Law School Notes and

Digests
Monday, December 19, 2016

SAMAHANG MANGGAGAWA SA CHARTER

CHEMICAL SOLIDARITY UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS
VS. CHARTER CHEMICAL AND COATING
CORPORATION G.R. No. 169717
Topic: Effect of Including Employees Outside the Bargaining Unit

FACTS:
1. Petitioner Union filed a petition for certification election among the regular rank-and-file employees of
respondent Company with the Mediation Arbitration Unit of DOLE-NCR
2. Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner union is not a
legitimate labor organization because of (1) failure to comply with the documentation requirements set by
law, and (2) the inclusion of supervisory employees within petitioner union
3. Med-Arbiter Falconitin: dismissed petition for certification election
- Petitioner union is not a legitimate labor organization because the Charter Certificate, “Sama-samang
Pahayag ng Pagsapi at Authorization,” and “Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga
Sumang-ayon at Nagratipika sa Saligang Batas” were not executed under oath and certified by the union
secretary and attested to by the union president; thus, fatally defective
- the list of membership of petitioner union consisted of 12 batchman, mill operator and
leadman who performed supervisory functions thus prohibited from joining union to
represent rank-and-file employees of company
- not being a legitimate labor organization, petitioner union has no right to file a petition for
certification election for the purpose of collective bargaining
4. DOLE: in favor of respondent company dismissing petitioner union’s appeal because it
is filed out of time
5. On MR, DOLE reversed its earlier ruling: no certification election was previously
conducted in favor of company; however, the prior certification was denied by Med-Arbiter
and, on appeal, was dismissed by DOLE for being filed out of time
6. CA:
- petitioner union failed to company with the documentation requirements under the Labor
Code;
- that union consisted both rank-and-file and supervisory employees;
- the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition
for certification election and the infirmity in the membership of petitioner union cannot be
remedied through the exclusion-inclusion proceedings in a pre-election conference
- considering that the union is not a legitimate labor organization, it has no legal right to
file a petition for certification election

ISSUE: Whether or not the mixture of rank-and-file and supervisory employees in petitioner union
nullifies its legal personality as a legitimate labor organization

RULING:

NO.

R.A. No. 6715 omitted specifying the exact effect of any violation of the prohibition (on the co-mingling of
supervisory and rank-and-file employees) would bring about on the legitimacy of a labor organization.
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
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.

DISPOSITIVE: Petitioner Union won.

DOCTRINE:

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, 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.
Posted by Michelle Vale Cruz at Monday, December 19, 2016
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41. Kapisanan ng mga Manggagawa sa Manila Railroad Co. v. Yard Crew Union, Station
Employees Union, RailRoad Engineering Dept. Union & MR Co. 109 1143 (60).
[G.R. Nos. L-16292-94, L-16309 and L-16317-18, October 31, 1960]

FACTS

On March 7, 1955, the Kapisanan Ng Mga Manggagawa Sa Manila Railroad Company, hereinafter
called Kapisanan, filed a petition praying that it be certified as the exclusive bargaining agent in the
Manila Railroad Company, hereinafter called Company. A decision was promulgated on September
29, 1956, affirmed by the Court en banc on January 16, 1957, in which the respondent Court found
three unions appropriate for purposes of collective bargaining, to wit: (1) The unit of locomotive
drivers, firemen, assistant firemen and motormen-otherwise known as the engine crew unit: (2) the
unit of conductors, assistant conductors, unit agents, assistant route agents and train posters,
otherwise known as the train crew unit, and (3) the unit of all the rest of the company personnel,
except the supervisors, temporary employees, the members of the Auditing Department, the
members of the security guard and professional and technical employees, referred to by the
respondent court as the unit of the rest of the employees. To these 3 units, the following unions were
respectively certified as the exclusive bargaining agents: (1) The Union de Maquinistas, Fogoneros,
Ayudantes y Motormen; (2) Union de Empleados de Trenes (conductors); and (3) the Kapisanan Ng
Mga Manggagawa Sa Manila Railroad Company.
After the decision had become final, a cases were filed by the Manila Railroad Yard Crew Union,
Station Employees' Union, and , by the Railroad Engineering Department Union, praying that they be
defined as a separate bargaining unit. All asked that they be certified in the units sought to be
separated. The respondent unions are legitimate labor organizations with certificates of registration
in the Department of Labor.

