G.R. No.

92357 July 21, 1993

PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION AGENCY (PSVSIA), GVM SECURITY
AND INVESTIGATION AGENCY (GVM) and ABAQUIN SECURITY AND DETECTIVE AGENCY, INC.
(ASDA), petitioners,
vs.
THE HON. SECRETARY OF LABOR RUBEN D. TORRES AND PGA BROTHERHOOD ASSOCIATION-
UNION OF FILIPINO WORKERS, respondents.

NOCON, J.:

The sole issue presented for resolution in this petition for certiorari with prayer for preliminary
injunction is whether or not a single petition for certification election or for recognition as the
sole and exclusive bargaining agent can validly or legally be filed by a labor union in three (3)
corporations each of which has a separate and distinct legal personality instead of filing three (3)
separate petitions.

On April 6, 1989, private respondent labor union, PGA Brotherhood Association - Union of Filipino
Workers (UFW), hereinafter referred to as "the Union " filed a petition for Direct
Certification/Certification Election among the rank and file employees of Philippine Scout
Veterans Security and Investigation Agency (PSVSIA), GVM Security and Investigations Agency,
Inc. (GVM). and Abaquin Security and Detective Agency, Inc. (ASDA). These three agencies were
collectively referred to by private respondent Union as the "PGA Security Agency," which is
actually the first letters of the corporate names of the agencies.

On April 11, 1989, summons was issued to the management of PSVSIA, GVM, ASDA (PGA Security
Agency) at 82 E. Rodriquez Avenue, Quezon City.

On April 11, 26, 1986, petitioners filed a single comment alleging therein that the said three
security agencies have separate and distinct corporate personalities while PGA Security Agency
is not a business or corporate entity and does not possess any personality whatsoever; the
petition was unclear as to whether the rank-and-file employees mentioned therein refer to those
of the three security agencies collectively and if so, the labor union cannot seek a certification
election in three separate bargaining units in one petition; the labor union included in their
organization "security supervisors," in violation of R.A. 6715; and though R.A. 6715 is already in
effect, there were still no implementing rules therefor.

On May 4, 1989, the security agencies filed a Consolidated Motion to Dismiss on the grounds that
the 721 supporting signatures do not meet the 20% minimum requirement for certification
election as the number of employees totals 2374 and that there are no implementing rules yet of
R.A. 6715.

On May 8, 1989, the Union filed an Omnibus Reply to Comment and Motion to Dismiss alleging
that it is clear that it is seeking a certification election in the three agencies; that the apparent
separate personalities of the three agencies were used merely to circumvent the prohibition in
R.A. 5847, as amended by P.D. 11 and P.D. 100, that a security agency must not have more than
1,000 guards in its employ; that the three security agencies' administration, management and
operations are so intertwined that they can be deemed to be a single entity; and that the
security supervisors cannot be deemed part of management since they do not meet the
definition of "supervisory employees" found in Articles 212(m), Labor Code, as amended by
Section 4, R.A. No. 6715.

On May 18, 1989, the security agencies filed a Rejoinder claiming that there is no violation of
R.A. 5487, as amended by P.D. 11 and P.D. 100 since the three agencies were incorporated long
before the decrees' issuance; that mere duplication of incorporators does not prove that the
three security agencies are actually one single entity; and that security guard supervisors, most
especially detachment commanders, fall within the definition of the term "supervisors."

On July 6, 1989, Med-Arbiter Rasidali C. Abdullah issued an Order in favor of the labor union
finding that PSVSIA, GVM and ASDA should be deemed as a single entity and bargaining unit for
the purpose of union organizing and the holding of a certification election. The dispositive portion
of the Order reads as follows:

WHEREFORE, premises considered, let a certification election be conducted among the rank and
file security guards of PSVSIA, GVM and ASDA within twenty (20) days from receipt hereof with
the usual pre-election conference of the parties. The list of eligible voters shall be based on the
security agencies' payroll three (3) months prior to the filing of this petition with the following
choices:

a) PGA Brotherhood Association-Union of Filipino Workers (UFW); and

b) No union.

SO ORDERED. 1

On July 21, 1989, the security agencies appealed the Med-Arbiter's Order to the Secretary of
Labor and Employment claiming that said Order was issued with grave abuse of discretion when
it ruled that the three security agencies could be considered as a single bargaining entity for
purposes of the holding of a certification election.

On December 15, 1989, the Labor Secretary Franklin M. Drilon denied the appeal for lack of merit
while at the same time affirming the Med-Arbiter's Order of July 6, 1989. He also ordered the
immediate conduct of a certification election. The dispositive portion of which reads as follows:

WHEREFORE, premises considered, the Appeal of respondents Security agencies is hereby denied
for lack of merit and the Order dated 6 July affirmed.

Let therefore, the pertinent records of this case be immediately forwarded to the Regional Office
for he immediate conduct of the certification election.

SO ORDERED. 2

On January 5, 1990, the three security agencies filed a Motion for Reconsideration arguing that
they were denied their rights to due process and that jurisdiction was not acquired over them by
the labor authorities.

On January 26, 1990, the succeeding Labor Secretary, Ruben D. Torres, likewise denied the
Motion for Reconsideration for lack of merit and reiterated the directive that a certification
election be conducted without further delay.

On March 14, 1990, the instant petition was filed by the three security agencies, raising the
following grounds:

SERIOUS ERRORS IN THE FINDINGS OF FACTS.

II

GRAVE ABUSE OF DISCRETION ON THE PART OF THE SECRETARY OF LABOR. 3

Petitioners insist that there are three (3) corporations in this petition, each of which has a
separate and distinct corporate personality of its own with separate registrations with the
Securities and Exchange Commission (SEC) and different Articles of Incorporation and By-Laws;
with separate sets of corporate officers and directors; and no common business address except
for GVM and ASDA which are located at 1957 Espaa corner Craig Streets, Sampaloc, Manila.

Petitioners claim that the facts and circumstances of the case of La Campana Coffee Factory, Inc.
v. Kaisahan Ng Mga Manggagawa sa La Campana 4 which public respondent claims to be on all
fours with the instant case, are very distinct from the facts and circumstance obtaining in the
case at bar. As to form of business organization, in the La Campana case, only one of two (2)
businesses was a corporation i.e., the La Campana Coffee Factory, Inc. and the other, the La
Campana Gaugau Packing, is a "non-entity," being merely a business name. In the case at bar,
all three (3) agencies are incorporated. Moreover, the issue involved in the instant case is one of
representation while in the La Campana case, the issue involved is the validity of a demand for
wage increases and other labor standards benefits.

Petitioners likewise contend that it was error to hold that the three companies should be treated
as one in a single bargaining unit in one petition for certification elections resulting in a violation
of the right to due process of each corporation as no notice of hearing and other legal processes
were served on each of said corporations. Consequently, no jurisdiction was acquired on them by
the Department of Labor and Employment.

Petitioners' arguments deserve scant consideration. The facts and circumstances extant in the
record indicate that the Med-Arbiter and Secretaries Drilon and Torres were not mistaken in
holding that the three security companies are in reality a single business entity operating as a
single company called the "PGA Security Group" or "PGA Security Services Group." Factual
findings of labor officials are conclusive and binding on the Court when supported by substantial
evidence. 5

The public repondent noted the following circumstances in the La Campana case similar to the
case at bar, as indicative of the fact that the La Campana Coffee Factory and La Campana
Gaugau Packing were in reality only one business with two trade names: (1) the two factories
occupied the same address, wherein they had their principal place of business; (2) their
signboards, advertisements, packages of starch, delivery truck and delivery forms all use one
appellation, "La Campana Starch and Coffee Factory"; (3) the workers in either company received
their pay from a single cashier, and (4) the workers in one company could easily transfer to the
other company, and vice-versa. This Court held therein that the veil of corporate fiction of the
coffee factory may be pierced to thwart the attempt to consider it part from the other business
owned by the same family. Thus, the fact that one of the businesses is not incorporated was not
the decisive factor that led the Court to consider the two factories as one. Moreover, we do not
find any materiality in the fact that the La Campana case was instituted to demand wage
increases and other labor standards benefits while this case was filed by the labor union to seek
recognition as the sole bargaining agent in the establishment. If businesses operating under one
management are treated as one for bargaining purposes, there is not much difference in treating
such businesses also as one for the preliminary purpose of labor organizing.

