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G.R. No.

L-25246 September 12, 1974

BENJAMIN VICTORIANO, plaintiff-appellee,


vs.
ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC., defendants, ELIZALDE ROPE WORKERS'
UNION, defendant-appellant.

Appeal to this Court on purely questions of law from the decision of the Court of First Instance of Manila in its Civil Case No. 58894.

The undisputed facts that spawned the instant case follow:

Benjamin Victoriano (hereinafter referred to as Appellee), a member of the religious sect known as the "Iglesia ni Cristo", had been in
the employ of the Elizalde Rope Factory, Inc. (hereinafter referred to as Company) since 1958. As such employee, he was a member
of the Elizalde Rope Workers' Union (hereinafter referred to as Union) which had with the Company a collective bargaining agreement
containing a closed shop provision which reads as follows:

Membership in the Union shall be required as a condition of employment for all permanent employees workers
covered by this Agreement.

The collective bargaining agreement expired on March 3, 1964 but was renewed the following day, March 4, 1964.

Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its amendment by Republic Act No. 3350, the employer was not
precluded "from making an agreement with a labor organization to require as a condition of employment membership therein, if such
labor organization is the representative of the employees." On June 18, 1961, however, Republic Act No. 3350 was enacted,
introducing an amendment to paragraph (4) subsection (a) of section 4 of Republic Act No. 875, as follows: ... "but such agreement
shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization".

Being a member of a religious sect that prohibits the affiliation of its members with any labor organization, Appellee presented his
resignation to appellant Union in 1962, and when no action was taken thereon, he reiterated his resignation on September 3, 1974.
Thereupon, the Union wrote a formal letter to the Company asking the latter to separate Appellee from the service in view of the fact
that he was resigning from the Union as a member. The management of the Company in turn notified Appellee and his counsel that
unless the Appellee could achieve a satisfactory arrangement with the Union, the Company would be constrained to dismiss him from
the service. This prompted Appellee to file an action for injunction, docketed as Civil Case No. 58894 in the Court of First Instance of
Manila to enjoin the Company and the Union from dismissing Appellee. 1 In its answer, the Union invoked the "union security clause"
of the collective bargaining agreement; assailed the constitutionality of Republic Act No. 3350; and contended that the Court had no
jurisdiction over the case, pursuant to Republic Act No. 875, Sections 24 and 9 (d) and (e). 2 Upon the facts agreed upon by the
parties during the pre-trial conference, the Court a quo rendered its decision on August 26, 1965, the dispositive portion of which
reads:

IN VIEW OF THE FOREGOING, judgment is rendered enjoining the defendant Elizalde Rope Factory, Inc. from
dismissing the plaintiff from his present employment and sentencing the defendant Elizalde Rope Workers' Union to
pay the plaintiff P500 for attorney's fees and the costs of this action. 3

From this decision, the Union appealed directly to this Court on purely questions of law, assigning the following errors:

I. That the lower court erred when it did not rule that Republic Act No. 3350 is unconstitutional.

II. That the lower court erred when it sentenced appellant herein to pay plaintiff the sum of P500 as attorney's fees
and the cost thereof.

In support of the alleged unconstitutionality of Republic Act No. 3350, the Union contented, firstly, that the Act infringes on the
fundamental right to form lawful associations; that "the very phraseology of said Republic Act 3350, that membership in a labor
organization is banned to all those belonging to such religious sect prohibiting affiliation with any labor organization" 4 , "prohibits all
the members of a given religious sect from joining any labor union if such sect prohibits affiliations of their members thereto" 5 ; and,
consequently, deprives said members of their constitutional right to form or join lawful associations or organizations guaranteed by
the Bill of Rights, and thus becomes obnoxious to Article III, Section 1 (6) of the 1935 Constitution. 6

Secondly, the Union contended that Republic Act No. 3350 is unconstitutional for impairing the obligation of contracts in that, while
the Union is obliged to comply with its collective bargaining agreement containing a "closed shop provision," the Act relieves the
employer from its reciprocal obligation of cooperating in the maintenance of union membership as a condition of employment; and
that said Act, furthermore, impairs the Union's rights as it deprives the union of dues from members who, under the Act, are relieved
from the obligation to continue as such members. 7
Thirdly, the Union contended that Republic Act No. 3350 discriminatorily favors those religious sects which ban their members from
joining labor unions, in violation of Article Ill, Section 1 (7) of the 1935 Constitution; and while said Act unduly protects certain
religious sects, it leaves no rights or protection to labor organizations. 8

Fourthly, Republic Act No. 3350, asserted the Union, violates the constitutional provision that "no religious test shall be required for
the exercise of a civil right," in that the laborer's exercise of his civil right to join associations for purposes not contrary to law has to
be determined under the Act by his affiliation with a religious sect; that conversely, if a worker has to sever his religious connection
with a sect that prohibits membership in a labor organization in order to be able to join a labor organization, said Act would violate
religious freedom. 9

Fifthly, the Union contended that Republic Act No. 3350, violates the "equal protection of laws" clause of the Constitution, it being a
discriminately legislation, inasmuch as by exempting from the operation of closed shop agreement the members of the "Iglesia ni
Cristo", it has granted said members undue advantages over their fellow workers, for while the Act exempts them from union
obligation and liability, it nevertheless entitles them at the same time to the enjoyment of all concessions, benefits and other
emoluments that the union might secure from the employer. 10

Sixthly, the Union contended that Republic Act No. 3350 violates the constitutional provision regarding the promotion of social
justice. 11

Appellant Union, furthermore, asserted that a "closed shop provision" in a collective bargaining agreement cannot be considered
violative of religious freedom, as to call for the amendment introduced by Republic Act No. 3350; 12 and that unless Republic Act No.
3350 is declared unconstitutional, trade unionism in this country would be wiped out as employers would prefer to hire or employ
members of the Iglesia ni Cristo in order to do away with labor organizations. 13

Appellee, assailing appellant's arguments, contended that Republic Act No. 3350 does not violate the right to form lawful
associations, for the right to join associations includes the right not to join or to resign from a labor organization, if one's conscience
does not allow his membership therein, and the Act has given substance to such right by prohibiting the compulsion of workers to join
labor organizations; 14 that said Act does not impair the obligation of contracts for said law formed part of, and was incorporated into,
the terms of the closed shop agreement; 15that the Act does not violate the establishment of religion clause or separation of Church
and State, for Congress, in enacting said law, merely accommodated the religious needs of those workers whose religion prohibits its
members from joining labor unions, and balanced the collective rights of organized labor with the constitutional right of an individual
to freely exercise his chosen religion; that the constitutional right to the free exercise of one's religion has primacy and preference
over union security measures which are merely contractual 16 ; that said Act does not violate the constitutional provision of equal
protection, for the classification of workers under the Act depending on their religious tenets is based on substantial distinction, is
germane to the purpose of the law, and applies to all the members of a given class; 17 that said Act, finally, does not violate the social
justice policy of the Constitution, for said Act was enacted precisely to equalize employment opportunities for all citizens in the midst
of the diversities of their religious beliefs." 18

I. Before We proceed to the discussion of the first assigned error, it is necessary to premise that there are some thoroughly
established principles which must be followed in all cases where questions of constitutionality as obtains in the instant case are
involved. All presumptions are indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must
prove its invalidity beyond a reasonable doubt, that a law may work hardship does not render it unconstitutional; that if any
reasonable basis may be conceived which supports the statute, it will be upheld, and the challenger must negate all possible bases;
that the courts are not concerned with the wisdom, justice, policy, or expediency of a statute; and that a liberal interpretation of the
constitution in favor of the constitutionality of legislation should be adopted. 19

1. Appellant Union's contention that Republic Act No. 3350 prohibits and bans the members of such religious sects that forbid
affiliation of their members with labor unions from joining labor unions appears nowhere in the wording of Republic Act No. 3350;
neither can the same be deduced by necessary implication therefrom. It is not surprising, therefore, that appellant, having thus
misread the Act, committed the error of contending that said Act is obnoxious to the constitutional provision on freedom of
association.

Both the Constitution and Republic Act No. 875 recognize freedom of association. Section 1 (6) of Article III of the Constitution of
1935, as well as Section 7 of Article IV of the Constitution of 1973, provide that the right to form associations or societies for purposes
not contrary to law shall not be abridged. Section 3 of Republic Act No. 875 provides that employees shall have the right to self-
organization and to form, join of assist labor organizations of their own choosing for the purpose of collective bargaining and to
engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. What the Constitution and
the Industrial Peace Act recognize and guarantee is the "right" to form or join associations. Notwithstanding the different theories
propounded by the different schools of jurisprudence regarding the nature and contents of a "right", it can be safely said that
whatever theory one subscribes to, a right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence
of legal restraint, whereby an employee may act for himself without being prevented by law; and second, power, whereby an
employee may, as he pleases, join or refrain from Joining an association. It is, therefore, the employee who should decide for himself
whether he should join or not an association; and should he choose to join, he himself makes up his mind as to which association he
would join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said
organization at any time. 20 It is clear, therefore, that the right to join a union includes the right to abstain from joining any
union. 21 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, and guaranteed to the employee, is
the "right" to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the
employee the duty to join associations. The law does not enjoin an employee to sign up with any association.

The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal
protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have
agreed on a closed shop, by virtue of which the employer may employ only member of the collective bargaining union, and the
employees must continue to be members of the union for the duration of the contract in order to keep their jobs. Thus Section 4 (a)
(4) of the Industrial Peace Act, before its amendment by Republic Act No. 3350, provides that although it would be an unfair labor
practice for an employer "to discriminate in regard to hire or tenure of employment or any term or condition of employment to
encourage or discourage membership in any labor organization" the employer is, however, not precluded "from making an agreement
with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative
of the employees". By virtue, therefore, of a closed shop agreement, before the enactment of Republic Act No. 3350, if any person,
regardless of his religious beliefs, wishes to be employed or to keep his employment, he must become a member of the collective
bargaining union. Hence, the right of said employee not to join the labor union is curtailed and withdrawn.

To that all-embracing coverage of the closed shop arrangement, Republic Act No. 3350 introduced an exception, when it added to
Section 4 (a) (4) of the Industrial Peace Act the following proviso: "but such agreement shall not cover members of any religious sects
which prohibit affiliation of their members in any such labor organization". Republic Act No. 3350 merely excludes ipso jure from the
application and coverage of the closed shop agreement the employees belonging to any religious sects which prohibit affiliation of
their members with any labor organization. What the exception provides, therefore, is that members of said religious sects cannot be
compelled or coerced to join labor unions even when said unions have closed shop agreements with the employers; that in spite of
any closed shop agreement, members of said religious sects cannot be refused employment or dismissed from their jobs on the sole
ground that they are not members of the collective bargaining union. It is clear, therefore, that the assailed Act, far from infringing
the constitutional provision on freedom of association, upholds and reinforces it. It does not prohibit the members of said religious
sects from affiliating with labor unions. It still leaves to said members the liberty and the power to affiliate, or not to affiliate, with
labor unions. If, notwithstanding their religious beliefs, the members of said religious sects prefer to sign up with the labor union, they
can do so. If in deference and fealty to their religious faith, they refuse to sign up, they can do so; the law does not coerce them to
join; neither does the law prohibit them from joining; and neither may the employer or labor union compel them to join. Republic Act
No. 3350, therefore, does not violate the constitutional provision on freedom of association.

2. Appellant Union also contends that the Act is unconstitutional for impairing the obligation of its contract, specifically, the "union
security clause" embodied in its Collective Bargaining Agreement with the Company, by virtue of which "membership in the union
was required as a condition for employment for all permanent employees workers". This agreement was already in existence at the
time Republic Act No. 3350 was enacted on June 18, 1961, and it cannot, therefore, be deemed to have been incorporated into the
agreement. But by reason of this amendment, Appellee, as well as others similarly situated, could no longer be dismissed from his job
even if he should cease to be a member, or disaffiliate from the Union, and the Company could continue employing him
notwithstanding his disaffiliation from the Union. The Act, therefore, introduced a change into the express terms of the union security
clause; the Company was partly absolved by law from the contractual obligation it had with the Union of employing only Union
members in permanent positions, It cannot be denied, therefore, that there was indeed an impairment of said union security clause.

According to Black, any statute which introduces a change into the express terms of the contract, or its legal construction, or its
validity, or its discharge, or the remedy for its enforcement, impairs the contract. The extent of the change is not material. It is not a
question of degree or manner or cause, but of encroaching in any respect on its obligation or dispensing with any part of its force.
There is an impairment of the contract if either party is absolved by law from its performance. 22 Impairment has also been predicated
on laws which, without destroying contracts, derogate from substantial contractual rights. 23

It should not be overlooked, however, that the prohibition to impair the obligation of contracts is not absolute and unqualified. The
prohibition is general, affording a broad outline and requiring construction to fill in the details. The prohibition is not to be read with
literal exactness like a mathematical formula, for it prohibits unreasonable impairment only. 24 In spite of the constitutional
prohibition, the State continues to possess authority to safeguard the vital interests of its people. Legislation appropriate to
safeguarding said interests may modify or abrogate contracts already in effect. 25 For not only are existing laws read into contracts in
order to fix the obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into
contracts as a postulate of the legal order. All contracts made with reference to any matter that is subject to regulation under the
police power must be understood as made in reference to the possible exercise of that power. 26 Otherwise, important and valuable
reforms may be precluded by the simple device of entering into contracts for the purpose of doing that which otherwise may be
prohibited. The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which
contractual relations are worthwhile a government which retains adequate authority to secure the peace and good order of society.
The contract clause of the Constitution must, therefore, be not only in harmony with, but also in subordination to, in appropriate
instances, the reserved power of the state to safeguard the vital interests of the people. It follows that not all legislations, which have
the effect of impairing a contract, are obnoxious to the constitutional prohibition as to impairment, and a statute passed in the
legitimate exercise of police power, although it incidentally destroys existing contract rights, must be upheld by the courts. This has
special application to contracts regulating relations between capital and labor which are not merely contractual, and said labor
contracts, for being impressed with public interest, must yield to the common good. 27
In several occasions this Court declared that the prohibition against impairing the obligations of contracts has no application to
statutes relating to public subjects within the domain of the general legislative powers of the state involving public welfare. 28 Thus,
this Court also held that the Blue Sunday Law was not an infringement of the obligation of a contract that required the employer to
furnish work on Sundays to his employees, the law having been enacted to secure the well-being and happiness of the laboring class,
and being, furthermore, a legitimate exercise of the police power. 29

In order to determine whether legislation unconstitutionally impairs contract obligations, no unchanging yardstick, applicable at all
times and under all circumstances, by which the validity of each statute may be measured or determined, has been fashioned, but
every case must be determined upon its own circumstances. Legislation impairing the obligation of contracts can be sustained when
it is enacted for the promotion of the general good of the people, and when the means adopted to secure that end are reasonable.
Both the end sought and the means adopted must be legitimate, i.e., within the scope of the reserved power of the state construed in
harmony with the constitutional limitation of that power. 30

What then was the purpose sought to be achieved by Republic Act No. 3350? Its purpose was to insure freedom of belief and religion,
and to promote the general welfare by preventing discrimination against those members of religious sects which prohibit their
members from joining labor unions, confirming thereby their natural, statutory and constitutional right to work, the fruits of which
work are usually the only means whereby they can maintain their own life and the life of their dependents. It cannot be gainsaid that
said purpose is legitimate.

The questioned Act also provides protection to members of said religious sects against two aggregates of group strength from which
the individual needs protection. The individual employee, at various times in his working life, is confronted by two aggregates of
power collective labor, directed by a union, and collective capital, directed by management. The union, an institution developed to
organize labor into a collective force and thus protect the individual employee from the power of collective capital, is, paradoxically,
both the champion of employee rights, and a new source of their frustration. Moreover, when the Union interacts with management, it
produces yet a third aggregate of group strength from which the individual also needs protection the collective bargaining
relationship. 31

The aforementioned purpose of the amendatory law is clearly seen in the Explanatory Note to House Bill No. 5859, which later
became Republic Act No. 3350, as follows:

It would be unthinkable indeed to refuse employing a person who, on account of his religious beliefs and
convictions, cannot accept membership in a labor organization although he possesses all the qualifications for the
job. This is tantamount to punishing such person for believing in a doctrine he has a right under the law to believe
in. The law would not allow discrimination to flourish to the detriment of those whose religion discards membership
in any labor organization. Likewise, the law would not commend the deprivation of their right to work and pursue a
modest means of livelihood, without in any manner violating their religious faith and/or belief. 32

It cannot be denied, furthermore, that the means adopted by the Act to achieve that purpose exempting the members of said
religious sects from coverage of union security agreements is reasonable.

It may not be amiss to point out here that the free exercise of religious profession or belief is superior to contract rights. In case of
conflict, the latter must, therefore, yield to the former. The Supreme Court of the United States has also declared on several occasions
that the rights in the First Amendment, which include freedom of religion, enjoy a preferred position in the constitutional
system. 33 Religious freedom, although not unlimited, is a fundamental personal right and liberty, 34 and has a preferred position in
the hierarchy of values. Contractual rights, therefore, must yield to freedom of religion. It is only where unavoidably necessary to
prevent an immediate and grave danger to the security and welfare of the community that infringement of religious freedom may be
justified, and only to the smallest extent necessary to avoid the danger.

3. In further support of its contention that Republic Act No. 3350 is unconstitutional, appellant Union averred that said Act
discriminates in favor of members of said religious sects in violation of Section 1 (7) of Article Ill of the 1935 Constitution, and which is
now Section 8 of Article IV of the 1973 Constitution, which provides:

No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof, and the free
exercise and enjoyment of religious profession and worship, without discrimination and preference, shall forever be
allowed. No religious test shall be required for the exercise of civil or political rights.

The constitutional provision into only prohibits legislation for the support of any religious tenets or the modes of worship of any sect,
thus forestalling compulsion by law of the acceptance of any creed or the practice of any form of worship, 35 but also assures the free
exercise of one's chosen form of religion within limits of utmost amplitude. It has been said that the religion clauses of the
Constitution are all designed to protect the broadest possible liberty of conscience, to allow each man to believe as his conscience
directs, to profess his beliefs, and to live as he believes he ought to live, consistent with the liberty of others and with the common
good. 36 Any legislation whose effect or purpose is to impede the observance of one or all religions, or to discriminate invidiously
between the religions, is invalid, even though the burden may be characterized as being only indirect. 37 But if the stage regulates
conduct by enacting, within its power, a general law which has for its purpose and effect to advance the state's secular goals, the
statute is valid despite its indirect burden on religious observance, unless the state can accomplish its purpose without imposing such
burden. 38

In Aglipay v. Ruiz 39 , this Court had occasion to state that the government should not be precluded from pursuing valid objectives
secular in character even if the incidental result would be favorable to a religion or sect. It has likewise been held that the statute, in
order to withstand the strictures of constitutional prohibition, must have a secular legislative purpose and a primary effect that
neither advances nor inhibits religion. 40 Assessed by these criteria, Republic Act No. 3350 cannot be said to violate the constitutional
inhibition of the "no-establishment" (of religion) clause of the Constitution.

The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not spiritual or religious or holy and eternal. It was intended
to serve the secular purpose of advancing the constitutional right to the free exercise of religion, by averting that certain persons be
refused work, or be dismissed from work, or be dispossessed of their right to work and of being impeded to pursue a modest means
of livelihood, by reason of union security agreements. To help its citizens to find gainful employment whereby they can make a living
to support themselves and their families is a valid objective of the state. In fact, the state is enjoined, in the 1935 Constitution, to
afford protection to labor, and regulate the relations between labor and capital and industry. 41 More so now in the 1973 Constitution
where it is mandated that "the State shall afford protection to labor, promote full employment and equality in employment, ensure
equal work opportunities regardless of sex, race or creed and regulate the relation between workers and employers. 42

The primary effects of the exemption from closed shop agreements in favor of members of religious sects that prohibit their members
from affiliating with a labor organization, is the protection of said employees against the aggregate force of the collective bargaining
agreement, and relieving certain citizens of a burden on their religious beliefs; and by eliminating to a certain extent economic
insecurity due to unemployment, which is a serious menace to the health, morals, and welfare of the people of the State, the Act also
promotes the well-being of society. It is our view that the exemption from the effects of closed shop agreement does not directly
advance, or diminish, the interests of any particular religion. Although the exemption may benefit those who are members of religious
sects that prohibit their members from joining labor unions, the benefit upon the religious sects is merely incidental and indirect. The
"establishment clause" (of religion) does not ban regulation on conduct whose reason or effect merely happens to coincide or
harmonize with the tenets of some or all religions. 43 The free exercise clause of the Constitution has been interpreted to require that
religious exercise be preferentially aided. 44

We believe that in enacting Republic Act No. 3350, Congress acted consistently with the spirit of the constitutional provision. It acted
merely to relieve the exercise of religion, by certain persons, of a burden that is imposed by union security agreements. It was
Congress itself that imposed that burden when it enacted the Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it so
deems advisable, could take away the same burden. It is certain that not every conscience can be accommodated by all the laws of
the land; but when general laws conflict with scrupples of conscience, exemptions ought to be granted unless some "compelling state
interest" intervenes. 45 In the instant case, We see no such compelling state interest to withhold exemption.

Appellant bewails that while Republic Act No. 3350 protects members of certain religious sects, it leaves no right to, and is silent as to
the protection of, labor organizations. The purpose of Republic Act No. 3350 was not to grant rights to labor unions. The rights of labor
unions are amply provided for in Republic Act No. 875 and the new Labor Code. As to the lamented silence of the Act regarding the
rights and protection of labor unions, suffice it to say, first, that the validity of a statute is determined by its provisions, not by its
silence 46 ; and, second, the fact that the law may work hardship does not render it unconstitutional. 47

It would not be amiss to state, regarding this matter, that to compel persons to join and remain members of a union to keep their jobs
in violation of their religious scrupples, would hurt, rather than help, labor unions, Congress has seen it fit to exempt religious
objectors lest their resistance spread to other workers, for religious objections have contagious potentialities more than political and
philosophic objections.

Furthermore, let it be noted that coerced unity and loyalty even to the country, and a fortiori to a labor union assuming that such
unity and loyalty can be attained through coercion is not a goal that is constitutionally obtainable at the expense of religious
liberty. 48 A desirable end cannot be promoted by prohibited means.

4. Appellants' fourth contention, that Republic Act No. 3350 violates the constitutional prohibition against requiring a religious test for
the exercise of a civil right or a political right, is not well taken. The Act does not require as a qualification, or condition, for joining any
lawful association membership in any particular religion or in any religious sect; neither does the Act require affiliation with a religious
sect that prohibits its members from joining a labor union as a condition or qualification for withdrawing from a labor union. Joining or
withdrawing from a labor union requires a positive act. Republic Act No. 3350 only exempts members with such religious affiliation
from the coverage of closed shop agreements. So, under this Act, a religious objector is not required to do a positive act to exercise
the right to join or to resign from the union. He is exempted ipso jure without need of any positive act on his part. A conscientious
religious objector need not perform a positive act or exercise the right of resigning from the labor union he is exempted from the
coverage of any closed shop agreement that a labor union may have entered into. How then can there be a religious test required for
the exercise of a right when no right need be exercised?
We have said that it was within the police power of the State to enact Republic Act No. 3350, and that its purpose was legal and in
consonance with the Constitution. It is never an illegal evasion of a constitutional provision or prohibition to accomplish a desired
result, which is lawful in itself, by discovering or following a legal way to do it. 49

5. Appellant avers as its fifth ground that Republic Act No. 3350 is a discriminatory legislation, inasmuch as it grants to the members
of certain religious sects undue advantages over other workers, thus violating Section 1 of Article III of the 1935 Constitution which
forbids the denial to any person of the equal protection of the laws. 50

The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the state. It
is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and child
should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as
such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity of rights. The Constitution
does not require that things which are different in fact be treated in law as though they were the same. The equal protection clause
does not forbid discrimination as to things that are different. 51 It does not prohibit legislation which is limited either in the object to
which it is directed or by the territory within which it is to operate.

The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of
knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars.
A law is not invalid because of simple inequality. 52 The very idea of classification is that of inequality, so that it goes without saying
that the mere fact of inequality in no manner determines the matter of constitutionality. 53 All that is required of a valid classification
is that it be reasonable, which means that the classification should be based on substantial distinctions which make for real
differences; that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it must
apply equally to each member of the class. 54 This Court has held that the standard is satisfied if the classification or distinction is
based on a reasonable foundation or rational basis and is not palpably arbitrary. 55

In the exercise of its power to make classifications for the purpose of enacting laws over matters within its jurisdiction, the state is
recognized as enjoying a wide range of discretion. 56 It is not necessary that the classification be based on scientific or marked
differences of things or in their relation. 57 Neither is it necessary that the classification be made with mathematical nicety. 58 Hence
legislative classification may in many cases properly rest on narrow distinctions, 59 for the equal protection guaranty does not
preclude the legislature from recognizing degrees of evil or harm, and legislation is addressed to evils as they may appear.

We believe that Republic Act No. 3350 satisfies the aforementioned requirements. The Act classifies employees and workers, as to the
effect and coverage of union shop security agreements, into those who by reason of their religious beliefs and convictions cannot sign
up with a labor union, and those whose religion does not prohibit membership in labor unions. Tile classification rests on real or
substantial, not merely imaginary or whimsical, distinctions. There is such real distinction in the beliefs, feelings and sentiments of
employees. Employees do not believe in the same religious faith and different religions differ in their dogmas and cannons. Religious
beliefs, manifestations and practices, though they are found in all places, and in all times, take so many varied forms as to be almost
beyond imagination. There are many views that comprise the broad spectrum of religious beliefs among the people. There are diverse
manners in which beliefs, equally paramount in the lives of their possessors, may be articulated. Today the country is far more
heterogenous in religion than before, differences in religion do exist, and these differences are important and should not be ignored.