The Kapisanan and the Company opposed the separation of the said three units on the following
grounds (1) That the Kapisanan had been duly certified as the collective bargaining agent in the unit
of all of the rest of the employees and it had entered into a collective bargaining agreement, and this
agreement bars certification of a unit at least during the first 12 months after the finality of the case;
(2) That the Court had denied similar petitions for separation of unit. Specifically, the petitions for the
separation of Mechanical Department Labor Union and Benguet Auto Lines Union were dismissed in
separate cases; and (3) That the three unions in question are barred from petitioning for separate
units because they are bound by the decision for having been represented therein by the Kapisanan.

After due hearing, the respondent Court ordered “ a plebiscite to be conducted among the
employees in the three proposed groups, namely: the Engineering Department, the Station
Employees and the Yard Crew Personnel. The employee in the proposed groups minus the
supervisors, temporary employees, members of the Auditing Department, members of the security
group, professionals and technical employees, shall vote, in a secret ballot to be conducted by this
Court, on the question of whether or not they desire to be separated from the unit of the rest of the
employees being represented by the Kapisanan.”

ISSUE:

Is the order of the respondent court, granting groups of employees to choose whether or not they
desire to be separated from the certified unit to which they belong, during the existence of a valid
bargaining contract entered into by a union close to the heels of its certification, contrary to law?

HELD

No. It is not contrary to law.

RATIO:

In the case of Democratic Labor Association vs. Cebu Stevedoring Co., G.R. No. L-10321, February
28, 1958, we stated that because of the modern complexity of the relation between both employer
and union structure, it becomes difficult to determine from the evidence alone which of the several
claimant groups forms a proper bargaining unit; that it becomes necessary to give consideration to
the express will or desire of the employees — a practice designated as the "Globe doctrine," which
sanctions the holding of a series of elections, not for the purpose of allowing the group receiving an
over all majority of votes to represent all employees, but for the specific purpose of permitting the
employees in each of the several categories to select the group which each chooses as a bargaining
unit; that the factors which may be considered and weighed in fixing appropriate units are: the
history, of their collective bargaining; the history, extent and type of organization of employees in
other plants of the same employer, or other employers in the same industry; the skill, wages, work
and working conditions of the employees; the desires of the employees; the eligibility of the
employees for membership in the union or unions involved; and the relationship between the unit or
units proposed and the employer's organization, management and operation, and the test in
determining the appropriate bargaining unit is that a unit must effect a grouping of employees who
have substantial, mutual interests in wages, hours, working conditions and other subjects of
collective bargaining.

It is manifest, therefore, that "the desires of the employees" is one of the factors in determining the
appropriate bargaining unit. The respondent Court was simply interested "in the verification of the
evidence already placed on record and submitted wherein the workers have signed manifestations
and resolutions of their desire to be separated from Kapisanan." Certainly, no one would deny the
respondent court's right of full investigation in arriving at a correct and conclusive finding of fact in
order to deny or grant the conclusive findings of fact in order to deny or grant the petitions for
certification election. On the contrary, all respondent court, or any court for that matter, to investigate
before acting, to do justice to the parties concerned. And one way of determining the will or desire of
the employees is what the respondent court had suggested: a plebiscite — carried by secret ballot.
A plebiscite not to be conducted by the Department of Labor, as contemplated in a certification
election under Sec. 12 of the Magna Charter of Labor, R.A. No. 875, but by the respondent court
itself. As well as observed by the respondent court, "the votes of workers one way or the other, in
these cases will not by any chance choose the agent or unit which will represent them anew, for
precisely that is a matter that is within the issues raised in these petitions for certification".