Indeed, the three agencies in the case at bar failed to rebut the fact that they are managed
through the Utilities Management Corporation with all of their employees drawing their salaries
and wages from said entity; that the agencies have common and interlocking incorporators and
officers; and that the PSVSIA, GVM and ASDA employees have a single Mutual Benefit System
and followed a single system of compulsory retirement.

No explanation was also given by petitioners why the security guards of one agency could easily
transfer from one agency to another and then back again by simply filling-up a common pro
forma slip called "Request for Transfer". Records also shows that the PSVSIA, GVM and ASDA
always hold joint yearly ceremonies such as the "PGA Annual Awards Ceremony". In
emergencies, all PSVSIA Detachment Commanders were instructed in a memorandum dated
November 10, 1988 to get in touch with the officers not only of PSVSIA but also of GVM and
ASDA. All of these goes to show that the security agencies concerned do not exist and operate
separately and distinctly from each other with different corporate directions and goals. On the
contrary, all the cross-linking of the three agencies' command, control and communication
systems indicate their unitary corporate personality. Accordingly, the veil of corporate fiction of
the three agencies should be lifted for the purpose of allowing the employees of the three
agencies to form a single labor union. As a single bargaining unit, the employees therein need
not file three separate petitions for certification election. All of these could be covered in a single
petition.

Petitioners' claim of alleged defect in the petition for certification election which although
addressed to the three security agencies merely alleged that there are only 1,000 employees
when the total number of employees in said security agencies is about 2,374 (PSVSIA - 1252;
GVM - 807; and ASDA - 315) thereby failing to comply with the legal requirement that at least
twenty percent (20%) of the employees in the bargaining unit must support the petition, betrays
lack of knowledge of the amendments introduced by R.A 6715 which became effective on March
21, 1989, prior to the filing of the petition for certification election on April 6, 1989. Under the
amendments, there is no need for the labor union to prove that at least 20% of the security
guards in the three agencies supported the petition. When a duly organized union files a petition
for certification election, the Med-Arbiter has the duty to automatically conduct an election. He
has no discretion on the matter. This is clearly the mandate of Article 257 of the Labor Code, as
amended by Section 24 of R.A. 6715, which now reads:

Art. 257. Petitions in unorganized establishments. In any establishment where there is no

certified bargaining agent, a certification election shall automatically be conducted by the Med-
Arbiter upon the filing of a petition by a legitimate labor organization.

The designation of the three agencies collectively as "PGA Security Agency" and the service of
summons to the management thereof at 82 E. Rodriguez Avenue, Quezon City did not render the
petition defective. Labor Secretary Franklin Drilon correctly noted the fact that the affidavits
executed separately and under oath by the three managers of the three security agencies
indicated their office address to be at PSVSIA Center II, E. Rodriguez Sr. Blvd., Quezon City.
Besides, even if there was improper service of summons by the Med-Arbiter, the three (3)
security agencies voluntarily submitted themselves to the jurisdiction of the labor authorities.
The summons were clearly sent to and received by their lawyer who filed motions and pleadings
on behalf of the three security agencies and who always appeared as their legal counsel. It
puzzles this Court why petitioners, who claim to be separate entities, continue to be represented
by one counsel even in this instant petition.

Finally, except where the employer has to file a petition for certification election pursuant to
Article 258 of the Labor Code because of a request to bargain collectively, it has nothing to do
with a certification election which is the sole concern of the workers. Its role in a certification
election has aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS)
v. Trajano, 6 as that of a mere by-stander. It has no legal standing in a certification election as it
cannot oppose the petition or appeal the Med-Arbiter's orders related thereto. An employer that
involves itself in a certification election lends suspicion to the fact that it wants to create a
company union.

This Court's disapprobation of management interference in certification elections is even more

forceful in Consolidated Farms, Inc. v. Noriel, 7 where we held:

On a matter that should be the exclusive concern of labor, the choice of a collective bargaining
representative, the employer is definitely an intruder. His participation, to say the least, deserves
no encouragement. This Court should be the last agency to lend support to such an attempt at
interference with a purely internal affair of labor.
Indeed, the three security agencies should not even be adverse parties in the certification
election itself. We note with disapproval the title given to the petition for certification election of
the Union by the Med-Arbiter and the Secretary of Labor naming the three security agencies as
respondents. Such is clearly an error. While employers may rightfully be notified or informed of
petitions of such nature, they should not, however, be considered parties thereto with
concomitant right to oppose it. Sound policy dictates that they should maintain a strictly hands-
off policy.

WHEREFORE, finding no reversible error in the questioned decision of the Secretary of Labor, the
instant petition for certiorari is hereby DISMISSED for utter lack of merit.

SO ORDERED.
G.R. No. 89609 January 27, 1992
NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)-TUCP,
petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of Labor Relations; and the
NATIONAL FEDERATION OF SUGAR WORKERS (NFSW)-FGT-KMU, respondents.

MEDIALDEA, J.:

This is a petition for certiorari seeking the nullification of the resolution issued by the respondent
Director of the Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside
the order of the Med-Arbiter dated February 8, 1989 denying the motion to dismiss the petition
and directing the conduct of a certification election among the rank and file employees or
workers of the Dacongcogon Sugar and Rice Milling Co. situated at Kabankalan, Negros
Occidental.

The antecedent facts giving rise to the controversy at bar are as follows:

Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP) is
a legitimate national labor organization duly registered with the Department of Labor and
Employment. Respondent Honorable Pura Ferrer-Calleja is impleaded in her official capacity as
the Director of the Bureau of Labor Relations of the Department of Labor and Employment, while
private respondent National Federation of Sugar Workers (NFSW-FGT-KMU) is a labor organization
duly registered with the Department of Labor and Employment.

Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros
Occidental employs about five hundred (500) workers during milling season and about three
hundred (300) on off-milling season.

On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon entered
into a collective bargaining agreement (CBA) for a term of three (3) years, which was to expire on
November 14, 1987.

When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for its
renewal. The CBA was extended for another three (3) years with reservation to negotiate for its
amendment, particularly on wage increases, hours of work, and other terms and conditions of
employment.

However, a deadlock in negotiation ensued on the matter of wage increases and optional
retirement. In order to obviate friction and tension, the parties agreed on a suspension to provide
a cooling-off period to give them time to evaluate and further study their positions. Hence, a
Labor Management Council was set up and convened, with a representative of the Department of
Labor and Employment, acting as chairman, to resolve the issues.
On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or
certification election among the rank and file workers of Dacongcogon.

