Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. Nos.

174040-41 September 22, 2010

INSULAR OTEL EMPLO!EES UNION-N"L, Petitioner, vs. #ATER"RONT INSULAR OTEL $A%AO, Respondent. DECISION PERALTA, J.: efore this Court is a petition for revie! on certiorari," under Rule #$ of the Rules of Court, see%in& to set aside the Decision' dated October "", '(($, and the Resolution) dated *ul+ "), '((, of the Court of -ppeals .C-/ in consolidated labor cases doc%eted as C-01.R. SP No. 2)2)" and C-01.R. SP No. 2),$3. Said Decision reversed the Decision# dated the -pril $, '((# of the -ccredited Voluntar+ -rbitrator Rosalina 4. Monte5o .-V- Monte5o/. 6he facts of the case, as culled fro7 the records, are as follo!s8 On Nove7ber ,, '(((, respondent 9aterfront Insular :otel Davao .respondent/ sent the Depart7ent of 4abor and E7plo+7ent .DO4E/, Re&ion ;I, Davao Cit+, a Notice of Suspension of Operations$ notif+in& the sa7e that it !ill suspend its operations for a period of si< 7onths due to severe and serious business losses. In said notice, respondent assured the DO4E that if the co7pan+ could not resu7e its operations !ithin the si<07onth period, the co7pan+ !ould pa+ the affected e7plo+ees all the benefits le&all+ due to the7. Durin& the period of the suspension, Do7+ R. Ro5as .Ro5as/, the President of Davao Insular :otel =ree E7plo+ees >nion .DI:=E>0N=4/, the reco&ni?ed labor or&ani?ation in 9aterfront Davao, sent respondent a nu7ber of letters as%in& 7ana&e7ent to reconsider its decision. In a letter, dated Nove7ber 2, '(((, Ro5as inti7ated that the 7e7bers of the >nion !ere deter7ined to %eep their 5obs and that the+ believed the+ too had to help respondent, thus8 <<<< Sir, !e are deter7ined to %eep our 5obs and push the :otel up fro7 sin%in&. 9e believe that !e have to help in this .sic/ critical ti7es. Initiall+, !e intend to suspend the re0ne&otiations of our C -. 9e could tal% further on possible ad5ust7ents on econo7ic benefits, the details of !hich !e are hopin& to discuss !ith +ou or an+ of +our e7issaries. < < <3

In another letter2 dated Nove7ber "(, '(((, Ro5as reiterated the >nion@s desire to help respondent, to !it8 9e !ould li%e to than% +ou for &ivin& us the opportunit+ to 7eet A!ithB +our representatives in order for us to air our senti7ents and e<tend our helpin& hands for a possible reconsideration of the co7pan+@s decision. 6he tal%s have enabled us to initiall+ co7e up !ith a su&&estion of solvin& the hi&h cost on pa+roll. 9e propose that '$ +ears and above be paid their due retire7ent benefits and put their len&th of service to ?ero !ithout loss of status of e7plo+7ent !ith a 7ini7u7 hirin& rate. 6hru this sche7e, the co7pan+ !ould be able to save a substantial a7ount and reduce &reatl+ the pa+roll costs !ithout affectin& the finance of the fa7ilies of the e7plo+ees because the+ !ill still have a 5ob fro7 !here the+ could &et their inco7e. Moreover, !e are also open to a possible reduction of so7e econo7ic benefits as our &esture of sincere desire to help. 9e are loo%in& for!ard to a 7ore fruitful round of tal%s in order to save the hotel.C In another letter"( dated Nove7ber '(, '(((, Ro5as sent respondent 7ore proposals as a for7 of the >nion@s &esture of their intention to help the co7pan+, thus8 "/ Suspension of AtheB C - for ten +ears, No stri%e no loc%0out shall be enforced. '/ Pa+ all the e7plo+ees their benefits due, and put the len&th of service to ?ero !ith a 7ini7u7 hirin& rate. Pa+7ent of benefits 7a+ be on a sta&&ered basis or as available. )/ Ni&ht pre7iu7 and holida+ pa+s shall be accordin& to la!. Overti7e hours rendered shall be offsetted as practiced. #/ Reduce the sic% leaves and vacation leaves to "$ da+sD"$da+s. $/ E7er&enc+ leave and birthda+ off are hereb+ !aived. ,/ Dut+ 7eal allo!ance is fi<ed at P)(.(( onl+. No 7ore 7idni&ht snac%s and double 7eal allo!ance. 6he coo% drin%s be stopped as practiced. 3/ 9e !ill shoulder $(E of the &roup health insurance and fa7il+ 7edical allo!ance be reduced to ",$((.(( instead of ),(((.((. 2/ 6he practice of brin&in& ho7e our unifor7s for laundr+ be continued.