42. San Miguel Corp. vs. Hon. Laguesma & North Luzon Magnolia Sales Labor Union Indep
236 S 595 (94) [G.R. No. 100485 September 21, 1994]

FACTS

Private respondent union filed for a petition for certification election among all the regular sales
personnel of Magnolia Dairy Products in the North Luzon Area. This was opposed by the petitioner
and questioned the appropriateness of the bargaining unit to be represented by the union. It claimed
that its bargaining history in its sales offices, plants and warehouses is to have a separate bargaining
unit for each sales office. During the hearing of the petition, the substitute lawyer of the petitioner
withdrew its opposition and agreed to consider one bargaining unit in the mentioned sales office.
Upon the order of the Mediator-Arbiter certifying the union as the sole and exclusive bargaining
agent for all the regular sales personnel in the North Luzon area, the petitioner appealed to the
Secretary of Labor contending a mistake in the decision brought by its substitute lawyer. In a
petition for certiorari, the petitioner contends that the prior collective bargaining is the most
pervasive criterion in determining the propriety of the CBA.

ISSUE

Whether or not the union represents an appropriate bargaining unit.

HELD.

sYes.

RATIO

The court ruled in accordance with the tests in determining an appropriate bargaining unit. The
fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of
the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as
substantial similarity of work and duties, or similarity of compensation and working conditions
(Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of
employment status. Contrary to petitioner's assertion, the Court has categorically ruled that the
existence of a prior collective bargaining history is neither decisive nor conclusive in the
determination of what constitutes an appropriate bargaining unit.

Indeed, the test of grouping is mutuality or commonality of interests. The employees sought to be
represented by the collective bargaining agent must have substantial mutual interests in terms of
employment and working conditions as evinced by the type of work they perform. In the case at bench,
respondent union sought to represent the sales personnel in the various Magnolia sales offices in northern
Luzon. There is similarity of employment status for only the regular sales personnel in the north Luzon
area are covered. They have the same duties and responsibilities and substantially similar compensation
and working conditions. The commonality of interest among he sales personnel in the north Luzon sales
area cannot be gainsaid. Further, the petitioner cannot insist that there should be one bargaining unit.
What greatly militates against this position is the meager number of sales personnel in each of the
Magnolia sales office in northern Luzon. Even the bargaining unit sought to be represented by respondent
union in the entire north Luzon sales area consists only of approximately
fifty-five (55) employees. Surely, it would not be for the best interest of these employees if they would
further be fractionalized. The adage "there is strength in number" is the very rationale underlying the
formation of a labor union.

43. Farley Fulache et al. vs. ABS-CBN Broadcasting GR 183810, 21 Jan 2010

FACTS:

The petitioners in this case are questioning the CBA executed between ABS-CBN and
the ABS-CBN Rank-and-File Employees Union (Union) because under such agreement,
they are only considered as temporary and not regular employees. The petitioners
claimed that they should be recognized as regular employees of ABS-CBN because they
had already rendered more than a year of service in the company and, therefore, entitled
to the benefits of a regular employee.

Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged
consideration called “talent fee” taken from the budget of a particular program and subject
to a ten percent (10%) withholding tax. Talents do not undergo probation. Their services
are engaged for a specific program or production, or a segment thereof. Their contracts
are terminated once the program, production or segment is completed. ABS-CBN alleged
that the petitioners’ services were contracted on various dates by its Cebu station as
independent contractors/off camera talents, and they were not entitled to regularization
in these capacities.
Labor Arbiter Rendoque rendered his decision holding that the petitioners were regular
employees of ABS-CBN, not independent contractors, and are entitled to the benefits and
privileges of regular employees

ABS-CBN appealed the ruling to the NLRC. While the appeal of the regularization case
was pending, ABS-CBN dismissed Fulache, Jabonero, Castillo, Lagunzad and Atinen (all
drivers) for their refusal to sign up contracts of employment with service contractor Able
Services. The four drivers and Atinen responded by filing a complaint for illegal
dismissal.

The Labor Arbiter Rendoque upheld the validity of ABS-CBN's contracting out of certain
work or services in its operations. The labor arbiter found that petitioners Fulache,
Jabonero, Castillo, Lagunzad and Atinen had been dismissed due to redundancy, an
authorized cause under the law.

The NLRC reversed the labor arbiter’s ruling in the illegal dismissal case; it found that
petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been illegally
dismissed and awarded them backwages and separation pay in lieu of reinstatement.
Under both cases, the petitioners were awarded CBA benefits and privileges from the
time they became regular employees up to the time of their dismissal.