On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the
following grounds, to wit:
I
The Petition was filed out of time;
II
There is a deadlocked (sic) of CBA negotiation between forced intervenor and respondent-
central. (Rollo, p. 25)
On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed.
By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by
private respondent NFSW-FGT-KMU and directed the conduct of certification election among the
rank and file workers of Dacongcogon, the dispositive portion of which provides as follows:

WHEREFORE, premises considered, the Motion to Dismiss the present petition is, as it is hereby
DENIED. Let therefore a certification election among the rank and file employees/workers of the
Dacongcogon Sugar and Rice Milling Co., situated at Kabankalan, Neg. Occ., be conducted with
the following choices:
(1) National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP);

(2) National Federation of Sugar Workers (NFSW);

(3) No Union.
The designated Representation Officer is hereby directed to call the parties for a pre-election
conference to thresh out the mechanics of the election and to conduct and supervise the same
within twenty (20) days from receipt by the parties of this Order. The latest payroll shall be used
to determine the list of qualified voters.
SO ORDERED. (Rollo, p. 34)
On February 9, 1989, private respondent filed a motion for reconsideration and/or appeal alleging
that the Honorable Med-Arbiter misapprehended the facts and the law applicable amounting to
gross incompetence. Hence, private respondent prayed that the order of the Med-Arbiter be set
aside and the motion to dismiss be reconsidered.
On February 27, 1989, petitioner filed its opposition to the motion for reconsideration praying
that the motion for reconsideration and/or appeal be denied for lack of merit.
On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a resolution
reversing the order of the Med-Arbiter, to wit:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 8 February 1989 is hereby
set aside and vacated, and a new one issued dismissing the above-entitled petition for being
filed out of time.
SO ORDERED. (Rollo, p. 46)

Hence, this petition raising four (4) issues, to wit:

I. RESPONDENT HON. PURA FERRER-CALLEJA, IN HER CAPACITY AS DIRECTOR OF THE

BUREAU OF LABOR RELATIONS, COMMITTED GRAVE ABUSE OF DISCRETION IN RENDERING HER
RESOLUTION DATED 26 JUNE 1989 REVERSING THE ORDER DATED FEBRUARY 8, 1989 OF MED-
ARBITER FELIZARDO SERAPIO.

II. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT PURA FERRER-
CALLEJA IS CONTRARY TO LAW AND JURISPRUDENCE.

III. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT DIRECTOR
PURA FERRER-CALLEJA DENIES THE RANK AND FILE EMPLOYEES OF THE DACONGCOGON SUGAR
& RICE MILLING COMPANY, AND THE HEREIN PETITIONER NACUSIP-TUCP, THEIR LEGAL AND
CONSTITUTIONAL RIGHTS.

IV. THAT RESPONDENT DIRECTOR PURA FERRER-CALLEJA, IN RENDERING HER SAID

RESOLUTION DATED 26 JUNE 1989 WAS BIASED AGAINST PETITIONER NACUSIP-TUCP. (Rollo,
p. 2)

The controversy boils down to the sole issue of whether or not a petition for certification election
may be filed after the 60-day freedom period.

Petitioner maintains that respondent Director Calleja committed grave abuse of discretion
amounting to excess of jurisdiction in rendering the resolution dated June 26, 1989 setting aside,
vacating and reversing the order dated February 8, 1989 of Med-Arbiter Serapio, in the following
manner:

1) by setting aside and vacating the aforesaid Order dated February 8, 1989 of Med-Arbiter
Felizardo Serapio and in effect dismissing the Petition for Direct or Certification Election of
Petitioner NACUSIP-TUCP (Annex "A" hereof) without strong valid, legal and factual basis;

2) by giving a very strict and limited interpretation of the provisions of Section 6, Rule V,
Book V of the Implementing Rules and Regulations of the Labor Code, as amended, knowing, as
she does, that the Labor Code, being a social legislation, should be liberally interpreted to afford
the workers the opportunity to exercise their legitimate legal and constitutional rights to self-
organization and to free collective bargaining;

3) by issuing her questioned Resolution of June 26, 1989 knowing fully well that upon the
effectivity of Rep. Act No. 6715 on 21 March 1989 she had no longer any appellate powers over
decisions of Med-Arbiters in cases of representation issues or certification elections;

4) by ignoring intentionally the applicable ruling of the Honorable Supreme Court in the case
of Kapisanan ng Mga Manggagawa sa La Suerte-FOITAF vs. Noriel, L-45475, June 20, 1977;

5) by clearly failing to appreciate the significance (sic) of the fact that for more than four (4)
years there has been no certification election involving the rank and file workers of the Company;
and,

6) by frustrating the legitimate desire and will of the workers of the Company to determine
their sole and exclusive collective bargaining representative through secret balloting. (Rollo, pp.
9-10)

However, the public respondent through the Solicitor General stresses that the petition for
certification election was filed out of time. The records of the CBA at the Collective Agreements
Division (CAD) of the Bureau of Labor Relations show that the CBA between Dacongcogon and
private respondent NFSW-FGT-KMU had expired on November 14, 1987, hence, the petition for
certification election was filed too late, that is, a period of more than one (1) year after the CBA
expired.

The public respondent maintains that Section 6 of the Rules Implementing Executive Order No.
111 commands that the petition for certification election must be filed within the last sixty (60)
days of the CBA and further reiterates and warns that any petition filed outside the 60-day
freedom period "shall be dismissed outright." Moreover, Section 3, Rule V, Book V of the Rules
Implementing the Labor Code enjoins the filing of a representation question, if before a petition
for certification election is filed, a bargaining deadlock to which the bargaining agent is a party is
submitted for conciliation or arbitration.
Finally, the public respondent emphasizes that respondent Director has jurisdiction to entertain
the motion for reconsideration interposed by respondent union from the order of the Med-Arbiter
directing a certification election. Public respondent contends that Section 25 of Republic Act No.
6715 is not applicable, "(f)irstly, there is as yet no rule or regulation established by the Secretary
for the conduct of elections among the rank and file of employer Dacongcogon; (s)econdly, even
the mechanics of the election which had to be first laid out, as directed in the Order dated
February 8, 1989 of the Med-Arbiter, was aborted by the appeal therefrom interposed by
respondent union; and (t)hirdly, petitioner is estopped to question the jurisdiction of respondent
Director after it filed its opposition to respondent union's Motion for Reconsideration (Annex
'F,' Petition) and without, as will be seen, in any way assailing such jurisdiction. . . ." (Rollo, p.66)

We find the petition devoid of merit.

A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code, as
amended by the rules implementing Executive Order No. 111 provides that:

Sec. 6. Procedure . . .

In a petition involving an organized establishment or enterprise where the majority status of the
incumbent collective bargaining union is questioned by a legitimate labor organization, the Med-
Arbiter shall immediately order the conduct of a certification election if the petition is filed during
the last sixty (60) days of the collective bargaining agreement. Any petition filed before or after
the sixty-day freedom period shall be dismissed outright.

The sixty-day freedom period based on the original collective bargaining agreement shall not be
affected by any amendment, extension or renewal of the collective bargaining agreement for
purposes of certification election.

xxx xxx xxx

The clear mandate of the aforequoted section is that the petition for certification election filed by
the petitioner NACUSIP-TUCP should be dismissed outright, having been filed outside the 60-day
freedom period or a period of more than one (1) year after the CBA expired.

It is a rule in this jurisdiction that only a certified collective bargaining agreement i.e., an
agreement duly certified by the BLR may serve as a bar to certification elections. (Philippine
Association of Free Labor Unions (PAFLU) v. Estrella, G.R. No. 45323, February 20, 1989, 170
SCRA 378, 382) It is noteworthy that the Bureau of Labor Relations duly certified the November
14, 1984 collective bargaining agreement. Hence, the contract-bar rule as embodied in Section
3, Rule V, Book V of the rules implementing the Labor Code is applicable.