C/ =i<ed 7annin& shall be i7ple7ented, the rest of 7anpo!er reFuire7ents 7a+be sourced thru 9-P and casual hirin&. Manpo!er for fi<ed 7annin& shall be "#$ ran%0 and0file union 7e7bers. "(/ >nion !ill cooperate full+ on strict i7ple7entation of house rules in order to attain desired productivit+ and discipline. 6he union !ill not tolerate proble7 7e7bers. ""/ 6he union in its desire to be of ut7ost service !ould adopt 7ulti0tas%in& for the hotel to be 7ore co7petitive. It is understood that !ith the suspension of the C - rene&otiations, the sa7e e<istin& C - shall be adopted and that all provisions therein shall re7ain enforced e<cept for those 7entioned in this proposal. 6hese proposals shall auto7aticall+ supersede the affected provisions of the C -."" In a hand!ritten letter"' dated Nove7ber '$, '(((, Ro5as once a&ain appealed to respondent for it to consider their proposals and to re0open the hotel. In said letter, Ro5as stated that 7anpo!er for fi<ed 7annin& shall be one hundred ."((/ ran%0and0file >nion 7e7bers instead of the one hundred fort+0five ."#$/ ori&inall+ proposed. =inall+, so7eti7e in *anuar+ '((", DI:=E>0N=4, throu&h Ro5as, sub7itted to respondent a Manifesto") concreti?in& their earlier proposals. -fter series of ne&otiations, respondent and DI:=E>0N=4, represented b+ its President, Ro5as, and Vice0Presidents, E<eFuiel *. Varela *r. and -velino C. ation, *r., si&ned a Me7orandu7 of -&ree7ent"# .MO-/ !herein respondent a&reed to re0open the hotel sub5ect to certain concessions offered b+ DI:=E>0N=4 in its Manifesto. -ccordin&l+, respondent do!nsi?ed its 7anpo!er structure to "(( ran%0and0file e7plo+ees as set forth in the ter7s of the MO-. Moreover, as a&reed upon in the MO-, a ne! pa+ scale !as also prepared b+ respondent. 6he retained e7plo+ees individuall+ si&ned a GReconfir7ation of E7plo+7entG "$ !hich e7bodied the ne! ter7s and conditions of their continued e7plo+7ent. Each e7plo+ee !as assisted b+ Ro5as !ho also si&ned the docu7ent. On *une "$, '((", respondent resu7ed its business operations. On -u&ust '', '((', Darius *oves .*oves/ and Debbie Planas, clai7in& to be local officers of the National =ederation of 4abor .N=4/, filed a Notice of Mediation", before the National Conciliation and Mediation oard .NCM /, Re&ion ;I, Davao Cit+. In said Notice, it !as stated that the >nion involved !as GD-RI>S *OVESDDE IE P4-N-S E6. -4, National =ederation of 4abor.G 6he issue raised in said Notice !as the GDi7inution of !a&es and other benefits throu&h unla!ful Me7orandu7 of -&ree7ent.G

On -u&ust 'C, '((', the NCM called *oves and respondent to a conference to e<plore the possibilit+ of settlin& the conflict. In the said conference, respondent and petitioner Insular :otel E7plo+ees >nion0N=4 .I:E>0N=4/, represented b+ *oves, si&ned a Sub7ission -&ree7ent "3 !herein the+ chose -V- -lfredo C. Olvida .-V- Olvida/ to act as voluntar+ arbitrator. Sub7itted for the resolution of -V- Olvida !as the deter7ination of !hether or not there !as a di7inution of !a&es and other benefits throu&h an unla!ful MO-. In support of his authorit+ to file the co7plaint, *oves, assisted b+ -tt+. Danilo Cullo .Cullo/, presented several Special Po!ers of -ttorne+ .SP-/ !hich !ere, ho!ever, undated and unnotari?ed. On Septe7ber ', '((', respondent filed !ith the NCM a Manifestation !ith Motion for a Second Preli7inar+ Conference,"2 raisin& the follo!in& &rounds8 "/ 6he persons !ho filed the instant co7plaint in the na7e of the Insular :otel E7plo+ees >nion0N=4 have no authorit+ to represent the >nionH '/ 6he individuals !ho e<ecuted the special po!ers of attorne+ in favor of the person !ho filed the instant co7plaint have no standin& to cause the filin& of the instant co7plaintH and )/ 6he e<istence of an intra0union dispute renders the filin& of the instant case pre7ature."C On Septe7ber ",, '((', a second preli7inar+ conference !as conducted in the NCM , !here Cullo denied an+ e<istence of an intra0union dispute a7on& the 7e7bers of the union. Cullo, ho!ever, confir7ed that the case !as filed not b+ the I:E>0N=4 but b+ the N=4. 9hen as%ed to present his authorit+ fro7 N=4, Cullo ad7itted that the case !as, in fact, filed b+ individual e7plo+ees na7ed in the SP-s. 6he hearin& officer directed both parties to elevate the afore7entioned issues to -V- Olvida.'( 6he case !as doc%eted as Case No. -C0''(0R 0""0(C0(''0(' and referred to -V- Olvida. Respondent a&ain raised its ob5ections, specificall+ ar&uin& that the persons !ho si&ned the co7plaint !ere not the authori?ed representatives of the >nion indicated in the Sub7ission -&ree7ent nor !ere the+ parties to the MO-. -V- Olvida directed respondent to file a for7al 7otion to !ithdra! its sub7ission to voluntar+ arbitration. On October ",, '((', respondent filed its Motion to 9ithdra!.'" Cullo then filed an Opposition'' !here the sa7e !as captioned8 N-6ION-4 =EDER-6ION O= 4- OR -nd 3C Individual E7plo+ees, >nion Me7bers, Co7plainants, 0versus0 9aterfront Insular :otel Davao, Respondent.

In said Opposition, Cullo reiterated that the co7plainants !ere not representin& I:E>0N=4, to !it8 <<<<
2. Respondent 7ust have been lost !hen it said that the individuals !ho e<ecuted the SP-

have no standin& to represent the union nor to assail the validit+ of Me7orandu7 of -&ree7ent .MO-/. #&'t (s )orre)t (s t&'t t&e (*+(,(+-'. )omp.'(*'*ts 're *ot represe*t(*/ t&e -*(o* but filin& the co7plaint throu&h their appointed attorne+s0in0fact to assert their individual ri&hts as !or%ers !ho are entitled to the benefits &ranted b+ la! and stipulated in the collective bar&ainin& a&ree7ent.') On Nove7ber "", '((', -V- Olvida issued a Resolution'# den+in& respondent@s Motion to 9ithdra!. On Dece7ber ",, '((', respondent filed a Motion for Reconsideration'$ !here it stressed that the Sub7ission -&ree7ent !as void because the >nion did not consent thereto. Respondent pointed out that the >nion had not issued an+ resolution dul+ authori?in& the individual e7plo+ees or N=4 to file the notice of 7ediation !ith the NCM . Cullo filed a Co77entDOpposition', to respondent@s Motion for Reconsideration. -&ain, Cullo ad7itted that the case !as not initiated b+ the I:E>0N=4, to !it8 6he case !as initiated b+ co7plainants b+ fillin& up Revised =or7 No. " of the NCM dul+ furnishin& respondent, cop+ of !hich is hereto attached as -nne< G-G for reference and consideration of the :onorable Voluntar+ -rbitrator. 6here is no 7ention there of Insular :otel E7plo+ees >nion, but onl+ National =ederation of 4abor .N=4/. 6he one appearin& at the Sub7ission -&ree7ent !as onl+ a 7atter of fillin& up the blan%s particularl+ on the Fuestion there of >nionH !hich !as filled up !ith Insular :otel E7plo+ees >nion0N=4. 6here is nothin& there that indicates that it is a co7plainant as the case is initiated b+ the individual !or%ers and National =ederation of 4abor, not b+ the local union. 6he local union !as not included as part+0 co7plainant considerin& that it !as a part+ to the assailed MO-.'3 On March "2, '((), -V- Olvida issued a Resolution'2 den+in& respondent@s Motion for Reconsideration. :e, ho!ever, ruled that respondent !as correct !hen it raised its ob5ection to N=4 as proper part+0co7plainant, thus8 -nent to the real co7plainant in this instant voluntar+ arbitration case, the respondent is correct !hen it raised ob5ection to the National =ederation of 4abor .N=4/ and as proper part+0 co7plainants. 6he proper part+0co7plainant is INS>4-R :O6E4 EMP4OIEES >NION0N=4, the reco&ni?ed and incu7bent bar&ainin& a&ent of the ran%0and0file e7plo+ees of the respondent hotel. In the sub7ission a&ree7ent of the parties dated -u&ust 'C, '((', the part+ co7plainant !ritten is INS>4-R :O6E4 EMP4OIEES >NION0N=4 and not the N-6ION-4 =EDER-6ION O= 4- OR and 3C other 7e7bers.