The NLRC resolved the motions for reconsideration on by both parties, thus, on the
regularization issue, the NLRC stood by the ruling that the petitioners were regular
employees entitled to the benefits and privileges of regular employees. On the illegal
dismissal case, the petitioners, while recognized as regular employees, were declared
dismissed due to redundancy. The NLRC denied the petitioners’ second motion for
reconsideration in its order of May 31, 2006 for being a prohibited pleading.

The petitioners went to the CA through a petition for certiorari under Rule 65 of the Rules of Court.
On the merits of the case, the CA ruled that the petitioners failed to prove their claim to CBA benefits
since they never raised the issue in the compulsory arbitration proceedings, and did not appeal the
labor arbiter’s decision which was silent on their entitlement to CBA benefits. The CA found that the
petitioners failed to show with specificity how Section 1 (Appropriate Bargaining Unit) and the other
provisions of the CBA applied to them.

On the illegal dismissal issue, the CA upheld the NLRC decision reinstating the labor arbiter’s April
21, 2003 ruling.17 Thus, the drivers – Fulache, Jabonero, Castillo and Lagunzad – were not illegally
dismissed as their separation from the service was due to redundancy; they had not presented any
evidence that ABS-CBN abused its prerogative in contracting out the services of drivers. Except for
separation pay, the CA denied the petitioners’ claim for backwages, moral and exemplary damages,
and attorney’s fees.

ISSUE:

Whether or not the petitioners are correct that they should be considered already as
regular employees
HELD:

The Petition is meritorious.

RATIO:

As regular employees, the petitioners fall within the coverage of the bargaining unit and
are therefore entitled to CBA benefits as a matter of law and contract. The parties’ 1999-
2002 CBA provided in its Article I (Scope of the Agreement) that:

“Section 1. APPROPRIATE BARGAINING UNIT. – The parties agree that the

appropriate bargaining unit shall be regular rank-and-file employees of ABS-CBN
BROADCASTING CORPORATION but shall not include:

a) Personnel classified as Supervisor and Confidential employees;

b) Personnel who are on “casual” or “probationary” status as defined in Section 2 hereof;
c) Personnel who are on “contract” status or who are paid for specified units of work such
as writer-producers, talent-artists, and singers.

The inclusion or exclusion of new job classifications into the bargaining unit shall be
subject of discussion between the COMPANY and the UNION.”

Under these terms, the petitioners are members of the appropriate bargaining unit
because they are regular rank-and-file employees and do not belong to any of the
excluded categories. Specifically, nothing in the records shows that they are supervisory
or confidential employees; neither are they casual nor probationary employees. Most
importantly, the labor arbiter’s decision of January 17, 2002 – affirmed all the way up to
the CA level – ruled against ABS-CBN’s submission that they are independent
contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage
under the CBA’s express terms and are entitled to its benefits.

44. General Rubber and Footwear Corp. vs. Bureau of Relations, NATU, 155 S 283 [G.R. No.
74262 October 29, 1987]

FACTS:

Petitioner is a corporation engaged in the business of manufacturing rubber sandals and

oilier rubber products. In 1985, the Samahang Manggagawa sa General Rubber Corporation
— ANGLO was formed by the daily paid — rank and file employees as their union for
collective bargaining, after the expiration on October 15, 1985 of the collective bargaining
agreement previously executed by petitioner with General Rubber Workers Union
(Independent) on October 15, 1982.

Be it noted however that on July 17, 1985, the monthly — paid employees of the petitioner-
corporation, after forming their own collective bargaining unit the National Association of
Trade Unions of Monthly Paid Employees-NATU, filed a petition for direct certification with
tile Bureau of Labor Relations which petition was opposed by herein petitioner.