This rule simply provides that a petition for certification election or a motion for intervention can
only be entertained within sixty days prior to the expiry date of an existing collective bargaining
agreement. Otherwise put, the rule prohibits the filing of a petition for certification election
during the existence of a collective bargaining agreement except within the freedom period, as it
is called, when the said agreement is about to expire. The purpose, obviously, is to ensure
stability in the relationships of the workers and the management by preventing frequent
modifications of any collective bargaining agreement earlier entered into by them in good faith
and for the stipulated original period. (Associated Labor Unions (ALU-TUCP) v. Trajano, G.R. No.
77539, April 12, 1989, 172 SCRA 49, 57 citing Associated Trade Unions (ATU v. Trajano, G.R. No.
L-75321, 20 June 1988, 162 SCRA 318, 322-323)

Anent the petitioner's contention that since the expiration of the CBA in 1987 private respondent
NFSW-FGT-KMU and Dacongcogon had not concluded a new CBA, We need only to stress what
was held in the case of Lopez Sugar Corporation v. Federation of Free Workers, Philippine Labor
Union Association (G.R. No. 75700-01, 30 August 1990, 189 SCRA 179, 191) quoting Article 253
of the Labor Code that "(i)t shall be the duty of both parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by the parties." 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. Hence, the contract bar rule still applies.

Besides, it should be emphasized that Dacongcogon, in its answer stated that the CBA was
extended for another three (3) years and that the deadlock was submitted to the Labor
Management Council.

All premises considered, the Court is convinced that the respondent Director of the Bureau of
Labor Relations did not commit grave abuse of discretion in reversing the order of the Med-
Arbiter.

ACCORDINGLY, the petition is DENIED and the resolution of the respondent Director of the Bureau
of Labor Relations is hereby AFFIRMED.
G.R. No. 99266 March 2, 1999
SAN MIGUEL CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, AND SAN MIGUEL CORPORATION
EMPLOYEES UNION (SMCEU) PTGWO, respondents.

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, assailing the
Resolution 1 of the National Labor Relations Commission in NLRC NCR CASE NO. 00094-90, which
dismissed the complaint of San Miguel Corporation (SMC), seeking to dismiss the notice of strike
given by the private respondent union and to compel the latter to comply with the provisions of
the Collective Bargaining Agreement (CBA) 2 on grievance machinery, arbitration, and the no-
strike clause, with prayer for the issuance of a temporary restraining order.

The antecedent facts are as follows:

In July 1990, San Miguel Cooperation, alleging the need to streamline its operations due to
financial loses, shut down some of its plants and declared 55 positions as redundant listed as
follows: seventeen (17) employees in the Business Logistics Division ("BLD"), seventeen (17) in
the Ayala Operations Center (AOC), and eighteen (18) in the Magnolia-Manila Buying Station
("Magnolia-MBS"). 3 Consequently, the private respondent union filed several grievance cases for
the said retrenched employees, praying for the redeployment of the said employees to the other
divisions of the company.

The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of the
parties' 1990 Collective Bargaining Agreement providing for the following procedures, to wit:

Sec.5. Processing of Grievance. Should a grievance arise, an earnest effort shall be made to
settle the grievance expeditiously in accordance with the following procedures:

Step 1. The individual employee concerned and the Union Directors, or the Union
Steward shall, first take up the employee's grievance orally with his immediate superior. If no
satisfactory agreement or adjustment of the grievance is reached, the grievance shall, within
twenty (20) working days from the occurrence of the cause or event which gave rise to the
grievance, be filed in writing with the Department Manager or the next level superior who shall
render his decision within ten (10) working days from the receipt of the written grievance. A copy
of the decision shall be furnished the Plant Personnel Officer.

Step 2. If the decision in Step 1 is rejected, the employee concerned may elevate or
appeal this in writing to the Plant Manager/Director or his duly authorized representative within
twenty (20) working days from the receipt of the Decision of the Department Manager,
Otherwise, the decision in Step 1 shall be deemed accepted by the employee.

The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the necessity,
of conducting grievance meetings. If necessary, the Plant Manager/Director and the Plant
Personnel Officer shall meet the employee concerned and the Union Director/Steward on such
date(s) as may be designated by the Plant Manager. In every plant/office, Grievance Meetings
shall be scheduled at least twice a month.

The Plant Manager shall give his written comments and decision within ten (10) working days
after his receipt of such grievance or the date of submission of the grievance for resolution, as
the case may be. A copy of his Decision shall be furnished the Employee Relations Directorate.

Step 3. If no satisfactory adjustment is arrived at Step 2, the employee may appeal the
Decision to the Conciliation Board as provided under Section 6 hereof, within fifteen (15) working
days from the date of receipt of the decision of the Plant Manager/Director or his designate.
Otherwise, the decision in Step 2 shall be deemed accepted by the employee.
The Conciliation Board shall meet on the grievance in such dates as shall be designated by the
Division/Business Unit Manager or his representative. In every Division/Business Unit, Grievance
Meetings of the Conciliation Board shall be scheduled at least once a month.

The Conciliation Board shall have fifteen (15) working days from the date of submission of the
grievance for resolution within which to decide on the grievance.

Sec. 6. Conciliation Board. There shall be a conciliation Board per Business Unit or
Division. Every Conciliation Board shall be composed of not more than five (5) representatives
each from the Company and the Union. Management and the Union may be assisted by their
respective legal counsels.

In every Division/Business Unit, the names of the Company and Union representatives to the
Conciliation Board shall be submitted to the Division/Business Unit Manager not later than
January of every year. The Conciliation Board members shall act as such for one (1) year until
removed by the Company or the Union, as the case may be.
xxx xxx xxx
Sec. 8. Submission to Arbitration. If the employee or Union is not satisfied with the
Decision of the Conciliation Board and desires to submit the grievance to arbitration, the
employee or the Union shall serve notice of such intention to the Company within fifteen (15)
working days after receipt of the Board's decision. If no such written notice is received by the
Company within fifteen (15) working days, the grievance shall be considered settled on the basis
of the company's position and shall no longer be available for arbitration. 4

During the grievance proceedings, however, most of the employees were redeployed, while
others accepted early retirement. As a result only 17 employees remained when the parties
proceeded to the third level (Step 3) of the grievance procedure. In a meeting on October 26,
1990, petitioner informed private respondent union that if by October 30, 1990, the remaining 17
employees could not yet be redeployed, their services would be terminated on November 2,
1990. The said meeting adjourned when Mr. Daniel S. L. Borbon II, a representative of the union,
declared that there was nothing more to discuss in view of the deadlock. 5

On November 7, 1990, the private respondent filed with the National Conciliation and Mediation
Board (NCMB) of the Department of Labor and Employment (DOLE) a notice of strike on the
following grounds: a) bargaining deadlock; b) union busting; c) gross violation of the Collective
Bargaining Agreement (CBA), such as non-compliance with the grievance procedure; d) failure to
provide private respondent with a list of vacant positions pursuant to the parties side agreement
that was appended to the 1990 CBA; and e) defiance of voluntary arbitration award. Petitioner on
the other hand, moved to dismiss the notice of strike but the NCMB failed to act on the motion.
On December 21, 1990, petitioner SMC filed a complaint 6 with the respondent NLRC, praying
for: (1) the dismissal the notice of strike; (2) an order compelling the respondent union to submit
to grievance and arbitration the issue listed in the notice of strike; (3) the recovery of the
expenses of litigation.
On April 16, 1991, respondent NLRC came out with a minute resolution dismissing the complaint;
holding, thus:
NLRC NCR IC NO. 000094-90, entitled San Miguel Corporation, Complainant -versus- San Miguel
Employees Union-PTWO (SMCEU), Respondent. Considering the allegations in the complaint to
restrain Respondent Union from declaring a strike and to enforce mutual compliance with the
provisions of the collective bargaining agreement on grievance machinery, and the no-strike
clause, with prayer for issuance of temporary restraining order, and the evidence adduced
therein, the Answer filed by the respondent and the memorandum filed by the complainant in
support of its application for the issuance of an injunction, the Second Division, after due
deliberation, Resolved to dismiss the complaint for lack of merit. 7
Aggrieved by the said resolution, petitioner found its way to this court via the present petition,
contending that:
I
IT IS THE POSITIVE LEGAL DUTY OR RESPONDENT NLRC TO COMPEL ARBITRATION AND TO ENJOIN
A STRIKE IN VIOLATION OF A NO STRIKE CLAUSE.
II
INJUNCTION IS THE ONLY IMMEDIATE, EFFECTIVE SUBSTITUTE FOR THE DISASTROUS ECONOMIC
WARFARE THAT ARBITRATION IS DESIGNED TO AVOID. 8
On June 3, 1991, to preserve the status quo, the Court issued a Resolution 9 granting petitioners
prayer for the issuance of a Temporary Restraining Order.