:o!ever, since the N=4 is the 7other federation of the local union, and si&nator+ to the e<istin& C -, it can represent the union, the officers, the 7e7bers or union and officers or 7e7bers, as the case 7a+ be, in all sta&es of proceedin&s in courts or ad7inistrative bodies provided that the issue of the case !ill involve labor07ana&e7ent relationship li%e in the case at bar. 6he dispositive portion of the March "2, '(() Resolution of -V- Olvida reads8 9:ERE=ORE, pre7ises considered, the 7otion for reconsideration filed b+ respondent is DENIED. 6he resolution dated Nove7ber "", '((' is 7odified in so far as the part+0 co7plainant is concernedH thus, instead of GNational =ederation of 4abor and 3C individual e7plo+ees, union 7e7bers,G shall be GInsular :otel E7plo+ees >nion0N=4 et. al., as stated in the 5oint sub7ission a&ree7ent dated -u&ust 'C, '(('. Respondent is directed to co7pl+ !ith the decision of this -rbitrator dated Nove7ber "", '((', No further 7otion of the sa7e nature shall be entertained.'C On Ma+ C, '((), respondent filed its Position Paper -d Cautela7,)( !here it declared, a7on& others, that the sa7e !as !ithout pre5udice to its earlier ob5ections a&ainst the 5urisdiction of the NCM and -V- Olvida and the standin& of the persons !ho filed the notice of 7ediation. Cullo, no! usin& the caption GInsular :otel E7plo+ees >nion0N=4, Complainant," filed a Co77ent)" dated *une $, '((). On *une '), '((), respondent filed its Repl+. )' 4ater, respondent filed a Motion for Inhibition)) alle&in& -V- Olvida@s bias and pre5udice to!ards the cause of the e7plo+ees. In an Order)# dated *ul+ '$, '((), -V- Olvida voluntaril+ inhibited hi7self out of GdelicadezaG and ordered the re7and of the case to the NCM . On -u&ust "', '((), the NCM issued a Notice reFuirin& the parties to appear before the conciliator for the selection of a ne! voluntar+ arbitrator. In a letter)$ dated -u&ust "C, '(() addressed to the NCM , respondent reiterated its position that the individual union 7e7bers have no standin& to file the notice of 7ediation before the NCM . Respondent stressed that the co7plaint should have been filed b+ the >nion. On Septe7ber "', '((), the NCM sent both parties a Notice), as%in& the7 to appear before it for the selection of the ne! voluntar+ arbitrator. Respondent, ho!ever, 7aintained its stand that the NCM had no 5urisdiction over the case. ConseFuentl+, at the instance of Cullo, the NCM approved ex parte the selection of -V- Monte5o as the ne! voluntar+ arbitrator. On -pril $, '((#, -V- Monte5o rendered a Decision)3 rulin& in favor of Cullo, the dispositive portion of !hich reads8 9:EREO=, in vie! of the all the fore&oin&, 5ud&7ent is hereb+ rendered8 ". Declarin& the Me7orandu7 of -&ree7ent in Fuestion as invalid as it is contrar+ to la! and public polic+H

'. Declarin& that there is a di7inution of the !a&es and other benefits of the >nion 7e7bers and officers under the said invalid MO-. ). Orderin& respondent 7ana&e7ent to i77ediatel+ reinstate the !or%ers !a&e rates and other benefits that the+ !ere receivin& and en5o+in& before the si&nin& of the invalid MO-H #. Orderin& the 7ana&e7ent respondent to pa+ attorne+Js fees in an a7ount eFuivalent to ten percent ."(E/ of !hatever total a7ount that the !or%ers union 7a+ receive representin& individual !a&e differentials. -s to the other clai7s of the >nion re&ardin& di7inution of other benefits, this accredited voluntar+ arbitrator is of the opinion that she has no authorit+ to entertain, particularl+ as to the co7putation thereof. SO ORDERED.)2 oth parties appealed the Decision of -V- Monte5o to the C-. Cullo onl+ assailed the Decision in so far as it did not cate&oricall+ order respondent to pa+ the covered !or%ers their differentials in !a&es rec%oned fro7 the effectivit+ of the MO- up to the actual reinstate7ent of the reduced !a&es and benefits. Cullos@ petition !as doc%eted as C-01.R. SP No. 2)2)". Respondent, for its part, Fuestioned a7on& others the 5urisdiction of the NCM . Respondent 7aintained that the MO- it had entered into !ith the officers of the >nion !as valid. Respondent@s petition !as doc%eted as C-01.R. SP No. 2),$3. oth cases !ere consolidated b+ the C-. On October "", '(($, the C- rendered a Decision)C rulin& in favor of respondent, the dispositive portion of !hich reads8 9:ERE=ORE, pre7ises considered, the petition for revie! in C-01.R. SP No. 2),$3 is hereb+ 1R-N6ED, !hile the petition in C-01.R. SP No. 2)2)" is DENIED. ConseFuentl+, the assailed Decision dated -pril $, '((# rendered b+ -V- Rosalina 4. Monte5o is hereb+ REVERSED and a ne! one entered declarin& the Me7orandu7 of -&ree7ent dated Ma+ 2, '((" V-4ID and EN=ORCE- 4E. Parties are DIREC6ED to co7pl+ !ith the ter7s and conditions thereof. SO ORDERED.#( -&&rieved, Cullo filed a Motion for Reconsideration, !hich !as, ho!ever, denied b+ the C- in a Resolution#" dated *ul+ "), '((,. :ence, herein petition, !ith Cullo raisin& the follo!in& issues for this Court@s resolution, to !it8 I. 9I6: D>E RESPEC6, 6:E :ONOR- 4E CO>R6 O= -PPE-4S COMMI66ED SERIO>S ERRORS IN =INDIN1 6:-6 6:E -CCREDI6ED VO4>N6-RI -R I6R-6OR :-S NO

