applicability of Agabon, the Club points out that the CA ruled that the three
respondents were illegally dismissed primarily because they were not afforded due
process. We are not unaware of the doctrine enunciated in Agabon that when there
is just cause for the dismissal of an employee, the lack of statutory due process
should not nullify the dismissal, or render it illegal or ineffectual, and the employer
should indemnify the employee for the violation of his statutory rights. 27 However,
we find that we could not apply Agabon to this case as we have found that the three
respondents were validly dismissed and were actually afforded due process.
Finally, the issue that since there was no bad faith on the part of the Club, the Union
is solely liable for the termination from employment of the three respondents, has
been mooted by our finding that their dismissal is valid.
WHEREFORE, premises considered, the Decision dated July 5, 2005 of the CA and
the Decision dated February 26, 2004 of the NLRC are hereby REVERSED and SET
ASIDE. The Decision dated January 27, 2003 of the Labor Arbiter in NLRC-NCR Case
No. 30-01-00130-02 is hereby REINSTATED.
No costs.
SO ORDERED.

National Union of Workers in Hotels V. NLRC

This is a Petition for Review on Certiorari under Rule 45, assailing the Decision1
rendered
by the Court of Appeals, which affirmed the Resolution2of the National Labor
Relations
Commission, dismissing for lack of merit the complaint for unfair labor practice filed
by
petitioner National Union of Workers in Hotels, Restaurants and Allied IndustriesManila
Pavilion Hotel (NUWHRAIN) against Manila Pavilion Hotel (the Hotel).
Petitioner NUWHRAIN is a legitimate labor organization composed of rank-and-file
employees of the Hotel,3 while respondent Acesite Philippines Hotel Corporation is
the
owner and operator of said Hotel.4
The Hotel entered into a Collective Bargaining Agreement with HI-MANILA PAVILION
HOTEL LABOR UNION (HIMPHLU), the exclusive bargaining agent of the rank-and-file
employees of the Hotel. Both parties consented that the representation aspect and
other
non-economic provisions of the Collective Bargaining Agreement were to be
effective
for five years or until 30 June 2005; and the economic provisions of the same were
to be
effective for three years or until 30 June 2003. The parties subsequently renegotiated the
economic provisions of the Collective Bargaining Agreement and extended the term
of their
effectivity for another two years or until 30 June 2005.5
During the 60-day freedom period which preceded the expiration of the Collective
Bargaining Agreement, starting on 1 May 2005 and ending on 30 June 2005, the
Hotel and
HIMPHLU negotiated the extension of the provisions of the existing Collective
Bargaining
Agreement for two years, effective 1 July 2005 to 30 June 2007. The parties signed
the
Memorandum of Agreement on 20 May 2005 and the employees ratified it on 27
May
2005.6
On 21 June 2005, NUWHRAIN was accorded by the Labor Relations Division of
the Department of Labor and Employment (DOLE) the status of a legitimate labor
organization.7 Thereafter, NUWHRAIN exercised the right to challenge the majority
status of the incumbent union, HIMPHLU, by filing a Petition for Certification Election
on 28 June 2005.8

On 5 July 2007, the Industrial Relations Division of the DOLE allowed the registration
of
the Memorandum of Agreement executed between HIMPHLU and the Hotel,
extending the
effectivity of the existing Collective Bargaining Agreement for another two years.9
After the lapse of the 60-day freedom period, but pending the disposition of the
Petition for Certification Election filed by NUWHRAIN, HIMPHLU served the Hotel
with a written demand dated 28 July 200510 for the dismissal of 36 employees
following their expulsion from HIMPHLU for alleged acts of disloyalty and violation
of its Constitution and by-laws. An Investigation Report11 was attached to the said
written demand, stating that the 36 employees, who were members of HIMPHLU,
joined NUWHRAIN, in violation of Section 2, Article IV of the Collective Bargaining
Agreement, which provided for a union security clause.12
On 1 August 2005, the Hotel issued Disciplinary Action Notices13 (Notices) to the 36
employees identified in the written demand of HIMPHLU. The Notices directed the
36
employees to submit a written explanation for their alleged acts of disloyalty and
violation of
the union security clause for which HIMPHLU sought their dismissal.
NLRC decided that there was no unfair labor practice.NUWHRAIN filed a Motion for
Reconsideration of the foregoing NLRC Resolution. It was denied by the NLRC in
another
Resolution dated 30 June 2006.20 Thus, NUWHRAIN filed a Petition for Certiorari
before
the Court of Appeals, docketed as C.A. G.R. SP No. 96171.
In the meantime, on 16 June 2006, the Certification Election for regular rank and file
employees of the Hotel was held, which HIMPHLU won. It was accordingly certified
as the exclusive bargaining agent for rank and file employees of the Hotel.21
On 30 May 2007, the Court of Appeals promulgated its Decision2 upholding the
Resolution
of the NLRC. It declared that the Hotel had acted prudently when it issued the
Notices to
the 36 employees after HIMPHLU demanded their dismissal. It clarified that these
Notices
did not amount to the termination of the employees concerned but merely sought
their
explanation on why the union security clause should not be applied to them. The
appellate
court also gave credence to the denial by the officers of the respondent and the
Hotel
that they made statements favoring HIMPHLU over NUWHRAIN during the
reconciliatory
conferences. The Court of Appeals further noted that the unhampered organization
and