Even from the phychological point of view, the classification is based on real and important differences. Religious beliefs are not mere
beliefs, mere ideas existing only in the mind, for they carry with them practical consequences and are the motives of certain rules. of
human conduct and the justification of certain acts. 60 Religious sentiment makes a man view things and events in their relation to his
God. It gives to human life its distinctive character, its tone, its happiness or unhappiness its enjoyment or irksomeness. Usually, a
strong and passionate desire is involved in a religious belief. To certain persons, no single factor of their experience is more important
to them than their religion, or their not having any religion. Because of differences in religious belief and sentiments, a very poor
person may consider himself better than the rich, and the man who even lacks the necessities of life may be more cheerful than the
one who has all possible luxuries. Due to their religious beliefs people, like the martyrs, became resigned to the inevitable and
accepted cheerfully even the most painful and excruciating pains. Because of differences in religious beliefs, the world has witnessed
turmoil, civil strife, persecution, hatred, bloodshed and war, generated to a large extent by members of sects who were intolerant of
other religious beliefs. The classification, introduced by Republic Act No. 3350, therefore, rests on substantial distinctions.

The classification introduced by said Act is also germane to its purpose. The purpose of the law is precisely to avoid those who
cannot, because of their religious belief, join labor unions, from being deprived of their right to work and from being dismissed from
their work because of union shop security agreements.

Republic Act No. 3350, furthermore, is not limited in its application to conditions existing at the time of its enactment. The law does
not provide that it is to be effective for a certain period of time only. It is intended to apply for all times as long as the conditions to
which the law is applicable exist. As long as there are closed shop agreements between an employer and a labor union, and there are
employees who are prohibited by their religion from affiliating with labor unions, their exemption from the coverage of said
agreements continues.
Finally, the Act applies equally to all members of said religious sects; this is evident from its provision. The fact that the law grants a
privilege to members of said religious sects cannot by itself render the Act unconstitutional, for as We have adverted to, the Act only
restores to them their freedom of association which closed shop agreements have taken away, and puts them in the same plane as
the other workers who are not prohibited by their religion from joining labor unions. The circumstance, that the other employees,
because they are differently situated, are not granted the same privilege, does not render the law unconstitutional, for every
classification allowed by the Constitution by its nature involves inequality.

The mere fact that the legislative classification may result in actual inequality is not violative of the right to equal protection, for
every classification of persons or things for regulation by law produces inequality in some degree, but the law is not thereby rendered
invalid. A classification otherwise reasonable does not offend the constitution simply because in practice it results in some
inequality. 61 Anent this matter, it has been said that whenever it is apparent from the scope of the law that its object is for the benefit
of the public and the means by which the benefit is to be obtained are of public character, the law will be upheld even though
incidental advantage may occur to individuals beyond those enjoyed by the general public. 62

6. Appellant's further contention that Republic Act No. 3350 violates the constitutional provision on social justice is also baseless.
Social justice is intended to promote the welfare of all the people. 63 Republic Act No. 3350 promotes that welfare insofar as it looks
after the welfare of those who, because of their religious belief, cannot join labor unions; the Act prevents their being deprived of
work and of the means of livelihood. In determining whether any particular measure is for public advantage, it is not necessary that
the entire state be directly benefited it is sufficient that a portion of the state be benefited thereby.

Social justice also means the adoption by the Government of measures calculated to insure economic stability of all component
elements of society, through the maintenance of a proper economic and social equilibrium in the inter-relations of the members of the
community. 64 Republic Act No. 3350 insures economic stability to the members of a religious sect, like the Iglesia ni Cristo, who are
also component elements of society, for it insures security in their employment, notwithstanding their failure to join a labor union
having a closed shop agreement with the employer. The Act also advances the proper economic and social equilibrium between labor
unions and employees who cannot join labor unions, for it exempts the latter from the compelling necessity of joining labor unions
that have closed shop agreements and equalizes, in so far as opportunity to work is concerned, those whose religion prohibits
membership in labor unions with those whose religion does not prohibit said membership. Social justice does not imply social
equality, because social inequality will always exist as long as social relations depend on personal or subjective proclivities. Social
justice does not require legal equality because legal equality, being a relative term, is necessarily premised on differentiations based
on personal or natural conditions. 65 Social justice guarantees equality of opportunity 66 , and this is precisely what Republic Act No.
3350 proposes to accomplish it gives laborers, irrespective of their religious scrupples, equal opportunity for work.

7. As its last ground, appellant contends that the amendment introduced by Republic Act No. 3350 is not called for in other words,
the Act is not proper, necessary or desirable. Anent this matter, it has been held that a statute which is not necessary is not, for that
reason, unconstitutional; that in determining the constitutional validity of legislation, the courts are unconcerned with issues as to the
necessity for the enactment of the legislation in question. 67 Courts do inquire into the wisdom of laws. 68 Moreover, legislatures,
being chosen by the people, are presumed to understand and correctly appreciate the needs of the people, and it may change the
laws accordingly. 69 The fear is entertained by appellant that unless the Act is declared unconstitutional, employers will prefer
employing members of religious sects that prohibit their members from joining labor unions, and thus be a fatal blow to unionism. We
do not agree. The threat to unionism will depend on the number of employees who are members of the religious sects that control the
demands of the labor market. But there is really no occasion now to go further and anticipate problems We cannot judge with the
material now before Us. At any rate, the validity of a statute is to be determined from its general purpose and its efficacy to
accomplish the end desired, not from its effects on a particular case. 70 The essential basis for the exercise of power, and not a mere
incidental result arising from its exertion, is the criterion by which the validity of a statute is to be measured. 71

II. We now pass on the second assignment of error, in support of which the Union argued that the decision of the trial court ordering
the Union to pay P500 for attorney's fees directly contravenes Section 24 of Republic Act No. 875, for the instant action involves an
industrial dispute wherein the Union was a party, and said Union merely acted in the exercise of its rights under the union shop
provision of its existing collective bargaining contract with the Company; that said order also contravenes Article 2208 of the Civil
Code; that, furthermore, Appellee was never actually dismissed by the defendant Company and did not therefore suffer any damage
at all . 72

In refuting appellant Union's arguments, Appellee claimed that in the instant case there was really no industrial dispute involved in
the attempt to compel Appellee to maintain its membership in the union under pain of dismissal, and that the Union, by its act,
inflicted intentional harm on Appellee; that since Appellee was compelled to institute an action to protect his right to work, appellant
could legally be ordered to pay attorney's fees under Articles 1704 and 2208 of the Civil Code. 73

The second paragraph of Section 24 of Republic Act No. 875 which is relied upon by appellant provides that:

No suit, action or other proceedings shall be maintainable in any court against a labor organization or any officer or
member thereof for any act done by or on behalf of such organization in furtherance of an industrial dispute to
which it is a party, on the ground only that such act induces some other person to break a contract of employment
or that it is in restraint of trade or interferes with the trade, business or employment of some other person or with
the right of some other person to dispose of his capital or labor. (Emphasis supplied)

That there was a labor dispute in the instant case cannot be disputed for appellant sought the discharge of respondent by virtue of
the closed shop agreement and under Section 2 (j) of Republic Act No. 875 a question involving tenure of employment is included in
the term "labor dispute". 74 The discharge or the act of seeking it is the labor dispute itself. It being the labor dispute itself, that very
same act of the Union in asking the employer to dismiss Appellee cannot be "an act done ... in furtherance of an industrial
dispute". The mere fact that appellant is a labor union does not necessarily mean that all its acts are in furtherance of an industrial
dispute. 75 Appellant Union, therefore, cannot invoke in its favor Section 24 of Republic Act No. 875. This case is not intertwined with
any unfair labor practice case existing at the time when Appellee filed his complaint before the lower court.

Neither does Article 2208 of the Civil Code, invoked by the Union, serve as its shield. The article provides that attorney's fees and
expenses of litigation may be awarded "when the defendant's act or omission has compelled the plaintiff ... to incur expenses to
protect his interest"; and "in any other case where the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered". In the instant case, it cannot be gainsaid that appellant Union's act in demanding Appellee's dismissal
caused Appellee to incur expenses to prevent his being dismissed from his job. Costs according to Section 1, Rule 142, of the Rules of
Court, shall be allowed as a matter of course to the prevailing party.

WHEREFORE, the instant appeal is dismissed, and the decision, dated August 26, 1965, of the Court of First Instance of Manila, in its
Civil Case No. 58894, appealed from is affirmed, with costs against appellant Union. It is so ordered.

G.R. No. 164301 August 10, 2010

BANK OF THE PHILIPPINE ISLANDS, Petitioner,


vs.
BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, Respondent.

May a corporation invoke its merger with another corporation as a valid ground to exempt its "absorbed employees" from the
coverage of a union shop clause contained in its existing Collective Bargaining Agreement (CBA) with its own certified labor union?
That is the question we shall endeavor to answer in this petition for review filed by an employer after the Court of Appeals decided in
favor of respondent union, which is the employees recognized collective bargaining representative.

At the outset, we should call to mind the spirit and the letter of the Labor Code provisions on union security clauses, specifically
Article 248 (e), which states, "x x x 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." 1 This case which involves the application of a collective
bargaining agreement with a union shop clause should be resolved principally from the standpoint of the clear provisions of our labor
laws, and the express terms of the CBA in question, and not by inference from the general consequence of the merger of corporations
under the Corporation Code, which obviously does not deal with and, therefore, is silent on the terms and conditions of employment
in corporations or juridical entities.

This issue must be resolved NOW, instead of postponing it to a future time when the CBA is renegotiated as suggested by the
Honorable Justice Arturo D. Brion because the same issue may still be resurrected in the renegotiation if the absorbed employees
insist on their privileged status of being exempt from any union shop clause or any variant thereof.

We find it significant to note that it is only the employer, Bank of the Philippine Islands (BPI), that brought the case up to this Court via
the instant petition for review; while the employees actually involved in the case did not pursue the same relief, but had instead
chosen in effect to acquiesce to the decision of the Court of Appeals which effectively required them to comply with the union shop
clause under the existing CBA at the time of the merger of BPI with Far East Bank and Trust Company (FEBTC), which decision had
already become final and executory as to the aforesaid employees. By not appealing the decision of the Court of Appeals, the
aforesaid employees are bound by the said Court of Appeals decision to join BPIs duly certified labor union. In view of the apparent
acquiescence of the affected FEBTC employees in the Court of Appeals decision, BPI should not have pursued this petition for review.
However, even assuming that BPI may do so, the same still cannot prosper.

What is before us now is a petition for review under Rule 45 of the Rules of Court of the Decision 2 dated September 30, 2003 of the
Court of Appeals, as reiterated in its Resolution 3 of June 9, 2004, reversing and setting aside the Decision 4 dated November 23, 2001
of Voluntary Arbitrator Rosalina Letrondo-Montejo, in CA-G.R. SP No. 70445, entitled BPI Employees Union-Davao Chapter-Federation
of Unions in BPI Unibank v. Bank of the Philippine Islands, et al.

The antecedent facts are as follows:

On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of Merger executed on January 20, 2000 by and between
BPI, herein petitioner, and FEBTC. 5 This Article and Plan of Merger was approved by the Securities and Exchange Commission on April
7, 2000.6

Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the
surviving corporation. FEBTC employees, including those in its different branches across the country, were hired by petitioner as its
own employees, with their status and tenure recognized and salaries and benefits maintained.

Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI Unibank (hereinafter the "Union," for brevity) is the
exclusive bargaining agent of BPIs rank and file employees in Davao City. The former FEBTC rank-and-file employees in Davao City
did not belong to any labor union at the time of the merger. Prior to the effectivity of the merger, or on March 31, 2000, respondent
Union invited said FEBTC employees to a meeting regarding the Union Shop Clause (Article II, Section 2) of the existing CBA between
petitioner BPI and respondent Union.7

The parties both advert to certain provisions of the existing CBA, which are quoted below:

ARTICLE I

Section 1. Recognition and Bargaining Unit The BANK recognizes the UNION as the sole and exclusive collective bargaining
representative of all the regular rank and file employees of the Bank offices in Davao City.

Section 2. Exclusions

Section 3. Additional Exclusions

Section 4. Copy of Contract

ARTICLE II

Section 1. Maintenance of Membership All employees within the bargaining unit who are members of the Union on the date of the
effectivity of this Agreement as well as employees within the bargaining unit who subsequently join or become members of the Union
during the lifetime of this Agreement shall as a condition of their continued employment with the Bank, maintain their membership in
the Union in good standing.

Section 2. Union Shop - New employees falling within the bargaining unit as defined in Article I of this Agreement, who may
hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular employees, join the Union as
a condition of their continued employment. It is understood that membership in good standing in the Union is a condition of their
continued employment with the Bank.8 (Emphases supplied.)

After the meeting called by the Union, some of the former FEBTC employees joined the Union, while others refused. Later, however,
some of those who initially joined retracted their membership.9

Respondent Union then sent notices to the former FEBTC employees who refused to join, as well as those who retracted their
membership, and called them to a hearing regarding the matter. When these former FEBTC employees refused to attend the hearing,
the president of the Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their employment
pursuant thereto.10

After two months of management inaction on the request, respondent Union informed petitioner BPI of its decision to refer the issue
of the implementation of the Union Shop Clause of the CBA to the Grievance Committee. However, the issue remained unresolved at
this level and so it was subsequently submitted for voluntary arbitration by the parties. 11
Voluntary Arbitrator Rosalina Letrondo-Montejo, in a Decision 12 dated November 23, 2001, ruled in favor of petitioner BPIs
interpretation that the former FEBTC employees were not covered by the Union Security Clause of the CBA between the Union and
the Bank on the ground that the said employees were not new employees who were hired and subsequently regularized, but were
absorbed employees "by operation of law" because the "former employees of FEBTC can be considered assets and liabilities of
the absorbed corporation." The Voluntary Arbitrator concluded that the former FEBTC employees could not be compelled to join
the Union, as it was their constitutional right to join or not to join any organization.

Respondent Union filed a Motion for Reconsideration, but the Voluntary Arbitrator denied the same in an Order dated March 25,
2002.13

Dissatisfied, respondent then appealed the Voluntary Arbitrators decision to the Court of Appeals. In the herein assailed Decision
dated September 30, 2003, the Court of Appeals reversed and set aside the Decision of the Voluntary Arbitrator. 14 Likewise, the Court
of Appeals denied herein petitioners Motion for Reconsideration in a Resolution dated June 9, 2004.

The Court of Appeals pertinently ruled in its Decision:

A union-shop clause has been defined as a form of union security provision wherein non-members may be hired, but to retain
employment must become union members after a certain period.

There is no question as to the existence of the union-shop clause in the CBA between the petitioner-union and the company. The
controversy lies in its application to the "absorbed" employees.

This Court agrees with the voluntary arbitrator that the ABSORBED employees are distinct and different from NEW employees BUT
only in so far as their employment service is concerned. The distinction ends there. In the case at bar, the absorbed employees
length of service from its former employer is tacked with their employment with BPI. Otherwise stated, the absorbed employees
service is continuous and there is no gap in their service record.

This Court is persuaded that the similarities of "new" and "absorbed" employees far outweighs the distinction between them. The
similarities lies on the following, to wit: (a) they have a new employer; (b) new working conditions; (c) new terms of employment and;
(d) new company policy to follow. As such, they should be considered as "new" employees for purposes of applying the provisions of
the CBA regarding the "union-shop" clause.

To rule otherwise would definitely result to a very awkward and unfair situation wherein the "absorbed" employees shall be in a
different if not, better situation than the existing BPI employees. The existing BPI employees by virtue of the "union-shop" clause are
required to pay the monthly union dues, remain as members in good standing of the union otherwise, they shall be terminated from
the company, and other union-related obligations. On the other hand, the "absorbed" employees shall enjoy the "fruits of labor" of
the petitioner-union and its members for nothing in exchange. Certainly, this would disturb industrial peace in the company which is
the paramount reason for the existence of the CBA and the union.

The voluntary arbitrators interpretation of the provisions of the CBA concerning the coverage of the "union-shop" clause is at war
with the spirit and the rationale why the Labor Code itself allows the existence of such provision.

The Supreme Court in the case of Manila Mandarin Employees Union vs. NLRC (G.R. No. 76989, September 29, 1987) rule, to quote:

"This Court has held that a valid form of union security, and such a provision in a collective bargaining agreement is not a restriction
of the right of freedom of association guaranteed by the Constitution.

A closed-shop agreement is an agreement whereby an employer binds himself to hire only members of the contracting union who
must continue to remain members in good standing to keep their jobs. It is "THE MOST PRIZED ACHIEVEMENT OF UNIONISM." IT
ADDS MEMBERSHIP AND COMPULSORY DUES. By holding out to loyal members a promise of employment in the closed-shop, it
wields group solidarity." (Emphasis supplied)

Hence, the voluntary arbitrator erred in construing the CBA literally at the expense of industrial peace in the company.

With the foregoing ruling from this Court, necessarily, the alternative prayer of the petitioner to require the individual respondents to
become members or if they refuse, for this Court to direct respondent BPI to dismiss them, follows. 15

Hence, petitioners present recourse, raising the following issues:

I
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE FORMER FEBTC EMPLOYEES SHOULD BE
CONSIDERED NEW EMPLOYEES OF BPI FOR PURPOSES OF APPLYING THE UNION SHOP CLAUSE OF THE CBA

II

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE VOLUNTARY ARBITRATORS
INTERPRETATION OF THE COVERAGE OF THE UNION SHOP CLAUSE IS "AT WAR WITH THE SPIRIT AND THE RATIONALE WHY
THE LABOR CODE ITSELF ALLOWS THE EXISTENCE OF SUCH PROVISION" 16

In essence, the sole issue in this case is whether or not the former FEBTC employees that were absorbed by petitioner upon the
merger between FEBTC and BPI should be covered by the Union Shop Clause found in the existing CBA between petitioner and
respondent Union.

Petitioner is of the position that the former FEBTC employees are not new employees of BPI for purposes of applying the Union Shop
Clause of the CBA, on this note, petitioner points to Section 2, Article II of the CBA, which provides:

New employees falling within the bargaining unit as defined in Article I of this Agreement, who may hereafter be regularly employed
by the Bank shall, within thirty (30) days after they become regular employees, join the Union as a condition of their continued
employment. It is understood that membership in good standing in the Union is a condition of their continued employment with the
Bank.17 (Emphases supplied.)

Petitioner argues that the term "new employees" in the Union Shop Clause of the CBA is qualified by the phrases "who may hereafter
be regularly employed" and "after they become regular employees" which led petitioner to conclude that the "new employees"
referred to in, and contemplated by, the Union Shop Clause of the CBA were only those employees who were "new" to BPI, on account
of having been hired initially on a temporary or probationary status for possible regular employment at some future date. BPI argues
that the FEBTC employees absorbed by BPI cannot be considered as "new employees" of BPI for purposes of applying the Union Shop
Clause of the CBA.18

According to petitioner, the contrary interpretation made by the Court of Appeals of this particular CBA provision ignores, or even
defies, what petitioner assumes as its clear meaning and scope which allegedly contradicts the Courts strict and restrictive
enforcement of union security agreements.

We do not agree.

Section 2, Article II of the CBA is silent as to how one becomes a "regular employee" of the BPI for the first time. There is nothing in
the said provision which requires that a "new" regular employee first undergo a temporary or probationary status before being
deemed as such under the union shop clause of the CBA.

"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 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.19

In the case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.,20 we ruled that:

It is the policy of the State to promote unionism to enable the workers to negotiate with management on the same
level and with more persuasiveness than if they were to individually and independently bargain for the improvement
of their respective conditions. To this end, the Constitution guarantees to them the rights "to self-organization, collective
bargaining and negotiations and peaceful concerted actions including the right to strike in accordance with law." There is no question
that these purposes could be thwarted if every worker were to choose to go his own separate way instead of joining his co-employees
in planning collective action and presenting a united front when they sit down to bargain with their employers. It is for this reason
that the law has sanctioned stipulations for the union shop and the closed shop as a means of encouraging the workers to join and
support the labor union of their own choice as their representative in the negotiation of their demands and the protection of their
interest vis--vis the employer. (Emphasis ours.)

In other words, the purpose of a union shop or other union security arrangement is to guarantee the continued existence of the union
through enforced membership for the benefit of the workers.
All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its
terms. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage ,
namely, employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which
prohibits its members from joining labor unions on religious grounds; 21employees already in the service and already members
of a union other than the majority at the time the union shop agreement took effect ;22 confidential employees who are
excluded from the rank and file bargaining unit; 23 and employees excluded from the union shop by express terms of the
agreement.

When certain employees are obliged to join a particular union as a requisite for continued employment, as in the case of Union
Security Clauses, this condition is a valid restriction of the freedom or right not to join any labor organization because it is in favor of
unionism. This Court, on occasion, has even held that a union security clause in a CBA is not a restriction of the right of freedom of
association guaranteed by the Constitution.24

Moreover, a closed shop agreement is an agreement whereby an employer binds himself to hire only members of the contracting
union who must continue to remain members in good standing to keep their jobs. It is " the most prized achievement of
unionism." It adds membership and compulsory dues. By holding out to loyal members a promise of employment in the closed
shop, it wields group solidarity.25

Indeed, the situation of the former FEBTC employees in this case clearly does not fall within the first three exceptions to the
application of the Union Shop Clause discussed earlier. No allegation or evidence of religious exemption or prior membership in
another union or engagement as a confidential employee was presented by both parties. The sole category therefore in which
petitioner may prove its claim is the fourth recognized exception or whether the former FEBTC employees are excluded by the
express terms of the existing CBA between petitioner and respondent.

To reiterate, petitioner insists that the term "new employees," as the same is used in the Union Shop Clause of the CBA at issue,
refers only to employees hired by BPI as non-regular employees who later qualify for regular employment and become regular
employees, and not those who, as a legal consequence of a merger, are allegedly automatically deemed regular employees of BPI.
However, the CBA does not make a distinction as to how a regular employee attains such a status. Moreover, there is nothing in the
Corporation Law and the merger agreement mandating the automatic employment as regular employees by the surviving corporation
in the merger.

It is apparent that petitioner hinges its argument that the former FEBTC employees were absorbed by BPI merely as a legal
consequence of a merger based on the characterization by the Voluntary Arbiter of these absorbed employees as included in the
"assets and liabilities" of the dissolved corporation - assets because they help the Bank in its operation and liabilities because
redundant employees may be terminated and company benefits will be paid to them, thus reducing the Banks financial status. Based
on this ratiocination, she ruled that the same are not new employees of BPI as contemplated by the CBA at issue, noting that the
Certificate of Filing of the Articles of Merger and Plan of Merger between FEBTC and BPI stated that "x x x the entire assets and
liabilities of FAR EASTERN BANK & TRUST COMPANY will be transferred to and absorbed by the BANK OF THE PHILIPPINE ISLANDS x x
x (underlining supplied)."26 In sum, the Voluntary Arbiter upheld the reasoning of petitioner that the FEBTC employees became BPI
employees by "operation of law" because they are included in the term "assets and liabilities."

Absorbed FEBTC Employees are Neither Assets nor Liabilities

In legal parlance, however, human beings are never embraced in the term "assets and liabilities." Moreover, BPIs absorption of
former FEBTC employees was neither by operation of law nor by legal consequence of contract. There was no government regulation
or law that compelled the merger of the two banks or the absorption of the employees of the dissolved corporation by the surviving
corporation. Had there been such law or regulation, the absorption of employees of the non-surviving entities of the merger would
have been mandatory on the surviving corporation. 27 In the present case, the merger was voluntarily entered into by both banks
presumably for some mutually acceptable consideration. In fact, the Corporation Code does not also mandate the absorption of the
employees of the non-surviving corporation by the surviving corporation in the case of a merger. Section 80 of the Corporation Code
provides:

SEC. 80. Effects of merger or consolidation. The merger or consolidation, as provided in the preceding sections shall have the
following effects:

1. The constituent corporations shall become a single corporation which, in case of merger, shall be the surviving
corporation designated in the plan of merger; and, in case of consolidation, shall be the consolidated corporation designated
in the plan of consolidation;

2. The separate existence of the constituent corporations shall cease, except that of the surviving or the consolidated
corporation;
3. The surviving or the consolidated corporation shall possess all the rights, privileges, immunities and powers and shall be
subject to all the duties and liabilities of a corporation organized under this Code;

4. The surviving or the consolidated corporation shall thereupon and thereafter possess all the rights, privileges, immunities
and franchises of each of the constituent corporations; and all property, real or personal, and all receivables due on
whatever account, including subscriptions to shares and other choses in action, and all and every other interest of, or
belonging to, or due to each constituent corporation, shall be taken and deemed to be transferred to and vested in such
surviving or consolidated corporation without further act or deed; and

5. The surviving or the consolidated corporation shall be responsible and liable for all the liabilities and obligations of each of
the constituent corporations in the same manner as if such surviving or consolidated corporation had itself incurred such
liabilities or obligations; and any claim, action or proceeding pending by or against any of such constituent corporations may
be prosecuted by or against the surviving or consolidated corporation, as the case may be. Neither the rights of creditors nor
any lien upon the property of any of such constituent corporations shall be impaired by such merger or consolidated.