*>RISDIC6ION OVER 6:E C-SE SIMP4I EC->SE 6:E NO6ICE O= MEDI-6ION DOES NO6 MEN6ION 6:E N-ME O= 6:E 4OC-4 >NION >6 ON4I 6:E -==I4I-6E =EDER-6ION 6:ERE I DISRE1-RDIN1 6:E S> MISSION -1REEMEN6 D>4I SI1NED I 6:E P-R6IES -ND 6:EIR 4E1-4 CO>NSE4S 6:-6 MEN6IONS 6:E N-ME O= 6:E 4OC-4 >NION. II. 9I6: D>E RESPEC6, 6:E :ONOR- 4E CO>R6 O= -PPE-4S COMMI66ED SERIO>S ERROR I DISRE1-RDIN1 6:E PROVISIONS O= 6:E C - SIMP4I EC->SE I6 E4IEVED 6:E >NPROVEN -44E1-6IONS O= RESPONDEN6 :O6E4 6:-6 I6 9-S S>==ERIN1 =ROM =IN-NCI-4 CRISIS. III. 6:E :ONOR- 4E CO>R6 O= -PPE-4S M>S6 :-VE SERIO>S4I ERRED IN CONC4>DIN1 6:-6 -R6IC4E "(( O= 6:E 4- OR CODE -PP4IES ON4I 6O ENE=I6S EN*OIED PRIOR 6O 6:E -DOP6ION O= 6:E 4- OR CODE 9:IC:, IN E==EC6, -44O9S 6:E DIMIN>6ION O= 6:E ENE=I6S EN*OIED I EMP4OIEES =ROM I6S -DOP6ION :ENCE=OR6:.#' 6he petition is not 7eritorious. -nent the first error raised, Cullo ar&ues that the C- erred !hen it overloo%ed the fact that before the case !as sub7itted to voluntar+ arbitration, the parties si&ned a Sub7ission -&ree7ent !hich 7entioned the na7e of the local union and not onl+ N=4. Cullo, thus, contends that the C- co77itted error !hen it ruled that the voluntar+ arbitrator had no 5urisdiction over the case si7pl+ because the Notice of Mediation did not state the na7e of the local union thereb+ disre&ardin& the Sub7ission -&ree7ent !hich states the na7es of local union as Insular :otel E7plo+ees >nion0N=4.#) In its Me7orandu7,## respondent 7aintains its position that the NCM and Voluntar+ -rbitrators had no 5urisdiction over the co7plaint. Respondent, ho!ever, no! also contends that I:E>0N=4 is a non0entit+ since it is DI:=E>0N=4 !hich is considered b+ the DO4E as the onl+ re&istered union in 9aterfront Davao.#$ Respondent ar&ues that the Sub7ission -&ree7ent does not na7e the local union DI:=E>0N=4 and that it had ti7el+ !ithdra!n its consent to arbitrate b+ filin& a 7otion to !ithdra!. - revie! of the develop7ent of the case sho!s that there has been 7uch confusion as to the identit+ of the part+ !hich filed the case a&ainst respondent. In the Notice of Mediation#, filed before the NCM , it stated that the union involved !as GD-RI>S *OVESDDE IE P4-N-S E6. -4., National =ederation of 4abor.G In the Sub7ission -&ree7ent,#3 ho!ever, it stated that the union involved !as GINS>4-R :O6E4 EMP4OIEES >NION0N=4.G =urther7ore, a perusal of the records !ould reveal that after si&nin& the Sub7ission -&ree7ent, respondent persistentl+ Fuestioned the authorit+ and standin& of the individual e7plo+ees to file