On September 2, 1985, the Med-Arbiter issued an Order for the holding of a certification
election after finding that a certification election is in order in this case and observing that
it is the fairest remedy to determine whether employees of petitioner desire to have a
union or not. On appeal, the Bureau of Labor Relations denied both the appeal and motion
for reconsideration interposed by petitioner and affirmed the ruling of the Med-Arbiter.
Hence, the present petition, imputing serious error's of law and grave abuse of discretion
on the part of the Bureau of Labor Relations in issuing the assailed order which sanctioned
the creation of two (2) bargaining units within petitioner-corporation.

In the Petition, the petitioner argues, among others, that “The Bureau of Labor Relations
overlooked the fact that these monthly-paid-employees are excluded from the first existing
bargaining unit of the daily-paid rank and file employees because in the year 1963, when the
employees of petitioner initially started to exercise their right to self-organization, herein petitioner
bargained for the exclusion of the monthly-paid employees from the existing bargaining unit because
they are performing vital functions of management. In view of this exclusion, petitioner took upon
itself to take care of them and directly gave them the benefits or privileges without having to bargain
for them or without the aid of the bargaining arm or force of a union.”
ISSUE

Whether private respondents are entitled to form union.

HELD:
YES, they are entitled. The Petition was dismissed.

RATIO:

Perhaps it is unusual for the petitioner to have to deal with two (2) collective bargaining
unions but there is no one to blame except petitioner itself for creating the situation it is in.

From the beginning of the existence in 1963 of a bargaining limit for the employees up to
the present, petitioner had sought to indiscriminately suppress the members of the private
respondent"s right to self-organization provided for by law. Petitioner, in justification of its
action, maintained that the exclusion of the members of the private respondent from the
bargaining union of the rank-and-file or from forming their own union was agreed upon by
petitioner corporation with the previous bargaining representatives namely: the General
"Rubber Workers Union PTGWO the General Workers Union — NAFLU and the General
Rubber Workers Union (independent). Such posture has no leg to stand on.

It has not been shown that private respondent was privy to this agreement. And even if it
were so, it can never bind subsequent federations and unions particularly private
respondent-union because it is a curtailment of the right to self-organization guaranteed by
the labor laws. However, to prevent any difficulty. and to avoid confusion to all concerned
and, more importantly, to fulfill the policy of the New Labor Code as well as to be consistent
with Our ruling in the Bulletin case, supra, the monthly-paid rank-and-file employees
should be allowed to join the union of the daily-paid-rank-and-file employees of petitioner
so that they can also avail of the CBA benefits or to form their own rank-and-file union,
without prejudice to the certification election that has been ordered.

45. Samahang Manggagawa sa Charter Chemical Super Zacarias Jenny Victorio, Union Pres.
V. Charter Chemical & Coating Corp. GR No. 169717; Mar. 16 2011.

FACTS:

Petitioner Union filed a petition for certification election among the regular rank-and-file
employees of respondent Company with the Mediation Arbitration Unit of DOLE-NCR.
Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner
union is not a legitimate labor organization because of (1) failure to comply with the
documentation requirements set by law, and (2) the inclusion of supervisory employees
within petitioner union

The Med-Arbiter dismissed petition for certification election because the Charter
Certificate, “Sama-samang Pahayag ng Pagsapi at Authorization,” and “Listahan ng mga
Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas”
were not executed under oath and certified by the union secretary and attested to by the
union president; thus, fatally defective. Furthermore, the list of membership of petitioner
union consisted of 12 batchman, mill operator and leadman who performed supervisory
functions thus prohibited from joining union to represent rank-and-file employees of
company. Finally, not being a legitimate labor organization, petitioner union has no right to
file a petition for certification election for the purpose of collective bargaining

On July 16, 1999, the DOLE initially issued a Decision8 in favor of respondent company dismissing
petitioner union’s appeal on the ground that the latter’s petition for certification election was filed out
of time. On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its January
13, 2000 Decision, the DOLE found that a review of the records indicates that no certification
election was previously conducted in respondent company. On the contrary, the prior certification
election filed by Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation
was, likewise, denied by the Med-Arbiter and, on appeal, was dismissed by the DOLE for being filed
out of time. Hence, there was no obstacle to the grant of petitioner union’s petition for certification
election

On appeal, the CA reversed the DOLE’s Decision and gave credence to the findings of the Med-
Arbiter that petitioner union failed to comply with the documentation requirements under the Labor
Code. It, likewise, upheld the Med-Arbiter’s finding that petitioner union consisted of both rank-and-
file and supervisory employees. Moreover, the CA held that the issues as to the legitimacy of
petitioner union may be attacked collaterally in a petition for certification election and the infirmity in
the membership of petitioner union cannot be remedied through the exclusion-inclusion proceedings
in a pre-election conference pursuant to the ruling in Toyota Motor Philippines v. Toyota Motor
Philippines Corporation Labor Union.11 Thus, considering that petitioner union is not a legitimate
labor organization, it has no legal right to file a petition for certification election.