Significantly, too, the Articles of Merger and Plan of Merger dated April 7, 2000 did not contain any specific stipulation with respect to
the employment contracts of existing personnel of the non-surviving entity which is FEBTC. Unlike the Voluntary Arbitrator, this Court
cannot uphold the reasoning that the general stipulation regarding transfer of FEBTC assets and liabilities to BPI as set forth in the
Articles of Merger necessarily includes the transfer of all FEBTC employees into the employ of BPI and neither BPI nor the FEBTC
employees allegedly could do anything about it. Even if it is so, it does not follow that the absorbed employees should not
be subject to the terms and conditions of employment obtaining in the surviving corporation.

The rule is that unless expressly assumed, labor contracts such as employment contracts and collective bargaining agreements are
not enforceable against a transferee of an enterprise, labor contracts being in personam, thus binding only between the parties. A
labor contract merely creates an action in personam and does not create any real right which should be respected by third parties.
This conclusion draws its force from the right of an employer to select his employees and to decide when to engage them as
protected under our Constitution, and the same can only be restricted by law through the exercise of the police power. 28

Furthermore, this Court believes that it is contrary to public policy to declare the former FEBTC employees as forming part of the
assets or liabilities of FEBTC that were transferred and absorbed by BPI in the Articles of Merger. Assets and liabilities, in this instance,
should be deemed to refer only to property rights and obligations of FEBTC and do not include the employment contracts of its
personnel. A corporation cannot unilaterally transfer its employees to another employer like chattel. Certainly, if BPI as an employer
had the right to choose who to retain among FEBTCs employees, FEBTC employees had the concomitant right to choose not to be
absorbed by BPI. Even though FEBTC employees had no choice or control over the merger of their employer with BPI, they had a
choice whether or not they would allow themselves to be absorbed by BPI. Certainly nothing prevented the FEBTCs employees from
resigning or retiring and seeking employment elsewhere instead of going along with the proposed absorption.

Employment is a personal consensual contract and absorption by BPI of a former FEBTC employee without the consent of the
employee is in violation of an individuals freedom to contract. It would have been a different matter if there was an express provision
in the articles of merger that as a condition for the merger, BPI was being required to assume all the employment contracts of all
existing FEBTC employees with the conformity of the employees. In the absence of such a provision in the articles of merger, then BPI
clearly had the business management decision as to whether or not employ FEBTCs employees. FEBTC employees likewise retained
the prerogative to allow themselves to be absorbed or not; otherwise, that would be tantamount to involuntary servitude.

There appears to be no dispute that with respect to FEBTC employees that BPI chose not to employ or FEBTC employees who chose to
retire or be separated from employment instead of "being absorbed," BPIs assumed liability to these employees pursuant to the
merger is FEBTCs liability to them in terms of separation pay, 29retirement pay30 or other benefits that may be due them depending on
the circumstances.

Legal Consequences of Mergers

Although not binding on this Court, American jurisprudence on the consequences of voluntary mergers on the right to employment
and seniority rights is persuasive and illuminating. We quote the following pertinent discussion from the American Law Reports:

Several cases have involved the situation where as a result of mergers, consolidations, or shutdowns, one group of employees, who
had accumulated seniority at one plant or for one employer, finds that their jobs have been discontinued except to the extent that
they are offered employment at the place or by the employer where the work is to be carried on in the future. Such cases have
involved the question whether such transferring employees should be entitled to carry with them their accumulated seniority or
whether they are to be compelled to start over at the bottom of the seniority list in the "new" job. It has been recognized in some
cases that the accumulated seniority does not survive and cannot be transferred to the "new" job.

In Carver v Brien (1942) 315 Ill App 643, 43 NE2d 597, the shop work of three formerly separate railroad corporations, which had
previously operated separate facilities, was consolidated in the shops of one of the roads. Displaced employees of the other two roads
were given preference for the new jobs created in the shops of the railroad which took over the work. A controversy arose between
the employees as to whether the displaced employees were entitled to carry with them to the new jobs the seniority rights they had
accumulated with their prior employers, that is, whether the rosters of the three corporations, for seniority purposes, should be
"dovetailed" or whether the transferring employees should go to the bottom of the roster of their new employer. Labor
representatives of the various systems involved attempted to work out an agreement which, in effect, preserved the seniority status
obtained in the prior employment on other roads, and the action was for specific performance of this agreement against a demurring
group of the original employees of the railroad which was operating the consolidated shops. The relief sought was denied, the court
saying that, absent some specific contract provision otherwise, seniority rights were ordinarily limited to the employment in which
they were earned, and concluding that the contract for which specific performance was sought was not such a completed and binding
agreement as would support such equitable relief, since the railroad, whose concurrence in the arrangements made was essential to
their effectuation, was not a party to the agreement.

Where the provisions of a labor contract provided that in the event that a trucker absorbed the business of another private
contractor or common carrier, or was a party to a merger of lines, the seniority of the employees absorbed or affected thereby
should be determined by mutual agreement between the trucker and the unions involved, it was held in Moore v International
Brotherhood of Teamsters, etc. (1962, Ky) 356 SW2d 241, that the trucker was not required to absorb the affected employees as well
as the business, the court saying that they could find no such meaning in the above clause, stating that it dealt only with seniority,
and not with initial employment. Unless and until the absorbing company agreed to take the employees of the company whose
business was being absorbed, no seniority problem was created, said the court, hence the provision of the contract could have no
application. Furthermore, said the court, it did not require that the absorbing company take these employees, but only that if it did
take them the question of seniority between the old and newemployees would be worked out by agreement or else be submitted to
the grievance procedure.31 (Emphasis ours.)

Indeed, from the tenor of local and foreign authorities, in voluntary mergers, absorption of the dissolved corporations employees or
the recognition of the absorbed employees service with their previous employer may be demanded from the surviving corporation if
required by provision of law or contract. The dissent of Justice Arturo D. Brion tries to make a distinction as to the terms and
conditions of employment of the absorbed employees in the case of a corporate merger or consolidation which will, in effect, take
away from corporate management the prerogative to make purely business decisions on the hiring of employees or will give it an
excuse not to apply the CBA in force to the prejudice of its own employees and their recognized collective bargaining agent. In this
regard, we disagree with Justice Brion.

Justice Brion takes the position that because the surviving corporation continues the personality of the dissolved corporation and
acquires all the latters rights and obligations, it is duty-bound to absorb the dissolved corporations employees, even in the absence
of a stipulation in the plan of merger. He proposes that this interpretation would provide the necessary protection to labor as it spares
workers from being "left in legal limbo."

However, there are instances where an employer can validly discontinue or terminate the employment of an employee without
violating his right to security of tenure. Among others, in case of redundancy, for example, superfluous employees may be terminated
and such termination would be authorized under Article 283 of the Labor Code. 32

Moreover, assuming for the sake of argument that there is an obligation to hire or absorb all employees of the non-surviving
corporation, there is still no basis to conclude that the terms and conditions of employment under a valid collective bargaining
agreement in force in the surviving corporation should not be made to apply to the absorbed employees.

The Corporation Code and the Subject Merger Agreement are Silent on Efficacy, Terms and Conditions of Employment Contracts

The lack of a provision in the plan of merger regarding the transfer of employment contracts to the surviving corporation could have
very well been deliberate on the part of the parties to the merger, in order to grant the surviving corporation the freedom to choose
who among the dissolved corporations employees to retain, in accordance with the surviving corporations business needs. If
terminations, for instance due to redundancy or labor-saving devices or to prevent losses, are done in good faith, they would be valid.
The surviving corporation too is duty-bound to protect the rights of its own employees who may be affected by the merger in terms of
seniority and other conditions of their employment due to the merger. Thus, we are not convinced that in the absence of a stipulation
in the merger plan the surviving corporation was compelled, or may be judicially compelled, to absorb all employees under the same
terms and conditions obtaining in the dissolved corporation as the surviving corporation should also take into consideration the state
of its business and its obligations to its own employees, and to their certified collective bargaining agent or labor union.

Even assuming we accept Justice Brions theory that in a merger situation the surviving corporation should be compelled to absorb
the dissolved corporations employees as a legal consequence of the merger and as a social justice consideration, it bears to
emphasize his dissent also recognizes that the employee may choose to end his employment at any time by voluntarily resigning. For
the employee to be "absorbed" by BPI, it requires the employees implied or express consent. It is because of this human element in
employment contracts and the personal, consensual nature thereof that we cannot agree that, in a merger situation, employment
contracts are automatically transferable from one entity to another in the same manner that a contract pertaining to purely
proprietary rights such as a promissory note or a deed of sale of property is perfectly and automatically transferable to the
surviving corporation.
That BPI is the same entity as FEBTC after the merger is but a legal fiction intended as a tool to adjudicate rights and obligations
between and among the merged corporations and the persons that deal with them. Although in a merger it is as if there is no change
in the personality of the employer, there is in reality a change in the situation of the employee. Once an FEBTC employee is absorbed,
there are presumably changes in his condition of employment even if his previous tenure and salary rate is recognized by BPI. It is
reasonable to assume that BPI would have different rules and regulations and company practices than FEBTC and it is incumbent
upon the former FEBTC employees to obey these new rules and adapt to their new environment. Not the least of the changes in
employment condition that the absorbed FEBTC employees must face is the fact that prior to the merger they were employees of an
unorganized establishment and after the merger they became employees of a unionized company that had an existing collective
bargaining agreement with the certified union. This presupposes that the union who is party to the collective bargaining agreement is
the certified union that has, in the appropriate certification election, been shown to represent a majority of the members of the
bargaining unit.

Likewise, with respect to FEBTC employees that BPI chose to employ and who also chose to be absorbed, then due to BPIs blanket
assumption of liabilities and obligations under the articles of merger, BPI was bound to respect the years of service of these FEBTC
employees and to pay the same, or commensurate salaries and other benefits that these employees previously enjoyed with FEBTC.

As the Union likewise pointed out in its pleadings, there were benefits under the CBA that the former FEBTC employees did
not enjoy with their previous employer. As BPI employees, they will enjoy all these CBA benefits upon their "absorption." Thus,
although in a sense BPI is continuing FEBTCs employment of these absorbed employees, BPIs employment of these absorbed
employees was not under exactly the same terms and conditions as stated in the latters employment contracts with FEBTC. This
further strengthens the view that BPI and the former FEBTC employees voluntarily contracted with each other for their employment in
the surviving corporation.

Proper Appreciation of the Term "New Employees" Under the CBA

In any event, it is of no moment that the former FEBTC employees retained the regular status that they possessed while working for
their former employer upon their absorption by petitioner. This fact would not remove them from the scope of the phrase "new
employees" as contemplated in the Union Shop Clause of the CBA, contrary to petitioners insistence that the term "new employees"
only refers to those who are initially hired as non-regular employees for possible regular employment.

The Union Shop Clause in the CBA simply states that "new employees" who during the effectivity of the CBA "may be regularly
employed" by the Bank must join the union within thirty (30) days from their regularization. There is nothing in the said clause that
limits its application to only new employees who possess non-regular status, meaning probationary status, at the start of their
employment. Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new
employees who are "absorbed" as regular employees from the beginning of their employment. What is indubitable from the Union
Shop Clause is that upon the effectivity of the CBA, petitioners new regular employees (regardless of the manner by which they
became employees of BPI) are required to join the Union as a condition of their continued employment.

The dissenting opinion of Justice Brion dovetails with Justice Carpios view only in their restrictive interpretation of who are "new
employees" under the CBA. To our dissenting colleagues, the phrase "new employees" (who are covered by the union shop clause)
should only include new employees who were hired as probationary during the life of the CBA and were later granted regular status.
They propose that the former FEBTC employees who were deemed regular employees from the beginning of their employment with
BPI should be treated as a special class of employees and be excluded from the union shop clause.

Justice Brion himself points out that there is no clear, categorical definition of "new employee" in the CBA. In other words, the term
"new employee" as used in the union shop clause is used broadly without any qualification or distinction. However, the Court should
not uphold an interpretation of the term "new employee" based on the general and extraneous provisions of the Corporation Code on
merger that would defeat, rather than fulfill, the purpose of the union shop clause. To reiterate, the provision of the Article 248(e) of
the Labor Code in point mandates that nothing in the said Code or any other law should stop the parties from requiring membership
in a recognized collective bargaining agent as a condition of employment.

Significantly, petitioner BPI never stretches its arguments so far as to state that the absorbed employees should be deemed "old
employees" who are not covered by the Union Shop Clause. This is not surprising.

By law and jurisprudence, a merger only becomes effective upon approval by the Securities and Exchange Commission (SEC) of the
articles of merger. In Associated Bank v. Court of Appeals,33 we held:

The procedure to be followed is prescribed under the Corporation Code. Section 79 of said Code requires the approval by the
Securities and Exchange Commission (SEC) of the articles of merger which, in turn, must have been duly approved by a majority of
the respective stockholders of the constituent corporations. The same provision further states that the merger shall be effective only
upon the issuance by the SEC of a certificate of merger. The effectivity date of the merger is crucial for determining when the merged
or absorbed corporation ceases to exist; and when its rights, privileges, properties as well as liabilities pass on to the surviving
corporation. (Emphasis ours.)
In other words, even though BPI steps into the shoes of FEBTC as the surviving corporation, BPI does so at a particular point in time,
i.e., the effectivity of the merger upon the SECs issuance of a certificate of merger. In fact, the articles of merger themselves
provided that both BPI and FEBTC will continue their respective business operations until the SEC issues the certificate of merger and
in the event SEC does not issue such a certificate, they agree to hold each other blameless for the non-consummation of the merger.

Considering the foregoing principle, BPI could have only become the employer of the FEBTC employees it absorbed after the approval
by the SEC of the merger. If the SEC did not approve the merger, BPI would not be in the position to absorb the employees of FEBTC
at all. Indeed, there is evidence on record that BPI made the assignments of its absorbed employees in BPI effective April 10, 2000, or
after the SECs approval of the merger.34 In other words, BPI became the employer of the absorbed employees only at some
point after the effectivity of the merger, notwithstanding the fact that the absorbed employees years of service with FEBTC were
voluntarily recognized by BPI.

Even assuming for the sake of argument that we consider the absorbed FEBTC employees as "old employees" of BPI who are not
members of any union (i.e., it is their date of hiring by FEBTC and not the date of their absorption that is considered), this does not
necessarily exclude them from the union security clause in the CBA. The CBA subject of this case was effective from April 1, 1996
until March 31, 2001. Based on the allegations of the former FEBTC employees themselves, there were former FEBTC employees who
were hired by FEBTC after April 1, 1996 and if their date of hiring by FEBTC is considered as their date of hiring by BPI, they would
undeniably be considered "new employees" of BPI within the contemplation of the Union Shop Clause of the said CBA. Otherwise, it
would lead to the absurd situation that we would discriminate not only between new BPI employees (hired during the life of the CBA)
and former FEBTC employees (absorbed during the life of the CBA) but also among the former FEBTC employees themselves. In other
words, we would be treating employees who are exactly similarly situated (i.e., the group of absorbed FEBTC employees) differently.
This hardly satisfies the demands of equality and justice.

Petitioner limited itself to the argument that its absorbed employees do not fall within the term "new employees" contemplated under
the Union Shop Clause with the apparent objective of excluding all, and not just some, of the former FEBTC employees from the
application of the Union Shop Clause.

However, in law or even under the express terms of the CBA, there is no special class of employees called "absorbed employees." In
order for the Court to apply or not apply the Union Shop Clause, we can only classify the former FEBTC employees as either "old" or
"new." If they are not "old" employees, they are necessarily "new" employees. If they are new employees, the Union Shop Clause did
not distinguish between new employees who are non-regular at their hiring but who subsequently become regular and new
employees who are "absorbed" as regular and permanent from the beginning of their employment. The Union Shop Clause did not so
distinguish, and so neither must we.

No Substantial Distinction Under the CBA Between Regular Employees Hired After Probationary Status and Regular
Employees Hired After the Merger

Verily, we agree with the Court of Appeals that there are no substantial differences between a newly hired non-regular employee who
was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee
pursuant to a merger, for purposes of applying the Union Shop Clause. Both employees were hired/employed only after the CBA was
signed. At the time they are being required to join the Union, they are both already regular rank and file employees of BPI. They
belong to the same bargaining unit being represented by the Union. They both enjoy benefits that the Union was able to secure for
them under the CBA. When they both entered the employ of BPI, the CBA and the Union Shop Clause therein were already in effect
and neither of them had the opportunity to express their preference for unionism or not. We see no cogent reason why the Union
Shop Clause should not be applied equally to these two types of new employees, for they are undeniably similarly situated.

The effect or consequence of BPIs so-called "absorption" of former FEBTC employees should be limited to what they actually agreed
to, i.e. recognition of the FEBTC employees years of service, salary rate and other benefits with their previous employer. The effect
should not be stretched so far as to exempt former FEBTC employees from the existing CBA terms, company policies and rules which
apply to employees similarly situated. If the Union Shop Clause is valid as to other new regular BPI employees, there is no reason why
the same clause would be a violation of the "absorbed" employees freedom of association.

Non-Application of Union Shop Clause Contrary to the Policy of the Labor Code and Inimical to Industrial Peace

It is but fair that similarly situated employees who enjoy the same privileges of a CBA should be likewise subject to the same
obligations the CBA imposes upon them. A contrary interpretation of the Union Shop Clause will be inimical to industrial peace and
workers solidarity. This unfavorable situation will not be sufficiently addressed by asking the former FEBTC employees to simply pay
agency fees to the Union in lieu of union membership, as the dissent of Justice Carpio suggests. The fact remains that other new
regular employees, to whom the "absorbed employees" should be compared, do not have the option to simply pay the agency fees
and they must join the Union or face termination.

Petitioners restrictive reading of the Union Shop Clause could also inadvertently open an avenue, which an employer could readily
use, in order to dilute the membership base of the certified union in the collective bargaining unit (CBU). By entering into a voluntary
merger with a non-unionized company that employs more workers, an employer could get rid of its existing union by the simple
expedient of arguing that the "absorbed employees" are not new employees, as are commonly understood to be covered by a CBAs
union security clause. This could then lead to a new majority within the CBU that could potentially threaten the majority status of the
existing union and, ultimately, spell its demise as the CBUs bargaining representative. Such a dreaded but not entirely far-fetched
scenario is no different from the ingenious and creative "union-busting" schemes that corporations have fomented throughout the
years, which this Court has foiled time and again in order to preserve and protect the valued place of labor in this jurisdiction
consistent with the Constitutions mandate of insuring social justice.

There is nothing in the Labor Code and other applicable laws or the CBA provision at issue that requires that a new employee has to
be of probationary or non-regular status at the beginning of the employment relationship. An employer may confer upon a new
employee the status of regular employment even at the onset of his engagement. Moreover, no law prohibits an employer from
voluntarily recognizing the length of service of a new employee with a previous employer in relation to computation of benefits or
seniority but it should not unduly be interpreted to exclude them from the coverage of the CBA which is a binding contractual
obligation of the employer and employees.

Indeed, a union security clause in a CBA should be interpreted to give meaning and effect to its purpose, which is to afford protection
to the certified bargaining agent and ensure that the employer is dealing with a union that represents the interests of the legally
mandated percentage of the members of the bargaining unit.

The union shop clause offers protection to the certified bargaining agent by ensuring that future regular employees who (a) enter the
employ of the company during the life of the CBA; (b) are deemed part of the collective bargaining unit; and (c) whose number will
affect the number of members of the collective bargaining unit will be compelled to join the union. Such compulsion has legal effect,
precisely because the employer by voluntarily entering in to a union shop clause in a CBA with the certified bargaining agent takes on
the responsibility of dismissing the new regular employee who does not join the union.

Without the union shop clause or with the restrictive interpretation thereof as proposed in the dissenting opinions, the company can
jeopardize the majority status of the certified union by excluding from union membership all new regular employees whom the
Company will "absorb" in future mergers and all new regular employees whom the Company hires as regular from the beginning of
their employment without undergoing a probationary period. In this manner, the Company can increase the number of members of
the collective bargaining unit and if this increase is not accompanied by a corresponding increase in union membership, the certified
union may lose its majority status and render it vulnerable to attack by another union who wishes to represent the same bargaining
unit.35

Or worse, a certified union whose membership falls below twenty percent (20%) of the total members of the collective bargaining unit
may lose its status as a legitimate labor organization altogether, even in a situation where there is no competing union. 36 In such a
case, an interested party may file for the cancellation of the unions certificate of registration with the Bureau of Labor Relations. 37

Plainly, the restrictive interpretation of the union shop clause would place the certified unions very existence at the mercy and
control of the employer. Relevantly, only BPI, the employer appears to be interested in pursuing this case. The former
FEBTC employees have not joined BPI in this appeal.

For the foregoing reasons, Justice Carpios proposal to simply require the former FEBTC to pay agency fees is wholly inadequate to
compensate the certified union for the loss of additional membership supposedly guaranteed by compliance with the union shop
clause. This is apart from the fact that treating these "absorbed employees" as a special class of new employees does not encourage
worker solidarity in the company since another class of new employees (i.e. those whose were hired as probationary and later
regularized during the life of the CBA) would not have the option of substituting union membership with payment of agency fees.

Justice Brion, on the other hand, appears to recognize the inherent unfairness of perpetually excluding the "absorbed" employees
from the ambit of the union shop clause. He proposes that this matter be left to negotiation by the parties in the next CBA. To our
mind, however, this proposal does not sufficiently address the issue. With BPI already taking the position that employees "absorbed"
pursuant to its voluntary mergers with other banks are exempt from the union shop clause, the chances of the said bank ever
agreeing to the inclusion of such employees in a future CBA is next to nil more so, if BPIs narrow interpretation of the union shop
clause is sustained by this Court.

Right of an Employee not to Join a Union is not Absolute and Must Give Way to the Collective Good of All Members of the Bargaining
Unit

The dissenting opinions place a premium on the fact that even if the former FEBTC employees are not old employees, they
nonetheless were employed as regular and permanent employees without a gap in their service. However, an employees permanent
and regular employment status in itself does not necessarily exempt him from the coverage of a union shop clause.

In the past this Court has upheld even the more stringent type of union security clause, i.e., the closed shop provision, and held that
it can be made applicable to old employees who are already regular and permanent but have chosen not to join a union. In the early
case of Juat v. Court of Industrial Relations, 38 the Court held that an old employee who had no union may be compelled to join the
union even if the collective bargaining agreement (CBA) imposing the closed shop provision was only entered into seven years after
of the hiring of the said employee. To quote from that decision:

A closed-shop agreement has been considered as one form of union security whereby only union members can be hired and workers
must remain union members as a condition of continued employment. The requirement for employees or workers to become
members of a union as a condition for employment redounds to the benefit and advantage of said employees because by holding out
to loyal members a promise of employment in the closed-shop the union wields group solidarity. In fact, it is said that "the closed-
shop contract is the most prized achievement of unionism."

xxxx

This Court had categorically held in the case of Freeman Shirt Manufacturing Co., Inc., et al. vs. Court of Industrial Relations, et al.,
G.R. No. L-16561, Jan. 28, 1961, that the closed-shop proviso of a collective bargaining agreement entered into between an employer
and a duly authorized labor union is applicable not only to the employees or laborers that are employed after the collective
bargaining agreement had been entered into but also to old employees who are not members of any labor union at the time the said
collective bargaining agreement was entered into. In other words, if an employee or laborer is already a member of a labor union
different from the union that entered into a collective bargaining agreement with the employer providing for a closed-shop, said
employee or worker cannot be obliged to become a member of that union which had entered into a collective bargaining agreement
with the employer as a condition for his continued employment. (Emphasis and underscoring supplied.)

Although the present case does not involve a closed shop provision that included even old employees, the Juat example is but one of
the cases that laid down the doctrine that the right not to join a union is not absolute. Theoretically, there is nothing in law or
jurisprudence to prevent an employer and a union from stipulating that existing employees (who already attained regular and
permanent status but who are not members of any union) are to be included in the coverage of a union security clause. Even Article
248(e) of the Labor Code only expressly exempts old employees who already have a union from inclusion in a union security
clause.39

Contrary to the assertion in the dissent of Justice Carpio, Juat has not been overturned by Victoriano v. Elizalde Rope Workers
Union40 nor by Reyes v. Trajano.41 The factual milieus of these three cases are vastly different.

In Victoriano, the issue that confronted the Court was whether or not employees who were members of the Iglesia ni Kristo (INK) sect
could be compelled to join the union under a closed shop provision, despite the fact that their religious beliefs prohibited them from
joining a union. In that case, the Court was asked to balance the constitutional right to religious freedom against a host of other
constitutional provisions including the freedom of association, the non-establishment clause, the non-impairment of contracts clause,
the equal protection clause, and the social justice provision. In the end, the Court held that "religious freedom, although not
unlimited, is a fundamental personal right and liberty, and has a preferred position in the hierarchy of values." 42

However, Victoriano is consistent with Juat since they both affirm that the right to refrain from joining a union is not absolute. The
relevant portion of Victoriano is quoted below:

The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal
protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have
agreed on a closed shop, by virtue of which the employer may employ only member of the collective bargaining union, and the
employees must continue to be members of the union for the duration of the contract in order to keep their jobs. Thus Section 4 (a)
(4) of the Industrial Peace Act, before its amendment by Republic Act No. 3350, provides that although it would be an unfair labor
practice for an employer "to discriminate in regard to hire or tenure of employment or any term or condition of employment to
encourage or discourage membership in any labor organization" the employer is, however, not precluded "from making an agreement
with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative
of the employees." By virtue, therefore, of a closed shop agreement, before the enactment of Republic Act No. 3350, if any person,
regardless of his religious beliefs, wishes to be employed or to keep his employment, he must become a member of the collective
bargaining union. Hence, the right of said employee not to join the labor union is curtailed and withdrawn. 43 (Emphases supplied.)

