PAL v.

PALEA

Facts:

Certain illegally dismissed PAL employees were ordered reinstated by the CIR which was affirmed by the
SC.

Issue:

What are the rights and privileges of reinstated employees during the layoff period?

Held:

Where, in the resolution of the CIR, it was held that the reinstated employees were entitled to back
wages from the date of their dismissal to the date of their reinstatement and without prejudice to their
seniority rights and privileges, it was held that the resolution intended to restore the said employees to
theri status immediately prior to their dismissal and this means that they should receive Christmas
bonus, accumulated sick leave privileges and transportation allowance during the layoff period. They
were treated as if they had not been absent from work and had been uninterruptedly working during the
layoff period. However, said employees are not entitled to the free trip passes which were not given
automatically or indiscriminately
I. LABOR ORGANIZATION IN GENERAL
A. POLICY 211 (b) (c) (d)
Art. 211. Declaration of Policy. A. It is the policy of the State:
b. To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social
justice and development;
c. To foster the free and voluntary organization of a strong and united labor movement;
d. To promote the enlightenment of workers concerning their rights and obligations as union members and as
employees;

B. LABOR ORGANIZATION UNIONS

1. Definitions = 212 (g) (h)
Art. 212. Definitions.
g. "Labor organization" means 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.
h. "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and
Employment, and includes any branch or local thereof.

Airline Pilots Association of the Philippines v. CIR, 76 SCRA 274 (77)

Dunlop v. Secretary of Labor, 300 SCRA 120 (98)

2. Legitimate Labor Organization 212 (h)

Progressive Development Corporation v. Secretary of DOLE, 205 SCRA 802 (92)

Coastal Subic, etc. v. DOLE, 507 SCRA 300 (06)

Cebu Seamans Association, Inc. v. Ferrer-Calleja, 212 SCRA 50 (92)

3. Company Union 212 (i); 248 (d)

4. Workers Assocation IR, Rule I (ccc)

C. UNION FUNCTION AND RATIONALE
United Seamans Union of the Philippines v. Davao Shipowners Association, 20 SCRA 1226 (67)

(8). Guijarno v. CIR, 52 SCRA 307 (73)

Facts:
Petitioners filed a case against Central Santos Lopez Co., Inc. (Company) and United Sugar Workers Union-ILO
(Union) questioning their allegedly illegal dismissal pursuant to a closed shop provision provided in the existing
CBA.
Petitioners were those expelled from the Union and the Company assumed that it had to dismiss them
pursuant to the closed shop provision in the CBA upon the instance of the Union.
The Company argues in its defense that it did not commit an unfair labor practice for the dismissal was sought
upon the instance of the Union from which the petitioners were expelled; that it merely complied with the
terms of the CBA and that a closed shop agreement is allowed under the law.
Issue: Whether or not the dismissal of the petitioners was valid.
Held: NO
A closed shop provision in a CBA must not be given a retroactive effect so as to preclude its being applied to
employees in the service. Such was the ruling in the case of Confederated Sons of Labor v. Anakan Lumber
Co., et al. (107 Phil. 915).
As was held in that case, an undertaking of this nature is so harsh that it must be strictly construed and
doubts must be resolved against the existence of a closed shop.
A closed shop agreement that is allowed under the Industrial Peace Act should apply to persons to be hired or
to employees who are not yet members of any labor organization.
It is inapplicable to those already in the service who are members of another union. To hold otherwise would
render minority unions at a grave disadvantage and force their members to disaffiliate with them to join the
majority union and render nugatory the right of employees to self-organization.
Further, it is well settled that a closed shop provision may not justify the termination by the employer of an
employee who is arbitrarily refused membership to the union without any reasonable ground.
The Supreme Court emphasized that such provisions are looked upon with great disfavor whenever they are
being utilized as an excuse for termination of employment.
The very rationale of a closed shop provision such as this is to strengthen the effectivity labor organizations.
However, such provision may be used as an instrumentality by the many to stifle the voices of the few in dissent.
This is the precise reason as to why the doctrine in Anakan was formulated.