ISSUE:

Whether or not the mixture of rank-and-file and supervisory employees in petitioner union
nullifies its legal personality as a legitimate labor organization

HELD :

NO.

RATIO:

R.A. No. 6715 omitted specifying the exact effect of any violation of the prohibition (on the
co-mingling of supervisory and rank-and-file employees) would bring about on the
legitimacy of a labor organization.

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

Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-
PGTWO 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 Rank-and-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.32 [Underline supplied]

The applicable law and rules in the instant case are the same as those in Kawashima because the
present petition for certification election was filed in 1999 when D.O. No. 9, series of 1997, was still
in effect. Hence, Kawashima applies with equal force here. As a result, petitioner union was not
divested of its status as a legitimate labor organization even if some of its members were
supervisory employees; it had the right to file the subject petition for certification election.

46. Sta. Lucia East Commercial Corp. v. Sec. of Labor & SLECC workers Assoc. (CLUP) G.R.
No. 162355, Aug 14, 2009.

Facts:
Confederated Labor Union of the Philippines (CLUP), in behalf of its chartered local, instituted a
petition for certification election among the regular rank-and-file employees of Sta. Lucia East
Commercial Corporation (SLECC) and its Affiliates
Med-Arbiter Bactin ordered the dismissal of the petition due to inappropriateness of the
bargaining unit.
CLUP-SLECC and its Affiliates Workers Union reorganized itself and re-registered as CLUP-Sta.
Lucia East Commercial Corporation Workers Association (herein appellant CLUP-SLECCWA),
limiting its membership to the rank-and-file employees of Sta. Lucia East Commercial Corporation.
CLUP-SLECCWA filed the instant petition. It alleged that SLECC employs about 115 employees
and that more than 20% of employees belonging to the rank-and-file category are its members.
CLUP-SLECCWA claimed that no certification election has been held among... them within the last
12 months prior to the filing of the petition
SLECC filed a motion to dismiss the petition. It averred that it has voluntarily recognized SMSLEC
on 20 July 2001 as the exclusive bargaining agent of its regular rank-and-file employees, and that
collective bargaining negotiations already commenced... between them. SLECC argued that the
petition should be dismissed for violating the one year and negotiation bar rules under pars. (c) and
(d), Section 11, Rule XI, Book V of the Omnibus Rules Implementing the Labor Code.
CLUP-SLECCWA filed its Opposition and Comment to SLECC'S Motion to Dismiss. It assailed the
validity of the voluntary recognition of SMSLEC by SLECC and their consequent negotiations and
execution of a CBA. According to CLUP-SLECCWA, the same were tainted with malice, collusion
and conspiracy involving some officials of the Regional Office and it violated one of the major
requirements for voluntary recognition, i.e., non-existence of another labor organization in the
same bargaining unit.
The Med-Arbiter's dismissed CLUP-SLECCWA's petition for direct certification on the ground of
contract bar rule. The prior voluntary recognition of SMSLEC and the CBA between SLECC and
SMSLEC bars the filing of CLUP-SLECCWA’s petition for direct certification. SMSLEC is entitled to
enjoy the rights, privileges, and obligations of an exclusive bargaining representative from the time of
the recording of the voluntary recognition. Moreover, the duly registered CBA bars the filing of the
petition for direct certification.

The Ruling of the Secretary of Labor and Employment found merit in CLUP-SLECCWA's appeal.
The Secretary held that the subsequent negotiations and registration of a CBA executed by SLECC
with SMSLEC could not bar CLUP-SLECCWA’s petition. CLUP-SLECC and its Affiliates Workers
Union constituted a registered labor organization at the time of SLECC’s voluntary recognition of
SMSLEC.