If Juat exemplified an exception to the rule that a person has the right not to join a union, Victoriano merely created an exception to
the exception on the ground of religious freedom.

Reyes, on the other hand, did not involve the interpretation of any union security clause. In that case, there was no certified
bargaining agent yet since the controversy arose during a certification election. In Reyes, the Court highlighted the idea that the
freedom of association included the right not to associate or join a union in resolving the issue whether or not the votes of members
of the INK sect who were part of the bargaining unit could be excluded in the results of a certification election, simply because they
were not members of the two contesting unions and were expected to have voted for "NO UNION" in view of their religious affiliation.
The Court upheld the inclusion of the votes of the INK members since in the previous case of Victoriano we held that INK members
may not be compelled to join a union on the ground of religious freedom and even without Victoriano every employee has the right to
vote "no union" in a certification election as part of his freedom of association. However, Reyes is not authority for Justice Carpios
proposition that an employee who is not a member of any union may claim an exemption from an existing union security clause
because he already has regular and permanent status but simply prefers not to join a union.

The other cases cited in Justice Carpios dissent on this point are likewise inapplicable. Basa v. Federacion Obrera de la Industria
Tabaquera y Otros Trabajadores de Filipinas, 44 Anucension v. National Labor Union, 45 and Gonzales v. Central Azucarera de Tarlac Labor
Union46 all involved members of the INK. In line with Victoriano, these cases upheld the INK members claimed exemption from the
union security clause on religious grounds. In the present case, the former FEBTC employees never claimed any religious grounds for
their exemption from the Union Shop Clause. As for Philips Industrial Development, Inc. v. National Labor Relations Corporation 47 and
Knitjoy Manufacturing, Inc. v. Ferrer-Calleja, 48 the employees who were exempted from joining the respondent union or who were
excluded from participating in the certification election were found to be not members of the bargaining unit represented by
respondent union and were free to form/join their own union. In the case at bar, it is undisputed that the former FEBTC employees
were part of the bargaining unit that the Union represented. Thus, the rulings in Philips and Knitjoy have no relevance to the issues at
hand.

Time and again, this Court has ruled that the individual employees right not to join a union may be validly restricted by a union
security clause in a CBA49 and such union security clause is not a violation of the employees constitutional right to freedom of
association.50

It is unsurprising that significant provisions on labor protection of the 1987 Constitution are found in Article XIII on Social Justice. The
constitutional guarantee given the right to form unions 51 and the State policy to promote unionism 52 have social justice
considerations. In Peoples Industrial and Commercial Employees and Workers Organization v. Peoples Industrial and Commercial
Corporation,53 we recognized that "[l]abor, being the weaker in economic power and resources than capital, deserve protection that is
actually substantial and material."

The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual employees right or
freedom of association, is not to protect the union for the unions sake. Laws and jurisprudence promote unionism and afford certain
protections to the certified bargaining agent in a unionized company because a strong and effective union presumably benefits all
employees in the bargaining unit since such a union would be in a better position to demand improved benefits and conditions of
work from the employer. This is the rationale behind the State policy to promote unionism declared in the Constitution, which was
elucidated in the above-cited case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.54

In the case at bar, since the former FEBTC employees are deemed covered by the Union Shop Clause, they are required to join the
certified bargaining agent, which supposedly has gathered the support of the majority of workers within the bargaining unit in the
appropriate certification proceeding. Their joining the certified union would, in fact, be in the best interests of the former FEBTC
employees for it unites their interests with the majority of employees in the bargaining unit. It encourages employee solidarity and
affords sufficient protection to the majority status of the union during the life of the CBA which are the precisely the objectives of
union security clauses, such as the Union Shop Clause involved herein. We are indeed not being called to balance the interests of
individual employees as against the State policy of promoting unionism, since the employees, who were parties in the court below, no
longer contested the adverse Court of Appeals decision. Nonetheless, settled jurisprudence has already swung the balance in favor
of unionism, in recognition that ultimately the individual employee will be benefited by that policy. In the hierarchy of constitutional
values, this Court has repeatedly held that the right to abstain from joining a labor organization is subordinate to the policy of
encouraging unionism as an instrument of social justice.

Also in the dissenting opinion of Justice Carpio, he maintains that one of the dire consequences to the former FEBTC employees who
refuse to join the union is the forfeiture of their retirement benefits. This is clearly not the case precisely because BPI expressly
recognized under the merger the length of service of the absorbed employees with FEBTC. Should some refuse to become members
of the union, they may still opt to retire if they are qualified under the law, the applicable retirement plan, or the CBA, based on their
combined length of service with FEBTC and BPI. Certainly, there is nothing in the union shop clause that should be read as to curtail
an employees eligibility to apply for retirement if qualified under the law, the existing retirement plan, or the CBA as the case may
be.

In sum, this Court finds it reasonable and just to conclude that the Union Shop Clause of the CBA covers the former FEBTC employees
who were hired/employed by BPI during the effectivity of the CBA in a manner which petitioner describes as "absorption." A contrary
appreciation of the facts of this case would, undoubtedly, lead to an inequitable and very volatile labor situation which this Court has
consistently ruled against.1avvphi1

In the case of former FEBTC employees who initially joined the union but later withdrew their membership, there is even greater
reason for the union to request their dismissal from the employer since the CBA also contained a Maintenance of Membership Clause.

A final point in relation to procedural due process, the Court is not unmindful that the former FEBTC employees refusal to join the
union and BPIs refusal to enforce the Union Shop Clause in this instance may have been based on the honest belief that the former
FEBTC employees were not covered by said clause. In the interest of fairness, we believe the former FEBTC employees should be
given a fresh thirty (30) days from notice of finality of this decision to join the union before the union demands BPI to terminate their
employment under the Union Shop Clause, assuming said clause has been carried over in the present CBA and there has been no
material change in the situation of the parties.

WHEREFORE, the petition is hereby DENIED, and the Decision dated September 30, 2003 of the Court of Appeals is AFFIRMED,
subject to the thirty (30) day notice requirement imposed herein. Former FEBTC employees who opt not to become union members
but who qualify for retirement shall receive their retirement benefits in accordance with law, the applicable retirement plan, or the
CBA, as the case may be.

SO ORDERED.

G.R. No. 186605 November 17, 2010

CENTRAL AZUCARERA DE BAIS EMPLOYEES UNION-NFL [CABEU-NFL], represented by its President, PABLITO
SAGURAN, Petitioner,
vs.
CENTRAL AZUCARERA DE BAIS, INC. [CAB], represented by its President, ANTONIO STEVEN L. CHAN, Respondent.

DECISION

MENDOZA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner Central Azucarera De Bais
Employees Union-National Federation of Labor (CABEU-NFL) seeking to reverse and set aside: (1) the September 26, 2008
Decision1 of the Court of Appeals (CA), in CA-G.R. SP No. 03238, which reversed the July 18, 2007 Decision 2 and September 28, 2007
Resolution3 of the National Labor Relations Commission (NLRC) and reinstated the July 13, 2006 Decision 4 of the Labor Arbiter (LA);
and (2) its January 21, 2009 Resolution5 denying the Motion for Reconsideration of CABEU-NFL.

THE FACTS

Respondent Central Azucarera De Bais, Inc. (CAB) is a corporation duly organized and existing under the laws of the Philippines. It is
represented by its President, Antonio Steven L. Chan (Chan), in this proceeding.

CABEU-NFL is a duly registered labor union and a certified bargaining agent of the CAB rank-and-file employees, represented by its
President, Pablito Saguran (Saguran).

On January 19, 2004, CABEU-NFL sent CAB a proposed Collective Bargaining Agreement (CBA)6 seeking increases in the daily wage
and vacation and sick leave benefits of the monthly employees and the grant of leave benefits and 13th month pay to seasonal
workers.

On March 27, 2004, CAB responded with a counter-proposal 7 to the effect that the production bonus incentive and special production
bonus and incentives be maintained. In addition, respondent CAB agreed to execute a pro-rated increase of wages every time the
government would mandate an increase in the minimum wage. CAB, however, did not agree to grant additional and separate
Christmas bonuses.

On May 21, 2004, CAB received an Amended Union Proposal8 sent by CABEU-NFL reducing its previous demand regarding wages and
bonuses. CAB, however, maintained its position on the matter. Thus, the collective bargaining negotiations resulted in a deadlock.

On account of the impasse, "CABEU-NFL filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB). The NCMB
then assumed conciliatory-mediation jurisdiction and summoned the parties to conciliation conferences."9

In its June 2, 2005 Letter sent to CAB 10 (letter-request), CABEU-NFL requested copies of CABs annual financial statements from 2001
to 2004 and asked for the resumption of conciliation meetings.

CAB replied through its June 14, 2005 Letter 11 (letter-response) to NCMB Regional Director of Dumaguete City Isidro Cepeda, which
reads:

At the outset, it observed that the letter signed by Mr. Pablito Saguran who is no longer an employee of the Central for he was one of
those lawfully terminated due to an authorized cause x x x.
More importantly, the declared purpose of the requested conciliation meeting has already been rendered moot and academic
because: (1) the Union which Mr. Saguran purportedly represents has already lost its majority status by reason of the disauthorization
and withdrawal of support thereto by more than 90% of the rank and file employees in the bargaining unit of Central sometime in
January, 2005, and (2) the workers themselves, acting as principal, after disauthorizing the previous agent CABEU-NFL have organized
themselves into a new Union known as Central Azucarera de Bais Employees Labor Association (CABELA) and after obtaining their
registration certificate and making due representation that it is a duly organized union representing almost all the rank and file
workers in the Central, had concluded a new collective bargaining agreement with the Central on April 21, 2005 in Dumaguete City.
The aforesaid CBA had been duly ratified by the rank and file workers constituting 91% of the collective bargaining unit x x x.

Clearly, therefore, the request for further conciliation conference will serve no lawful and practical purpose. In view of the foregoing,
and for the sake of continued industrial peace prevailing in the Central, we beseech the Honorable Office to disregard the aforesaid
request.

It appears that the NCMB failed to act on the letter-response of CAB. Neither did it convene CAB and CABEU-NFL to continue the
negotiations between them.

Reacting from the letter-response of CAB, CABEU-NFL filed a Complaint for Unfair Labor Practice 12 for the formers refusal to bargain
with it.

On July 13, 2006, the LA dismissed the complaint.13 Pertinent portions of the LA decision read:

The procedure in the discharge of the duty to bargain collectively is provided for in Article 250 of the Labor Code: (1) the party who
desires to negotiate an agreement shall serve a written notice upon the other party with a statement of proposals; (2) the other party
shall make a reply thereto not later than ten (10) days from receipt of notice; (3) if the dispute is unsettled resulting in a deadlock,
the NCMB shall intervene upon the request or at its own initiative and call the parties to conciliation Meeting x x x (4) if the NCMB
fails to effect an agreement, the Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their
case to a voluntary arbitrator; (5) the parties may also go on strike or declare a lockout as the case may be after complying with legal
requirements. Subject, of course, to the plenary power of the Secretary of Labor and Employment to assume jurisdiction over the
dispute or to certify the same to the NLRC for compulsory arbitration.

In the case at bar, the record shows that respondent CAB replied to the complainant Unions CBA proposals with its own set of
counterproposals x x x. Likewise, respondent CAB responded to the Unions subsequent counterproposals x x x. Record further shows
that respondent CAB participated in a series of CBA negotiations conducted by the parties at the plant level as well as in the
conciliation/mediation proceedings conducted by the NCMB. Unfortunately, both exercises resulted in a deadlock.

At this juncture it cannot be said, therefore, that respondent CAB refused to negotiate or that it violated its duty to bargain
collectively in light of its active participation in the past CBA negotiations at the plant level as well as in the NCMB. x x x

We do not agree that respondent CAB committed an unfair labor practice act in questioning the capacity of Mr. Pablito Saguran to
represent complainant union in the CBA negotiations because Mr. Pablito Saguran was no longer an employee of respondent CAB at
that time having been separated from employment on the ground of redundancy and having received the corresponding separation
benefits. x x x.

So also, we do not find respondent CAB guilty of unfair labor practice by its act of writing the NCMB Director in a letter dated June 24,
2005, stating its legal position on complainants request for further conciliation to the effect that since almost [all] of the rank and file
employees, the principals in a principal-agent relationship, have withdrawn their support to the complainant union and that in fact
they have already organized themselves into a DOLE-registered labor union known as CABELA, any further conciliation will serve no
lawful and practical purpose. x x x.

At this juncture, it was incumbent upon the NCMB to make a ruling on the request of the complainant union as well as upon the
corresponding comment of respondent CAB. If the NCMB chose not to pursue further negotiation between the parties, respondent
CAB should not be faulted therefor. x x x.

Under the facts obtaining, when the conciliation/mediation by the NCMB has not been officially concluded, we find the instant
complaint for unfair labor practice not only without merit but also premature.

WHEREFORE, foregoing considered, the case is hereby DISMISSED for lack of merit.

SO ORDERED.

On appeal, the NLRC in its July 18, 2007 Decision 14 reversed the LAs decision and found CAB guilty of unfair labor practice. The NLRC
explained:
The issue to be resolved is whether or not respondent company committed an unfair labor practice for violation of its duty to bargain
collectively in good faith.

The important event to discuss in the instant case is respondents act of concluding a CBA with CABELA. As gleaned from
respondents letter to NCMB dated June 14, 2005, it concluded a CBA with CABELA because they opined that complainant lost its
majority status in January 2005 when 90% of the rank-and-file employees disauthorized and withdrew their support to complainant.
These rank-and-file employees who withdrew their support, organized and formed CABELA. In fine, respondent believed that CABELA
enjoyed the majority status of CABELA since it was supported by 90% of all employees in the bargaining unit.

In resolving the issue of whether respondents act of concluding a CBA with CABELA is warranted under the circumstances is to
examine the validity of such act. The mechanics of collective bargaining are set in motion only when the following jurisdictional
preconditions are present, namely: 1) possession of the status of majority representation of the employees representative in
accordance with any of the means of selection and designation provided for by the Labor Code, 2) proof of majority representation,
and 3) a demand to bargain under Article 250, par. (a) of the Labor Code x x x.

In the instant case, it is undeniable that complainant is the certified collective bargaining agent of the regular workers and seasonal
employees of respondent. Its status as such was determined in a certification election conducted by the Department of Labor and
Employment (DOLE). As such, there was no reason for respondent to deal and negotiate with CABELA since the latter does not have
such status of majority representation. x x x.

X x x. Based on this premise, respondent violated its duty to bargain with complainant when during the pendency of the conciliation
proceedings before the NCMB it concluded a CBA with another union as a consequence, it refused to resume negotiation with
complainant upon the latters demand.1avvphi1

With respect to respondents observation that the request for conciliation meeting was signed by one who is not eligible and
authorized to represent any union with the company since he is no longer an employee, suffice it to state that at the time the request
was made, such employee has questioned the validity of his dismissal with then NLRC. X x x.

Respondents failure to act on the request of the complainant to resume negotiation for no valid reason constitutes unfair labor
practice. Consequently, the proposed CBA as amended should be imposed to respondent.

WHEREFORE, premises considered, the appealed Decision is REVERSED and SET ASIDE. Another one is entered declaring that
respondent Central Azucarera de Bais is guilty of unfair labor practice. As such, the proposed CBA of complainant, as amended is
imposed to respondent Central Azucarera de Bais.

SO ORDERED.

CAB moved for a reconsideration but the motion was denied by the NLRC in its resolution dated September 28, 2007. 15

Unsatisfied, CAB elevated the matter to the CA by way of a petition for certiorari under Rule 65 alleging grave abuse of discretion on
the part of the NLRC in reversing the LA decision and issuing the questioned resolution.

On September 26, 2008, the CA found CABs petition meritorious and reversed the NLRC decision and resolution. The CA pointed out:

First. This Court has acquired jurisdiction over the person of private respondent CABEU-NFL. Through its counsel of record, CABEU-
NFL already filed its extensive comment on the instant petition. Hence, it is now useless to contend that it was denied notice of the
same and the opportunity to be heard on it. x x x.

Second. Petitioner CAB was not shown to have violated the rule requiring parties to certify in their initiatory pleadings against forum
shopping. Private respondent CABEU-NFL alleges in its comment that the two cases are pending before this Court: CA-G.R. No. 03132
and CA-G.R. No. 03017 involving the same parties as in the case at bar. Unfortunately, CABEU-NFL did not explain how the issues in
those pending cases are related to or similar to those involved in this proceeding. x x x.

Third. In the case at bar, private respondent CABEU-NFL failed in its burden of proof to present substantial evidence to support the
allegation of unfair labor practice. The assailed Decision and Resolution of public respondent referred merely to two (2) circumstances
which allegedly support the conclusion that the presumption of good faith had been rebutted and that bad faith was extant in
petitioners actions. To recall, these circumstances are: (a) the execution of a supposed collective bargaining agreement with another
labor union, CABELA; and (b) CABs sending of the letter dated June 14, 2005 to NCMB seeking to call off the collective bargaining
negotiations. These, however, are not enough to ascribe the very serious offense of unfair labor practice upon petitioner. x x x.

x x x petitioner CAB was not scuttling the ongoing negotiations towards a new collective bargaining agreement. It was simply
propounding a position to the NCMB for the latter to rule on. That the negotiations did not push through was not the result of CAB
managements intransigence because there was none at least so far as the case record confirms. There is nothing that establishes
petitioners predetermined resolve not to budge from an initial position perhaps stubbornness of some ambiguous sort but not the
absence of good faith to pursue collective bargaining. x x x.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated July 18, 2007 and Resolution dated September 28, 2007
of public respondent National Labor Relations Commission in NLRC Case No. V-000002-07 are REVERSED and SET
ASIDE. The Decision dated July 13, 2006 in NLRC RAB VII Case No. 07-0104-2005-D entitled Central Azucarera de Bais Employees
Union-NFL (CABEU-NFL), represented by Pablito Saguran, complainant, versus, (CAB) and/or Steven Chan as Owner and Roberto de la
Rosa as Manager, respondents of Labor Arbiter Fructuoso T. Villarin IV is REINSTATED and AFFIRMED IN TOTO. Costs of suit de
oficio.

SO ORDERED.

CABEU-NFL moved for a reconsideration but its motion was denied by the CA in its Resolution dated January 21, 2009. 16

Hence this petition.

In its Memorandum,17 CABEU-NFL raised the following:

ISSUES

I) WHETHER OF NOT THE COURT OF APPEALS VIOLATED THE CONSTITUTIONAL RIGHTS OF PETITIONER WHEN
THE HONORABLE COURT OF APPEALS REVERSED THE FINDINGS OF THE NATIONAL LABOR RELATIONS
COMMISSION (NLRC) WHICH HELD RESPONDENT GUILTY OF UNFAIR LABOR PRACTICE.18

II) WHETHER OR NOT THE COURT OF APPEALS VIOLATED THE CONSTITUTIONAL RIGHTS OF THE PETITIONER
WHEN IT GAVE DUE COURSE TO RESPONDENTS PETITION FOR CERTIORARI WITHOUT COMPLYING WITH THE
JURISDICTIONAL REQUIREMENTS UNDER RULE 65, SECTION 1 AND SUPREME COURT CIRCULAR NO. 04-94, ON
CERTIFICATION ON NON-FORUM SHOPPING.19

In sum, the petition raises three (3) issues for the Courts consideration which are whether or not the CA erred: (1) in giving due
course to the petition for certiorari despite service of the copy of the petition to CABEU-NFLs counsel and not to itself ; (2) in giving
due course to the petition for certiorari despite the failure of CAB to indicate the address of CABEU-NFL in the petition; and (3) in
absolving CAB of unfair labor practice.

CABEU-NFL insists that the CA erred in giving due course to the petition for certiorari because respondent CAB served a copy of its CA
petition to CABEU-NFLs counsel and not to CABEU-NFL itself. CABEU-NFL, likewise, harps on the failure of CAB to indicate CABEU-
NFLs full address in the said petition as required in petitions for certiorari, citing Section 1, Rule 6520 in relation to Section 3, Rule
46.21

Ultimately, CABEU-NFL aggressively asserts that CAB is guilty of unfair labor practice on the ground of its refusal to bargain
collectively. CABEU-NFL claims to be the duly certified bargaining agent of the CAB rank-and-file employees such that it requested to
bargain through a letter-request which was subsequently turned down by CAB in its letter-response. Anchored on the admission in the
CAB letter-response of a supposed CBA with CABELA, CABEU-NFL charges that such act constitutes a violation of CABs duty to
bargain collectively under Article 253 of the Labor Code 22 and consequently an act of unfair labor practice prohibited under Article
248 (g) of the Labor Code.23 CABEU-NFL also submits that CAB violated the prohibition against forum shopping when it filed its
petition in the CA. CABEU-NFL claims that the failure of CABs counsel to disclose to the CA the pendency of CA-G.R. SP No.
033132 and CA-G.R. SP No. 03017 constituted forum shopping, a sufficient ground to dismiss the said petition.

In its Memorandum,24 CAB claims that service of the copy of the petition for certiorari to CABEU-NFLs counsel was sufficient. It
vehemently denies its alleged failure to indicate CABEU-NFLs name and address in its petition. CAB also stresses that CA-G.R. SP No.
033132 and CA-G.R. SP No. 03017 "were initiated exclusively by members of CABEU and by CABEU itself, respectively, and not by
CAB."25 CAB further argues that there was no identity of issues or causes of action between the two abovementioned cases and this
case.

On the issue of unfair labor practice, CAB counters that in view of the disassociation of more than 90% of rank-and-file workers from
CABEU-NFL, it was constrained to negotiate and conclude in good faith a new CBA with CABELA, the newly established union by
workers who disassociated from CABEU-NFL. CAB emphasizes that it declined further negotiations with CABEU-NFL in good faith
because to continue with it would serve no practical purpose. Considering that the NCMB has yet to resolve CABs query in its letter-
response, CAB was left without any choice but accede to the demands of CABELA. In concluding a CBA with CABELA, CAB claims that
it acted in the best interest of the rank-and-file workers which belied bad faith.
THE COURTS RULING

The petition lacks merit.

On the technical issues, CABEU-NFLs insistence that service of the copy of the CA petition should have been made to it, rather than
to its counsel, is unavailing.

On the matter of service, Section 1, Rule 65 in relation to Section 3, Rule 46 of the Rules of Court, clearly provides that in a petition
filed originally in the CA, the petitioner is required to serve a copy of the petition on the adverse party before its filing. If the adverse
party appears by counsel, service shall be made on such counsel pursuant to Section 2, Rule 13. 26

With respect to the alleged failure of CAB to indicate the address of CABEU-NFL in the CA petition, it appears that CABEU-NFL is
misleading the Court. A perusal of the petition 27 filed before the CA reveals that CAB indeed indicated both the name 28 and
address29 of CABEU-NFL. Moreover, the indication in said petition by CAB that CABEU-NFL could be served with court processes
through its counsel was substantial compliance with the Rules.30

The Court, likewise, cannot sustain CABEU-NFLs contention on forum shopping against CAB.

By forum shopping, a party initiates two or more actions in separate tribunals, grounded on the same cause, hoping that one or the
other tribunal would favorably dispose of the matter. The elements of forum shopping are: (1) identity of parties, or at least such
parties as would represent the same interest in both actions; (2) identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and (3) identity of the two preceding particulars such that any judgment rendered in the other action will,
regardless of which party is successful, amount to res judicata in the action under consideration.31

In the case at bench, CABEU-NFL merely raised the fact of the pendency of CA-G.R. SP No. 033132 and CA-G.R. SP No. 03017 in its
comment on the petition for certiorari32 filed before the CA without demonstrating any similarity in the causes of action between the
said cases and the present case. The CA, citing the ruling in Tboli Agro-Industrial Development, Inc. v. Solilapsi 33 as authority, points
out that:

This Court cannot take judicial notice of what CA-G.R. No. 03132 and CA-G.R. No. 03017 involve because:

"As a general rule, courts are not authorized to take judicial notice in the adjudication of cases pending before them of the contents of
other cases even when such cases have been tried or are pending in the same court and notwithstanding the fact that both cases
may have been tried or are actually pending before the same judge. Courts may be required to take judicial notice of the decisions of
the appellate courts but not of the decisions of the coordinate trial courts, or even of a decision or the facts involved in another case
tried by the same court itself, unless the parties introduce the same in evidence or the court, as a matter of convenience, decides to
do so. Besides, judicial notice of matters which ought to be known to judges because of their judicial functions is only discretionary
upon the court. It is not mandatory."

In the absence of evidence to show that the issues involved in these cases are the same, this Court cannot give credence to private
respondents claim of forum shopping.

The Court now proceeds to determine whether or not respondent CAB was guilty of acts constituting unfair labor practice by refusing
to bargain collectively.

The Court rules in the negative.

CAB is being accused of violating its duty to bargain collectively supposedly because of its act in concluding a CBA with CABELA,
another union in the bargaining unit, and its failure to resume negotiations with CABEU-NFL.