the co7plaint. Cullo then clarified in subseFuent docu7ents captioned as GNational =ederation of 4abor and 3C Individual E7plo+ees, >nion Me7bers, ComplainantsG that the individual co7plainants are not representin& the union, but filin& the co7plaint throu&h their appointed attorne+s0in0fact.#2 -V- Olvida, ho!ever, in a Resolution dated March "2, '((), a&reed !ith respondent that the proper part+0co7plainant should be INS>4-R :O6E4 EMP4OIEES >NION0N=4, to !it8 < < < In the sub7ission a&ree7ent of the parties dated -u&ust 'C, '((', the part+ co7plainant !ritten is INS>4-R :O6E4 EMP4OIEES >NION0N=4 and not the N-6ION-4 =EDER-6ION O= 4- OR and 3C other 7e7bers.#C 6he dispositive portion of the Resolution dated March "2, '(() of -V- Olvida reads8 9:ERE=ORE, pre7ises considered, the 7otion for reconsideration filed b+ respondent is DENIED. 6he resolution dated Nove7ber "", '((', is 7odified in so far as the part+ co7plainant is concerned, thus, instead of GNational =ederation of 4abor and 3C individual e7plo+ees, union 7e7bers,G shall be GInsular :otel E7plo+ees >nion0N=4 et. al., as stated in the 5oint sub7ission a&ree7ent dated -u&ust 'C, '(('. Respondent is directed to co7pl+ !ith the decision of this -rbitrator dated Nove7ber "", '(('.$( -fter the March "2, '(() Resolution of -V- Olvida, Cullo adopted GInsular :otel E7plo+ees >nion0N=4 et. al., ComplainantG as the caption in all his subseFuent pleadin&s. Respondent, ho!ever, !as still ada7ant that neither Cullo nor the individual e7plo+ees had authorit+ to file the case in behalf of the >nion. 9hile it is undisputed that a sub7ission a&ree7ent !as si&ned b+ respondent and GI:E>0N=4,G then represented b+ *oves and Cullo, this Court finds that there are t!o circu7stances !hich affect its validit+8 first, the Notice of Mediation !as filed b+ a part+ !ho had no authorit+ to do soH second, that respondent had persistentl+ voiced out its ob5ection Fuestionin& the authorit+ of *oves, Cullo and the individual 7e7bers of the >nion to file the co7plaint before the NCM . Procedurall+, the first step to sub7it a case for 7ediation is to file a notice of preventive 7ediation !ith the NCM . It is onl+ after this step that a sub7ission a&ree7ent 7a+ be entered into b+ the parties concerned. Section ), Rule IV of the NCM Manual of Procedure provides !ho 7a+ file a notice of preventive 7ediation, to !it8 9ho 7a+ file a notice or declare a stri%e or loc%out or reFuest preventive 7ediation. 0 A*0 )ert(1(e+ or +-.0 re)o/*(2e+ b'r/'(*(*/ represe*t't(,e m'0 1(.e ' *ot()e or +e).'re ' str(3e or re4-est 1or pre,e*t(,e me+('t(o* (* )'ses o1 b'r/'(*(*/ +e'+.o)3s '*+ -*1'(r .'bor pr')t()es. 6he e7plo+er 7a+ file a notice or declare a loc%out or reFuest for preventive 7ediation in the sa7e cases. In the absence of a certified or dul+ reco&ni?ed bar&ainin& representative, an+ le&iti7ate labor or&ani?ation in the establish7ent 7a+ file a notice, reFuest preventive 7ediation or declare a stri%e, but onl+ on &rounds of unfair labor practice.

=ro7 the fore&oin&, it is clear that onl+ a certified or dul+ reco&ni?ed bar&ainin& a&ent 7a+ file a notice or reFuest for preventive 7ediation. It is curious that even Cullo hi7self ad7itted, in a nu7ber of pleadin&s, that the case !as filed not b+ the >nion but b+ individual 7e7bers thereof. Clearl+, therefore, the NCM had no 5urisdiction to entertain the notice filed before it. Even thou&h respondent si&ned a Sub7ission -&ree7ent, it had, ho!ever, i77ediatel+ 7anifested its desire to !ithdra! fro7 the proceedin&s after it beca7e apparent that the >nion had no part in the co7plaint. -s a 7atter of fact, onl+ four da+s had lapsed after the si&nin& of the Sub7ission -&ree7ent !hen respondent called the attention of -V- Olvida in a GManifestation !ith Motion for a Second Preli7inar+ ConferenceG$" that the persons !ho filed the instant co7plaint in the na7e of Insular :otel E7plo+ees >nion0N=4 had no authorit+ to represent the >nion. Respondent cannot be estopped in raisin& the 5urisdictional issue, because it is basic that the issue of 5urisdiction 7a+ be raised at an+ sta&e of the proceedin&s, even on appeal, and is not lost b+ !aiver or b+ estoppel. In Figueroa v. People,$' this Court e<plained that estoppel is the e<ception rather than the rule, to !it8 -ppl+in& the said doctrine to the instant case, the petitioner is in no !a+ estopped b+ laches in assailin& the 5urisdiction of the R6C, considerin& that he raised the lac% thereof in his appeal before the appellate court. -t that ti7e, no considerable period had +et elapsed for laches to attach. 6rue, dela+ alone, thou&h unreasonable, !ill not sustain the defense of Gestoppel b+ lachesG unless it further appears that the part+, %no!in& his ri&hts, has not sou&ht to enforce the7 until the condition of the part+ pleadin& laches has in &ood faith beco7e so chan&ed that he cannot be restored to his for7er state, if the ri&hts be then enforced, due to loss of evidence, chan&e of title, intervention of eFuities, and other causes. In appl+in& the principle of estoppel b+ laches in the e<ceptional case of Sibon&hano+, the Court therein considered the patent and revoltin& ineFuit+ and unfairness of havin& the 5ud&7ent creditors &o up their Calvar+ once 7ore after 7ore or less "$ +ears.6he sa7e, ho!ever, does not obtain in the instant case. 9e note at this point that estoppel, bein& in the nature of a forfeiture, is not favored b+ la!. It is to be applied rarel+Konl+ fro7 necessit+, and onl+ in e<traordinar+ circu7stances. 6he doctrine 7ust be applied !ith &reat care and the eFuit+ 7ust be stron& in its favor.9hen 7isapplied, the doctrine of estoppel 7a+ be a 7ost effective !eapon for the acco7plish7ent of in5ustice. < < < .Italics supplied./$) 6he Fuestion to be resolved then is, do the individual 7e7bers of the >nion have the reFuisite standin& to Fuestion the MO- before the NCM L On this note, Tabigue v. International Copra Export Corporation (INTE C!"$# is instructive8 Respectin& petitionersJ thesis that unsettled &rievances should be referred to voluntar+ arbitration as called for in the C -, the sa7e does not lie.6he pertinent portion of the C - reads8 In case of an+ dispute arisin& fro7 the interpretation or i7ple7entation of this -&ree7ent or an+ 7atter affectin& the relations of 4abor and Mana&e7ent, the >NION and the COMP-NI a&ree to e<haust all possibilities of conciliation throu&h the &rievance 7achiner+. 6he co77ittee shall