registration of NUWHRAIN negated its allegation that the Hotel required its
employees not
to join a labor organization as a condition for their employment.
NUWHRAINs Motion for Reconsideration of the aforementioned Decision of the
Court of
Appeals was denied by the same court in a Resolution.23
Hence, the present Petition, in which NUWHRAIN makes the following assignment of
errors:
ISSUE: Whether the dismissal of the subject employees in accordance with CBAs
Union
Security Clause deemed unfair labor practice.
The instant Petition lacks merit.
NUWHRAIN maintains that the respondent committed unfair labor practice when (1)
the
Hotel issued the Notices to the 36 employees, former members of HIMPHLU, who
switched
allegiance to NUWHRAIN; and (2) the officers of the respondent and the Hotel
allegedly
uttered statements during the reconciliatory conferences indicating their preference
for
HIMPHLU and their disapproval of NUWHRAIN. This argument is specious.
Union security is a generic term which is applied to and comprehends closed
shop, union shop, maintenance of membership or any other form of agreement
which imposes upon employees the obligation to acquire or retain union
membership
as a condition affecting employment.25 Article 248(e) of the Labor Code recognizes
the
effectivity of a union shop clause:
The law allows stipulations for union shop and closed shop as a means of
encouraging
workers to join and support the union of their choice in the protection of their rights
and
interests vis--vis the employer. By thus promoting unionism, workers are able to
negotiate
with management on an even playing field and with more persuasiveness than if
they
were to individually and separately bargain with the employer.26 In Villar v.
Inciong,27 this
Court held that employees have the right to disaffiliate from their union and form a
new
organization of their own; however, they must suffer the consequences of their
separation
from the union under the security clause of the Collective Bargaining Agreement.

In the present case, the Collective Bargaining Agreement includes a union security
provision.28 To avoid the clear possibility of liability for breaching the union security
clause
of the Collective Bargaining Agreement and to protect its own interests, the only
sensible
option left to the Hotel, upon its receipt of the demand of HIMPHLU for the dismissal
of the
36 employees, was to conduct its own inquiry so as to make its own findings on
whether
there was sufficient ground to dismiss the said employees who defected from
HIMPHLU.
The issuance by the respondent of the Notices requiring the 36 employees to
submit their
explanations to the charges against them was the reasonable and logical first step
in a fair
investigation. It is important to note that the Hotel did not take further steps to
terminate the
36 employees. Instead, it arranged for reconciliatory conferences between the
contending
unions in order to avert the possibility of dismissing the 36 employees for violation
of the
union security clause of the Collective Bargaining Agreement.
This Court, in Malayang Samahan ng Manggagawa sa M. Greenfield v. Ramos29
clearly
stated the general rule: the dismissal of an employee by the company pursuant to a
labor
unions demand in accordance with a union security agreement does not constitute
unfair
labor practice. An employer is not considered guilty of unfair labor practice if it
merely
complied in good faith with the request of the certified union for the dismissal of
employees
expelled from the union pursuant to the union security clause in the Collective
Bargaining
Agreement.30 In the case at bar, there is even less possibility of sustaining a finding
of guilt
for unfair labor practice where respondent did not dismiss the 36 employees,
despite the
insistence of HIMPHLU, the sole bargaining agent for the rank and file employees of
the
Hotel, on the basis of the union security clause of the Collective Bargaining
Agreement. The
only act attributed to the respondent is its issuance of the Notices which, contrary
to being

an unfair labor practice, even afforded the employees involved a chance to be

heard.
In all, respondent had not committed any act which would constitute unfair labor
practice.
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The assailed Decision
dated 30 May 2007 of the Court of Appeals in CA-G.R. SP No. 96171 is hereby
AFFIRMED.
Costs against petitioner NUWHRAIN.
BELYCA CORPORATION vs. FERRER-CALLEJA
168 SCRA 184
PARAS; November 29, 1988

NATURE
Petition for certiorari and prohibition with preliminary injunction.

FACTS
- In the instant case, respondent ALU seeks direct certification as the sole and
exclusive bargaining agent of all the rank-and-file workers of the livestock and agro
division of petitioner BELYCA Corporation engaged in piggery, poultry raising and
the planting of agricultural crops such as corn, coffee and various vegetables. But
petitioner contends that the bargaining unit must include all the workers in its
integrated business concerns ranging from piggery, poultry, to supermarts and
cinemas so as not to split an otherwise single bargaining unit into fragmented
bargaining units.

ISSUE
WON the proposed bargaining unit by Belyca is an appropriate bargaining unit.

HELD
No.
- According to Rothenberg, a proper bargaining unit maybe said to be a group of
employees of a given employer, comprised of all or less than all of the entire body
of employees, which the collective interests of all the employees, consistent with

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

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

- Among the factors considered in Democratic Labor Association v. Cebu

Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees (Glove
Doctrine); (2) affinity and unity of employee's interest, such as substantial similarity
of work and duties or similarity of compensation and working conditions; (3) prior
collective bargaining history; and (4) employment status, such as temporary,
seasonal and probationary employees".

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

Reasoning
It is beyond question that the employees of the livestock and agro division of
petitioner corporation perform work entirely different from those performed by
employees in the supermarts and cinema. Among others, the noted difference are:
their working conditions, hours of work, rates of pay, including the categories of
their positions and employment status. To lump all the employees of petitioner in its
integrated business concerns cannot result in an efficacious bargaining unit
comprised of constituents enjoying a community or mutuality of interest.

DISPOSITION The petition is DISMISSED for lack of merit.

UP v FERRER CALLEJA

00 SCRA 00
NARVASA,CJ; July 14, 1992

NATURE
Special civil action of certiorari

FACTS
UP seeks the nullification of the Order of Director Pura Ferrer-Calleja of the Bureau of
Labor Relations holding that "professors, associate professors and assistant
professors are . . rank-and-file employees . . ;" consequently, they should, together
with the so-called non-academic, non-teaching, and all other employees of the
University, be represented by only one labor organization.

HELD
A bargaining unit is a group of employees, comprised of all or less than the entire
body of the employees, which the collective interest of all the employees, consistent
with equity interest of all the employer, indicate to be the best suited to serve the
reciproocal rights and duties of the parties under the collective bargaining
provisions of the law.