The concept of unfair labor practice is provided in Article 247 of the Labor Code which states:

Article 247. Concept of Unfair Labor Practice and Procedure for Prosecution thereof. -- Unfair labor practices violate the constitutional
right of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including
their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-management relations.

The Labor Code, likewise, enumerates the acts constituting unfair labor practices of the employer, thus:

Article 248. Unfair Labor Practices of Employers.It shall be unlawful for an employer to commit any of the following unfair labor
practice:
(g) To violate the duty to bargain collectively as prescribed by this Code.

For a charge of unfair labor practice to prosper, it must be shown that CAB was motivated by ill will, "bad faith, or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation,
wounded feelings or grave anxiety resulted x x x" in suspending negotiations with CABEU-NFL. Notably, CAB believed that CABEU-NFL
was no longer the representative of the workers.34 It just wanted to foster industrial peace by bowing to the wishes of the
overwhelming majority of its rank and file workers and by negotiating and concluding in good faith a CBA with CABELA." 35 Such
actions of CAB are nowhere tantamount to anti-unionism, the evil sought to be punished in cases of unfair labor practices.

Furthermore, basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same. By
imputing bad faith to the actuations of CAB, CABEU-NFL has the burden of proof to present substantial evidence to support the
allegation of unfair labor practice.36 Apparently, CABEU-NFL refers only to the circumstances mentioned in the letter-response,
namely, the execution of the supposed CBA between CAB and CABELA and the request to suspend the negotiations, to conclude that
bad faith attended CABs actions. The Court is of the view that CABEU-NFL, in simply relying on the said letter-response, failed to
substantiate its claim of unfair labor practice to rebut the presumption of good faith.

Moreover, as correctly determined by the LA, the filing of the complaint for unfair labor practice was premature inasmuch as the issue
of collective bargaining is still pending before the NCMB.

In the resolution of labor cases, this Court has always been guided by the State policy enshrined in the Constitution that the rights of
workers and the promotion of their welfare shall be protected. The Court is, likewise, guided by the goal of attaining industrial peace
by the proper application of the law. Thus, it cannot favor one party, be it labor or management, in arriving at a just solution to a
controversy if the party has no valid support to its claims. It is not within this Courts power to rule beyond the ambit of the law. 37

WHEREFORE, the petition is DENIED.

G.R. No. 141471 September 18, 2000

COLEGIO DE SAN JUAN DE LETRAN, petitioner,


vs.
ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS, respondents.

KAPUNAN, J.:

This is a petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals, promulgated on 9 August 1999,
dismissing the petition filed by Colegio de San Juan de Letran (hereinafter, "petitioner") and affirming the Order of the Secretary of
Labor, dated December 2, 1996, finding the petitioner guilty of unfair labor practice on two (2) counts.

The facts, as found by the Secretary of Labor and affirmed by the Court of Appeals, are as follows:

"On December 1992, Salvador Abtria, then President of respondent union, Association of Employees and Faculty of Letran, initiated
the renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San Juan de Letran for the last two (2) years of the
CBA's five (5) year lifetime from 1989-1994. On the same year, the union elected a new set of officers wherein private respondent
Eleanor Ambas emerged as the newly elected President (Secretary of Labor and Employment's Order dated December 2, 1996, p. 12).
Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already
prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the union members, who eventually
rejected the said CBA (Ibid, p. 2).

Petitioner accused the union officers of bargaining in bad faith before the National Labor Relations Commission (NLRC). Labor Arbiter
Edgardo M. Madriaga decided in favor of petitioner. However, the Labor Arbiter's decision was reversed on appeal before the NLRC
(Ibid, p. 2).

On January 1996, the union notified the National Conciliation and Mediation Board (NCMB) of its intention to strike on the grounds
(sic) of petitioner's: non-compliance with the NLRC (1) order to delete the name of Atty. Federico Leynes as the union's legal counsel;
and (2) refusal to bargain (Ibid, p. 1).

On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a new five-year CBA starting 1994-
1999. On February 7, 1996, the union submitted its proposals to petitioner, which notified the union six days later or on February 13,
1996 that the same had been submitted to its Board of Trustees. In the meantime, Ambas was informed through a letter dated
February 15, 1996 from her superior that her work schedule was being changed from Monday to Friday to Tuesday to Saturday. Ambas
protested and requested management to submit the issue to a grievance machinery under the old CBA (Ibid, p. 2-3).

Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on March 27, 1996 before the NCMB
to discuss the ground rules for the negotiation. On March 29, 1996, the union received petitioner's letter dismissing Ambas for alleged
insubordination. Hence, the union amended its notice of strike to include Ambas' dismissal. (Ibid, p. 2-3).

On April 20, 1996, both parties again discussed the ground rules for the CBA renegotiation. However, petitioner stopped the
negotiations after it purportedly received information that a new group of employees had filed a petition for certification election
(Ibid, p. 3).

On June 18, 1996, the union finally struck. On July 2, 1996, public respondent the Secretary of Labor and Employment assumed
jurisdiction and ordered all striking employees including the union president to return to work and for petitioner to accept them back
under the same terms and conditions before the actual strike. Petitioner readmitted the striking members except Ambas. The parties
then submitted their pleadings including their position papers which were filed on July 17, 1996 ( Ibid, pp. 2-3).

On December 2, 1996, public respondent issued an order declaring petitioner guilty of unfair labor practice on two counts and
directing the reinstatement of private respondent Ambas with backwages. Petitioner filed a motion for reconsideration which was
denied in an Order dated May 29, 1997 (Petition, pp. 8-9)." 1

Having been denied its motion for reconsideration, petitioner sought a review of the order of the Secretary of Labor and Employment
before the Court of Appeals. The appellate court dismissed the petition and affirmed the findings of the Secretary of Labor and
Employment. The dispositive portion of the decision of the Court of Appeals sets forth:

WHEREFORE, foregoing premises considered, this Petition is DISMISSED, for being without merit in fact and in law.

With cost to petitioner.

SO ORDERED.2

Hence, petitioner comes to this Court for redress.

Petitioner ascribes the following errors to the Court of Appeals:

THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE RULING OF
THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF REFUSAL TO BARGAIN
(UNFAIR LABOR PRACTICE) FOR SUSPENDING THE COLLECTIVE BARGAINING NEGOTIATIONS WITH RESPONDENT AEFL,
DESPITE THE FACT THAT THE SUSPENSION OF THE NEGOTIATIONS WAS BROUGHT ABOUT BY THE FILING OF A PETITION FOR
CERTIFICATION ELECTION BY A RIVAL UNION WHO CLAIMED TO COMMAND THE MAJORITY OF THE EMPLOYEES WITHIN THE
BARGAINING UNIT.

II
THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE RULING OF
THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF UNFAIR LABOR PRACTICE
FOR DISMISSING RESPONDENT AMBAS, DESPITE THE FACT THAT HER DISMISSAL WAS CAUSED BY HER INSUBORDINATE
ATTITUDE, SPECIFICALLY, HER REFUSAL TO FOLLOW THE PRESCRIBED WORK SCHEDULE. 3

The twin questions of law before this Court are the following: (1) whether petitioner is guilty of unfair labor practice by refusing to
bargain with the union when it unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA)
upon mere information that a petition for certification has been filed by another legitimate labor organization? (2) whether the
termination of the union president amounts to an interference of the employees' right to self-organization?

The petition is without merit.

After a thorough review of the records of the case, this Court finds that petitioner has not shown any compelling reason sufficient to
overturn the ruling of the Court of Appeals affirming the findings of the Secretary of Labor and Employment. It is axiomatic that the
findings of fact of the Court of Appeals are conclusive and binding on the Supreme Court and will not be reviewed or disturbed on
appeal. In this case, the petitioner failed to show any extraordinary circumstance justifying a departure from this established doctrine.

As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty to bargain collectively," as follows:

Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a mutual obligation to
meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours
of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under
such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel
any party to agree to a proposal or to make any concession.

Noteworthy in the above definition is the requirement on both parties of the performance of the mutual obligation to meet and
convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. Undoubtedly, respondent Association
of Employees and Faculty of Letran (AEFL) (hereinafter, "union") lived up to this requisite when it presented its proposals for the CBA
to petitioner on February 7, 1996. On the other hand, petitioner devised ways and means in order to prevent the negotiation.

Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply to the proposals presented
by the latter. More than a month after the proposals were submitted by the union, petitioner still had not made any counter-proposals.
This inaction on the part of petitioner prompted the union to file its second notice of strike on March 13, 1996. Petitioner could only
offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matter as its excuse for failing to file its
reply. This is a clear violation of Article 250 of the Labor Code governing the procedure in collective bargaining, to wit:

Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its
proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice. 4

xxx

As we have held in the case of Kiok Loy vs. NLRC,5 the company's refusal to make counter-proposal to the union's proposed CBA is an
indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union,
there is a clear evasion of the duty to bargain collectively. 6 In the case at bar, petitioner's actuation show a lack of sincere desire to
negotiate rendering it guilty of unfair labor practice.

Moreover, the series of events that transpired after the filing of the first notice of strike in January 1996 show petitioner's resort to
delaying tactics to ensure that negotiation would not push through. Thus, on February 15, 1996, or barely a few days after the union
proposals for the new CBA were submitted, the union president was informed by her superior that her work schedule was being
changed from Mondays to Fridays to Tuesdays to Saturdays. A request from the union president that the issue be submitted to a
grievance machinery was subsequently denied. Thereafter, the petitioner and the union met on March 27, 1996 to discuss the ground
rules for negotiation. However, just two days later, or on March 29, 1996, petitioner dismissed the union president for alleged
insubordination. In its final attempt to thwart the bargaining process, petitioner suspended the negotiation on the ground that it
allegedly received information that a new group of employees called the Association of Concerned Employees of Colegio (ACEC) had
filed a petition for certification election. Clearly, petitioner tried to evade its duty to bargain collectively.

Petitioner, however, argues that since it has already submitted the union's proposals to the Board of Trustees and that a series of
conferences had already been undertaken to discuss the ground rules for negotiation such should already be considered as acts
indicative of its intention to bargain. As pointed out earlier, the evidence on record belie the assertions of petitioner.
Petitioner, likewise, claims that the suspension of negotiation was proper since by the filing of the petition for certification election the
issue on majority representation of the employees has arose. According to petitioner, the authority of the union to negotiate on behalf
of the employees was challenged when a rival union filed a petition for certification election. Citing the case of Lakas Ng
Manggagawang Makabayan v. Marcelo Enterprises,7petitioner asserts that in view of the pendency of the petition for certification
election, it had no duty to bargain collectively with the union.

We disagree. In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification
election raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does not ipso
facto justify the suspension of negotiation by the employer. The petition must first comply with the provisions of the Labor Code and
its Implementing Rules. Foremost is that a petition for certification election must be filed during the sixty-day freedom period. The
"Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides that: " . If a
collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification
election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement." The
rule is based on Article 232,8 in relation to Articles 253, 253-A and 256 of the Labor Code. No petition for certification election for any
representation issue may be filed after the lapse of the sixty-day freedom period. The old CBA is extended until a new one is signed.
The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect
until a new CBA shall have been validly executed. 9 Hence, the contract bar rule still applies. 10 The purpose is to ensure stability in the
relationship of the workers and the company by preventing frequent modifications of any CBA earlier entered into by them in good
faith and for the stipulated original period.11

In the case at bar, the lifetime of the previous CBA was from 1989-1994.1wphi1 The petition for certification election by ACEC,
allegedly a legitimate labor organization, was filed with the Department of Labor and Employment (DOLE) only on May 26, 1996.
Clearly, the petition was filed outside the sixty-day freedom period. Hence, the filing thereof was barred by the existence of a valid
and existing collective bargaining agreement. Consequently, there is no legitimate representation issue and, as such, the filing of the
petition for certification election did not constitute a bar to the ongoing negotiation. Reliance, therefore, by petitioner of the ruling
in Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises 12 is misplaced since that case involved a legitimate representation
issue which is not present in the case at bar.

Significantly, the same petition for certification election was dismissed by the Secretary of Labor on October 25, 1996.1wphi1 The
dismissal was upheld by this Court in a Resolution, dated April 21, 1997. 13

In view of the above, there is no doubt that petitioner is guilty of unfair labor practice by its stern refusal to bargain in good faith with
respondent union.

Concerning the issue on the validity of the termination of the union president, we hold that the dismissal was effected in violation of
the employees' right to self-organization.

To justify the dismissal, petitioner asserts that the union president was terminated for cause, allegedly for insubordination for her
failure to comply with the new working schedule assigned to her, and pursuant to its managerial prerogative to discipline and/or
dismiss its employees. While we recognize the right of the employer to terminate the services of an employee for a just or authorized
cause, nevertheless, the dismissal of employees must be made within the parameters of law and pursuant to the tenets of equity and
fair play.14 The employer's right to terminate the services of an employee for just or authorized cause must be exercised in good
faith.15More importantly, it must not amount to interfering with, restraining or coercing employees in the exercise of their right to self-
organization because it would amount to, as in this case, unlawful labor practice under Article 248 of the Labor Code.

The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was dismissed in order to strip the
union of a leader who would fight for the right of her co-workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had
been working for the petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten
(10) years her working schedule was from Monday to Friday. However, things began to change when she was elected as union
president and when she started negotiating for a new CBA. Thus, it was when she was the union president and during the period of
tense and difficult negotiations when her work schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did
not budge, although her schedule was changed, she was outrightly dismissed for alleged insubordination. 16 We quote with approval
the following findings of the Secretary of Labor on this matter, to wit:

"Assuming arguendo that Ms. Ambas was guilty, such disobedience was not, however, a valid ground to teminate her employment.
The disputed management action was directly connected with Ms. Ambas' determination to change the complexion of the CBA. As a
matter of fact, Ms. Ambas' unflinching position in faithfully and truthfully carrying out her duties and responsibilities to her Union and
its members in getting a fair share of the fruits of their collective endeavors was the proximate cause for her dismissal, the charge of
insubordination being merely a ploy to give a color of legality to the contemplated management action to dismiss her. Thus, the
dismissal of Ms. Ambas was heavily tainted with and evidently done in bad faith. Manifestly, it was designed to interfere with the
members' right to self-organization.

Admittedly, management has the prerogative to discipline its employees for insubordination. But when the exercise of such
management right tends to interfere with the employees' right to self-organization, it amounts to union-busting and is therefore a
prohibited act. The dismissal of Ms. Ambas was clearly designed to frustrate the Union in its desire to forge a new CBA with the
College that is reflective of the true wishes and aspirations of the Union members. Her dismissal was merely a subterfuge to get rid of
her, which smacks of a pre-conceived plan to oust her from the premises of the College. It has the effect of busting the Union,
stripping it of its strong-willed leadership. When management refused to treat the charge of insubordination as a grievance within the
scope of the Grievance Machinery, the action of the College in finally dismissing her from the service became arbitrary, capricious
and whimsical, and therefore violated Ms. Ambas' right to due process." 17

In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming the findings of the Secretary of Labor
and Employment. The right to self-organization of employees must not be interfered with by the employer on the pretext of exercising
management prerogative of disciplining its employees. In this case, the totality of conduct of the employer shows an evident attempt
to restrain the employees from fully exercising their rights under the law. This cannot be done under the Labor Code.

WHEREFORE, premises considered, the petition is DENIED for lack of merit.

G.R. No. 116751 August 28, 1998

ORIENTAL TIN CAN LABOR UNION, petitioner,


vs.
SECRETARY OF LABOR AND EMPLOYMENT, ORIENTAL TIN CAN WORKERS UNION FEDERATION OF FREE WORKERS
[OTCWU-FFW] and ORIENTAL TIN CAN AND METAL SHEET MANUFACTURING, respondents.

ROMERO, J.:

Respondent (in G.R. No. 116751) and petitioner (in sister case G.R. No. 116779), Oriental Tin Can and Metal Sheet Manufacturing
Company, Inc. (the company) is engaged in the manufacture of tin can containers and metal sheets. On March 3, 1994, it entered into
a collective bargaining agreement (CBA) with petitioner Oriental Tin Can Labor Union (OTCLU) as the existing CBA was due to expire
on April 15, 1994. Four days later, 248 of the company's rank-and-file employees authorized the Federation of Free Workers (FFW) to
file a petition for certification election. 1 On March 10, 1994, however, this petition was repudiated via a written waiver 2 by 115 of the
signatories who, along with other employees totalling 897, ratified the CBA on the same date.

On March 18, 1994, armed with Charter Certificate No. IV-MEE-089, respondent Oriental Tin Can Workers Union Federation of Free
Workers (OTCWU-FFW) filed a petition for certification election with the National Capital Region office of the Department of Labor and
Employment (DOLE), pursuant to Article 256 of the Labor Code. Purporting to represent the regular rank-and-file employees of the
company, the petition was accompanied by the "authentic signatures" of 25% of the employees/workers in the bargaining unit.

The OTCLU filed a manifestation and motion on April 15, 1994, praying for the dismissal of the petition for certification election on the
ground that it was not endorsed by at least 25% of the employees of the bargaining unit. Some of the employees who initially signed
the petition had allegedly withdrawn in writing such support prior to the filing of the same.

The OTCWU-FFW filed a reply to said manifestation and motion, claiming that the retraction of support for the petition was "not
verified under oath" and, therefore, had no legal and binding effect. It further asserted that the petition had the required support of
more than 25% of all the employees in the bargaining unit.

For its part, the company filed a comment alleging inter alia that the new CBA was ratified by 897 out of the 1,020 rank-and-file
employees within the bargaining unit. The OTCLU then filed a motion to dismiss and/or position paper reiterating its position that the
petition did not comply with the 25% signature requirement and maintaining that the new CBA was a bar to a certification election.

To said comment and motion to dismiss, the OTCWU-FFW filed a consolidated reply, alleging that "an employer has no legal
personality to oppose a petition for certification election; that there are only 882 rank and file workers in the bargaining unit and not
1,020 which included supervisors and workers hired after the filing of the petition; that those who gave their support to the filing of
the petition did not withdraw or retract the same before or after the petition was filed; the Collective Bargaining Agreement (CBA)
between respondent company and Forced Intervenor (OTCLU) is a sweetheart contract and concluded within the freedom period; and
that additional employees gave their support to the petition after the same was filed." 3

The company filed a rejoinder to said consolidated reply, asserting its objection to the petition for certification election because the
case at bar "involves a collective bargaining agreement which was ratified by 897 employees including the 245 workers who had
earlier given their consent to the filing of the petition; that the benefits provided for therein are being enjoyed by the workers
themselves; that a certification election would impair the said contract; that the officers of (OTCWU-FFW) were among those who
ratified the CBA; and (OTCWU-FFW) failed to name the supervisors and workers hired after the filing of the petition that were allegedly
included in the list of rank and file employees." 4

In the meantime, on April 18, 1994, the DOLE issued a certificate of registration of the CBA pursuant to Article 231 of the Labor Code,
as amended by Republic Act No. 6715. It showed that the CBA between the company and the OTCLU would have the force and effect
of law between the parties that had complied with the requirements and standards for registration thereof.

On June 1, 1994, the officers of the OTCWU-FFW walked out of their jobs, prompting the company to require them to explain in writing
why no disciplinary action should be taken against them for walking out en masse. The following day, said union filed a notice of
strike with the National Conciliation and Mediation Board (NCMB) grounded on the alleged dismissal of union members/officers. Two
days later, the company directed said officers to report back to work within 48 hours, but none of them did.

In an order dated June 7, 1994, Med-Arbiter Renato D. Parugo dismissed the petition for certification election for lack of merit. Noting
that the petition was filed after the valid retractions were made, he concluded that by the withdrawal of support to the petition by
115 workers, the remaining 133 of the 1,020 employees were clearly less than the 25% subscription requirement. Thus, he opined:

There is merit to the Company's contention that by subsequently ratifying the CBA, the employees in effect
withdrew their previous support to the petition. Thus, when the petition was filed on March 18, 1994, it did not have
the required consent of the employees within the bargaining unit. Another factor which militates against the
petition is the fact that actually there are 1,020 rank and file workers in the bargaining unit. Twenty-five percent
(25%) of this is 255, but admittedly only 248 union members had originally authorized the filing of the petition. The
law expressly requires that a petition for certification election should be supported by the written consent of at least
25% of all the employees in the bargaining unit at the time of the filing thereof.

In view of the circumstances obtaining in the case at bar, we are constrained to order the dismissal of the instant
petition. Furthermore, it would be in the interest of industrial peace to deny the holding of a certification election
among the rank and file workers of respondent Company during the effectivity of the new CBA it appearing that out
of 1,020 rank and file employees, 897 have ratified the same and the benefits of which are currently being enjoyed
by all covered employees of respondent Company. 5

The OTCWU-FFW appealed this ruling to the Labor Secretary. On June 18, 1994, however, during the pendency of the appeal, said
union staged a strike that prevented the free ingress and egress of non-striking employees, delivery trucks and other vehicles to and
from the company's premises. Upon complaint of the company, the National Labor Relations Commission (NLRC) issued a writ of
preliminary injunction on July 19, 1994, on the ground that the strike caused the company to incur daily losses amounting to P3.6
million.

Meanwhile, on July 15, 1994, Undersecretary Bienvenido E. Laguesma, acting on the appeal of the OTCWU-FFW, issued a
resolution 6 holding that:

An examination of the records of this case shows that the subject CBA was concluded during the 60-day freedom
period of the old CBA which expired on 15 April 1994, and registered with the Regional Office of this Department on
18 April 1994 while the petition for certification election was filed on 18 March 1994. It is therefore, crystal clear
that, the present petition was filed during the freedom period and no registered CBA in the respondent
establishment could be invoked (to) pose as a bar to the holding of a certification election. In other words, when the
said CBA was registered there was a pending representation case. Consequently, said CBA cannot bar the election
being prayed for. This is the rule contained in Section 4, Rule V of the Rules and Regulations Implementing the
Labor Code, as amended, which provides that:

Sec. 4. Effects of early agreements. The representation case shall not, however, be adversely
affected by a collective bargaining agreement registered before or during the last sixty (60) days
of a subsisting agreement or during the pendency of the representation case. (Emphasis supplied)

On the issue of whether the 25% support requirement for filing the petition for certification election had been met, Undersecretary
Laguesma opined thus:

The rule being followed in case of alleged retractions and withdrawals, as appellant correctly pointed out, is that the
best forum for determining whether there was (sic) indeed retractions is the certification election itself wherein the
workers can freely express their choice in a secret ballot. (Atlas Free Workers Union vs. Noriel, et al., 104 SCRA 565)
The argument of (OTCLU) that since the withdrawal was made prior to the filing of the petition it should be
presumed voluntary and therefore, has adversely affected the petition, lacks merit. The Supreme Court ruling cited
in support of the argument (i.e. La Suede Cigar and Cigarette Factory, et al. vs. Director of the Bureau of Labor
Relations, et al., 123 SCRA 679) is not squarely applicable in the present case. For while in the said case it was
undisputably (sic) shown that 31 members have withdrawn their support to the petition, in the present case, the
employees who supposedly withdrew from the union executed joint statements (Sama-samang Pahayag) declaring
that the "WAIVER" document they signed has no force and effect considering that it was the product of duress, force
and intimidation employed by the company after it learned of the petition for certification election, and reiterating
their wish to be given the opportunity to choose the union of their choice. Said statements raised doubts on the
voluntariness of the retractions, destroyed the presumption that retractions made before the filing of the petition
are deemed voluntary and consequently brought the present case outside the mantle of the Atlas ruling

He added that even if there were 1,020 rank-and-file employees in the bargaining unit, the signatures gathered sufficed to meet the
25% support requirement because the Sama-samang Pahayag invalidating the previous "Waiver," contained 359 signatures which,
when added to the 165 signatures submitted by the OTCWU-FFW on May 27, 1994, brought the total to 524, much more than the
required 25% of the alleged 1,020 rank-and-file employees. Moreover, in case of doubt, the DOLE tends to favor the conduct of
certification election, for the rule on simultaneous submission of the consent signatures and the petition should be liberally
interpreted. As such, "contracts where the identity of the authorized representative of the workers is in doubt must be rejected in
favor of a more certain indication of the will of the workers. Any stability that does not establish the type of industrial peace
contemplated by the law must be subordinated to the employees' freedom to choose their real representative." Accordingly,
Undersecretary Laguesma disposed of the appeal as follows:

WHEREFORE, the appeal of the petitioner is hereby granted and the Order of the Med-Arbiter is hereby set aside. In
lieu thereof, a new order is hereby issued directing the conduct of a certification election among the regular rank
and file employees of the Oriental Tin Can and Metal Sheet Manufacturing, with the following as choices:

1. Oriental Tin Can Workers Union Federation of Free Workers (OTCWU-FFW);

2. Oriental Tin Can Labor Union (OTCLU);

3. No Union.

Let therefore, the entire records of this case be forwarded to the Regional Office of origin for the immediate conduct
of certification election, subject to the usual pre-election conference. The payrolls three (3) months before the filing
of the petition shall be the basis of the list of eligible voters.

SO RESOLVED.

Herein petitioners filed a motion for reconsideration of said resolution, but this was denied for lack of merit in the resolution dated
August 22, 1994. From this resolution, the company and the OTCLU filed separate petitions for certiorari before this Court.