resolve all proble7s sub7itted to it !ithin fifteen ."$/ da+s after the proble7s haAveB been discussed b+ the 7e7bers. If the dispute or &rievance cannot be settled b+ the Co77ittee, or if the co77ittee failed to act on the 7atter !ithin the period of fifteen ."$/ da+s herein stipulated, the >NION and the COMP-NI a&ree to sub7it the issue to Voluntar+ -rbitration. Selection of the arbitrator shall be 7ade !ithin seven .3/ da+s fro7 the date of notification b+ the a&&rieved part+. 6he -rbitrator shall be selected b+ lotter+ fro7 four .#/ Fualified individuals no7inated b+ in eFual nu7bers b+ both parties ta%en fro7 the list of -rbitrators prepared b+ the National Conciliation and Mediation oard .NCM /. If the Co7pan+ and the >nion representatives !ithin ten ."(/ da+s fail to a&ree on the -rbitrator, the NCM shall na7e the -rbitrator. 6he decision of the -rbitrator shall be final and bindin& upon the parties. :o!ever, the -rbitrator shall not have the authorit+ to chan&e an+ provisions of the -&ree7ent.6he cost of arbitration shall be borne eFuall+ b+ the parties. Petitioners have not, ho!ever, been dul+ authori?ed to represent the union. -propos is this CourtJs pronounce7ent in -tlas =ar7s, Inc. v. National 4abor Relations Co77ission, vi?8 < < < Pursuant to -rticle ',( of the 4abor Code, the parties to a C - shall na7e or desi&nate their respective representatives to the &rievance 7achiner+ and if the &rievance is unsettled in that level, it shall auto7aticall+ be referred to the voluntar+ arbitrators desi&nated in advance b+ parties to a C -. ConseFuentl+, onl+ disputes involvin& the union and the co7pan+ s&'.. be re1erre+ to t&e /r(e,'*)e m')&(*er0 or ,o.-*t'r0 'rb(tr'tors. .E7phasis and underscorin& supplied./$$ If the individual 7e7bers of the >nion have no authorit+ to file the case, does the federation to !hich the local union is affiliated have the standin& to do soL On this note, Coastal #ubic $a% Terminal, Inc. v. &epartment o' (abor and Emplo%ment$, is enli&htenin&, thus8 < < < - local union does not o!e its e<istence to the federation !ith !hich it is affiliated. It is a separate and distinct voluntar+ association o!in& its creation to the !ill of its 7e7bers. Mere '11(.('t(o* +oes *ot +(,est t&e .o)'. -*(o* o1 (ts o5* perso*'.(t0, *e(t&er +oes (t /(,e t&e mot&er 1e+er't(o* t&e .()e*se to ')t (*+epe*+e*t.0 o1 t&e .o)'. -*(o*. It onl+ &ives rise to a contract of a&enc+, !here the for7er acts in representation of the latter. :ence, local unions are considered principals !hile the federation is dee7ed to be 7erel+ their a&ent. < < <$3 ased on the fore&oin&, this Court a&rees !ith approval !ith the disFuisition of the C- !hen it ruled that N=4 had no authorit+ to file the co7plaint in behalf of the individual e7plo+ees, to !it8 -nent the first issue, 9e hold that the voluntar+ arbitrator had no 5urisdiction over the case. 9aterfront contents that the Notice of Mediation does not 7ention the na7e of the >nion but 7erel+ referred to the National =ederation of 4abor .N=4/ !ith !hich the >nion is affiliated. In the subseFuent pleadin&s, N=4@s le&al counsel even confir7ed that the case !as not filed b+ the union but b+ N=4 and the individual e7plo+ees na7ed in the SP-s !hich !ere not even dated nor notari?ed.

Even &rantin& that petitioner >nion !as affiliated !ith N=4, still the relationship bet!een that of the local union and the labor federation or national union !ith !hich the for7er !as affiliated is &enerall+ understood to be that of a&enc+, !here the local is the principal and the federation the a&enc+. ein& 7erel+ an a&ent of the local union, N=4 should have presented its authorit+ to file the Notice of Mediation. 9hile 9e co77end N=4@s ?ealousness in protectin& the ri&hts of lo!l+ !or%ers, 9e cannot, ho!ever, allo! it to &o be+ond !hat it is e7po!ered to do. -s provided under the NCM Manual of Procedures, onl+ a certified or dul+ reco&ni?ed bar&ainin& representative and an e7plo+er 7a+ file a notice of 7ediation, declare a stri%e or loc%out or reFuest preventive 7ediation. 6he Collective ar&ainin& -&ree7ent .C -/, on the other, reco&ni?es that DI:=E>0N=4 is the e<clusive bar&ainin& representative of all per7anent e7plo+ees. 6he inclusion of the !ord GN=4G after the na7e of the local union 7erel+ stresses that the local union is N=4@s affiliate. It does not, ho!ever, 7ean that the local union cannot stand on its o!n. 6he local union o!es its creation and continued e<istence to the !ill of its 7e7bers and not to the federation to !hich it belon&s. 6he sprin& cannot rise hi&her than its source, so to spea%.$2 In its Me7orandu7, respondent contends that I:E>0N=4 is a non0entit+ and that DI:=E>0N=4 is the onl+ reco&ni?ed bar&ainin& unit in their establish7ent. 9hile the resolution of the said ar&u7ent is alread+ 7oot and acade7ic &iven the discussion above, this Court shall address the sa7e nevertheless. 9hile the Nove7ber ",, '((, Certification$C of the DO4E clearl+ states that GI:E>0N=4G is not a re&istered labor or&ani?ation, this Court finds that respondent is estopped fro7 Fuestionin& the sa7e as it did not raise the said issue in the proceedin&s before the NCM and the Voluntar+ -rbitrators. - perusal of the records reveals that the 7ain theor+ posed b+ respondent !as !hether or not the individual e7plo+ees had the authorit+ to file the co7plaint not!ithstandin& the apparent non0participation of the union. Respondent never put in issue the fact that DI:=E>0 N=4 !as not the sa7e as I:E>0N=4. ConseFuentl+, it is alread+ too late in the da+ to assert the sa7e. -nent the second issue raised b+ Cullo, the sa7e is a&ain !ithout 7erit. Cullo contends that respondent !as not reall+ sufferin& fro7 serious losses as found b+ the C-. Cullo anchors his position on the denial b+ the 9a&e oard of respondent@s petition for e<e7ption fro7 9a&e Order No. R69P 0;"0(2 on the &round that it is a distressed establish7ent.,( In said denial, the oard ruled8 - careful anal+sis of applicant@s audited financial state7ents sho!ed that durin& the period endin& Dece7ber )", "CCC, it re&istered retained earnin&s a7ountin& to P2,,,",',(.((. App.()'*t6s (*ter(m 1(*'*)('. st'teme*ts 1or t&e 4-'rter e*+(*/ 7-*e 80, 2000 )'**ot be )o*s(+ere+, 's t&e s'me 5's *ot '-+(te+. -ccordin&l+, this oard finds that applicant is not Fualified for e<e7ption as a distressed establish7ent pursuant to the aforecited criteria.," In its Decision, the C- held that upholdin& the validit+ of the MO- !ould 7ean the continuance of the hotel@s operation and financial viabilit+, to !it8