II. UNION REGISTRATION PROCEDURE

A. Union Registration and Procedure
1. Union Registration and the Statutory Guarantee Freedom of Association

Philippine Association of Free Labor Unions v. Secretary of Labor, 27 SCRA 40 (69)

0. Philippine Diamond Hotel and Resort, Inc. v. Manila Diamond Hotel Employees Union, 494 SCRA 195
(06)
FACTS: On November 11, 1996, MANILA DIAMOND HOTEL EMPLOYEES UNION, registered before the DOLE, filed
a Petition for Certification Election before the DOLE-National Capital Region (NCR) seeking certification as the
exclusive bargaining representative of its members. The DOLE-NCR denied the unions petition as it failed to
comply with legal requirements, specifically Section 2, Rule V, Book V of the Rules and Regulations Implementing
the Labor Code, and was seen to fragment the employees of petitioner. Through its president Kimpo, the union
later notified petitioner of its intention to negotiate, by Notice to Bargain, a Collective Bargaining Agreement (CBA)
for its members (because of an incident where one of its members was suspended due to non-remittance of
P71,692.50 at the end of his cashier duty for the day). Acting on the notice, the Hotel, through its HR, advised the
union that since it was not certified by the DOLE as the exclusive bargaining agent, it could not be recognized as
such. The union clarified that it sought to bargain "for its members only," and declared that "[the Hotels] refusal to
bargain [would prompt] the union to engage in concerted activities to protect and assert its rights under the Labor
Code." The union went on to file a Notice of Strike on September 29, 1997 with the National Conciliation and
Mediation Board (NCMB) due to unfair labor practice (ULP) in that the Hotel refused to bargain with it and the rank-
and-file employees were being harassed and prevented from joining it. Conciliation conferences were conducted,
however, with one conference still pending, the union went on strike which resulted to illegal acts by the strikers
such as obstructing the free ingress to and egress from the Hotel. The company filed a petition declare the strike
illegal. SOLE issued an order certifying the dispute to the NLRC for compulsory arbitration and directing the striking
officers and members to return to work within 24 hours and the Hotel to accept them back under the same terms
and conditions prevailing before the strike. DOLE Acting secretary later on modified this by ordering for payroll
reinstatement. NLRC declared that the strike was illegal and that the union officers and members who were
reinstated to the Hotels payroll were deemed to have lost their employment status. CA modified NLRC ruling and
held that strike was illegal, but ordering reinstatement for union members (only officers were deemed terminated)
plus backwages.
Issues: WON strike was illegal
WON the members are entitled to reinstatement and backwages
Held: Yes. Decision AFFIRMED (as to this issue)
No. Decision was MODIFIED (as to this issue) in that only those members who did not commit illegal acts should be
reinstated but with no backwages.
As ART. 255 on EXCLUSIVE BARGAINING REPRESENTATION AND WORKERS PARTICIPATION IN POLICY AND
DECISION-MAKING declares, only the labor organization designated or selected by the majority of the employees
in an appropriate collective bargaining unit is the exclusive representative of the employees in such unit for the
purpose of collective bargaining. Unions reliance on ART 242 (a) (A legitimate labor organization shall have the
right to act as representative of its members for the purpose of collective bargaining) is misplaced for not every
legitimate labor organization possesses the rights mentioned therein. Article 242 (a) must be read in
relation to above-quoted Article 255. It bears noting that the goal of the DOLE is geered towards "a single
employer wide unit which is more to the broader and greater benefit of the employees working force." The
philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees bargaining power
with the management. To veer away from such goal would be contrary, inimical and repugnant to the objectives of
a strong and dynamic unionism. Petitioners refusal to bargain then with respondent cannot be considered a ULP to
justify the staging of the strike. Union was likewise unable to prove the hotels alleged acts of union interference,
coercion and discrimination tantamount to union-busting.
Union violated Article 264 which proscribes the staging of a strike on the ground of ULP during the pendency of
cases involving the same grounds for the strike. The employment of violence, intimidation, restraint or coercion in
carrying out concerted activities which are injurious to the rights to property renders a strike illegal. And so is
picketing or the obstruction to the free use of property or the comfortable enjoyment of life or property, when
accompanied by intimidation, threats, violence, and coercion as to constitute nuisance. Thus, following paragraph
3, Article 264(a), the union officers who knowingly participates in an illegal strike may be declared to have lost its
employment status. An ordinary striking worker cannot, however be dismissed for mere participation in an illegal
strike. There must be proof that he committed illegal acts during a strike. Such being the case, a remand of the
case to the Labor Arbiter, through the NLRC, is in order for the purpose only of determining the respective liabilities
of the strikers listed by petitioner. Backwages however cannot be granted for the general rule is that backwages
shall not be awarded in an economic strike on the principle that "a fair days wage" accrues only for a "fair days
labor. If there is no work performed by the employee there can be no wage or pay, unless of course, the laborer
was able, willing and ready to work but was illegally locked out, dismissed or suspended.