The Petition is impressed with merit.

Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor Code 10, reads:

Sec.1. Grounds for strike and lockout. A strike or lockout may be declared in cases of
bargaining deadlocks and unfair labor practices. Violations of the collective bargaining
agreements, except flagrant and/or malicious refusal to comply with its economic provisions,
shall not be considered unfair labor practice and shall not be strikeable. No strike or lockout may
be declared on grounds involving inter-union and intra-union disputes or on issues brought to
voluntary, or compulsory, arbitration.

In the case under consideration, the grounds relied upon by the private respondent union are
non-strikeable. The issues which may lend substance to the notice of strike filed by the private
respondent union are: collective bargaining deadlock and petitioner's alleged violation of the
collective bargaining agreement. These grounds, however, appear more illusory than real.

Collective Bargaining Deadlock is defined as "the situation between the labor and the
management of the company where there is failure in the collective bargaining negotiations
resulting in a stalemate" 11 This situation, is non-existent in the present case since there is a
Board assigned on the third level (Step 3) of the grievance machinery to resolve the conflicting
views of the parties. Instead of asking the Conciliation Board composed of five representatives
each from the company and the union, to decide the conflict, petitioner declared a deadlock, and
thereafter, filed a notice of strike. For failing to exhaust all the steps in the grievance machinery
and arbitration proceedings provided in the Collective Bargaining Agreement, the notice of strike
should have been dismissed by the NLRC and private respondent union ordered to proceed with
the grievance and arbitration proceedings. In the case of Liberal Labor Union vs. Phil. Can
Co. 12, the court declared as illegal the strike staged by the union for not complying with the
grievance procedure provided in the collective bargaining agreement, ruling that:

. . . the main purpose of the parties in adopting a procedure in the settlement of their disputes is
to prevent a strike. This procedure must be followed in its entirety if it is to achieve its
objective. . . . strikes held in violation of the terms contained in the collective bargaining
agreement are illegal, specially when they provide for conclusive arbitration clauses. These
agreements must be strictly adhered to and respected if their ends have to be achieved. . . . 13

As regards the alleged violation of the CBA, we hold that such a violation is chargeable against
the private respondent union. In abandoning the grievance proceedings and stubbornly refusing
to avail of the remedies under the CBA. private respondent violated the mandatory provisions of
the collective bargaining agreement.

Abolition of departments or positions in the company is one of the recognized management

prerogatives. 14 Noteworthy is the fact that the private respondent does not question the validity
of the business move of petitioner. In the absence of proof that the act of petitioner was ill-
motivated, it is presumed that petitioner San Miguel Corporation acted in good faith. In fact,
petitioner acceded to the demands of the private respondent union by redeploying most of the
employees involved; such that from an original 17 excess employees in BLD, 15 were
successfully redeployed. In AOC, out of the 17 original excess, 15 were redeployed. In the
Magnolia Manila Buying Station, out of 18 employees, 6 were redeployed and only 12 were
terminated. 15

So also, in filing complaint with the NLRC, petitioner prayed that the private respondent union be
compelled to proceed with the grievance and arbitration proceedings. Petitioner having evinced
its willingness to negotiate the fate of the remaining employees affected, there is no ground to
sustain the notice of strike of the private respondent union.

All things studiedly considered. we are of the ineluctable conclusion, and so hold, that the NLRC
gravely abused its discretion in dismissing the complaint of Petitioner SMC for the dismissal of
the notice of strike, issuance of a temporary restraining order, and an order compelling the
respondent union to settle the dispute under the grievance machinery of their CBA..

WHEREFORE, the instant petition is hereby GRANTED. Petitioner San Miguel Corporation and
private respondent San Miguel Corporation Employees Union PTGWO are hereby directed to
complete the third level (Step 3) of the Grievance Procedure and proceed with the Arbitration
proceedings if necessary. No pronouncement as to costs.

G.R. No. 172666 December 7, 2011

PICOP RESOURCES, INCORPORATED (PRI), Represented in this Petition by MR.
WILFREDO D. FUENTES, in his capacity as Senior Vice-President and Resident
Manager, Petitioner,
vs.
RICARDO DEQUILLA, ELMO PABILANDO, CESAR ATIENZA and ANICETO ORBETA, JR., and
NAMAPRI-SPFI, Respondents.

This is a petition for review assailing the April 14, 2005 Decision1 of the Court of Appeals (CA)
which reversed and set aside the Resolutions2 of the National Labor Relations Commission
(NLRC) dated December 27, 2002 and March 28, 2003, and reinstated the June 9, 2001 Decision3
of the Labor Arbiter (LA), which declared the dismissal of the private respondents as illegal.

The Facts

Ricardo Dequilla, Cesar Atienza and Aniceto Orbeta (private respondents) were regular rank-and-
file employees of Picop Resources, Inc. (PICOP) and members of the NAMAPRI-SPFL, a duly
registered labor organization and existing bargaining agent of the PICOP rank-and-file
employees. PICOP and NAMAPRI-SPFL had a collective bargaining agreement (CBA) which would
expire on May 22, 2000.
On May 16, 2000, the late Atty. Proculo P. Fuentes, Jr. (Atty. Fuentes), then National President of
the Southern Philippines Federation of Labor (SPFL), advised the PICOP management to
terminate about 800 employees due to acts of disloyalty, specifically, for allegedly campaigning,
supporting and signing a petition for the certification of a rival union, the Federation of Free
Workers Union (FFW) before the 60-day "freedom period" and during the effectivity of the CBA.
Such acts of disloyalty were construed to be a valid cause for termination under the terms and
conditions of the CBA. Based on the CBA, the freedom period would start on March 22, 2000.

Acting on the advice of Atty. Fuentes, Atty. Romero Boniel (Atty. Boniel), Manager of the PICOP
Legal and Labor Relations Department, issued a memorandum directing the employees
concerned to explain within seventy-two (72) hours why their employment should not be
terminated due to alleged acts of disloyalty. Upon receiving their explanation letters, Atty. Boniel
endorsed the same to Atty. Fuentes who then requested the termination of 46 employees found
guilty of acts of disloyalty.

On October 16, 2000, PICOP served a notice of termination due to acts of disloyalty to 31 of the
46 employees. Private respondents were among the 31 employees dismissed from employment
by PICOP on November 16, 2000.

Enraged at what management did to them, private respondents filed a complaint before the
NLRC Regional Arbitration Branch No. XIII, Butuan City, for Unfair Labor Practice and Illegal
Dismissal with money claims, damages and attorneys fees.