< < < 9e cannot close Our e+es to the i7pendin& financial distress that an e7plo+er 7a+ suffer should the ter7s of e7plo+7ent under the said C - continue. If indeed 9e are to tilt the balance of 5ustice to labor, then 9e !ould be inclined to favor for the nonce petitioner 9aterfront. 6o uphold the validit+ of the MO- !ould 7ean the continuance of the hotel@s operation and financial viabilit+. Other!ise, the eventual per7anent closure of the hotel !ould onl+ result to pre5udice of the e7plo+ees, as a conseFuence thereof, !ill necessaril+ lose their 5obs.,' In its petition before the C-, respondent sub7itted its audited financial state7ents,) !hich sho! that for the +ears "CC2, "CCC, until Septe7ber )(, '(((, its total operatin& losses a7ounted to P#2,#(C,)2$.((. ased on the fore&oin&, the C- !as not !ithout basis !hen it declared that respondent !as sufferin& fro7 i7pendin& financial distress. 9hile the 9a&e oard denied respondent@s petition for e<e7ption, this Court notes that the denial !as partl+ due to the fact that the *une '((( financial state7ents then sub7itted b+ respondent !ere not audited. Cullo did not Fuestion nor discredit the accurac+ and authenticit+ of respondent@s audited financial state7ents. 6his Court, therefore, has no reason to Fuestion the veracit+ of the contents thereof. Moreover, it bears to point out that respondent@s audited financial state7ents coverin& the +ears '((" to '(($ sho! that it still continues to suffer losses.,# =inall+, anent the last issue raised b+ Cullo, the sa7e is !ithout 7erit. Cullo ar&ues that the C- 7ust have erred in concludin& that -rticle "(( of the 4abor Code applies onl+ to benefits alread+ en5o+ed at the ti7e of the pro7ul&ation of the 4abor Code. -rticle "(( of the 4abor Code provides8 PRO:I I6ION -1-INS6 E4IMIN-6ION OR DIMIN>6ION O= ENE=I6S0 Nothin& in this oo% shall be construed to eli7inate or in an+ !a+ di7inish supple7ents, or other e7plo+ee benefits bein& en5o+ed at the ti7e of the pro7ul&ation of this Code. On this note, )pex *ining Compan%, Inc. v. N( C,$ is instructive, to !it8 Clearl+, the prohibition a&ainst eli7ination or di7inution of benefits set out in -rticle "(( of the 4abor Code is specificall+ concerned !ith benefits alread+ en5o+ed at the ti7e of the pro7ul&ation of the 4abor Code. -rticle "(( does not, in other !ords, purport to appl+ to situations arisin& after the pro7ul&ation date of the 4abor Code < < <.,, Even assu7in& arguendo that -rticle "(( applies to the case at bar, this Court a&rees !ith respondent that the sa7e does not prohibit a union fro7 offerin& and a&reein& to reduce !a&es and benefits of the e7plo+ees. In ivera v. Espiritu,,3 this Court ruled that the ri&ht to free collective bar&ainin&, after all, includes the ri&ht to suspend it, thus8 - C - is Ga contract e<ecuted upon reFuest of either the e7plo+er or the e<clusive bar&ainin& representative incorporatin& the a&ree7ent reached after ne&otiations !ith respect to !a&es, hours of !or% and all other ter7s and conditions of e7plo+7ent, includin& proposals for

ad5ustin& an+ &rievances or Fuestions arisin& under such a&ree7ent.G 6he pri7ar+ purpose of a C - is the stabili?ation of labor07ana&e7ent relations in order to create a cli7ate of a sound and stable industrial peace. In construin& a C -, the courts 7ust be practical and realistic and &ive due consideration to the conte<t in !hich it is ne&otiated and the purpose !hich it is intended to serve. T&e 'ss'(.e+ PAL-PALEA '/reeme*t 5's t&e res-.t o1 ,o.-*t'r0 )o..e)t(,e b'r/'(*(*/ *e/ot('t(o*s -*+ert'3e* (* t&e .(/&t o1 t&e se,ere 1(*'*)('. s(t-'t(o* 1')e+ b0 t&e emp.o0er, 5(t& t&e pe)-.('r '*+ -*(4-e (*te*t(o* o1 *ot mere.0 promot(*/ (*+-str('. pe')e 't PAL, b-t pre,e*t(*/ t&e .'tter9s ).os-re. 9e find no conflict bet!een said a&ree7ent and -rticle '$)0- of the 4abor Code. -rticle '$)0- has a t!o0fold purpose. One is to pro7ote industrial stabilit+ and predictabilit+. Inas7uch as the a&ree7ent sou&ht to pro7ote industrial peace at P-4 durin& its rehabilitation, said a&ree7ent satisfies the first purpose of -rticle '$)0-.+a,p-i+ 6he other is to assi&n specific ti7etables !herein ne&otiations beco7e a 7atter of ri&ht and reFuire7ent. Nothin& in -rticle '$)0-, prohibits the parties fro7 !aivin& or suspendin& the 7andator+ ti7etables and a&reein& on the re7edies to enforce the sa7e. In the instant case, it !as P-4E-, as the e<clusive bar&ainin& a&ent of P-4Js &round e7plo+ees, that voluntaril+ entered into the C - !ith P-4. It !as also P-4E- that voluntaril+ opted for the "(0+ear suspension of the C -. Either case !as the unionJs e<ercise of its ri&ht to collective bar&ainin&. T&e r(/&t to 1ree )o..e)t(,e b'r/'(*(*/, '1ter '.., (*).-+es t&e r(/&t to s-spe*+ (t.,2 4astl+, this Court is not un7indful of the fact that DI:=E>0N=4@s Constitution and +04a!s specificall+ provides that Gthe results of the collective bar&ainin& ne&otiations shall be sub5ect to ratification and approval b+ 7a5orit+ vote of the >nion 7e7bers at a 7eetin& convened, or b+ plebiscite held for such special purpose.G,C -ccordin&l+, it is undisputed that the MO- !as not sub5ect to ratification b+ the &eneral 7e7bership of the >nion. 6he Fuestion to be resolved then is, does the non0ratification of the MO- in accordance !ith the >nion@s constitution prove fatal to the validit+ thereofL It 7ust be re7e7bered that after the MO- !as si&ned, the 7e7bers of the >nion individuall+ si&ned contracts deno7inated as GReconfir7ation of E7plo+7ent.G3( Cullo did not dispute the fact that of the 23 7e7bers of the >nion, !ho si&ned and accepted the GReconfir7ation of E7plo+7ent,G 3" are the respondent e7plo+ees in the case at bar. Moreover, it bears to stress that all the e7plo+ees !ere assisted b+ Ro5as, DI:=E>0N=4@s president, !ho even co0si&ned each contract. Stipulated in each Reconfir7ation of E7plo+7ent !ere the ne! salar+ and benefits sche7e. In addition, it bears to stress that specific provisions of the ne! contract also 7ade reference to the MO-. 6hus, the individual 7e7bers of the union cannot fei&n %no!led&e of the e<ecution of the MO-. Each contract !as freel+ entered into and there is no indication that the sa7e !as attended b+ fraud, 7isrepresentation or duress. 6o this Court@s 7ind, the si&nin& of the individual GReconfir7ation of E7plo+7entG should, therefore, be dee7ed an i7plied ratification b+ the >nion 7e7bers of the MO-.