G. R. No. 116779

In assailing the resolution of July 15, 1994, the company raises in issue the following grounds to show that the Labor Secretary,
through Undersecretary Laguesma, gravely abused his discretion in: (a) ordering the conduct of a certification election even though
the employees who signed the petition therefor had withdrawn their support by ratifying the CBA and even though no certification
election could be conducted without the written consent of at least 25% of all the employees in the bargaining unit, and (b) ruling, in
effect, "that the provision of Article 256 of the Labor Code takes precedence over that of Article 253 of the same Code."

The company concedes that, as an employer, it should "remain a bystander in the entire process of selection by the employees of
their bargaining representative, since the exercise is indisputably an all-employee affair." Nonetheless, it justifies its "right to question
the filing of the petition for certification election" by the situation "where, the small number of employees, the very ones who had
earlier supported the petition for certification election, subsequently changed their mind, and ratified the CBA and thereafter reaped
from its bounty." 7 Thus, in its desire to maintain industrial peace, the company deemed it necessary to challenge the propriety of
holding a certification election.

This argument is misleading.

It is a well-established rule that certification elections are exclusively the concern of employees; hence, the employer lacks the legal
personality to challenge the same. 8 In Golden Farms, Inc. v. Secretary of Labor, 9 the Court declared:

. . . Law and policy demand that employers take a strict, hands-off stance in certification elections. The bargaining
representative of employees should be chosen free from any extraneous influence of management. A labor
bargaining representative, to be effective, must owe its loyalty to the employees alone and to no other.
The only instance when an employer may concern itself with employee representation activities is when it has to file the petition for
certification election because there is no existing CBA in the unit and it was requested to bargain collectively, pursuant to Article 258
of the Labor code. 10 After filing the petition, the role of the employer ceases and it becomes a mere bystander. 11 The company's
interference in the certification election below by actively opposing the same is manifestly uncalled-for and unduly creates a
suspicion that it intends to establish a company union. 12 On this score, it is clear that the perceived grave abuse of discretion on the
part of the Labor Secretary is non-existent and G.R. No. 116779 should, consequently, be dismissed. This case will now proceed and
decided on the merits of the issues raised in G.R. No. 116751.

G.R. No. 116751

The OTCLU contends that the Labor Secretary acted without jurisdiction or with grave abuse of discretion: (a) in "imposing upon the
employees the manner of choosing their collective bargaining representative by ordering a certification election notwithstanding the
fact that the overwhelming majority of the employees have already decided to retain the petitioner (OCTLU) as their collective
bargaining representative," and (b) in giving due course to the petition for certification election even though it lacked the required
support of 25% of the employees.

(a) The OTCLU maintains that the Labor Secretary improperly prescribed the mode of picking a collective bargaining agent upon the
employees who effectively repudiated the "notion" of a certification election by ratifying the CBA entered into during the freedom
period

This contention is without merit as it runs counter to the policy of the State on the matter.

Undersecretary Laguesma, by authority of the Secretary of the DOLE, was exercising the function of the Department to "(e)nforce
social and labor legislation to protect the working class and regulate the relations between the worker and his employee" 13 when he
issued the resolution being assailed in the instant petition. As will be shown shortly, he was merely applying the law applicable to the
appeal raised before his office.

The Labor Code imposes upon the employer and the representative of the employees the duty to bargain collectively. 14 Since the
question of right of representation as between competing labor organizations in a bargaining unit is imbued with public interest, 15 the
law governs the choice of a collective bargaining representative which shall be the duly certified agent of the employees concerned.
An official certification becomes necessary where the bargaining agent fails to present adequate and reasonable proof of its majority
authorization and where the employer demands it, or when the employer honestly doubts the majority representation of several
contending bargaining groups. 16 In fact, Article 255 of the Labor Code allows the majority of the employees in an appropriate
collective bargaining unit to designate or select the labor organization which shall be their exclusive representative for the purpose of
collective bargaining.

The designation or selection of the bargaining representative without, however, going through the process set out by law for the
conduct of a certification election applies only when representation is not in issue. There is no problem if a union is unanimously
chosen by a majority of the employees as their bargaining representative, but a question of representation arising from the presence
of more than one union in a bargaining unit aspiring to be the employees' representative, can only be resolved by holding a
certification election under the supervision of the proper government authority. Thus:

It bears stressing that no obstacle must be placed to the holding of certification elections, for it is a statutory policy
that should not be circumvented. We have held that whenever there is doubt as to whether a particular union
represents the majority of the rank-and-file employees, in the absence of a legal impediment, the holding of a
certification election is the most democratic method of determining the employees' choice of their bargaining
representative. It is the appropriate means whereby controversies and disputes on representation may be laid to
rest, by the unequivocal vote of the employees themselves. Indeed, it is the keystone of industrial democracy. 17

Given these premises, the filing of a petition for certification election by one of the two unions in the bargaining unit is enough basis
for the DOLE, through its authorized official, to implement the law by directing the conduct of a certification election.

Art. 253-A of the Labor Code explicitly provides that the aspect of a union's representation of the rank-and-file employees contained
in the CBA shall be for a term of five (5) years and that "(n)o petition questioning the majority status of the incumbent bargaining
agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of
the sixty-day period immediately before the date of expiry of such five year term of the Collective Bargaining Agreement."
Accordingly, Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code provides that "(i)f a collective bargaining
agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for
intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement."

It is uncontroverted that the petition for certification election in this case was filed on March 18, 1994, twenty-eight days before the
expiration of the existing CBA on April 15, 1994, and well within the 60-day period provided for by the Code. The OTCLU, however, is
concerned with the effect of the employees' ratification of the new CBA on the timely filing of the petition for certification election.
Would such ratification nullify the petition?

The law dictates a negative reply. The filing of a petition for certification election during the 60-day freedom period gives rise to a
representation case that must be resolved even though a new CBA has been entered into within that period. This is clearly provided
for in the aforequoted Section 4, Rule V, Book V of the Omnibus Rules Implementing the Labor Code. The reason behind this rule is
obvious. A petition for certification election is not necessary where the employees are one in their choice of a representative in the
bargaining process. Moreover, said provision of the Omnibus Rules manifests the intent of the legislative authority to allow, if not
encourage, the contending unions in a bargaining unit to hold a certification election during the freedom period. Hence, the Court
held in the case of Warren Manufacturing Workers Union (WMWU) v. Bureau of Labor Relations, 18 that the agreement prematurely
signed by the union and the company during the freedom period does not affect the petition for certification election filed by another
union.

(b) As regards the 25% support requirement, we concur with public respondent's finding that said requisite has been met in this case.
With regard to the finding that the "waiver" document executed by the employees "was the product of duress, force and intimidation
employed by the company after it learned of the petition for certification election," 19 the following pronouncement of the Court is
relevant:

. . . Even doubts as to the required 30% being met warrant (the) holding of the certification election. In fact, once
the required percentage requirement has been reached, the employees' withdrawal from union membership taking
place after the filing of the petition for certification election will not affect the petition. On the contrary, the
presumption arises that the withdrawal was not free but was procured through duress, coercion or for a valuable
consideration. Hence, the subsequent disaffiliation of the six (6) employees from the union will not be counted
against or deducted from the previous number who had signed up for certification . . . 20 (Citations omitted)

21
The support requirement is a mere technicality which should be employed in determining the true will of the workers instead of
frustrating the same. Thus, in Port Workers Union of the Philippines (PWUP) v. Laguesma, 22 this Court declared that:

In line with this policy (that the holding of a certification election is a certain and definitive mode of arriving at the
choice of the employees' bargaining representative), we feel that the administrative rule requiring the simultaneous
submission of the 25% consent signatures upon the filing of the petition for certification election should not be
strictly applied to frustrate the determination of the legitimate representative of the workers. Significantly, the
requirement in the rule is not found in Article 256, the law it seeks to implement. This is all the more reason why
the regulation should at best be given only a directory effect. Accordingly, we hold that the mere filing of a petition
for certification election within the freedom period is sufficient basis for the issuance of an order for the holding of a
certification election, subject to the submission of the consent signatures within a reasonable period from such
filing.

All doubts as to the number of employees actually supporting the holding of a certification election should, therefore, be resolved by
going through such procedure. It is judicially settled that a certification election is the most effective and expeditious means of
determining which labor organizations can truly represent the working force in the appropriate bargaining unit of the company. 23 If
the OTCLU wanted to be retained as the rank-and-file employees' bargaining representative, it should have sought their vote, not
engaged in legal sophistry. The selection by the majority of the employees of the union which would best represent them in the CBA
negotiations should be achieved through the democratic process of an election. 24

The fear expressed by the OTCLU that granting the petition for certification election would be prejudicial to all the employees since
the new CBA would run the risk of being nullified and the employees would be required to restitute whatever benefits they might
have received under the new CBA, is to be dismissed as being baseless and highly speculative.

The benefits that may be derived from the implementation of the CBA prematurely entered into between the OTCLU and the company
shall, therefore, be in full force and effect until the appropriate bargaining representative is chosen and negotiations for a new
collective bargaining agreement is thereafter concluded. 25 A struggle between contending labor unions must not jeopardize the
implementation of a CBA that is advantageous to employees.

WHEREFORE, both petitions for certiorari are hereby DISMISSED. This decision is immediately executory. Costs against petitioners.
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 Resolution2 of the Court of Appeals in CA-G.R. SP No. 76175, which affirmed the December 27, 2002 Decision 3 and February
13, 2003 Resolution4 of the Secretary of the Department of Labor and Employment (SOLE) that set aside the August 10, 2002
Decision5 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 non-academic 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 non-teaching 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 reconsideration 21 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.27 Subsequently, 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, 2003 29 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 12 38of 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 rank-and-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 by-laws; 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 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.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 rank-
and-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 non-academic
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.

G.R. No. 142824 December 19, 2001

INTERPHIL LABORATORIES EMPLOYEES UNION-FFW, ENRICO GONZALES and MA. THERESA MONTEJO,petitioners,
vs.
INTERPHIL LABORATORIES, INC., AND HONORABLE LEONARDO A. QUISUMBING, SECRETARY OF LABOR AND
EMPLOYMENT, respondents.

KAPUNAN, J.:

Assailed in this petition for review on certiorari are the decision, promulgated on 29 December 1999, and the resolution, promulgated
on 05 April 2000, of the Court of Appeals in CA-G.R. SP No. 50978.

Culled from the questioned decision, the facts of the case are as follows:

Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank-and-file employees of Interphil
Laboratories, Inc., a company engaged in the business of manufacturing and packaging pharmaceutical products. They had a
Collective Bargaining Agreement (CBA) effective from 01 August 1990 to 31 July 1993.

Prior to the expiration of the CBA or sometime in February 1993, Allesandro G. Salazar, 1 Vice-President-Human Resources Department
of respondent company, was approached by Nestor Ocampo, the union president, and Hernando Clemente, a union director. The two
union officers inquired about the stand of the company regarding the duration of the CBA which was set to expire in a few months.
Salazar told the union officers that the matter could be best discussed during the formal negotiations which would start soon.

In March 1993, Ocampo and Clemente again approached Salazar. They inquired once more about the CBA status and received the
same reply from Salazar. In April 1993, Ocampo requested for a meeting to discuss the duration and effectivity of the CBA. Salazar
acceded and a meeting was held on 15 April 1993 where the union officers asked whether Salazar would be amenable to make the
new CBA effective for two (2) years, starting 01 August 1993. Salazar, however, declared that it would still be premature to discuss
the matter and that the company could not make a decision at the moment. The very next day, or on 16 April 1993, all the rank-and-
file employees of the company refused to follow their regular two-shift work schedule of from 6:00 a.m. to 6:00 p.m., and from 6:00
p.m. to 6:00 a.m. At 2:00 p.m. and 2:00 a.m., respectively, the employees stopped working and left their workplace without sealing
the containers and securing the raw materials they were working on. When Salazar inquired about the reason for their refusal to
follow their normal work schedule, the employees told him to "ask the union officers." To minimize the damage the overtime boycott
was causing the company, Salazar immediately asked for a meeting with the union officers. In the meeting, Enrico Gonzales, a union
director, told Salazar that the employees would only return to their normal work schedule if the company would agree to their
demands as to the effectivity and duration of the new CBA. Salazar again told the union officers that the matter could be better
discussed during the formal renegotiations of the CBA. Since the union was apparently unsatisfied with the answer of the company,
the overtime boycott continued. In addition, the employees started to engage in a work slowdown campaign during the time they
were working, thus substantially delaying the production of the company. 2

On 14 May 1993, petitioner union submitted with respondent company its CBA proposal, and the latter filed its counter-proposal.

On 03 September 1993, respondent company filed with the National Labor Relations Commission (NLRC) a petition to declare illegal
petitioner union's "overtime boycott" and "work slowdown" which, according to respondent company, amounted to illegal strike. The
case, docketed NLRC-NCR Case No. 00-09-05529-93, was assigned to Labor Arbiter Manuel R. Caday.

On 22 October 1993, respondent company filed with the National Conciliation and Mediation Board (NCMB) an urgent request for
preventive mediation aimed to help the parties in their CBA negotiations. 3 The parties, however, failed to arrive at an agreement and
on 15 November 1993, respondent company filed with the Office of the Secretary of Labor and Employment a petition for assumption
of jurisdiction.

On 24 January 1994, petitioner union filed with the NCMB a Notice of Strike citing unfair labor practice allegedly committed by
respondent company. On 12 February 1994, the union staged a strike.

On 14 February 1994, Secretary of Labor Nieves Confesor issued an assumption order 4 over the labor dispute. On 02 March 1994,
Secretary Confesor issued an order directing respondent company to "immediately accept all striking workers, including the fifty-three
(53) terminated union officers, shop stewards and union members back to work under the same terms and conditions prevailing prior
to the strike, and to pay all the unpaid accrued year end benefits of its employees in 1993." 5 On the other hand, petitioner union was
directed to "strictly and immediately comply with the return-to-work orders issued by (the) Office x x x 6 The same order pronounced
that "(a)ll pending cases which are direct offshoots of the instant labor dispute are hereby subsumed herewith." 7

In the i, the case before Labor Arbiter Caday continued. On 16 March 1994, petitioner union filed an "Urgent Manifestation and Motion
to Consolidate the Instant Case and to Suspend Proceedings" seeking the consolidation of the case with the labor dispute pending
before the Secretary of Labor. Despite objection by respondent company, Labor Arbiter Caday held in abeyance the proceedings
before him. However, on 06 June 1994, Acting Labor Secretary Jose S. Brillantes, after finding that the issues raised would require a
formal hearing and the presentation of evidentiary matters, directed Labor Arbiters Caday and M. Sol del Rosario to proceed with the
hearing of the cases before them and to thereafter submit their report and recommendation to his office.

On 05 September 1995, Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo A.
Quisumbing.8 Then Secretary Quisumbing approved and adopted the report in his Order, dated 13 August 1997, hence:

WHEREFORE, finding the said Report of Labor Arbiter Manuel R. Caday to be supported by substantial evidence, this Office
hereby RESOLVES to APPROVE and ADOPT the same as the decision in this case, and judgment is hereby rendered:

(1) Declaring the 'overtime boycott' and 'work slowdown' as illegal strike;

(2) Declaring the respondent union officers namely:

Nestor Ocampo President

Carmelo Santos Vice-President

Marites Montejo Treasurer/Board Member

Rico Gonzales Auditor


Rod Abuan Director

Segundino Flores Director

Hernando Clemente Director

who spearheaded and led the overtime boycott and work slowdown, to have lost their employment status; and

(3) Finding the respondents guilty of unfair labor practice for violating the then existing CBA which prohibits the union or any
employee during the existence of the CBA from staging a strike or engaging in slowdown or interruption of work and ordering
them to cease and desist from further committing the aforesaid illegal acts.

Petitioner union moved for the reconsideration of the order but its motion was denied. The union went to the Court of Appeals via a
petition for certiorari. In the now questioned decision promulgated on 29 December 1999, the appellate court dismissed the petition.
The union's motion for reconsideration was likewise denied.

Hence, the present recourse where petitioner alleged:

THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS, LIKE THE HONORABLE PUBLIC RESPONDENT IN THE
PROCEEDINGS BELOW, COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION
WHEN IT COMPLETELY DISREGARDED "PAROL EVIDENCE RULE" IN THE EVALUATION AND APPRECIATION OF EVIDENCE
PROFERRED BY THE PARTIES.

THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO
LACK AND/OR EXCESS OF JURISDICTION, WHEN IT DID NOT DECLARE PRIVATE RESPONDENT'S ACT OF EXTENDING
SUBSTANTIAL SEPARATION PACKAGE TO ALMOST ALL INVOLVED OFFICERS OF PETITIONER UNION, DURING THE PENDENCY OF
THE CASE, AS TANTAMOUNT TO CONDONATION, IF INDEED, THERE WAS ANY MISDEED COMMITTED.

THE HONORABLE FIFTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO
LACK AND/OR EXCESS OF JURISDICTION WHEN IT HELD THAT THE SECRETARY OF LABOR AND EMPLOYMENT HAS
JURISDICTION OVER A CASE (A PETITION TO DECLARE STRIKE ILLEGAL) WHICH HAD LONG BEEN FILED AND PENDING BEFORE
THE LABOR ARBITER.9

We sustain the questioned decision.

On the matter of the authority and jurisdiction of the Secretary of Labor and Employment to rule on the illegal strike committed by
petitioner union, it is undisputed that the petition to declare the strike illegal before Labor Arbiter Caday was filed long before the
Secretary of Labor and Employment issued the assumption order on 14 February 1994. However, it cannot be denied that the issues
of "overtime boycott" and "work slowdown" amounting to illegal strike before Labor Arbiter Caday are intertwined with the labor
dispute before the Labor Secretary. In fact, on 16 March 1994, petitioner union even asked Labor Arbiter Caday to suspend the
proceedings before him and consolidate the same with the case before the Secretary of Labor. When Acting Labor Secretary Brillantes
ordered Labor Arbiter Caday to continue with the hearing of the illegal strike case, the parties acceded and participated in the
proceedings, knowing fully well that there was also a directive for Labor Arbiter Caday to thereafter submit his report and
recommendation to the Secretary. As the appellate court pointed out, the subsequent participation of petitioner union in the
continuation of the hearing was in effect an affirmation of the jurisdiction of the Secretary of Labor.

The appellate court also correctly held that the question of the Secretary of Labor and Employment's jurisdiction over labor and labor-
related disputes was already settled in International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated Labor
Union (ALU)10 where the Court declared:

In the present case, the Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume
jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national
interest, and decide the same accordingly. Necessarily, this authority to assume jurisdiction over the said labor dispute must
include and extend to all questions and controversies arising therefrom, including cases over which the labor arbiter has
exclusive jurisdiction.

Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptions thereto. This is evident from the
opening proviso therein reading '(e)xcept as otherwise provided under this Code . . .' Plainly, Article 263(g) of the Labor Code
was meant to make both the Secretary (or the various regional directors) and the labor arbiters share jurisdiction, subject to
certain conditions. Otherwise, the Secretary would not be able to effectively and efficiently dispose of the primary dispute. To
hold the contrary may even lead to the absurd and undesirable result wherein the Secretary and the labor arbiter concerned
may have diametrically opposed rulings. As we have said, '(i)t is fundamental that a statute is to be read in a manner that
would breathe life into it, rather than defeat it.

In fine, the issuance of the assailed orders is within the province of the Secretary as authorized by Article 263(g) of the Labor
Code and Article 217(a) and (5) of the same Code, taken conjointly and rationally construed to subserve the objective of the
jurisdiction vested in the Secretary.11

Anent the alleged misappreciation of the evidence proffered by the parties, it is axiomatic that the factual findings of the Labor
Arbiter, when sufficiently supported by the evidence on record, must be accorded due respect by the Supreme Court. 12 Here, the
report and recommendation of Labor Arbiter Caday was not only adopted by then Secretary of Labor Quisumbing but was likewise
affirmed by the Court of Appeals. We see no reason to depart from their findings.

Petitioner union maintained that the Labor Arbiter and the appellate court disregarded the "parol evidence rule" 13when they upheld
the allegation of respondent company that the work schedule of its employees was from 6:00 a.m. to 6:00 p.m. and from 6:00 p.m. to
6:00 am. According to petitioner union, the provisions of their CBA on working hours clearly stated that the normal working hours
were "from 7:30 a.m. to 4:30 p.m." 14 Petitioner union underscored that the regular work hours for the company was only eight (8)
hours. It further contended that the Labor Arbiter as well as the Court of Appeals should not have admitted any other evidence
contrary to what was stated in the CBA.

The reliance on the parol evidence rule is misplaced. In labor cases pending before the Commission or the Labor Arbiter, the rules of
evidence prevailing in courts of law or equity are not controlling. 15 Rules of procedure and evidence are not applied in a very rigid and
technical sense in labor cases.16 Hence, the Labor Arbiter is not precluded from accepting and evaluating evidence other than, and
even contrary to, what is stated in the CBA.

In any event, the parties stipulated:

Section 1. Regular Working Hours A normal workday shall consist of not more than eight (8) hours. The regular working
hours for the Company shall be from 7:30 A.M. to 4:30 P.M. The schedule of shift work shall be maintained; however the
company may change the prevailing work time at its discretion, should such change be necessary in the operations of the
Company. All employees shall observe such rules as have been laid down by the company for the purpose of effecting
control over working hours.17

It is evident from the foregoing provision that the working hours may be changed, at the discretion of the company, should such
change be necessary for its operations, and that the employees shall observe such rules as have been laid down by the company. In
the case before us, Labor Arbiter Caday found that respondent company had to adopt a continuous 24-hour work daily schedule by
reason of the nature of its business and the demands of its clients. It was established that the employees adhered to the said work
schedule since 1988. The employees are deemed to have waived the eight-hour schedule since they followed, without any question
or complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule effectively
changed the working hours stipulated in the CBA. As the employees assented by practice to this arrangement, they cannot now be
heard to claim that the overtime boycott is justified because they were not obliged to work beyond eight hours.

As Labor Arbiter Caday elucidated in his report:

Respondents' attempt to deny the existence of such regular overtime schedule is belied by their own awareness of the
existence of the regular overtime schedule of 6:00 A.M. to 6:00 P.M. and 6:00 P.M. to 6:00 A.M. of the following day that has
been going on since 1988. Proof of this is the case undisputedly filed by the union for and in behalf of its members, wherein
it is claimed that the company has not been computing correctly the night premium and overtime pay for work rendered
between 2:00 A.M. and 6:00 A.M. of the 6:00 P.M. to 6:00 A.M. shift. (tsn pp. 9-10, testimony of Alessandro G. Salazar during
hearing on August 9, 1994). In fact, the union Vice-President Carmelo C. Santos, demanded that the company make a
recomputation of the overtime records of the employees from 1987 (Exh. "P"). Even their own witness, union Director Enrico
C. Gonzales, testified that when in 1992 he was still a Quality Control Inspector at the Sucat Plant of the company, his
schedule was sometime at 6:00 A.M. to 6:00 P.M., sometime at 6:00 A.M. to 2:00 P.M., at 2:00 P.M. to 10:00 P.M. and
sometime at 6:00 P.M. to 6:00 A.M., and when on the 6 to 6 shifts, he received the commensurate pay (t.s.n. pp. 7-9, hearing
of January 10, 1994). Likewise, while in the overtime permits, dated March 1, 6, 8, 9 to 12, 1993, which were passed around
daily for the employees to sign, his name appeared but without his signatures, he however had rendered overtime during
those dates and was paid because unlike in other departments, it has become a habit to them to sign the overtime schedule
weekly (t.s.n. pp. 26-31, hearing of January 10, 1994). The awareness of the respondent union, its officers and members
about the existence of the regular overtime schedule of 6:00 A.M. to 6:00 P.M. and 6:00 P.M. to 6:00 A.M. of the following day
will be further shown in the discussion of the second issue.18

As to the second issue of whether or not the respondents have engaged in "overtime boycott" and "work slowdown" from
April 16, 1993 up to March 7, 1994, both amounting to illegal strike, the evidence presented is equally crystal clear that the
"overtime boycott" and "work slowdown" committed by the respondents amounted to illegal strike.

As undisputably testified to by Mr. Alessandro G. Salazar, the company's Vice-President-Human Resources Department,
sometime in February, 1993, he was approached by the union President Nestor Ocampo and Union Director Hernando
Clemente who asked him as to what was the stand of the company regarding the duration of the CBA between the company
and which was set to expire on July 31, 1993. He answered that the matter could be best discussed during the formal
renegotiations which anyway was to start soon. This query was followed up sometime in March, 1993, and his answer was
the same. In early April, 1993, the union president requested for a meeting to discuss the duration and effectivity of the CBA.
Acceding to the request, a meeting was held on April 15, 1993 wherein the union officers asked him if he would agree to
make the new CBA effective on August 1, 1993 and the term thereof to be valid for only two (2) years. When he answered
that it was still premature to discuss the matter, the very next day, April 16, 1993, all the rank and file employees of the
company refused to follow their regular two-shift work schedule of 6:00 A.M. to 6:00 P.M. and 6:00 P.M. to 6:00 A.M., when
after the 8-hours work, they abruptly stopped working at 2:00 P.M. and 2:00 A.M., respectively, leaving their place of work
without sealing the containers and securing the raw materials they were working on. When he saw the workers leaving
before the end of their shift, he asked them why and their reply was "asked (sic) the union officers." Alarmed by the overtime
boycott and the damage it was causing the company, he requested for a meeting with the union officers. In the meeting, he
asked them why the regular work schedule was not being followed by the employees, and union Director Enrico Gonzales,
with the support of the other union officers, told him that if management would agree to a two-year duration for the new
CBA and an effectivity date of August 1, 1993, all employees will return to the normal work schedule of two 12-hour shifts.
When answered that the management could not decide on the matter at the moment and to have it discussed and agreed
upon during the formal renegotiations, the overtime boycott continued and the employees at the same time employed a
work slowdown campaign during working hours, causing considerable delay in the production and complaints from the
clients/customers (Exh. "O", Affidavit of Alessandro G. Salazar which formed part of his direct testimony). This testimonial
narrations of Salazar was, as earlier said, undisputed because the respondents' counsel waived his cross examination (t.s.n.
p. 15, hearing on August 9, 1994).