In Democratic Labor Association v Cebu Stevedoring, there are factors which must
be considered in determining the proper unit.

Rothernberg mentions:
1. Will of the employees.
2. Affinity and unity of the employees interest, such as substantial similarity of
works and duties or similarity of compensation and work conditions,
3. Prior collective bargaining history
4. Employment status

The test of the grouping is community of mutuality of interests because the basic
test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise
of their collective bargaining rights.

Disposition Wherefore the assailed order is affirmed.

G.R. No. 179146
July 23, 2013
HOLY CHILD CATHOLIC SCHOOL, Petitioner,
vs.
HON. PATRICIA STO. TOMAS, in her official capacity as Secretary of the
Department of Labor and Employment, and PINAG-ISANG TINIG AT LAKAS
NG ANAKPAWIS HOLY CHILD CATHOLIC SCHOOL TEACHERS AND
EMPLOYEES LABOR UNION (HCCS-TELU-PIGLAS), Respondents.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the Rules of Civil
Procedure are the April 18, 2007 Decision 1 and July 31, 2007 Resolution 2 of the
Court of Appeals in CA-G.R. SP No. 76175, which affirmed the December 27, 2002
Decision3 and February 13, 2003 Resolution4 of the Secretary of the Department of
Labor and Employment (SOLE) that set aside the August 10, 2002 Decision 5 of the
Med-Arbiter denying private respondents petition for certification election.
The factual antecedents are as follows:
On May 31, 2002, a petition for certification election was filed by private respondent
Pinag-Isang Tinig at Lakas ng Anakpawis Holy Child Catholic School Teachers and
Employees Labor Union (HCCS-TELUPIGLAS), alleging that: PIGLAS is a legitimate
labor organization duly registered with the Department of Labor and Employment
(DOLE) representing HCCS-TELU-PIGLAS; HCCS is a private educational institution
duly registered and operating under Philippine laws; there are approximately one
hundred twenty (120) teachers and employees comprising the proposed appropriate
bargaining unit; and HCCS is unorganized, there is no collective bargaining
agreement or a duly certified bargaining agent or a labor organization certified as
the sole and exclusive bargaining agent of the proposed bargaining unit within one
year prior to the filing of the petition.6 Among the documents attached to the
petition were the certificate of affiliation with Pinag-Isang Tinig at Lakas ng
Anakpawis Kristiyanong Alyansa ng Makabayang Obrero (PIGLAS-KAMAO) issued by
the Bureau of Labor Relations (BLR), charter certificate issued by PIGLASKAMAO,
and certificate of registration of HCCS-TELU as a legitimate labor organization issued
by the DOLE.7
In its Comment8 and Position Paper,9 petitioner HCCS consistently noted that it is a
parochial school with a total of 156 employees as of June 28, 2002, broken down as
follows: ninety-eight (98) teaching personnel, twenty-five (25) non-teaching
academic employees, and thirty-three (33) non-teaching non-academic workers. It

averred that of the employees who signed to support the petition, fourteen (14)
already resigned and six (6) signed twice. Petitioner raised that members of private
respondent do not belong to the same class; it is not only a mixture of managerial,
supervisory, and rank-and-file employees as three (3) are vice-principals, one (1)
is a department head/supervisor, and eleven (11) are coordinators but also a
combination of teaching and non-teaching personnel as twenty-seven (27) are
non-teaching personnel. It insisted that, for not being in accord with Article 245 10 of
the Labor Code, private respondent is an illegitimate labor organization lacking in
personality to file a petition for certification election, as held in Toyota Motor
Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union; 11 and
an inappropriate bargaining unit for want of community or mutuality of interest, as
ruled in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and Employment 12 and
De La Salle University Medical Center and College of Medicine v. Laguesma. 13
Private respondent, however, countered that petitioner failed to substantiate its
claim that some of the employees included in the petition for certification election
holds managerial and supervisory positions.14 Assuming it to be true, it argued that
Section 11 (II),15 Rule XI of DOLE Department Order (D.O.) No. 9, Series of 1997,
provided for specific instances in which a petition filed by a legitimate organization
shall be dismissed by the Med-Arbiter and that "mixture of employees" is not one of
those enumerated. Private respondent pointed out that questions pertaining to
qualifications of employees may be threshed out in the inclusion-exclusion
proceedings prior to the conduct of the certification election, pursuant to Section
2,16 Rule XII of D.O. No. 9. Lastly, similar to the ruling in In Re: Globe Machine and
Stamping Company,17 it contended that the will of petitioners employees should be
respected as they had manifested their desire to be represented by only one
bargaining unit. To back up the formation of a single employer unit, private
respondent asserted that even if the teachers may receive additional pay for an
advisory class and for holding additional loads, petitioners academic and nonacademic personnel have similar working conditions. It cited Laguna College v.
Court of Industrial Relations,18 as well as the case of a union in West Negros College
in Bacolod City, which allegedly represented both academic and non-academic
employees.
On August 10, 2002, Med-Arbiter Agatha Ann L. Daquigan denied the petition for
certification election on the ground that the unit which private respondent sought to
represent is inappropriate. She resolved:
A certification election proceeding directly involves two (2) issues namely: (a) the
proper composition and constituency of the bargaining unit; and (b) the validity of
majority representation claims. It is therefore incumbent upon the Med-Arbiter to
rule on the appropriateness of the bargaining unit once its composition and
constituency is questioned.
Section 1 (q), Rule I, Book V of the Omnibus Rules defines a "bargaining unit" as a
group of employees sharing mutual interests within a given employer unit
comprised of all or less than all of the entire body of employees in the employer unit
or any specific occupational or geographical grouping within such employer unit.