In Planters Products, Inc. v. N( C,3" this Court refrained fro7 declarin& a C - invalid not!ithstandin& that the sa7e !as not ratified in vie! of the fact that the e7plo+ees had en5o+ed benefits under it, thus8 >nder -rticle ')" of the 4abor Code and Sec. ", Rule I;, oo% V of the I7ple7entin& Rules, the parties to a collective Abar&ainin&B a&ree7ent are reFuired to furnish copies of the appropriate Re&ional Office !ith acco7pan+in& proof of ratification b+ the 7a5orit+ of all the !or%ers in a bar&ainin& unit. 6his !as not done in the case at bar. ut !e do not declare the "C2#0"C23 C invalid or void considerin& that the e7plo+ees have en5o+ed benefits fro7 it. 6he+ cannot receive benefits under provisions favorable to the7 and later insist that the C - is void si7pl+ because other provisions turn out not to the li%in& of certain e7plo+ees. < < <. Moreover, the t!o C -s prior to the "C2#0"C23 C - !ere not also for7all+ ratified, +et the e7plo+ees are basin& their present clai7s on these C -s. It (s (*(4-(to-s to re)e(,e be*e1(ts 1rom ' C:A '*+ .'ter o* +(s).'(m (ts ,'.(+(t0.3' -pplied to the case at bar, !hile the ter7s of the MO- undoubtedl+ reduced the salaries and certain benefits previousl+ en5o+ed b+ the 7e7bers of the >nion, it cannot escape this Court@s attention that it !as the e<ecution of the MO- !hich paved the !a+ for the re0openin& of the hotel, not!ithstandin& its financial distress. More i7portantl+, the e<ecution of the MOallo!ed respondents to %eep their 5obs. It !ould certainl+ be iniFuitous for the 7e7bers of the >nion to si&n ne! contracts pro7ptin& the re0openin& of the hotel onl+ to later on rene&e on their a&ree7ent on the fact of the non0ratification of the MO-. In addition, it bears to point out that Ro5as did not act unilaterall+ !hen he ne&otiated !ith respondent@s 7ana&e7ent. 6he Constitution and +04a!s of DI:=E>0N=4 clearl+ provide that the president is authori?ed to represent the union on all occasions and in all 7atters in !hich representation of the union 7a+ be a&reed or reFuired.3) =urther7ore, Ro5as !as properl+ authori?ed under a oard of Directors Resolution3# to ne&otiate !ith respondent, the pertinent portions of !hich read8 SECRE6-RI@s CER6I=IC-6E I, M-. SOCORRO 4ISE66E . I -RR-, < < <, do hereb+ certif+ that, at a 7eetin& of the oard of Directors of the DI:=E>0N=4, on '2 =eb. '((" !ith a Fuoru7 dul+ constituted, the follo!in& resolutions !ere unani7ousl+ approved8 RESO4VED, as it is hereb+ resolved that the Manifesto dated '$ =eb. '((" be approved ratified and adoptedH RESOL%E$, "URT ER, t&'t Mr. $om0 R. Ro;'s, t&e pres(+e*t o1 t&e $I "EU-N"L, be &ereb0 '-t&or(2e+ to *e/ot('te 5(t& #'ter1ro*t I*s-.'r ote. $','o '*+ to 5or3 1or t&e .'tter6s '))ept'*)e o1 t&e propos'.s )o*t'(*e+ (* $I "EU-N"L M'*(1estoH and RESOL%E$, "INALL!, t&'t Mr. $om0 R. Ro;'s (s &ereb0 '-t&or(2e+ to s(/* '*0 '*+ '.. +o)-me*ts to (mp.eme*t, '*+ )'rr0 (*to e11e)t, &(s 1ore/o(*/ '-t&or(t0.3$

9ithal, !hile the scales of 5ustice usuall+ tilt in favor of labor, the peculiar circu7stances herein prevent this Court fro7 appl+in& the sa7e in the instant petition. Even if our la!s endeavor to &ive life to the constitutional polic+ on social 5ustice and on the protection of labor, it does not 7ean that ever+ labor dispute !ill be decided in favor of the !or%ers. 6he la! also reco&ni?es that 7ana&e7ent has ri&hts !hich are also entitled to respect and enforce7ent in the interest of fair pla+.3, # ERE"ORE, pre7ises considered, the petition is $ENIE$. 6he Decision dated October "", '(($, and the Resolution dated *ul+ "), '((, of the Court of -ppeals in consolidated labor cases doc%eted as C-01.R. SP No. 2)2)" and C-01.R. SP No. 2),$3, are A""IRME$. SO ORDERED. $IOS$A$O M. PERALTA -ssociate *ustice