LA Ruling

On June 9, 2001, after the parties submitted their respective position papers, the LA rendered a
decision declaring as illegal the termination of the private respondents. The dispositive portion of
the LA Decision reads:

WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainants dismissal illegal; and

2. Ordering respondents PRI and NAMPRI-SPFL to reinstate complainants to their former or

equivalent positions without loss of seniority rights and to jointly and solidarily pay their
backwages in the total amount of P 177,403.68, as shown in the computation, hereto attached
and marked as Annex "A" hereof, plus damages in the amount of P 10,000.00 each and
attorneys fees equivalent to 10% of the total monetary award.

SO ORDERED. 4

NLRC Ruling

PICOP elevated the LA decision to the NLRC but its appeal was dismissed in the November 19,
2002 NLRC Resolution.5 On motion for reconsideration, however, the NLRC issued another
resolution,6 dated December 27, 2002, reversing and setting aside its November 19, 2002
Resolution, the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, the above resolution dated November 19, 2002, is
Reversed and Set Aside. In lieu thereof, a new judgment is rendered DISMISSING the above-
entitled case for lack of merit.

SO ORDERED.7

CA Ruling
Upon the denial of their motion for reconsideration, the private respondents brought the case to
the CA. On April 14, 2005, the CA rendered the subject decision reversing and setting aside the
December 27, 2002 NLRC resolution and reinstating the June 9, 2001 Decision of the LA. The
decretal portion of the CA decision reads:

WHEREFORE, premises considered, [the] instant petition is GRANTED and the assailed resolutions
of the Public Respondent NLRC are hereby REVERSED and SET ASIDE. In view thereof, ordered
REINSTATED is the Decision of Acting Executive Labor Arbiter Rogelio P. Legaspi dated 09 June
2001 which reads:

WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainants dismissal illegal; and

2. Ordering Respondents PRI and NAMPRI-SPFL to reinstate Complainants to their former or

equivalent positions without loss of seniority rights and to jointly and solidarily pay their
backwages in the total amount of P 177,403.68, plus damages in the amount of P 10,000.00
each and attorneys fees equivalent to 10% of the total monetary award.

SO ORDERED.8

The CA ruled, among others, that although private respondents signed an authorization for the
filing of the petition for certification election of a rival union, PICOP Democratic Trade Unionist-
Federation of Free Workers (FFW), such act was not a sufficient ground to terminate the
employment of private respondents. It explained:

Ruminating from the alleged violation of the CBA, We see no reason, sufficient and compelling
enough, to sustain the Public Respondents raison detre in overturning the Labor Arbiters ruling
in favor of the Petitioners. While it is true that Petitioners signed the authorization in support of
the Petition for certification election of FFW before the "freedom period," such act is not a
sufficient ground to terminate the employment of the Petitioners in as much as the petition itself
was filed during the freedom period. Hence, there is nil a basis to impute acts of disloyalty to
Petitioners. Imputations of an alleged violation of the CBA should not arise from a vague and all
embracing definition of alleged "acts of disloyalty." Neither should it arise from speculative
inferences where no evidence appears from the record that Respondent NAMAPRI-SPFL expressly
defined "acts of disloyalty." Besides, to Our mind, signing an authorization for the filing of the
petition for certification election does not constitute an act of disloyalty per se. There must be
proof of contemporaneous acts of resignation or withdrawal of their membership from the
Respondent NAMAPRI-SPFL to which they are members. Respondents miserably failed to present
evidence to justify a valid termination of employees in pursuance to the CBA allegedly violated.
Petitioners, in fact remained in good standing, a continuing requirement for retaining their
employment in the Respondent PRI. Petitioners neither joined nor affiliated with FFW and
continuously paid their union dues with Respondent NAMAPRI-SPFL. Consequently, this lends
credence to the Labor Arbiters ruling that Petitioners dismissal was indeed illegal.

Likewise, the advise of the Respondent NAMAPRI-SPFL to the Respondent PRI to effect the
termination of employees, including herein Petitioners, finds no basis in fact and in law
considering that at the time the Respondent PRI dismissed the Petitioners, among others, on 16
November 2000, there was no more CBA to speak of after it had already expired on 22 May
2000.9

The CA further agreed with private respondents that Article 256 and not Article 253, of the Labor
Code applied in this case. The CA discussed this point as follows:

We are inclined to favor Petitioners stance that Article 256, supra, is applicable. The issue of acts
of disloyalty relates more to a direct connection on the alleged violation or breach of loyalty to
the majority status of the incumbent union than on violation of the terms and conditions of the
agreement under Article 253, supra, as the Respondents would want Us to believe. Article 256
provides that at the expiration of the 60-day period reckoned from the expiration date of the
CBA, the employer shall continue to recognize the majority status of the incumbent bargaining
agent only where no petition for certification election is filed. However, as earlier pointed, a
petition was already filed by the Petitioners, among others, during the 60-day freedom period.
Clearly, from the imports of said provision, it will render nugatory the purpose of the law
providing for a freedom period for the filing of a petition for certification election should the act
of signing/filing the said petition be interpreted as an act of disloyalty and will render farce the
need for a certification election as an instrument of ascertaining the true expression of the will of
the workers as to which labor organization would represent them.

To construe the provision of law in Article 253, supra, as imposing a restriction against the
signing and filing a petition for certification election during the freedom period, is to violate the
constitutional right of the employees to organize freely. It is a basic precept of statutory
construction that statutes should be construed not so much according to the letters that killeth
but in line with the purpose for which they have been enacted.10

Not in conformity with the CA decision, PICOP filed this petition for review posing the following

ISSUES

WHETHER [OR NOT] AN EXISTING COLLECTIVE BARGAINING AGREEMENT (CBA) CAN BE GIVEN
ITS FULL FORCE AND EFFECT IN ALL ITS TERMS AND CONDITIONS INCLUDING ITS UNION
SECURITY CLAUSE, EVEN BEYOND THE 5-YEAR PERIOD WHEN NO NEW CBA HAS YET BEEN
ENTERED INTO?

WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION AND/OR CONCLUSION OF LAW

FALLS WITHIN THE AMBIT OF THE EXTRA ORDINARY REMEDY OF CERTIORARI UNDER RULE 65,
REVISED RULES OF COURT.11

PICOP basically argues that Article 253 of the Labor Code applies in this case. Article 253 of the
Labor Code provides that the terms and conditions of a CBA remain in full force and effect even
beyond the 5-year period when no new CBA has yet been reached. It claims that the private
respondents violated this provision when they campaigned for, supported and signed FFWs
petition for certification election on March 19 and 20, 2000, before the onset of the freedom
period. It further argues that private respondents were not denied due process when they were
terminated. Finally, it claims that the decision of the NLRC on the issues raised was not without
merit. Even assuming that it erred in its judgment on the legal issues raised, its error is not
equivalent to an abuse of discretion that should fall within the ambit of the extraordinary remedy
of certiorari.

Private respondents position

Private respondents argue that the substantial arguments raised by PICOP in this petition are
basically a rehash of the same issues and arguments contained in its Motion for Reconsideration
of the CA decision. Private respondents adopted and repleaded the ruling of the CA in their
Comment12 on this petition.

The Courts Ruling

The petition merits a denial.