1. Coastal Subic etc. v. DOLE, 507 SCRA 300 (06)

San Miguel Corporation, etc. v. San Miguel, etc., 533 SCRA 125 (07)
Progressive Development Corporation v. Laguesma, 205 SCRA 802 (92)
Phoenix Iron and Steel Corporation v. Secretary of Labor, 244 SCRA 173 (95)
FACTS: Private respondent PISCOR Workers Union Alliance of Nationalist and Genuine Labor Organizations
(PISCOR-ANGLO) asserting to be a legitimate labor organization filed on 13 October 1992 a petition for certification
election with the Med-Arbiter. On 3 December 1992 petitioner Phoenix Iron and Steel Corporation (PHOENIX)
sought clarification of the legal personality of PISCOR-ANGLO (UNION). On 19 January 1993, finding that the
UNION had not complied with the requisites of law, Med-Arbiter Napoleon v. Fernando dismissed the petition
holding that PISCOR is not a duly registered labor organization for (1) failure to file books of account before the
BLR, (2) failure by the union president to attest the constitution and by-laws as well as the list of members who
ratified the same, and (3)failure to verify the constitution and by-laws under oath (citing the ruling in Progressive
Development Corporation vs. Secretary of Labor). On appeal to the Office of Secretary of Labor, Undersecretary
Bienvenido E. Laguesma, acting by authority of the Secretary of Labor, issued on 8 June 1993 a resolution "calling
for the immediate conduct of a certification election . . . . with PISCOR Workers Union-Anglo and No Union as the
choices." holding that PISCOR, by submitting duly certified copies of its constitution and by-laws, list of officers,
and charter certificate has complied with the requirement of organization of a chapter and dismissing the other
issues as mere technicalities. Solicitor General filed a Manifestation and Motion supporting Phoenix stand that
PISCOR-ANGLO has no personality and recommended the SOLE resolution to be set aside.
Issue: WON the ruling in Progressive Development Corporation vs. Secretary of Labor applies in the case (i.e. WON
there was non compliance with the requirements for legitimate labor organization)
Held: Yes. SOLE resolution SET ASIDE; Med Arbiter decision REINSTATED.
As held in the Progressive case:
A local or chapter . . . becomes a legitimate labor organization only upon submission of the following to the BLR:
1) A charter certificate, within 30 days from its issuance by the labor federation or national union, and
2) The constitution and by-laws, a statement on the set of officers, and the books of accounts all of which are
certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by
its president.
Absent compliance with these mandatory requirements, the local or chapter does not become a legitimate labor
organization.
In the case of union registration, the rationale for requiring that the submitted documents and papers be certified
under oath by the secretary or treasurer, as the case may be, and attested to by the president is apparent. The
submission of the required documents (and payment of P50.00 registration fee) becomes the Bureau's basis for
approval of the application for registration. The inclusion of the certification and attestation requirements will in a
marked degree allay the apprehensions of the employer. Not only is the issuance of any false statement and
misrepresentation a ground for cancellation of registration (see Article 239 (a), (c) and (d)); it is also a ground for
a criminal charge of perjury. The certification and attestation requirements are preventive measures against the
commission of fraud. They likewise afford a measure of protection to unsuspecting employees who may be lured
into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or to use the union for
dubious ends.
In the case of union affiliation with a federation (as in this case), the documentary requirements are found in Rule
II, Section 3 (e), Book V of the Implementing Rules, which we again quote as follows: "(c) The local or chapter of a
labor federation or national union shall have and maintain a constitution and by-laws, set of officers and books of
accounts. For reporting purposes, the procedure governing the reporting of independently registered unions,
federations or national unions shall be observed" (emphasis supplied).
Since the "procedure governing the reporting of independently registered unions" refers to the certification and
attestation requirements contained in Article 235, paragraph 2, it follows that the constitution and by-laws, set of
officers and books of accounts submitted by the local and chapter must likewise comply with these requirements.
The same rationale for requiring the submission of duly subscribed documents upon union registration exists in the
case of union affiliation.

2.