Aside from the foregoing undisputed testimonies of Salazar, the testimonies of other Department Managers pointing to the
union officers as the instigators of the overtime boycott and work slowdown, the testimony of Epifanio Salumbides (Exh. "Y")
a union member at the time the concerted activities of the respondents took place, is quoted hereunder:

"2. Noon Pebrero 1993, ipinatawag ng Presidente ng Unyon na si Nestor Ocampo ang lahat ng taga-maintenance ng
bawat departamento upang dumalo sa isang miting. Sa miting na iyon, sinabi ni Rod Abuan, na isang Direktor ng
Unyon, na mayroon ilalabas na memo ang Unyon na nag-uutos sa mga empleyado ng Kompanya na mag-imbento
ng sari-saring dahilan para lang hindi sila makapagtrabaho ng "overtime". Sinabihan rin ako ni Tessie Montejo na
siya namang Treasurer ng Unyon na 'Manny, huwag ka na lang pumasok sa Biyernes para hindi ka masabihan ng
magtrabaho ng Sabado at Linggo' na siya namang araw ng "overtime" ko x x x

"3. Nakalipas ang dalawang buwan at noong unang bahagi ng Abril 1993, miniting kami ng Shop Stewards namin na
sina Ariel Abenoja, Dany Tansiongco at Vicky Baron. Sinabihan kami na huwag ng mag-overtime pag nagbigay ng
senyas ang Unyon ng "showtime."

"4. Noong umaga ng ika-15 ng Abril 1993, nagsabi na si Danny Tansiongco ng "showtime". Dahil dito wala ng
empleyadong nag-overtime at sabay-sabay silang umalis, maliban sa akin. Ako ay pumasok rin noong Abril 17 at
18, 1993 na Sabado at Linggo.

"5. Noong ika-19 ng Abril 1993, ako ay ipinatawag ni Ariel Abenoja Shop Steward, sa opisina ng Unyon. Nadatnan ko
doon ang halos lahat ng opisyales ng Unyon na sina:

Nestor Ocampo Presidente

Carmelo Santos Bise-Presidente

Nanding Clemente Director

TessMontejo Chief Steward

Segundo Flores Director

Enrico Gonzales Auditor

Boy Alcantara Shop Steward

Rod Abuan Director


at marami pang iba na hindi ko na maala-ala. Pagpasok ko, ako'y pinaligiran ng mga opisyales ng Unyon. Tinanong
ako ni Rod Aguan kung bakit ako "nag-overtime" gayong "Binigyan ka na namin ng instruction na huwag pumasok,
pinilit mo pa ring pumasok." "Management ka ba o Unyonista." Sinagot ko na ako ay Unyonista. Tinanong niya muli
kung bakit ako pumasok. Sinabi ko na wala akong maibigay na dahilan para lang hindi pumasok at "mag-overtime."
Pagkatapos nito, ako ay pinagmumura ng mga opisyales ng Unyon kaya't ako ay madaliang umalis.

xxx xxx xxx

Likewise, the respondents' denial of having a hand in the work slowdown since there was no change in the performance and
work efficiency for the year 1993 as compared to the previous year was even rebuffed by their witness Ma. Theresa Montejo,
a Quality Control Analyst. For on cross-examination, she (Montejo) admitted that she could not answer how she was able to
prepare the productivity reports from May 1993 to February 1994 because from April 1993 up to April 1994, she was on
union leave. As such, the productivity reports she had earlier shown was not prepared by her since she had no personal
knowledge of the reports (t.s.n. pp. 32-35, hearing of February 27, 1995). Aside from this admission, the comparison made
by the respondents was of no moment, because the higher production for the years previous to 1993 was reached when the
employees regularly rendered overtime work. But undeniably, overtime boycott and work slowdown from April 16, 1993 up
to March 7, 1994 had resulted not only in financial losses to the company but also damaged its business reputation.

Evidently, from all the foregoing, respondents' unjustified unilateral alteration of the 24-hour work schedule thru their
concerted activities of "overtime boycott" and "work slowdown" from April 16, 1993 up to March 7, 1994, to force the
petitioner company to accede to their unreasonable demands, can be classified as a strike on an installment basis, as
correctly called by petitioner company x x x19

It is thus undisputed that members of the union by their own volition decided not to render overtime services in April
1993.20 Petitioner union even admitted this in its Memorandum, dated 12 April 1999, filed with the Court of Appeals, as well as in the
petition before this Court, which both stated that "(s)ometime in April 1993, members of herein petitioner, on their own volition and in
keeping with the regular working hours in the Company x x x decided not to render overtime". 21 Such admission confirmed the
allegation of respondent company that petitioner engaged in "overtime boycott" and "work slowdown" which, to use the words of
Labor Arbiter Caday, was taken as a means to coerce respondent company to yield to its unreasonable demands.

More importantly, the "overtime boycott" or "work slowdown" by the employees constituted a violation of their CBA, which prohibits
the union or employee, during the existence of the CBA, to stage a strike or engage in slowdown or interruption of work. 22 In Ilaw at
Buklod ng Manggagawa vs. NLRC ,23 this Court ruled:

x x x (T)he concerted activity in question would still be illicit because contrary to the workers' explicit contractual
commitment "that there shall be no strikes, walkouts, stoppage or slowdown of work, boycotts, secondary boycotts, refusal
to handle any merchandise, picketing, sit-down strikes of any kind, sympathetic or general strikes, or any other interference
with any of the operations of the COMPANY during the term of x x x (their collective bargaining) agreement."

What has just been said makes unnecessary resolution of SMC's argument that the workers' concerted refusal to adhere to
the work schedule in force for the last several years, is a slowdown, an inherently illegal activity essentially illegal even in
the absence of a no-strike clause in a collective bargaining contract, or statute or rule. The Court is in substantial agreement
with the petitioner's concept of a slowdown as a "strike on the installment plan;" as a willful reduction in the rate of work by
concerted action of workers for the purpose of restricting the output of the employer, in relation to a labor dispute; as an
activity by which workers, without a complete stoppage of work, retard production or their performance of duties and
functions to compel management to grant their demands. The Court also agrees that such a slowdown is generally
condemned as inherently illicit and unjustifiable, because while the employees "continue to work and remain at their
positions and accept the wages paid to them," they at the same time "select what part of their allotted tasks they care to
perform of their own volition or refuse openly or secretly, to the employer's damage, to do other work;" in other words, they
"work on their own terms." x x x24

Finally, the Court cannot agree with the proposition that respondent company, in extending substantial separation package to some
officers of petitioner union during the pendency of this case, in effect, condoned the illegal acts they committed.

Respondent company correctly postured that at the time these union officers obtained their separation benefits, they were still
considered employees of the company. Hence, the company was merely complying with its legal obligations. 25 Respondent company
could have withheld these benefits pending the final resolution of this case. Yet, considering perhaps the financial hardships
experienced by its employees and the economic situation prevailing, respondent company chose to let its employees avail of their
separation benefits. The Court views the gesture of respondent company as an act of generosity for which it should not be punished.

WHEREFORE, the petition is DENIED DUE COURSE and the 29 December 1999 decision of the Court of Appeals is AFFIRMED.

SO ORDERED.
G.R. No. L-31195 June 5, 1973

PHILIPPINE BLOOMING MILLS EMPLOYMENT ORGANIZATION, NICANOR TOLENTINO, FLORENCIO, PADRIGANO RUFINO,
ROXAS MARIANO DE LEON, ASENCION PACIENTE, BONIFACIO VACUNA, BENJAMIN PAGCU and RODULFO
MUNSOD, petitioners,
vs.
PHILIPPINE BLOOMING MILLS CO., INC. and COURT OF INDUSTRIAL RELATIONS, respondents.

The petitioner Philippine Blooming Mills Employees Organization (hereinafter referred to as PBMEO) is a legitimate labor union
composed of the employees of the respondent Philippine Blooming Mills Co., Inc., and petitioners Nicanor Tolentino, Florencio
Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin Pagcu and Rodulfo Munsod are officers and
members of the petitioner Union.

Petitioners claim that on March 1, 1969, they decided to stage a mass demonstration at Malacaang on March 4, 1969, in protest
against alleged abuses of the Pasig police, to be participated in by the workers in the first shift (from 6 A.M. to 2 P.M.) as well as those
in the regular second and third shifts (from 7 A.M. to 4 P.M. and from 8 A.M. to 5 P.M., respectively); and that they informed the
respondent Company of their proposed demonstration.

The questioned order dated September 15, 1969, of Associate Judge Joaquin M. Salvador of the respondent Court reproduced the
following stipulation of facts of the parties parties

3. That on March 2, 1969 complainant company learned of the projected mass demonstration at Malacaang in
protest against alleged abuses of the Pasig Police Department to be participated by the first shift (6:00 AM-2:00 PM)
workers as well as those working in the regular shifts (7:00 A.M. to 4:00 PM and 8:00 AM to 5:00 PM) in the morning
of March 4, 1969;

4. That a meeting was called by the Company on March 3, 1969 at about 11:00 A.M. at the Company's canteen, and
those present were: for the Company: (1) Mr. Arthur L. Ang (2) Atty. S. de Leon, Jr., (3) and all department and
section heads. For the PBMEO (1) Florencio Padrigano, (2) Rufino Roxas, (3) Mariano de Leon, (4) Asencion Paciente,
(5) Bonifacio Vacuna and (6) Benjamin Pagcu.

5. That the Company asked the union panel to confirm or deny said projected mass demonstration at Malacaang
on March 4, 1969. PBMEO thru Benjamin Pagcu who acted as spokesman of the union panel, confirmed the planned
demonstration and stated that the demonstration or rally cannot be cancelled because it has already been agreed
upon in the meeting. Pagcu explained further that the demonstration has nothing to do with the Company because
the union has no quarrel or dispute with Management;

6. That Management, thru Atty. C.S. de Leon, Company personnel manager, informed PBMEO that the
demonstration is an inalienable right of the union guaranteed by the Constitution but emphasized, however, that
any demonstration for that matter should not unduly prejudice the normal operation of the Company. For which
reason, the Company, thru Atty. C.S. de Leon warned the PBMEO representatives that workers who belong to the
first and regular shifts, who without previous leave of absence approved by the Company, particularly , the officers
present who are the organizers of the demonstration, who shall fail to report for work the following morning (March
4, 1969) shall be dismissed, because such failure is a violation of the existing CBA and, therefore, would be
amounting to an illegal strike;

7. That at about 5:00 P.M. on March 3, 1969, another meeting was convoked Company represented by Atty. C.S. de
Leon, Jr. The Union panel was composed of: Nicanor Tolentino, Rodolfo Munsod, Benjamin Pagcu and Florencio
Padrigano. In this afternoon meeting of March 3, 1969, Company reiterated and appealed to the PBMEO
representatives that while all workers may join the Malacaang demonstration, the workers for the first and regular
shift of March 4, 1969 should be excused from joining the demonstration and should report for work; and thus utilize
the workers in the 2nd and 3rd shifts in order not to violate the provisions of the CBA, particularly Article XXIV: NO
LOCKOUT NO STRIKE'. All those who will not follow this warning of the Company shall be dismiss; De Leon
reiterated the Company's warning that the officers shall be primarily liable being the organizers of the mass
demonstration. The union panel countered that it was rather too late to change their plans inasmuch as the
Malacaang demonstration will be held the following morning; and

8. That a certain Mr. Wilfredo Ariston, adviser of PBMEO sent a cablegram to the Company which was received 9:50
A.M., March 4, 1969, the contents of which are as follows: 'REITERATING REQUEST EXCUSE DAY SHIFT EMPLOYEES
JOINING DEMONSTRATION MARCH 4, 1969.' (Pars. 3-8, Annex "F", pp. 42-43, rec.)
Because the petitioners and their members numbering about 400 proceeded with the demonstration despite the pleas of the
respondent Company that the first shift workers should not be required to participate in the demonstration and that the workers in
the second and third shifts should be utilized for the demonstration from 6 A.M. to 2 P.M. on March 4, 1969, respondent Company
prior notice of the mass demonstration on March 4, 1969, with the respondent Court, a charge against petitioners and other
employees who composed the first shift, charging them with a "violation of Section 4(a)-6 in relation to Sections 13 and 14, as well as
Section 15, all of Republic Act No. 875, and of the CBA providing for 'No Strike and No Lockout.' " (Annex "A", pp. 19-20, rec.). The
charge was accompanied by the joint affidavit of Arthur L. Ang and Cesareo de Leon, Jr. (Annex "B", pp. 21-24, rec.). Thereafter, a
corresponding complaint was filed, dated April 18, 1969, by Acting Chief Prosecutor Antonio T. Tirona and Acting Prosecutor Linda P.
Ilagan (Annex "C", pp. 25-30, rec.)

In their answer, dated May 9, 1969, herein petitioners claim that they did not violate the existing CBA because they gave the
respondent Company prior notice of the mass demonstration on March 4, 1969; that the said mass demonstration was a valid
exercise of their constitutional freedom of speech against the alleged abuses of some Pasig policemen; and that their mass
demonstration was not a declaration of strike because it was not directed against the respondent firm (Annex "D", pp. 31-34, rec.)

After considering the aforementioned stipulation of facts submitted by the parties, Judge Joaquin M. Salvador, in an order dated
September 15, 1969, found herein petitioner PBMEO guilty of bargaining in bad faith and herein petitioners Florencio Padrigano,
Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin Pagcu, Nicanor Tolentino and Rodulfo Munsod as
directly responsible for perpetrating the said unfair labor practice and were, as a consequence, considered to have lost their status as
employees of the respondent Company (Annex "F", pp. 42-56, rec.)

Herein petitioners claim that they received on September 23, 1969, the aforesaid order (p. 11, rec.); and that they filed on September
29, 1969, because September 28, 1969 fell on Sunday (p. 59, rec.), a motion for reconsideration of said order dated September 15,
1969, on the ground that it is contrary to law and the evidence, as well as asked for ten (10) days within which to file their arguments
pursuant to Sections 15, 16 and 17 of the Rules of the CIR, as amended (Annex "G", pp. 57-60, rec. )

In its opposition dated October 7, 1969, filed on October 11, 1969 (p. 63, rec.), respondent Company averred that herein petitioners
received on September 22, 1969, the order dated September 17 (should be September 15), 1969; that under Section 15 of the
amended Rules of the Court of Industrial Relations, herein petitioners had five (5) days from September 22, 1969 or until September
27, 1969, within which to file their motion for reconsideration; and that because their motion for reconsideration was two (2) days
late, it should be accordingly dismissed, invoking Bien vs. Castillo, 1 which held among others, that a motion for extension of the five-
day period for the filing of a motion for reconsideration should be filed before the said five-day period elapses (Annex "M", pp. 61-64,
rec.).

Subsequently, herein petitioners filed on October 14, 1969 their written arguments dated October 11, 1969, in support of their motion
for reconsideration (Annex "I", pp. 65-73, rec.).

In a resolution dated October 9, 1969, the respondent en banc dismissed the motion for reconsideration of herein petitioners for
being pro forma as it was filed beyond the reglementary period prescribed by its Rules (Annex "J", pp. 74-75, rec.), which herein
petitioners received on October 28, 196 (pp. 12 & 76, rec.).

At the bottom of the notice of the order dated October 9, 1969, which was released on October 24, 1969 and addressed to the
counsels of the parties (pp. 75-76, rec.), appear the requirements of Sections 15, 16 and 17, as amended, of the Rules of the Court of
Industrial Relations, that a motion for reconsideration shall be filed within five (5) days from receipt of its decision or order and that
an appeal from the decision, resolution or order of the C.I.R., sitting en banc, shall be perfected within ten (10) days from receipt
thereof (p. 76, rec.).

On October 31, 1969, herein petitioners filed with the respondent court a petition for relief from the order dated October 9, 1969, on
the ground that their failure to file their motion for reconsideration on time was due to excusable negligence and honest mistake
committed by the president of the petitioner Union and of the office clerk of their counsel, attaching thereto the affidavits of the said
president and clerk (Annexes "K", "K-1" and "K-2", rec.).

Without waiting for any resolution on their petition for relief from the order dated October 9, 1969, herein petitioners filed on
November 3, 1969, with the Supreme Court, a notice of appeal (Annex "L", pp. 88-89, rec.).

There is need of briefly restating basic concepts and principles which underlie the issues posed by the case at bar.

(1) In a democracy, the preservation and enhancement of the dignity and worth of the human personality is the central core as well
as the cardinal article of faith of our civilization. The inviolable character of man as an individual must be "protected to the largest
possible extent in his thoughts and in his beliefs as the citadel of his person." 2
(2) The Bill of Rights is designed to preserve the ideals of liberty, equality and security "against the assaults of opportunism, the
expediency of the passing hour, the erosion of small encroachments, and the scorn and derision of those who have no patience with
general principles." 3

In the pithy language of Mr. Justice Robert Jackson, the purpose of the Bill of Rights is to withdraw "certain subjects from the
vicissitudes of political controversy, to place them beyond the reach of majorities and officials, and to establish them as legal
principles to be applied by the courts. One's rights to life, liberty and property, to free speech, or free press, freedom of worship and
assembly, and other fundamental rights may not be submitted to a vote; they depend on the outcome of no elections." 4 Laski
proclaimed that "the happiness of the individual, not the well-being of the State, was the criterion by which its behaviour was to be
judged. His interests, not its power, set the limits to the authority it was entitled to exercise." 5

(3) The freedoms of expression and of assembly as well as the right to petition are included among the immunities reserved by the
sovereign people, in the rhetorical aphorism of Justice Holmes, to protect the ideas that we abhor or hate more than the ideas we
cherish; or as Socrates insinuated, not only to protect the minority who want to talk, but also to benefit the majority who refuse to
listen. 6 And as Justice Douglas cogently stresses it, the liberties of one are the liberties of all; and the liberties of one are not safe
unless the liberties of all are protected. 7

(4) The rights of free expression, free assembly and petition, are not only civil rights but also political rights essential to man's
enjoyment of his life, to his happiness and to his full and complete fulfillment. Thru these freedoms the citizens can participate not
merely in the periodic establishment of the government through their suffrage but also in the administration of public affairs as well
as in the discipline of abusive public officers. The citizen is accorded these rights so that he can appeal to the appropriate
governmental officers or agencies for redress and protection as well as for the imposition of the lawful sanctions on erring public
officers and employees.

(5) While the Bill of Rights also protects property rights, the primacy of human rights over property rights is recognized. 8 Because
these freedoms are "delicate and vulnerable, as well as supremely precious in our society" and the "threat of sanctions may deter
their exercise almost as potently as the actual application of sanctions," they "need breathing space to survive," permitting
government regulation only "with narrow specificity." 9

Property and property rights can be lost thru prescription; but human rights are imprescriptible. If human rights are extinguished by
the passage of time, then the Bill of Rights is a useless attempt to limit the power of government and ceases to be an efficacious
shield against the tyranny of officials, of majorities, of the influential and powerful, and of oligarchs political, economic or
otherwise.

In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a preferred position as they are essential to the
preservation and vitality of our civil and political institutions; 10 and such priority "gives these liberties the sanctity and the sanction
not permitting dubious intrusions." 11

The superiority of these freedoms over property rights is underscored by the fact that a mere reasonable or rational relation between
the means employed by the law and its object or purpose that the law is neither arbitrary nor discriminatory nor oppressive
would suffice to validate a law which restricts or impairs property rights. 12 On the other hand, a constitutional or valid infringement of
human rights requires a more stringent criterion, namely existence of a grave and immediate danger of a substantive evil which the
State has the right to prevent. So it has been stressed in the main opinion of Mr. Justice Fernando in Gonzales vs. Comelec and
reiterated by the writer of the opinion in Imbong vs. Ferrer. 13 It should be added that Mr. Justice Barredo in Gonzales vs.
Comelec, supra, like Justices Douglas, Black and Goldberg in N.Y. Times Co. vs. Sullivan, 14 believes that the freedoms of speech and
of the press as well as of peaceful assembly and of petition for redress of grievances are absolute when directed against public
officials or "when exercised in relation to our right to choose the men and women by whom we shall be governed," 15 even as Mr.
Justice Castro relies on the balancing-of-interests test. 16 Chief Justice Vinson is partial to the improbable danger rule formulated by
Chief Judge Learned Hand, viz. whether the gravity of the evil, discounted by its improbability, justifies such invasion of free
expression as is necessary to avoid the danger. 17

II

The respondent Court of Industrial Relations, after opining that the mass demonstration was not a declaration of strike, concluded
that by their "concerted act and the occurrence temporary stoppage of work," herein petitioners are guilty bargaining in bad faith and
hence violated the collective bargaining agreement with private respondent Philippine Blooming Mills Co., inc.. Set against and tested
by foregoing principles governing a democratic society, such conclusion cannot be sustained. The demonstration held petitioners on
March 4, 1969 before Malacaang was against alleged abuses of some Pasig policemen, not against their employer, herein private
respondent firm, said demonstrate was purely and completely an exercise of their freedom expression in general and of their right of
assembly and petition for redress of grievances in particular before appropriate governmental agency, the Chief Executive, again the
police officers of the municipality of Pasig. They exercise their civil and political rights for their mutual aid protection from what they
believe were police excesses. As matter of fact, it was the duty of herein private respondent firm to protect herein petitioner Union
and its members fro the harassment of local police officers. It was to the interest herein private respondent firm to rally to the
defense of, and take up the cudgels for, its employees, so that they can report to work free from harassment, vexation or peril and as
consequence perform more efficiently their respective tasks enhance its productivity as well as profits. Herein respondent employer
did not even offer to intercede for its employees with the local police. Was it securing peace for itself at the expenses of its workers?
Was it also intimidated by the local police or did it encourage the local police to terrorize or vex its workers? Its failure to defend its
own employees all the more weakened the position of its laborers the alleged oppressive police who might have been all the more
emboldened thereby subject its lowly employees to further indignities.

In seeking sanctuary behind their freedom of expression well as their right of assembly and of petition against alleged persecution of
local officialdom, the employees and laborers of herein private respondent firm were fighting for their very survival, utilizing only the
weapons afforded them by the Constitution the untrammelled enjoyment of their basic human rights. The pretension of their
employer that it would suffer loss or damage by reason of the absence of its employees from 6 o'clock in the morning to 2 o'clock in
the afternoon, is a plea for the preservation merely of their property rights. Such apprehended loss or damage would not spell the
difference between the life and death of the firm or its owners or its management. The employees' pathetic situation was a stark
reality abused, harassment and persecuted as they believed they were by the peace officers of the municipality. As above
intimated, the condition in which the employees found themselves vis-a-vis the local police of Pasig, was a matter that vitally affected
their right to individual existence as well as that of their families. Material loss can be repaired or adequately compensated. The
debasement of the human being broken in morale and brutalized in spirit-can never be fully evaluated in monetary terms. The
wounds fester and the scars remain to humiliate him to his dying day, even as he cries in anguish for retribution, denial of which is
like rubbing salt on bruised tissues.

As heretofore stated, the primacy of human rights freedom of expression, of peaceful assembly and of petition for redress of
grievances over property rights has been sustained. 18 Emphatic reiteration of this basic tenet as a coveted boon at once the
shield and armor of the dignity and worth of the human personality, the all-consuming ideal of our enlightened civilization becomes
Our duty, if freedom and social justice have any meaning at all for him who toils so that capital can produce economic goods that can
generate happiness for all. To regard the demonstration against police officers, not against the employer, as evidence of bad faith in
collective bargaining and hence a violation of the collective bargaining agreement and a cause for the dismissal from employment of
the demonstrating employees, stretches unduly the compass of the collective bargaining agreement, is "a potent means of inhibiting
speech" and therefore inflicts a moral as well as mortal wound on the constitutional guarantees of free expression, of peaceful
assembly and of petition. 19

The collective bargaining agreement which fixes the working shifts of the employees, according to the respondent Court Industrial
Relations, in effect imposes on the workers the "duty ... to observe regular working hours." The strain construction of the Court of
Industrial Relations that a stipulated working shifts deny the workers the right to stage mass demonstration against police abuses
during working hours, constitutes a virtual tyranny over the mind and life the workers and deserves severe condemnation.
Renunciation of the freedom should not be predicated on such a slender ground.

The mass demonstration staged by the employees on March 4, 1969 could not have been legally enjoined by any court, such an
injunction would be trenching upon the freedom expression of the workers, even if it legally appears to be illegal picketing or
strike. 20 The respondent Court of Industrial Relations in the case at bar concedes that the mass demonstration was not a declaration
of a strike "as the same not rooted in any industrial dispute although there is concerted act and the occurrence of a temporary
stoppage work." (Annex "F", p. 45, rec.).