There is no question that in the CBA entered into by the parties, there is a union security clause.
The clause imposes upon the workers the obligation to join and maintain membership in the
companys recognized union as a condition for employment.
"Union security" is a generic term, which is applied to and comprehends "closed shop," "union
shop," "maintenance of membership," or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment. There is union shop when all new regular employees are required to join the union
within a certain period as a condition for their continued employment. There is maintenance of
membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a
condition for continued employment until they are promoted or transferred out of the bargaining
unit, or the agreement is terminated. A closed shop, on the other hand, may be defined as an
enterprise in which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of which the employees in interest
are a part.13

There is no dispute that private respondents were members of NAMAPRI-SPFL who were
terminated by PICOP due to alleged acts of disloyalty. It is basic in labor jurisprudence that the
burden of proof rests upon management to show that the dismissal of its worker was based on a
just cause. When an employer exercises its power to terminate an employee by enforcing the
union security clause, it needs to determine and prove the following: (1) the union security
clause is applicable; (2) the union is requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to
expel the employee from the union.14

In this case, the resolution thereof hinges on whether PICOP was able to show sufficient evidence
to support the decision of the union to expel private respondents from it.

PICOP basically contends that private respondents were justly terminated from employment for
campaigning, supporting and signing a petition for the certification of FFW, a rival union, before
the 60-day "freedom period" and during the effectivity of the CBA. Their acts constitute an act of
disloyalty against the union which is valid cause for termination pursuant to the Union Security
Clause in the CBA.

The Court finds Itself unable to agree.

Considering the peculiar circumstances, the Court is of the view that the acts of private
respondents are not enough proof of a violation of the Union Security Clause which would
warrant their dismissal. PICOP failed to show in detail how private respondents campaigned and
supported FFW. Their mere act of signing an authorization for a petition for certification election
before the freedom period does not necessarily demonstrate union disloyalty. It is far from being
within the definition of "acts of disloyalty" as PICOP would want the Court to believe. The act of
"signing an authorization for a petition for certification election" is not disloyalty to the union per
se considering that the petition for certification election itself was filed during the freedom period
which started on March 22, 2000.

Moreover, as correctly ruled by the CA, the records are bereft of proof of any contemporaneous
acts of resignation or withdrawal of union membership or non-payment of union dues. Neither is
there proof that private respondents joined FFW. The fact is, private respondents remained in
good standing with their union, NAMAPRI-SPFL. This point was settled in the case of PICOP
Resources, Incorporated (PRI) v. Anacleto L. Taeca,15 where it was written:

However, as to the third requisite, we find that there is no sufficient evidence to support the
decision of PRI to terminate the employment of the respondents.
PRI alleged that respondents were terminated from employment based on the alleged acts of
disloyalty they committed when they signed an authorization for the Federation of Free Workers
(FFW) to file a Petition for Certification Election among all rank-and-file employees of PRI. It
contends that the acts of respondents are a violation of the Union Security Clause, as provided in
their Collective Bargaining Agreement.

We are unconvinced.

We are in consonance with the Court of Appeals when it held that the mere signing of the
authorization in support of the Petition for Certification Election of FFW on March 19, 20 and 21,
or before the "freedom period," is not sufficient ground to terminate the employment of
respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing
in the records would show that respondents failed to maintain their membership in good standing
in the Union. Respondents did not resign or withdraw their membership from the Union to which
they belong. Respondents continued to pay their union dues and never joined the FFW.

Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing
an authorization letter to file a petition for certification election as they signed it outside the
freedom period. However, we are constrained to believe that an "authorization letter to file a
petition for certification election" is different from an actual "Petition for Certification Election."
Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW was
filed only on May 18, 2000. Thus, it was within the ambit of the freedom period which
commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is prohibited is the
filing of a petition for certification election outside the 60-day freedom period. This is not the
situation in this case. If at all, the signing of the authorization to file a certification election was
merely preparatory to the filing of the petition for certification election, or an exercise of
respondents right to self-organization.16

Finally, PICOP insists that Article 253 of the Labor Code applies in this case, not Article 256
thereof. The Court agrees with the CA that its argument is misplaced. This issue was tackled and
settled in the same PICOP Resources, Incorporated (PRI) v. Taeca case, to wit:

Moreover, PRI anchored their decision to terminate respondents employment on Article 253 of
the Labor Code which states that "it shall be the duty of both parties to keep the status quo and
to continue in full force and effect the terms and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by the parties." It claimed that they are
still bound by the Union Security Clause of the CBA even after the expiration of the CBA; hence,
the need to terminate the employment of respondents.

Petitioner's reliance on Article 253 is misplaced.

The provision of Article 256 of the Labor Code is particularly enlightening. It reads:

Article 256. Representation issue in organized establishments. - In organized establishments,

when a verified petition questioning the majority status of the incumbent bargaining agent is
filed before the Department of Labor and Employment within the sixty-day period before the
expiration of a collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot when the verified petition is supported by the written consent of at least
twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the
employees in the appropriate bargaining unit. To have a valid election, at least a majority of all
eligible voters in the unit must have cast their votes. The labor union receiving the majority of
the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the
unit. When an election which provides for three or more choices results in no choice receiving a
majority of the valid votes cast, a run-off election shall be conducted between the labor unions
receiving the two highest number of votes: Provided, That the total number of votes for all
contending unions is at least fifty per cent (50%) of the number of votes cast.
At the expiration of the freedom period, the employer shall continue to recognize the majority
status of the incumbent bargaining agent where no petition for certification election is filed.

Applying the same provision, it can be said that while it is incumbent for the employer to
continue to recognize the majority status of the incumbent bargaining agent even after the
expiration of the freedom period, they could only do so when no petition for certification election
was filed. The reason is, with a pending petition for certification, any such agreement entered
into by management with a labor organization is fraught with the risk that such a labor union
may not be chosen thereafter as the collective bargaining representative. The provision for
status quo is conditioned on the fact that no certification election was filed during the freedom
period. Any other view would render nugatory the clear statutory policy to favor certification
election as the means of ascertaining the true expression of the will of the workers as to which
labor organization would represent them.

In the instant case, four (4) petitions were filed as early as May 12, 2000.1awphi1 In fact, a
petition for certification election was already ordered by the Med-Arbiter of DOLE Caraga Region
on August 23, 2000. Therefore, following Article 256, at the expiration of the freedom period,
PRI's obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent does not hold
true when petitions for certification election were filed, as in this case.

Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to
the economic provisions of the CBA, and does not include representational aspect of the CBA. An
existing CBA cannot constitute a bar to a filing of a petition for certification election. When there
is a representational issue, the status quo provision in so far as the need to await the creation of
a new agreement will not apply. Otherwise, it will create an absurd situation where the union
members will be forced to maintain membership by virtue of the union security clause existing
under the CBA and, thereafter, support another union when filing a petition for certification
election. If we apply it, there will always be an issue of disloyalty whenever the employees
exercise their right to self-organization. The holding of a certification election is a statutory policy
that should not be circumvented, or compromised.

Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the
workers. Their freedom to choose who should be their bargaining representative is of paramount
importance. The fact that there already exists a bargaining representative in the unit concerned
is of no moment as long as the petition for certification election was filed within the freedom
period. What is imperative is that by such a petition for certification election the employees are
given the opportunity to make known of who shall have the right to represent them thereafter.
Not only some, but all of them should have the right to do so. What is equally important is that
everyone be given a democratic space in the bargaining unit concerned.

We will emphasize anew that the power to dismiss is a normal prerogative of the
employer.1avvphi1 This, however, is not without limitations. The employer is bound to exercise
caution in terminating the services of his employees especially so when it is made upon the
request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not
be arbitrary and capricious. Due process must be observed in dismissing an employee, because
it affects not only his position but also his means of livelihood. Employers should, therefore,
respect and protect the rights of their employees, which include the right to labor. 17

Considering that private respondents were illegally dismissed, basic law provides that they shall
be entitled to the benefit of full backwages and reinstatement unless the latter is no longer
viable, in which case, a grant of separation pay shall be awarded equivalent to one month salary
for every year of service.