This definition has provided the "community or mutuality of interest" test as the
standard in determining the constituency of a collective bargaining unit. This is so
because the basic test of an asserted bargaining units acceptability is whether or
not it is fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights. The application of this test may either
result in the formation of an employer unit or in the fragmentation of an employer
unit.
In the case at bar, the employees of petitioner, may, as already suggested, quite
easily be categorized into (2) general classes: one, the teaching staff; and two, the
non-teaching-staff. Not much reflection is needed to perceive that the community or
mutuality of interest is wanting between the teaching and the non-teaching staff. It
would seem obvious that the teaching staff would find very little in common with
the non-teaching staff as regards responsibilities and function, working conditions,
compensation rates, social life and interests, skills and intellectual pursuits, etc.
These are plain and patent realities which cannot be ignored. These dictate the
separation of these two categories of employees for purposes of collective
bargaining. (University of the Philippines vs. Ferrer-Calleja, 211 SCRA 451) 19
Private respondent appealed before the SOLE, who, on December 27, 2002, ruled
against the dismissal of the petition and directed the conduct of two separate
certification elections for the teaching and the non-teaching personnel, thus:
We agree with the Med-Arbiter that there are differences in the nature of work,
hours and conditions of work and salary determination between the teaching and
non-teaching personnel of petitioner. These differences were pointed out by
petitioner in its position paper. We do not, however, agree with the Med-Arbiter that
these differences are substantial enough to warrant the dismissal of the petition.
First, as pointed out by private respondent, "inappropriateness of the bargaining
unit sought to be represented is not a ground for the dismissal of the petition." In
fact, in the cited case of University of the Philippines v. Ferrer-Calleja, supra, the
Supreme Court did not order the dismissal of the petition but ordered the conduct of
a certification election, limiting the same among the non-academic personnel of the
University of the Philippines.
It will be recalled that in the U.P. case, there were two contending unions, the
Organization of Non-Academic Personnel of U.P. (ONAPUP) and All U.P. Workers
Union composed of both academic and nonacademic personnel of U.P. ONAPUP
sought the conduct of certification election among the rank-and-file non-academic
personnel only while the all U.P. Workers Union sought the conduct of certification
election among all of U.P.s rank-and-file employees covering academic and
nonacademic personnel. While the Supreme Court ordered a separate bargaining
unit for the U.P. academic personnel, the Court, however, did not order them to
organize a separate labor organization among themselves. The All U.P. Workers
Union was not directed to divest itself of its academic personnel members and in
fact, we take administrative notice that the All U.P. Workers Union continue to exist
with a combined membership of U.P. academic and non-academic personnel
although separate bargaining agreements is sought for the two bargaining units.

Corollary, private respondent can continue to exist as a legitimate labor

organization with the combined teaching and non-teaching personnel in its
membership and representing both classes of employees in separate bargaining
negotiations and agreements.
WHEREFORE, the Decision of the Med-Arbiter dated 10 August 2002 is hereby
REVERSED and SET ASIDE. In lieu thereof, a new order is hereby issued directing the
conduct of two certification elections, one among the non-teaching personnel of
Holy Child Catholic School, and the other, among the teaching personnel of the
same school, subject to the usual pre-election conferences and inclusion-exclusion
proceedings, with the following choices:
A. Certification Election Among Petitioners Teaching Personnel:
1. Holy Child Catholic School Teachers and Employees Labor Union; and
2. No Union.
B. Certification Election Among Petitioners Non-Teaching Personnel:
1. Holy Child Catholic School Teachers and Employees Labor Union; and
2. No Union.
Petitioner is hereby directed to submit to the Regional Office of origin within ten (10)
days from receipt of this Decision, a certified separate list of its teaching and nonteaching personnel or when necessary a separate copy of their payroll for the last
three (3) months prior to the issuance of this Decision. 20
Petitioner filed a motion for reconsideration21 which, per Resolution dated February
13, 2003, was denied. Consequently, petitioner filed before the CA a Petition for
Certiorari with Prayer for Temporary Restraining Order and Preliminary
Injunction.22 The CA resolved to defer action on the prayer for TRO pending the filing
of private respondents Comment.23 Later, private respondent and petitioner filed
their Comment24 and Reply,25respectively.
On July 23, 2003, petitioner filed a motion for immediate issuance of a TRO, alleging
that Hon. Helen F. Dacanay of the Industrial Relations Division of the DOLE was set
to implement the SOLE Decision when it received a summons and was directed to
submit a certified list of teaching and non-teaching personnel for the last three
months prior to the issuance of the assailed Decision. 26 Acting thereon, on August 5,
2003, the CA issued the TRO and ordered private respondent to show cause why the
writ of preliminary injunction should not be granted. 27Subsequently, a Manifestation
and Motion28 was filed by private respondent, stating that it repleads by reference
the arguments raised in its Comment and that it prays for the immediate lifting of
the TRO and the denial of the preliminary injunction. The CA, however, denied the
manifestation and motion on November 21, 200329 and, upon motion of
petitioner,30 granted the preliminary injunction on April 21, 2005. 31 Thereafter, both
parties filed their respective Memorandum.32
On April 18, 2007, the CA eventually dismissed the petition. As to the purported
commingling of managerial, supervisory, and rank-and-file employees in private
respondents membership, it held that the Toyota ruling is inapplicable because the
vice-principals, department head, and coordinators are neither supervisory nor
managerial employees. It reasoned:

x x x While it may be true that they wield power over other subordinate employees
of the petitioner, it must be stressed, however, that their functions are not confined
with policy-determining such as hiring, firing, and disciplining of employees,
salaries, teaching/working hours, other monetary and non-monetary benefits, and
other terms and conditions of employment. Further, while they may formulate
policies or guidelines, nonetheless, such is merely recommendatory in nature, and
still subject to review and evaluation by the higher executives, i.e., the principals or
executive officers of the petitioner. It cannot also be denied that in institutions like
the petitioner, company policies have already been pre-formulated by the higher
executives and all that the mentioned employees have to do is carry out these
company policies and standards. Such being the case, it is crystal clear that there is
no improper commingling of members in the private respondent union as to
preclude its petition for certification of (sic) election. 33
Anent the alleged mixture of teaching and non-teaching personnel, the CA agreed
with petitioner that the nature of the formers work does not coincide with that of
the latter. Nevertheless, it ruled that the SOLE did not commit grave abuse of
discretion in not dismissing the petition for certification election, since it directed
the conduct of two separate certification elections based on Our ruling in University
of the Philippines v. Ferrer-Calleja. 34
A motion for reconsideration35 was filed by petitioner, but the CA denied the
same;36 hence, this petition assigning the alleged errors as follows:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RULING IN THE
CASE OF TOYOTA MOTOR PHILIPPINES CORPORATION VS. TOYOTA MOTOR
PHILIPPINES CORPORATION LABOR UNION (268 SCRA 573) DOES NOT APPLY IN THE
CASE AT BAR DESPITE THE [COMMINGLING] OF BOTH SUPERVISORY OR
MANAGERIAL AND RANK-AND-FILE EMPLOYEES IN THE RESPONDENT UNION;
II
THE HONORABLE COURT OF APPEALS ERRED IN ITS CONFLICTING RULING
ALLOWING THE CONDUCT OF CERTIFICATION ELECTION BY UPHOLDING THAT THE
RESPONDENT UNION REPRESENTED A BARGAINING UNIT DESPITE ITS OWN
FINDINGS THAT THERE IS NO MUTUALITY OF INTEREST BETWEEN THE MEMBERS OF
RESPONDENT UNION APPLYING THE TEST LAID DOWN IN THE CASE OF UNIVERSITY
OF THE PHILIPPINES VS. FERRER-CALLEJA (211 SCRA 451). 37
We deny.
Petitioner claims that the CA contradicted the very definition of managerial and
supervisory employees under existing law and jurisprudence when it did not classify
the vice-principals, department head, and coordinators as managerial or
supervisory employees merely because the policies and guidelines they formulate
are still subject to the review and evaluation of the principal or executive officers of
petitioner. It points out that the duties of the vice-principals, department head, and
coordinators include the evaluation and assessment of the effectiveness and
capability of the teachers under them; that such evaluation and assessment is
independently made without the participation of the higher Administration of

petitioner; that the fact that their recommendation undergoes the approval of the
higher Administration does not take away the independent nature of their judgment;
and that it would be difficult for the vice-principals, department head, and
coordinators to objectively assess and evaluate the performances of teachers under
them if they would be allowed to be members of the same labor union.
On the other hand, aside from reiterating its previous submissions, private
respondent cites Sections 9 and 1238of Republic Act (R.A.) No. 9481 to buttress its
contention that petitioner has no standing to oppose the petition for certification
election. On the basis of the statutory provisions, it reasons that an employer is not
a party-in-interest in a certification election; thus, petitioner does not have the
requisite right to protect even by way of restraining order or injunction.
First off, We cannot agree with private respondents invocation of R.A. No. 9481.
Said law took effect only on June 14, 2007; hence, its applicability is limited to labor
representation cases filed on or after said date. 39 Instead, the law and rules in force
at the time private respondent filed its petition for certification election on May 31,
2002 are R.A. No. 6715, which amended Book V of Presidential Decree (P.D.) No. 442
(the Labor Code), as amended, and the Rules and Regulations Implementing R.A.
No. 6715, as amended by D.O. No. 9, which was dated May 1, 1997 but took effect
on June 21, 1997.40
However, note must be taken that even without the express provision of Section 12
of RA No. 9481, the "Bystander Rule" is already well entrenched in this jurisdiction.
It has been consistently held in a number of cases that a certification election is the
sole concern of the workers, except when the employer itself has to file the petition
pursuant to Article 259 of the Labor Code, as amended, but even after such filing its
role in the certification process ceases and becomes merely a bystander. 41 The
employer clearly lacks the personality to dispute the election and has no right to
interfere at all therein.42 This is so since any uncalled-for concern on the part of the
employer may give rise to the suspicion that it is batting for a company
union.43 Indeed, the demand of the law and policy for an employer to take a strict,
hands-off stance in certification elections is based on the rationale that the
employees bargaining representative should be chosen free from any extraneous
influence of the management; that, to be effective, the bargaining representative
must owe its loyalty to the employees alone and to no other. 44
Now, going back to petitioners contention, the issue of whether a petition for
certification election is dismissible on the ground that the labor organizations
membership allegedly consists of supervisory and rank-and-file employees is
actually not a novel one. In the 2008 case of Republic v. Kawashima Textile Mfg.,
Philippines, Inc.,45wherein the employer-company moved to dismiss the petition for
certification election on the ground inter alia that the union membership is a
mixture of rank-and-file and supervisory employees, this Court had conscientiously
discussed the applicability of Toyota and Dunlop in the context of R.A. No. 6715 and
D.O. No. 9, viz.:
It was in R.A. No. 875, under Section 3, that such questioned mingling was first
prohibited, to wit:

Sec. 3. Employees' right to self-organization. - Employees shall have the right to

self-organization and to form, join or assist labor organizations of their own choosing
for the purpose of collective bargaining through representatives of their own
choosing and to engage in concerted activities for the purpose of collective
bargaining and other mutual aid or protection. Individuals employed as supervisors
shall not be eligible for membership in a labor organization of employees under
their supervision but may form separate organizations of their own. (Emphasis
supplied)
Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect
the legitimacy of the labor organization. Under Section 15, the only instance when a
labor organization loses its legitimacy is when it violates its duty to bargain
collectively; but there is no word on whether such mingling would also result in loss
of legitimacy. Thus, when the issue of whether the membership of two supervisory
employees impairs the legitimacy of a rank-and-file labor organization came before
the Court En Banc in Lopez v. Chronicle Publication Employees Association, the
majority pronounced:
It may be observed that nothing is said of the effect of such ineligibility upon the
union itself or on the status of the other qualified members thereof should such
prohibition be disregarded. Considering that the law is specific where it intends to
divest a legitimate labor union of any of the rights and privileges granted to it by
law, the absence of any provision on the effect of the disqualification of one of its
organizers upon the legality of the union, may be construed to confine the effect of
such ineligibility only upon the membership of the supervisor. In other words, the
invalidity of membership of one of the organizers does not make the union illegal,
where the requirements of the law for the organization thereof are, nevertheless,
satisfied and met. (Emphasis supplied)
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No.
875. The provision in the Labor Code closest to Sec. 3 is Article 290, which is
deafeningly silent on the prohibition against supervisory employees mingling with
rank-and-file employees in one labor organization. Even the Omnibus Rules
Implementing Book V of the Labor Code (Omnibus Rules) merely provides in Section
11, Rule II, thus:
Sec. 11. Supervisory unions and unions of security guards to cease operation. - All
existing supervisory unions and unions of security guards shall, upon the effectivity
of the Code, cease to operate as such and their registration certificates shall be
deemed automatically cancelled. However, existing collective agreements with such
unions, the life of which extends beyond the date of effectivity of the Code shall be
respected until their expiry date insofar as the economic benefits granted therein
are concerned.
Members of supervisory unions who do not fall within the definition of managerial
employees shall become eligible to join or assist the rank and file organization. The
determination of who are managerial employees and who are not shall be the
subject of negotiation between representatives of supervisory union and the
employer. If no agreement s reached between the parties, either or both of them

may bring the issue to the nearest Regional Office for determination. (Emphasis
supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to
declare in Bulletin v. Sanchez that supervisory employees who do not fall under the
category of managerial employees may join or assist in the formation of a labor
organization for rank-and-file employees, but they may not form their own labor
organization.
While amending certain provisions of Book V of the Labor Code, E.O. No. 111 and its
implementing rules continued to recognize the right of supervisory employees, who
do not fall under the category of managerial employees, to join a rank- and-file
labor organization.
Effective 1989, R.A. No. 6715 restored the prohibition against the questioned
mingling in one labor organization, viz.:
Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to
read as follows:
Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership
in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own (Emphasis supplied)
Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact
effect any violation of the prohibition would bring about on the legitimacy of a labor
organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended
Omnibus Rules) which supplied the deficiency by introducing the following
amendment to Rule II (Registration of Unions):
Sec. 1. Who may join unions. - x x x Supervisory employees and security guards
shall not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their own;
Provided, that those supervisory employees who are included in an existing rankand-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain
in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus
Rules, viz.;
Sec. 1. Where to file. - A petition for certification election may be filed with the
Regional Office which has jurisdiction over the principal office of the employer. The
petition shall be in writing and under oath.
Sec. 2. Who may file. - Any legitimate labor organization or the employer, when
requested to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among
others:
xxxx
(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate

bargaining unit of the rank-and-file employees shall not include supervisory

employees and/or security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and
duly registered labor organization from exercising its right to file a petition for
certification election.
Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the
Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both rank-and-file
and supervisory employees is no labor organization at all. It cannot, for any guise or
purpose, be a legitimate labor organization. Not being one, an organization which
carries a mixture of rank-and-file and supervisory employees cannot possess any of
the rights of a legitimate labor organization, including the right to file a petition for
certification election for the purpose of collective bargaining. It becomes necessary,
therefore, anterior to the granting of an order allowing a certification election, to
inquire into the composition of any labor organization whenever the status of the
labor organization is challenged on the basis of Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the names of at
least twenty-seven (27) supervisory employees in Level Five positions, the union
could not, prior to purging itself of its supervisory employee members, attain the
status of a legitimate labor organization. Not being one, it cannot possess the
requisite personality to file a petition for certification election. (Emphasis supplied)
In Dunlop, in which the labor organization that filed a petition for certification
election was one for supervisory employees, but in which the membership included
rank-and-file employees, the Court reiterated that such labor organization had no
legal right to file a certification election to represent a bargaining unit composed of
supervisors for as long as it counted rank-and-file employees among its members.
It should be emphasized that the petitions for certification election involved in
Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995,
respectively; hence, the 1989 Rules was applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further
amended by Department Order No. 9, series of 1997 (1997 Amended Omnibus
Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus
Rules - that the petition for certification election indicate that the bargaining unit of
rank-and-file employees has not been mingled with supervisory employees - was
removed. Instead, what the 1997 Amended Omnibus Rules requires is a plain
description of the bargaining unit, thus:
Rule XI
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing and under
oath and shall contain, among others, the following: x x x (c) The description of the
bargaining unit."