The respondent firm claims that there was no need for all its employees to participate in the demonstration and that they suggested
to the Union that only the first and regular shift from 6 A.M. to 2 P.M. should report for work in order that loss or damage to the firm
will be averted. This stand failed appreciate the sine qua non of an effective demonstration especially by a labor union, namely the
complete unity of the Union members as well as their total presence at the demonstration site in order to generate the maximum
sympathy for the validity of their cause but also immediately action on the part of the corresponding government agencies with
jurisdiction over the issues they raised against the local police. Circulation is one of the aspects of freedom of expression. 21 If
demonstrators are reduced by one-third, then by that much the circulation of the issues raised by the demonstration is diminished.
The more the participants, the more persons can be apprised of the purpose of the rally. Moreover, the absence of one-third of their
members will be regarded as a substantial indication of disunity in their ranks which will enervate their position and abet continued
alleged police persecution. At any rate, the Union notified the company two days in advance of their projected demonstration and the
company could have made arrangements to counteract or prevent whatever losses it might sustain by reason of the absence of its
workers for one day, especially in this case when the Union requested it to excuse only the day-shift employees who will join the
demonstration on March 4, 1969 which request the Union reiterated in their telegram received by the company at 9:50 in the morning
of March 4, 1969, the day of the mass demonstration (pp. 42-43, rec.). There was a lack of human understanding or compassion on
the part of the firm in rejecting the request of the Union for excuse from work for the day shifts in order to carry out its mass
demonstration. And to regard as a ground for dismissal the mass demonstration held against the Pasig police, not against the
company, is gross vindictiveness on the part of the employer, which is as unchristian as it is unconstitutional.

III

The respondent company is the one guilty of unfair labor practice. Because the refusal on the part of the respondent firm to permit all
its employees and workers to join the mass demonstration against alleged police abuses and the subsequent separation of the eight
(8) petitioners from the service constituted an unconstitutional restraint on the freedom of expression, freedom of assembly and
freedom petition for redress of grievances, the respondent firm committed an unfair labor practice defined in Section 4(a-1) in
relation to Section 3 of Republic Act No. 875, otherwise known as the Industrial Peace Act. Section 3 of Republic Act No. 8 guarantees
to the employees the right "to engage in concert activities for ... mutual aid or protection"; while Section 4(a-1) regards as an unfair
labor practice for an employer interfere with, restrain or coerce employees in the exercise their rights guaranteed in Section Three."

We repeat that the obvious purpose of the mass demonstration staged by the workers of the respondent firm on March 4, 1969, was
for their mutual aid and protection against alleged police abuses, denial of which was interference with or restraint on the right of the
employees to engage in such common action to better shield themselves against such alleged police indignities. The insistence on
the part of the respondent firm that the workers for the morning and regular shift should not participate in the mass demonstration,
under pain of dismissal, was as heretofore stated, "a potent means of inhibiting speech." 22

Such a concerted action for their mutual help and protection deserves at least equal protection as the concerted action of employees
in giving publicity to a letter complaint charging bank president with immorality, nepotism, favoritism an discrimination in the
appointment and promotion of ban employees. 23 We further ruled in the Republic Savings Bank case, supra, that for the employees
to come within the protective mantle of Section 3 in relation to Section 4(a-1) on Republic Act No. 875, "it is not necessary that union
activity be involved or that collective bargaining be contemplated," as long as the concerted activity is for the furtherance of their
interests. 24

As stated clearly in the stipulation of facts embodied in the questioned order of respondent Court dated September 15, 1969, the
company, "while expressly acknowledging, that the demonstration is an inalienable right of the Union guaranteed by the
Constitution," nonetheless emphasized that "any demonstration for that matter should not unduly prejudice the normal operation of
the company" and "warned the PBMEO representatives that workers who belong to the first and regular shifts, who without previous
leave of absence approved by the Company, particularly the officers present who are the organizers of the demonstration, who shall
fail to report for work the following morning (March 4, 1969) shall be dismissed, because such failure is a violation of the existing CBA
and, therefore, would be amounting to an illegal strike (;)" (p. III, petitioner's brief). Such threat of dismissal tended to coerce the
employees from joining the mass demonstration. However, the issues that the employees raised against the local police, were more
important to them because they had the courage to proceed with the demonstration, despite such threat of dismissal. The most that
could happen to them was to lose a day's wage by reason of their absence from work on the day of the demonstration. One day's pay
means much to a laborer, more especially if he has a family to support. Yet, they were willing to forego their one-day salary hoping
that their demonstration would bring about the desired relief from police abuses. But management was adamant in refusing to
recognize the superior legitimacy of their right of free speech, free assembly and the right to petition for redress.

Because the respondent company ostensibly did not find it necessary to demand from the workers proof of the truth of the alleged
abuses inflicted on them by the local police, it thereby concedes that the evidence of such abuses should properly be submitted to
the corresponding authorities having jurisdiction over their complaint and to whom such complaint may be referred by the President
of the Philippines for proper investigation and action with a view to disciplining the local police officers involved.

On the other hand, while the respondent Court of Industrial Relations found that the demonstration "paralyzed to a large extent the
operations of the complainant company," the respondent Court of Industrial Relations did not make any finding as to the fact of loss
actually sustained by the firm. This significant circumstance can only mean that the firm did not sustain any loss or damage. It did not
present evidence as to whether it lost expected profits for failure to comply with purchase orders on that day; or that penalties were
exacted from it by customers whose orders could not be filled that day of the demonstration; or that purchase orders were cancelled
by the customers by reason of its failure to deliver the materials ordered; or that its own equipment or materials or products were
damaged due to absence of its workers on March 4, 1969. On the contrary, the company saved a sizable amount in the form of wages
for its hundreds of workers, cost of fuel, water and electric consumption that day. Such savings could have amply compensated for
unrealized profits or damages it might have sustained by reason of the absence of its workers for only one day.

IV

Apart from violating the constitutional guarantees of free speech and assembly as well as the right to petition for redress of
grievances of the employees, the dismissal of the eight (8) leaders of the workers for proceeding with the demonstration and
consequently being absent from work, constitutes a denial of social justice likewise assured by the fundamental law to these lowly
employees. Section 5 of Article II of the Constitution imposes upon the State "the promotion of social justice to insure the well-being
and economic security of all of the people," which guarantee is emphasized by the other directive in Section 6 of Article XIV of the
Constitution that "the State shall afford protection to labor ...". Respondent Court of Industrial Relations as an agency of the State is
under obligation at all times to give meaning and substance to these constitutional guarantees in favor of the working man; for
otherwise these constitutional safeguards would be merely a lot of "meaningless constitutional patter." Under the Industrial Peace
Act, the Court of Industrial Relations is enjoined to effect the policy of the law "to eliminate the causes of industrial unrest by
encouraging and protecting the exercise by employees of their right to self-organization for the purpose of collective bargaining
and for the promotion of their moral, social and economic well-being." It is most unfortunate in the case at bar that respondent Court
of Industrial Relations, the very governmental agency designed therefor, failed to implement this policy and failed to keep faith with
its avowed mission its raison d'etre as ordained and directed by the Constitution.

V
It has been likewise established that a violation of a constitutional right divests the court of jurisdiction; and as a consequence its
judgment is null and void and confers no rights. Relief from a criminal conviction secured at the sacrifice of constitutional liberties,
may be obtained through habeas corpus proceedings even long after the finality of the judgment. Thus, habeas corpus is the remedy
to obtain the release of an individual, who is convicted by final judgment through a forced confession, which violated his
constitutional right against self-incrimination; 25or who is denied the right to present evidence in his defense as a deprivation of his
liberty without due process of law, 26even after the accused has already served sentence for twenty-two years. 27

Both the respondents Court of Industrial Relations and private firm trenched upon these constitutional immunities of petitioners. Both
failed to accord preference to such rights and aggravated the inhumanity to which the aggrieved workers claimed they had been
subjected by the municipal police. Having violated these basic human rights of the laborers, the Court of Industrial Relations ousted
itself of jurisdiction and the questioned orders it issued in the instant case are a nullity. Recognition and protection of such freedoms
are imperative on all public offices including the courts 28 as well as private citizens and corporations, the exercise and enjoyment of
which must not be nullified by mere procedural rule promulgated by the Court Industrial Relations exercising a purely delegate
legislative power, when even a law enacted by Congress must yield to the untrammelled enjoyment of these human rights. There is
no time limit to the exercise of the freedoms. The right to enjoy them is not exhausted by the delivery of one speech, the printing of
one article or the staging of one demonstration. It is a continuing immunity to be invoked and exercised when exigent and expedient
whenever there are errors to be rectified, abuses to be denounced, inhumanities to be condemned. Otherwise these guarantees in
the Bill of Rights would be vitiated by rule on procedure prescribing the period for appeal. The battle then would be reduced to a race
for time. And in such a contest between an employer and its laborer, the latter eventually loses because he cannot employ the best
an dedicated counsel who can defend his interest with the required diligence and zeal, bereft as he is of the financial resources with
which to pay for competent legal services. 28-a

VI

The Court of Industrial Relations rule prescribes that motion for reconsideration of its order or writ should filed within five (5) days
from notice thereof and that the arguments in support of said motion shall be filed within ten (10) days from the date of filing of such
motion for reconsideration (Sec. 16). As above intimated, these rules of procedure were promulgated by the Court of Industrial
Relations pursuant to a legislative delegation. 29

The motion for reconsideration was filed on September 29, 1969, or seven (7) days from notice on September 22, 1969 of the order
dated September 15, 1969 or two (2) days late. Petitioners claim that they could have filed it on September 28, 1969, but it was a
Sunday.

Does the mere fact that the motion for reconsideration was filed two (2) days late defeat the rights of the petitioning employees? Or
more directly and concretely, does the inadvertent omission to comply with a mere Court of Industrial Relations procedural rule
governing the period for filing a motion for reconsideration or appeal in labor cases, promulgated pursuant to a legislative delegation,
prevail over constitutional rights? The answer should be obvious in the light of the aforecited cases. To accord supremacy to the
foregoing rules of the Court of Industrial Relations over basic human rights sheltered by the Constitution, is not only incompatible with
the basic tenet of constitutional government that the Constitution is superior to any statute or subordinate rules and regulations, but
also does violence to natural reason and logic. The dominance and superiority of the constitutional right over the aforesaid Court of
Industrial Relations procedural rule of necessity should be affirmed. Such a Court of Industrial Relations rule as applied in this case
does not implement or reinforce or strengthen the constitutional rights affected,' but instead constrict the same to the point of
nullifying the enjoyment thereof by the petitioning employees. Said Court of Industrial Relations rule, promulgated as it was pursuant
to a mere legislative delegation, is unreasonable and therefore is beyond the authority granted by the Constitution and the law. A
period of five (5) days within which to file a motion for reconsideration is too short, especially for the aggrieved workers, who usually
do not have the ready funds to meet the necessary expenses therefor. In case of the Court of Appeals and the Supreme Court, a
period of fifteen (15) days has been fixed for the filing of the motion for re hearing or reconsideration (See. 10, Rule 51; Sec. 1, Rule
52; Sec. 1, Rule 56, Revised Rules of Court). The delay in the filing of the motion for reconsideration could have been only one day if
September 28, 1969 was not a Sunday. This fact accentuates the unreasonableness of the Court of Industrial are concerned.

It should be stressed here that the motion for reconsideration dated September 27, 1969, is based on the ground that the order
sought to be reconsidered "is not in accordance with law, evidence and facts adduced during the hearing," and likewise prays for an
extension of ten (10) days within which to file arguments pursuant to Sections 15, 16 and 17 of the Rules of the Court of Industrial
Relations (Annex "G", pp. 57-60, rec.); although the arguments were actually filed by the herein petitioners on October 14, 1969
(Annex "I", pp. 70-73, rec.), long after the 10-day period required for the filing of such supporting arguments counted from the filing of
the motion for reconsideration. Herein petitioners received only on October 28, 1969 the resolution dated October 9, 1969 dismissing
the motion for reconsideration for being pro forma since it was filed beyond the reglementary period (Annex "J", pp. 74-75, rec.)

It is true that We ruled in several cases that where a motion to reconsider is filed out of time, or where the arguments in suppf such
motion are filed beyond the 10 day reglementary period provided for by the Court of Industrial Relations rules, the order or decision
subject of 29-a reconsideration becomes final and unappealable. But in all these cases, the constitutional rights of free expression,
free assembly and petition were not involved.
It is a procedural rule that generally all causes of action and defenses presently available must be specifically raised in the complaint
or answer; so that any cause of action or defense not raised in such pleadings, is deemed waived. However, a constitutional issue can
be raised any time, even for the first time on appeal, if it appears that the determination of the constitutional issue is necessary to a
decision of the case, the very lis mota of the case without the resolution of which no final and complete determination of the dispute
can be made. 30 It is thus seen that a procedural rule of Congress or of the Supreme Court gives way to a constitutional right. In the
instant case, the procedural rule of the Court of Industrial Relations, a creature of Congress, must likewise yield to the constitutional
rights invoked by herein petitioners even before the institution of the unfair labor practice charged against them and in their defense
to the said charge.

In the case at bar, enforcement of the basic human freedoms sheltered no less by the organic law, is a most compelling reason to
deny application of a Court of Industrial Relations rule which impinges on such human rights. 30-a

It is an accepted principle that the Supreme Court has the inherent power to "suspend its own rules or to except a particular case
from its operation, whenever the purposes of justice require." 30-b Mr. Justice Barredo in his concurring opinion in Estrada vs. Sto.
Domingo. 30-c reiterated this principle and added that

Under this authority, this Court is enabled to cove with all situations without concerning itself about procedural
niceties that do not square with the need to do justice, in any case, without further loss of time, provided that the
right of the parties to a full day in court is not substantially impaired. Thus, this Court may treat an appeal as a
certiorari and vice-versa. In other words, when all the material facts are spread in the records before Us, and all the
parties have been duly heard, it matters little that the error of the court a quo is of judgment or of jurisdiction. We
can then and there render the appropriate judgment. Is within the contemplation of this doctrine that as it is
perfectly legal and within the power of this Court to strike down in an appeal acts without or in excess of jurisdiction
or committed with grave abuse of discretion, it cannot be beyond the admit of its authority, in appropriate cases, to
reverse in a certain proceed in any error of judgment of a court a quo which cannot be exactly categorized as a
flaw of jurisdiction. If there can be any doubt, which I do not entertain, on whether or not the errors this Court has
found in the decision of the Court of Appeals are short of being jurisdiction nullities or excesses, this Court would
still be on firm legal grounds should it choose to reverse said decision here and now even if such errors can be
considered as mere mistakes of judgment or only as faults in the exercise of jurisdiction, so as to avoid the
unnecessary return of this case to the lower court for the sole purpose of pursuing the ordinary course of an appeal.
(Emphasis supplied). 30-d

Insistence on the application of the questioned Court industrial Relations rule in this particular case at bar would an unreasoning
adherence to "Procedural niceties" which denies justice to the herein laborers, whose basic human freedoms, including the right to
survive, must be according supremacy over the property rights of their employer firm which has been given a full hearing on this
case, especially when, as in the case at bar, no actual material damage has be demonstrated as having been inflicted on its property
rights.

If We can disregard our own rules when justice requires it, obedience to the Constitution renders more imperative the suspension of a
Court of Industrial Relations rule that clash with the human rights sanctioned and shielded with resolution concern by the specific
guarantees outlined in the organic law. It should be stressed that the application in the instant case Section 15 of the Court of
Industrial Relations rules relied upon by herein respondent firm is unreasonable and therefore such application becomes
unconstitutional as it subverts the human rights of petitioning labor union and workers in the light of the peculiar facts and
circumstances revealed by the record.

The suspension of the application of Section 15 of the Court of Industrial Relations rules with reference to the case at is also
authorized by Section 20 of Commonwealth Act No. 103, the C.I.R. charter, which enjoins the Court of Industrial Relations to "act
according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms ..."

On several occasions, We emphasized this doctrine which was re-stated by Mr. Justice Barredo, speaking for the Court, in the 1970
case of Kapisanan, etc. vs. Hamilton, etc., et. al., 30-e thus:

As to the point that the evidence being offered by the petitioners in the motion for new trial is not "newly
discovered," as such term is understood in the rules of procedure for the ordinary courts, We hold that such
criterion is not binding upon the Court of Industrial Relations. Under Section 20 of Commonwealth Act No. 103, 'The
Court of Industrial Relations shall adopt its, rules or procedure and shall have such other powers as generally
pertain to a court of justice: Provided, however, That in the hearing, investigation and determination of any
question or controversy and in exercising any duties and power under this Act, the Court shall act according to
justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be
bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and
equitable.' By this provision the industrial court is disengaged from the rigidity of the technicalities applicable to
ordinary courts. Said court is not even restricted to the specific relief demanded by the parties but may issue such
orders as may be deemed necessary or expedient for the purpose of settling the dispute or dispelling any doubts
that may give rise to future disputes. (Ang Tibay v. C.I.R., G.R. No. 46496, Feb. 17, 1940; Manila Trading & Supply
Co. v. Phil. Labor, 71 Phil. 124.) For these reasons, We believe that this provision is ample enough to have enabled
the respondent court to consider whether or not its previous ruling that petitioners constitute a minority was
founded on fact, without regard to the technical meaning of newly discovered evidence. ... (Alonso v. Villamor, 16
Phil. 315; Chua Kiong v. Whitaker, 46 Phil. 578). (emphasis supplied.)

To apply Section 15 of the Court of Industrial Relations rules with "pedantic rigor" in the instant case is to rule in effect that the poor
workers, who can ill-afford an alert competent lawyer, can no longer seek the sanctuary of human freedoms secured to them by the
fundamental law, simply because their counsel erroneously believing that he received a copy of the decision on September 23,
1969, instead of September 22, 1969 - filed his motion for reconsideration September 29, 1969, which practically is only one day late
considering that September 28, 1969 was a Sunday.

Many a time, this Court deviated from procedure technicalities when they ceased to be instruments of justice, for the attainment of
which such rules have been devised. Summarizing the jurisprudence on this score, Mr. Justice Fernando, speaking for a unanimous
Court in Palma vs. Oreta, 30-f Stated:

As was so aptly expressed by Justice Moreland in Alonso v. Villamor (16 Phil. 315 [1910]. The Villamor decision was
cited with approval in Register of Deeds v. Phil. Nat. Bank, 84 Phil. 600 [1949]; Potenciano v. Court of Appeals, 104
Phil. 156 [1958] and Uy v. Uy, 14243, June 30, 1961, 2 SCRA 675.), decided as far back as 1910, "technicality. when
it deserts its proper-office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant
consideration from courts." (Ibid., p, 322.) To that norm, this Court has remained committed. The late Justice Recto
in Blanco v. Bernabe, (63 Phil. 124 [1936]) was of a similar mind. For him the interpretation of procedural rule
should never "sacrifice the ends justice." While "procedural laws are no other than technicalities" view them in their
entirety, 'they were adopted not as ends themselves for the compliance with which courts have organized and
function, but as means conducive to the realization the administration of the law and of justice ( Ibid., p.,128). We
have remained steadfastly opposed, in the highly rhetorical language Justice Felix, to "a sacrifice of substantial
rights of a litigant in altar of sophisticated technicalities with impairment of the sacred principles of justice."
(Potenciano v. Court of Appeals, 104 Phil. 156, 161 [1958]). As succinctly put by Justice Makalintal, they "should
give way to the realities of the situation." (Urbayan v. Caltex, L-15379, Aug. 31, 1962, 5 SCRA 1016, 1019). In the
latest decision in point promulgated in 1968, (Udan v. Amon, (1968, 23 SCRA citing McEntee v. Manotok, L-14968,
Oct. 27, 1961, 3 SCRA 272.) Justice Zaldivar was partial to an earlier formulation of Justice Labrador that rules of
procedure "are not to be applied in a very rigid, technical sense"; but are intended "to help secure substantial
justice." (Ibid., p. 843) ... 30-g

Even if the questioned Court of Industrial Relations orders and rule were to be given effect, the dismissal or termination of the
employment of the petitioning eight (8) leaders of the Union is harsh for a one-day absence from work. The respondent Court itself
recognized the severity of such a sanction when it did not include the dismissal of the other 393 employees who are members of the
same Union and who participated in the demonstration against the Pasig police. As a matter of fact, upon the intercession of the
Secretary of Labor, the Union members who are not officers, were not dismissed and only the Union itself and its thirteen (13) officers
were specifically named as respondents in the unfair labor practice charge filed against them by the firm (pp. 16-20, respondent's
Brief; Annexes "A", "B" and "C", pp. 20-30, rec.). Counsel for respondent firm insinuates that not all the 400 or so employee
participated in the demonstration, for which reason only the Union and its thirteen (13) officers were specifically named in the unfair
labor practice charge (p. 20, respondent's brief). If that were so, then many, if not all, of the morning and regular shifts reported for
work on March 4, 1969 and that, as a consequence, the firm continued in operation that day and did not sustain any damage.

The appropriate penalty if it deserves any penalty at all should have been simply to charge said one-day absence against their
vacation or sick leave. But to dismiss the eight (8) leaders of the petitioner Union is a most cruel penalty, since as aforestated the
Union leaders depend on their wages for their daily sustenance as well as that of their respective families aside from the fact that it is
a lethal blow to unionism, while at the same time strengthening the oppressive hand of the petty tyrants in the localities.

Mr. Justice Douglas articulated this pointed reminder:

The challenge to our liberties comes frequently not from those who consciously seek to destroy our system of
Government, but from men of goodwill good men who allow their proper concerns to blind them to the fact that
what they propose to accomplish involves an impairment of liberty.

... The Motives of these men are often commendable. What we must remember, however, is that preservation of
liberties does not depend on motives. A suppression of liberty has the same effect whether the suppress or be a
reformer or an outlaw. The only protection against misguided zeal is a constant alertness of the infractions of the
guarantees of liberty contained in our Constitution. Each surrender of liberty to the demands of the moment makes
easier another, larger surrender. The battle over the Bill of Rights is a never ending one.

... The liberties of any person are the liberties of all of us.

... In short, the Liberties of none are safe unless the liberties of all are protected.
... But even if we should sense no danger to our own liberties, even if we feel secure because we belong to a group
that is important and respected, we must recognize that our Bill of Rights is a code of fair play for the less fortunate
that we in all honor and good conscience must be observe. 31

The case at bar is worse.

Management has shown not only lack of good-will or good intention, but a complete lack of sympathetic understanding of the plight
of its laborers who claim that they are being subjected to indignities by the local police, It was more expedient for the firm to
conserve its income or profits than to assist its employees in their fight for their freedoms and security against alleged petty
tyrannies of local police officers. This is sheer opportunism. Such opportunism and expediency resorted to by the respondent
company assaulted the immunities and welfare of its employees. It was pure and implement selfishness, if not greed.

Of happy relevance is the 1967 case of Republic Savings Bank vs. C.I.R., 32 where the petitioner Bank dismissed eight (8) employees
for having written and published "a patently libelous letter ... to the Bank president demanding his resignation on the grounds of
immorality, nepotism in the appointment and favoritism as well as discrimination in the promotion of bank employees." Therein, thru
Mr. Justice Castro, We ruled:

It will avail the Bank none to gloat over this admission of the respondents. Assuming that the latter acted in their
individual capacities when they wrote the letter-charge they were nonetheless protected for they were engaged in
concerted activity, in the exercise of their right of self organization that includes concerted activity for mutual aid
and protection, (Section 3 of the Industrial Peace Act ...) This is the view of some members of this Court. For, as has
been aptly stated, the joining in protests or demands, even by a small group of employees, if in furtherance of their
interests as such, is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity
be involved or that collective bargaining be contemplated. (Annot., 6 A.L.R. 2d 416 [1949]).

xxx xxx xxx

Instead of stifling criticism, the Bank should have allowed the respondents to air their grievances.

xxx xxx xxx

The Bank defends its action by invoking its right to discipline for what it calls the respondents' libel in giving undue
publicity to their letter-charge. To be sure, the right of self-organization of employees is not unlimited (Republic
Aviation Corp. vs. NLRB 324 U.S. 793 [1945]), as the right of the employer to discharge for cause (Philippine
Education Co. v. Union of Phil. Educ. Employees, L-13773, April 29, 1960) is undenied. The Industrial Peace Act does
not touch the normal exercise of the right of the employer to select his employees or to discharge them. It is
directed solely against the abuse of that right by interfering with the countervailing right of self organization (Phelps
Dodge Corp. v. NLRB 313 U.S. 177 [1941])...

xxx xxx xxx

In the final sum and substance, this Court is in unanimity that the Bank's conduct, identified as an interference with
the employees' right of self-organization or as a retaliatory action, and/or as a refusal to bargain collectively,
constituted an unfair labor practice within the meaning and intendment of section 4(a) of the Industrial Peace Act.
(Emphasis supplied.) 33

If free expression was accorded recognition and protection to fortify labor unionism in the Republic Savings case, supra, where the
complaint assailed the morality and integrity of the bank president no less, such recognition and protection for free speech, free
assembly and right to petition are rendered all the more justifiable and more imperative in the case at bar, where the mass
demonstration was not against the company nor any of its officers.

WHEREFORE, judgement is hereby rendered:

(1) setting aside as null and void the orders of the respondent Court of Industrial Relations dated September 15 and October 9, 1969;
and

(2) directing the re instatement of the herein eight (8) petitioners, with full back pay from the date of their separation from the
service until re instated, minus one day's pay and whatever earnings they might have realized from other sources during their
separation from the service.

With costs against private respondent Philippine Blooming Company, Inc.