The appellate court affirmed the ruling of the Secretary and quoted extensively from the
Secretary's decision. The appellate court agreed with the Secretary’s finding that the workers
sought to be represented by CLUP-SLECC and its Affiliates Workers Union included the same
workers in the bargaining unit represented by SMSLEC. SMSLEC was not the only legitimate labor
organization operating in the subject bargaining unit at the time of SMSLEC’s voluntary recognition
on 20 July 2001. Thus, SMSLEC’s voluntary recognition was void and could not bar CLUP-
SLECCWA’s petition for certification election.

Issues:
Whether the CA commited a reversible error when it affirmed the Secretary’s finding that SLECC’s
voluntary recognition of SMSLEC was done while a legitimate labor organization was in existence in
the bargaining unit.

HELD:
The petition has no merit. We see no reason to overturn the rulings of the Secretary and of the
appellate court.
RATIO:

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

A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of
the entire body of employees, consistent with equity to the employer, indicated to be the best suited
to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of
the law."

The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of
the employees (Globe Doctrine); (2) affinity and unity of the employees’ interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions (Substantial
Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status.

Contrary to petitioner’s assertion, this Court has categorically ruled that the existence of a prior
collective bargaining history is neither decisive nor conclusive in the determination of what
constitutes an appropriate bargaining unit.

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

CLUP-SLECC and its Affiliates Workers Union’s initial problem was that they constituted a legitimate
labor organization representing a non-appropriate bargaining unit. However, CLUP-SLECC and its
Affiliates Workers Union subsequently re-registered as CLUP-SLECCWA, limiting its members to the
rank-and-file of SLECC. SLECC cannot ignore that CLUP-SLECC and its Affiliates Workers Union
was a legitimate labor organization at the time of SLECC’s voluntary recognition of SMSLEC.
SLECC and SMSLEC cannot, by themselves, decide whether CLUP-SLECC and its Affiliates
Workers Union represented an appropriate bargaining unit. 1avv phi 1

The inclusion in the union of disqualified employees is not among the grounds for cancellation of
registration, unless such inclusion is due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) to (c) of Article 239 of the Labor Code.10 Thus, CLUP-
SLECC and its Affiliates Workers Union, having been validly issued a certificate of registration,
should be considered as having acquired juridical personality which may not be attacked collaterally.
The proper procedure for SLECC is to file a petition for cancellation of certificate of registration11 of
CLUP-SLECC and its Affiliates Workers Union and not to immediately commence voluntary
recognition proceedings with SMSLEC.

47. Allied Free Worker Union (PLUM) vs. Cia Maritima, 19 S 258 (67)

FACTS

This is a consolidation of 3 cases involving both parties.

Respondent Compania Maritima (MARITIMA), a local corp. engaged in shipping entered
into a contract for lease of services with petitioner Allied Free Workers’ Union (AFWU),
a duly registered legitimate labor union. In the contract, it was stipulated that AFWU will
do and perform all the work of stevedoring and arrastre services of all vessels or boats of
MARITIMA in Iligan City; that the contract is good and valid for 1 month starting Aug.12,
1952, but may be renewed by agreement of the parties with the reservation that
MARITIMA has the right to revoke said contract even before the expiration of the term,
if and when AFWU fails to render good service.

Towards the end of 1953, MARITIMA complained to AFWU of unsatisfactory and

inefficient service. To remedy the situation, MARITIMA was forced to hire extra laborers
from among “stand-by” workers not affiliated to any union.

On July 1954, AFWU sent a written proposal to MARITIMA for a CBA, but the latter did
not reply. Thereafter, AFWU instituted an action in the CIR praying that it be certified as
the sole and exclusive bargaining unit composed of all the laborers doing arrastre and
stevedoring work for MARITIMA, to which action MARITIMA answered, alleging lack of
EREE relationship. On Aug.1954, MARITIMA informed AFWU of the termination of the
contract because of the inefficient service rendered by the latter which had adversely
affected its business. The termination was to take effect as of Sept.1, 1954. MARITIMA
then contracted with the Iligan Stevedoring Union for the arrastre and stevedoring work.
The latter agreed to perform the work subject to the same terms and conditions of the
contract with AFWU. The new agreement was to be carried out on Sept.1, 1954.