In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of
the 1997 Amended Omnibus Rules, although the specific provision involved therein
was only Sec. 1, Rule VI, to wit:
Sec. 1. Chartering and creation of a local/chapter.- A duly registered federation or
national union may directly create a local/chapter by submitting to the Regional
Office or to the Bureau two (2) copies of the following: a) a charter certificate issued
by the federation or national union indicating the creation or establishment of the
local/chapter; (b) the names of the local/chapter's officers, their addresses, and the
principal office of the local/chapter; and (c) the local/ chapter's constitution and bylaws; provided that where the local/chapter's constitution and by-laws is the same
as that of the federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the
Secretary or the Treasurer of the local/chapter and attested to by its President.
which does not require that, for its creation and registration, a local or chapter
submit a list of its members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands
Employees Union-PTGWO in which the core issue was whether mingling affects the
legitimacy of a labor organization and its right to file a petition for certification
election. This time, given the altered legal milieu, the Court abandoned the view in
Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a
prohibition against the mingling of supervisory and rank-and-file employees in one
labor organization, the Labor Code does not provide for the effects thereof. Thus,
the Court held that after a labor organization has been registered, it may exercise
all the rights and privileges of a legitimate labor organization. Any mingling
between supervisory and rank-and-file employees in its membership cannot affect
its legitimacy for that is not among the grounds for cancellation of its registration,
unless such mingling was brought about by misrepresentation, false statement or
fraud under Article 239 of the Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing
Products Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rankand-File Union-FFW, the Court explained that since the 1997 Amended Omnibus
Rules does not require a local or chapter to provide a list of its members, it would be
improper for the DOLE to deny recognition to said local or chapter on account of any
question pertaining to its individual members.
More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which
involved a petition for cancellation of union registration filed by the employer in
1999 against a rank-and-file labor organization on the ground of mixed
membership: the Court therein reiterated its ruling in Tagaytay Highlands that the
inclusion in a union of disqualified employees is not among the grounds for
cancellation, unless such inclusion is due to misrepresentation, false statement or
fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of
the Labor Code.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus
Rules, as interpreted by the Court in Tagaytay Highlands, San Miguel and Air

Philippines, had already set the tone for it. Toyota and Dunlop no longer hold sway
in the present altered state of the law and the rules. 46
When a similar issue confronted this Court close to three years later, the above
ruling was substantially quoted in Samahang Manggagawa sa Charter Chemical
Solidarity of Unions in the Philippines for Empowerment and Reforms (SMCC-Super)
v. Charter Chemical and Coating Corporation. 47 In unequivocal terms, We reiterated
that the alleged inclusionof supervisory employees in a labor organization seeking
to represent the bargaining unit of rank-and-file employees does not divest it of its
status as a legitimate labor organization.48
Indeed, Toyota and Dunlop no longer hold true under the law and rules governing
the instant case. The petitions for certification election involved in Toyota and
Dunlop were filed on November 26, 1992 and September 15, 1995, respectively;
hence, the 1989 Rules and Regulations Implementing R.A. No. 6715 (1989 Amended
Omnibus Rules) was applied. In contrast, D.O. No. 9 is applicable in the petition for
certification election of private respondent as it was filed on May 31, 2002.
Following the doctrine laid down in Kawashima and SMCC-Super, it must be stressed
that petitioner cannot collaterally attack the legitimacy of private respondent by
praying for the dismissal of the petition for certification election:
Except when it is requested to bargain collectively, an employer is a mere bystander
to any petition for certification election; such proceeding is non-adversarial and
merely investigative, for the purpose thereof is to determine which organization will
represent the employees in their collective bargaining with the employer. The
choice of their representative is the exclusive concern of the employees; the
employer cannot have any partisan interest therein; it cannot interfere with, much
less oppose, the process by filing a motion to dismiss or an appeal from it; not even
a mere allegation that some employees participating in a petition for certification
election are actually managerial employees will lend an employer legal personality
to block the certification election. The employer's only right in the proceeding is to
be notified or informed thereof.
The amendments to the Labor Code and its implementing rules have buttressed
that policy even more.49
Further, the determination of whether union membership comprises managerial
and/or supervisory employees is a factual issue that is best left for resolution in the
inclusion-exclusion proceedings, which has not yet happened in this case so still
premature to pass upon. We could only emphasize the rule that factual findings of
labor officials, who are deemed to have acquired expertise in matters within their
jurisdiction, are generally accorded not only with respect but even finality by the
courts when supported by substantial evidence. 50 Also, the jurisdiction of this Court
in cases brought before it from the CA via Rule 45 is generally limited to reviewing
errors of law or jurisdiction. The findings of fact of the CA are conclusive and
binding. Except in certain recognized instances, 51We do not entertain factual issues
as it is not Our function to analyze or weigh evidence all over again; the evaluation
of facts is best left to the lower courts and administrative agencies/quasi-judicial
bodies which are better equipped for the task. 52

Turning now to the second and last issue, petitioner argues that, in view of the
improper mixture of teaching and non-teaching personnel in private respondent due
to the absence of mutuality of interest among its members, the petition for
certification election should have been dismissed on the ground that private
respondent is not qualified to file such petition for its failure to qualify as a
legitimate labor organization, the basic qualification of which is the representation
of an appropriate bargaining unit.
We disagree.
The concepts of a union and of a legitimate labor organization are different from,
but related to, the concept of a bargaining unit:
Article 212(g) of the Labor Code defines a labor organization as "any union or
association of employees which exists in whole or in part for the purpose of
collective bargaining or of dealing with employers concerning terms and conditions
of employment." Upon compliance with all the documentary requirements, the
Regional Office or Bureau shall issue in favor of the applicant labor organization a
certificate indicating that it is included in the roster of legitimate labor
organizations. Any applicant labor organization shall acquire legal personality and
shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration. 53
In case of alleged inclusion of disqualified employees in a union, the proper
procedure for an employer like petitioner is to directly file a petition for cancellation
of the unions certificate of registration due to misrepresentation, false statement or
fraud under the circumstances enumerated in Article 239 of the Labor Code, as
amended.54 To reiterate, private respondent, having been validly issued a certificate
of registration, should be considered as having acquired juridical personality which
may not be attacked collaterally.
On the other hand, a bargaining unit has been defined as a "group of employees of
a given employer, comprised of all or less than all of the entire body of employees,
which the collective interests of all the employees, consistent with equity to the
employer, indicated to be best suited to serve reciprocal rights and duties of the
parties under the collective bargaining provisions of the law." 55 In determining the
proper collective bargaining unit and what unit would be appropriate to be the
collective bargaining agency, the Court, in the seminal case of Democratic Labor
Association v. Cebu Stevedoring Company, Inc., 56 mentioned several factors that
should be considered, to wit: (1) will of employees (Globe Doctrine); (2) affinity and
unity of employees' interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions; (3) prior collective bargaining
history; and (4) employment status, such as temporary, seasonal and probationary
employees. We stressed, however, that the test of the grouping is community or
mutuality of interest, because "the basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights." 57