3. UST Faculty Union v. Bitonio, 318 SCRA 185 (99)

Facts:
Petitioner USTFU is the exclusive bargaining representative of the faculty of UST. In September 1996, the
Union announced the convening of a general assembly on 05 October 1996. Among the agenda in the general
assembly is the election of USTFU. The proposed election was contested by some members of the Union
alleging that the preparations for the said election as demanded by the Unions constitution and by-laws (CBL)
were not satisfied. The meeting was moved earlier to 04 October 1996.
On 04 October 1996, the general faculty assembly was held. It was attended by both members of USTFU and
non-members thereof. In the said general assembly a new set of USTFUs officers was elected by acclamation
and clapping of hands.
Respondents filed a petition with the med-arbiter alleging the illegality of the election conducted on 04 October
1996 as it did not conform to the requirements of the CBL.
In the meantime a new CBA was declared to be ratified purportedly by a majority of USTs academic
community.
The med-arbiter rendered a decision declaring the election done in 04 October 1996 as null and void for not
having been executed conformably to the CBL of the Union. The said decision was affirmed by public
respondent Bitonio Jr., hence this petition.
Issue: WON the election conducted on 04 October 1996 is null and void
Held:
Yes the election is null and void. Petitioners argue that the anomalies allegedly comtted by the respondents
impelled them to conduct the election on 04 October 1996 and that such exercise was pursuant to their right
to self-organization.
Self-organization is a fundamental right guaranteed by the workers by the Philippine Constitution and the
Labor Code. Such right is better understood in the context of ILO Convention No. 87 to which the Philippines is
a signatory. It provides that the incident of the assertion of the right to self-organization is reflected in the
promulgation of the unions CBL which governs the relationship between the members of the union. It is where
the rights, duties and obligations, powers, functions and authority of the officers and as well as the members is
defined. It determines the validity of the acts done by any officer or member of the union.
Clearly the election conducted on 04 October 1996 was tainted with irregularities as:
o The assembly was not convened in accordance with the provision of the CBL
o There was no commission of elections to oversee the election as mandated by Sections 1 and 2 of
Article IX of the CBL
o The purported election was not done thru secret balloting as provided by Section 6 Article IX of the
CBL as well as Article 241 (c) of the Labor Code
The foregoing infirmities more than justifies the conclusion by the public respondents that the proceedings
were rendered void due to lack of due process.
As to the contention that the 04 October 1996 assembly suspended the operation of the CBL, such argument is
bereft of merit. Such is in fact, an implied admission that the election held on that date could not be considered as
valid under the existing USTFU constitution.
8. Guijarno v. CIR, 52 SCRA 307 (73)
(Pls. read originals of all cases cited in Guijarno)
Facts:
Petitioners filed a case against Central Santos Lopez Co., Inc. (Company) and United Sugar Workers Union-ILO
(Union) questioning their allegedly illegal dismissal pursuant to a closed shop provision provided in the existing
CBA.
Petitioners were those expelled from the Union and the Company assumed that it had to dismiss them
pursuant to the closed shop provision in the CBA upon the instance of the Union.
The Company argues in its defense that it did not commit an unfair labor practice for the dismissal was sought
upon the instance of the Union from which the petitioners were expelled; that it merely complied with the
terms of the CBA and that a closed shop agreement is allowed under the law.
Issue: Whether or not the dismissal of the petitioners was valid.
Held: NO
A closed shop provision in a CBA must not be given a retroactive effect so as to preclude its being applied to
employees in the service. Such was the ruling in the case of Confederated Sons of Labor v. Anakan Lumber
Co., et al. (107 Phil. 915).
As was held in that case, an undertaking of this nature is so harsh that it must be strictly construed and
doubts must be resolved against the existence of a closed shop.
A closed shop agreement that is allowed under the Industrial Peace Act should apply to persons to be hired or
to employees who are not yet members of any labor organization.
It is inapplicable to those already in the service who are members of another union. To hold otherwise would
render minority unions at a grave disadvantage and force their members to disaffiliate with them to join the
majority union and render nugatory the right of employees to self-organization.
Further, it is well settled that a closed shop provision may not justify the termination by the employer of an
employee who is arbitrarily refused membership to the union without any reasonable ground.
The Supreme Court emphasized that such provisions are looked upon with great disfavor whenever they are
being utilized as an excuse for termination of employment.
The very rationale of a closed shop provision such as this is to strengthen the effectivity labor organizations.
However, such provision may be used as an instrumentality by the many to stifle the voices of the few in dissent.
This is the precise reason as to why the doctrine in Anakan was formulated.

F. COVERAGE WORKER INCLUSION AND EXCLUSION, 248 (e)

Art. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the
following unfair labor practice:
e. To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to
encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop
the parties from requiring membership in a recognized collective bargaining agent as a condition for employment,
except those employees who are already members of another union at the time of the signing of the collective
bargaining agreement. Employees of an appropriate bargaining unit who are not members of the recognized
collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by
members of the recognized collective bargaining agent, if such non-union members accept the benefits under the
collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph
(o) of this Code shall not apply to the non-members of the recognized collective bargaining agent;