On Aug.26, 1954, AFWU charged MARITIMA of unfair labor practices (ULPs) before the
CIR. MARITIMA answered, again denying the ER-EE relationship between the parties.
On Sept.9, 1954, MARITIMA filed an action to rescind the contract, enjoin AFWU
members from doing arrastre and stevedoring work in connection with its vessels, and for
recovery of damages against AFWU and its officers. The CFI ordered the rescission of the
contract and permanently enjoined AFWU members from performing work in connection
with MARITIMA’s vessels.

AFWU was later able to secure a writ of preliminary injunction ordering the maintenance
of the status quo prior to Jan.6, 1961. Thus, after Jan.18, 1961, AFWU laborers were again
back doing the same work as before.

On Nov.4, 1963, after almost 10 years, the CFI finally rendered its decision: In pursuance
of the provisions of Sec.12 of R.A. 875 and the Rules of this court on certification election,
the Honorable Secretary of Labor or any of his authorized representative is hereby
requested to conduct certification election among all the workers and/or stevedores
working in the wharf of Iligan City who are performing stevedoring and arrastre service
aboard Compania Maritima vessels docking at Iligan City port in order to determine their
representative for collective bargaining with the employer, whether these desire to be
represented by the petitioner Allied Free Workers Union or neither; and upon
termination of the said election, the result thereof shall forthwith be submitted to this
court for further consideration. From this ruling, both parties appealed, AFWU claiming
that it should be declared outright as the majority union while MARITIMA contends that
said court could not even have correctly ordered a certification election considering that
there was an absence of ER-EE relationship between it and said laborers.

ISSUE

WON the order of a certification election by the CIR was proper. (WON there was an ER-
EE relationship between AFWU and MARITIMA)

HELD

NO. Before a certification election can be held, there must exist an ER-EE relationship
between the ER and the petitioner union.

RATIO

The duty to bargain collectively exists only between the “employer” and its “employees.”
Where there is no duty to bargain collectively, it is not proper to hold certification
elections in connection therewith. Reasoning In its findings, the CIR observed that after
the rescission, the AFWU laborers continued working in accordance with the “cabo
system,” which was the prevailing custom in the place. Under this system, the union was
an independent contractor. The CIR also made a finding that prior to the contract between
MARITIMA and AFWU, the former had an oral arrastre and stevedoring agreement with
another union, the Iligan Laborers Union (ILU), which agreement was also based on the
“cabo” system. After unsatisfactory service, MARITIMA cancelled this oral contract and
entered into a new contract with AFWU, the terms and conditions of which were similar
to the oral contract with ILU. The written contract between AFWU and MARITIMA was
signed under the assurance by AFWU that the same arrangement previously had with the
former union regarding performance and execution of arrastre and stevedoring contract
be followed in accordance with the custom of such kind of work in Iligan. Thus, petitioner
union operated as a labor contractor under the so-called “cabo” system.

From these findings, Insofar as the working agreement was concerned, there was no real
difference between the contract and the prior oral agreement. Both were based on the
“cabo” system. Hence, since the parties observed the “cabo” system after the rescission of
the contract, and since the characteristics of said system show that the contracting union
was an independent contractor, it is reasonable to assume that AFWU continued being an
independent contractor of MARITIMA. And, being an independent contractor, it could
not qualify as an “employee”. With more reason would this be true with respect to the
laborers. Moreover, there is no evidence at all regarding the characteristics of the working
arrangement between AFWU and MARITIMA after the termination of the CONTRACT.
All we have to go on is the court a quo’s finding that the “cabo” system was observed-a
system that negatives employment relationship.

Since the only function of a certification election is to determine, with judicial sanction,
which union shall be the official representative or spokesman of the “employees” will be,
there being no ER-EE relationship between the parties disputants, it follows that there is
neither a duty to bargain collectively. Thus, the order for certification election in question
cannot be sustained.