As the SOLE correctly observed, petitioner failed to comprehend the full import of
Our ruling in U.P. It suffices to quote with approval the apt disposition of the SOLE
when she denied petitioners motion for reconsideration:
Petitioner likewise claimed that we erred in interpreting the decision of the Supreme
Court in U.P. v. Ferrer-Calleja, supra. According to petitioner, the Supreme Court
stated that the non-academic rank-andfile employees of the University of the
Philippines shall constitute a bargaining unit to the exclusion of the academic
employees of the institution. Hence, petitioner argues, it sought the creation of
separate bargaining units, namely: (1) petitioners teaching personnel to the
exclusion of non-teaching personnel; and (2) petitioners non-teaching personnel to
the exclusion of teaching personnel.
Petitioner appears to have confused the concepts of membership in a bargaining
unit and membership in a union. In emphasizing the phrase "to the exclusion of
academic employees" stated in U.P. v. Ferrer-Calleja, petitioner believed that the
petitioning union could not admit academic employees of the university to its
membership. But such was not the intention of the Supreme Court.
A bargaining unit is a group of employees sought to be represented by a petitioning
union. Such employees need not be members of a union seeking the conduct of a
certification election. A union certified as an exclusive bargaining agent represents
not only its members but also other employees who are not union members. As
pointed out in our assailed Decision, there were two contending unions in the U.P.
case, namely, the Organization of Non-Academic Personnel of U.P. (ONAPUP) and the
All U.P. Workers Union composed of both U.P. academic and non-academic
personnel. ONAPUP sought the conduct of a certification election among the rankand-file non-academic personnel only, while the All U.P. Workers Union intended to
cover all U.P. rank-and-file employees, involving both academic and non-academic
personnel.
The Supreme Court ordered the "non-academic rank-and-file employees of U.P. to
constitute a bargaining unit to the exclusion of the academic employees of the
institution", but did not order them to organize a separate labor organization. In the
U.P. case, the Supreme Court did not dismiss the petition and affirmed the order for
the conduct of a certification election among the non-academic personnel of U.P.,
without prejudice to the right of the academic personnel to constitute a separate
bargaining unit for themselves and for the All U.P. Workers Union to institute a
petition for certification election.
In the same manner, the teaching and non-teaching personnel of petitioner school
must form separate bargaining units.1wphi1 Thus, the order for the conduct of two
separate certification elections, one involving teaching personnel and the other
involving non-teaching personnel. It should be stressed that in the subject petition,
private respondent union sought the conduct of a certification election among all
the rank-and-file personnel of petitioner school. Since the decision of the Supreme
Court in the U.P. case prohibits us from commingling teaching and non-teaching
personnel in one bargaining unit, they have to be separated into two separate
bargaining units with two separate certification elections to determine whether the

employees in the respective bargaining units desired to be represented by private

respondent. In the U.P. case, only one certification election among the nonacademic personnel was ordered, because ONAPUP sought to represent that
bargaining unit only. No petition for certification election among the academic
personnel was instituted by All U.P. Workers Union in the said case; thus, no
certification election pertaining to its intended bargaining unit was ordered by the
Court.58
Indeed, the purpose of a certification election is precisely to ascertain the majority
of the employees choice of an appropriate bargaining unit to be or not to be
represented by a labor organization and, if in the affirmative case, by which one. 59
At this point, it is not amiss to stress once more that, as a rule, only questions of law
may be raised in a Rule 45 petition. In Montoya v. Transmed Manila
Corporation,60 the Court discussed the particular parameters of a Rule 45 appeal
from the CAs Rule 65 decision on a labor case, as follows:
x x x In a Rule 45 review, we consider the correctness of the assailed CA decision, in
contrast with the review for jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of questions of law raised against the
assailed CA decision. In ruling for legal correctness, we have to view the CA decision
in the same context that the petition for certiorari it ruled upon was presented to it;
we have to examine the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion in the NLRC
decision before it, not on the basis of whether the NLRC decision on the merits of
the case was correct. In other words, we have to be keenly aware that the CA
undertook a Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it. This is the approach that should be basic in a Rule 45 review of
a CA ruling in a labor case. In question form, the question to ask is: Did the CA
correctly determine whether the NLRC committed grave abuse of discretion in ruling
on the case?61
Our review is, therefore, limited to the determination of whether the CA correctly
resolved the presence or absence of grave abuse of discretion in the decision of the
SOLE, not on the basis of whether the latter's decision on the merits of the case was
strictly correct. Whether the CA committed grave abuse of discretion is not what is
ruled upon but whether it correctly determined the existence or want of grave
abuse of discretion on the part of the SOLE.
WHEREFORE, the pet1t1on is DENIED. The April 18, 2007 Decision and July 31,
2007, Resolution of the Court of Appeals in CA-G.R. SP No. 76175, which affirmed
the December 27, 2002 Decision of the Secretary of the Department of Labor and
Employment that set aside the
August 10, 2002 Decision of the Med-Arbiter denying private respondent's petition
for certification election are hereby AFFIRMED.
SO ORDERED.