X x x Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed
from the time their actual compensation was withheld from them up to the time of their actual
reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from
the time of their illegal termination up to the finality of the decision X x x.18

Private respondents are also entitled to an award of attorneys fees equivalent to 10% of the
total monetary award as they were compelled to litigate in order to seek redress for their illegal
dismissal.
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.

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,7 petitioner 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 Enterprises12 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.15 More
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.

Philippine Scout Veterans Security vs Torres

GR 92357
Facts:
On April 6, 1989, private respondent labor union, PGA Brotherhood Association Union of Filipino
Workers (UFW), hereinafter referred to as the Union filed a petition for Direct
Certification/Certification Election among the rank and file employees of Philippine Scout
Veterans Security and Investigation Agency (PSVSIA), GVM Security and Investigations Agency,
Inc. (GVM). and Abaquin Security and Detective Agency, Inc. (ASDA). These three agencies were
collectively referred to by private respondent Union as the PGA Security Agency, which is
actually the first letters of the corporate names of the agencies.
On April 11, 1989, summons was issued to the management of PSVSIA, GVM, ASDA (PGA Security
Agency) at 82 E. Rodriquez Avenue, Quezon City.
On April 11, 26, 1986, petitioners filed a single comment alleging therein that the said three
security agencies have separate and distinct corporate personalities while PGA Security Agency
is not a business or corporate entity and does not possess any personality whatsoever; the
petition was unclear as to whether the rank-and-file employees mentioned therein refer to those
of the three security agencies collectively and if so, the labor union cannot seek a certification
election in three separate bargaining units in one petition.
Issue: WON petitioners can interfere with the certification election proceeding.
Held:
Except where the employer has to file a petition for certification election pursuant to Article 258
of the Labor Code because of a request to bargain collectively, it has nothing to do with a
certification election which is the sole concern of the workers. Its role in a certification election
has aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS) v.
Trajano, as that of a mere by-stander. It has no legal standing in a certification election as it
cannot oppose the petition or appeal the Med-Arbiters orders related thereto. An employer that
involves itself in a certification election lends suspicion to the fact that it wants to create a
company union.
This Courts disapprobation of management interference in certification elections is even more
forceful in Consolidated Farms, Inc. v. Noriel, where we held:
On a matter that should be the exclusive concern of labor, the choice of a collective bargaining
representative, the employer is definitely an intruder. His participation, to say the least, deserves
no encouragement. This Court should be the last agency to lend support to such an attempt at
interference with a purely internal affair of labor.

National Congress of Union in Sugar Industry v. Ferrer-Calleja (Medialdea, 1992)

Pet: National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-
TUCP) Filed forcertification election (after freedom period) but denied by
Res: Hon. Pura Ferrer-Calleja as the Dir. of Bureau of Labor Relations on MR by
Priv. Res: National Federation of Sugar Workers (NFSW-FGT-KMU) the union sought to
be replaced byPet. because it was in a negotiating deadlock with their employer.

Facts:
1.DACONGCOGON Sugar and Rice Milling Co. in Negros Occ. Employs about 500 workers during
milling season, and 300 workers during off milling season. DACONGCOGON has 2 competing
labor unions for these workers.
2.Nov. 14, 1984 DACONGCOGON entered into a CBA with Priv. Res. Natl Federation, effective
three years./ until Nov 14, 1987
3.The CBA was renewed, extended for another 3years, BUT with reservation for amendments
regarding wage increases, hours of work, and other terms of conditions of employment.
4.The negotiation for the reservations in the CBA, went into a deadlock. The parties agreed to a
suspension and cooling off period.
5.Meanwhile (Dec 5, 1988) Pet. National Congress, FILED: direct certification/certification election
(They filed beyond the freedom period of 60days before CBA expiry)OPPOSED: National
Federation moved to dismiss the petition because, (1) it was filed out of time, (2) there was still
the deadlocked CBA. ANSWER: DACONGCOGON, petition to dismiss.
6.Med-Arbiter: Directed the conduct of the Certification Election.Dir. BLR/Res: Reversed,
dismissed the petition for being filed out of time. (beyond freedom pd.)

Issue: w/n a petition for certification election may be filed after the 60-day freedom period?

Decision: NO. It should be dismissed outright based on RuleV 6 BookV of the labor codes IRR.
That the CBA was in deadlock is immaterial because CBAs are deemed to continue to be in force
until a new CBA is executed. LC 253.
1.Pet. Stand: That IRR provisions should be liberally construed in favor of workers exercising their
right to self-org, Res. does not have jurisdiction, and that Res. ignored SC case of Kapisanan ng
mga Mangagawa sa La Suerte-FOITAF v. Noriel. (Court only touched upon the first
contention)Res. Stand: Petition was filed out of time (More than a year after CBA expired) and
should be dismissed outright.
2.A careful perusal of the provision (RuleV 6 BookV) shows that there is a clear mandate that the
petition should be dismissed outright for having been filed outside the 60-day freedom period.
3.Only a certified CBA may serve as a bar to certification elections. (3 RuleV, BookV and PAFLU
v.Estrella 170 S 378)
a. Here BLR certified the CBA executed in 1984, hence the contract bar rule is applicable.
b. petition for certification election or a motion for intervention can only be entertained
within sixty days prior to the expiry date of an existing collective bargaining agreement.
c. OR Rule prohibits the filing of a petition for certification election during the
existence of a collective bargaining agreement except within the freedom period, as it is
called, when the said agreement is about to expire
d. PURPOSE: is to ensure stability in the relationships of the workers and the management
by preventing frequent modifications of any collective bargaining agreement earlier
entered into by them in good faith and for the stipulated original period (ALU-TUCP v.
Trajano)
4.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.
a. As held in Lopez Sugar Corp. v. Federation of Free Workers citing Art. 253 of the Labor
code: that "(i)t shall be the duty of both parties to keep the status quo and to continue in
ull force and effect the terms and conditions of the existing agreement during the 60-day
period and/or until a new agreement is reached by the parties."

WHEREFORE Pet. DENIED. Certification Election was not allowed

PICOP RESOURCES INC. V. DEQUILLA (2011)

PICOP RESOURCES, INCORPORATED (PRI), Represented in this Petition by MR.
WILFREDOD. FUENTES, in his capacity as Senior Vice-President and Resident Manager,
Petitioner, vs.RICARDO DEQUILLA, ELMO PABILANDO, CESAR ATIENZA and ANICETO
ORBETA, JR., andNAMAPRI-SPFI, Respondents.

Facts:

Private respondents were regular rank and file employees of Picop Resources and members of
NAMAPRI-SPFL, a duly registered labor organization and existing bargaining agent of the PICOP
rank and file employees. The company and the union had a CBA. Atty. Fuentes, the National
President of the Southern Philippines Federation of Labor, advised PICOP to terminate about 800
employees due to acts of disloyalty, specifically, for allegedly campaigning, supporting and
signing a petition for the certification of a rival union, the Federation of Free Workers Union (FFW)
on March 19 and 20 of 2000, which was before the 60-day "freedom period" and during
the effectivity of the CBA. Based on the CBA, the freedom period would start on March 22, 2000.
Their acts constitute an act of disloyalty against the union which is valid cause for termination
pursuant to the Union Security Clause in the CBA.
Thus, PICOP issued a memorandum directing the employees concerned to explain within 72hours
why their employment should not be terminated due to alleged acts of disloyalty. Upon receiving
their letters, PICOP endorsed them to Atty. Fuentes who then requested the termination of 46
employees found guilty of disloyalty. PICOP served a notice of termination due to acts of
disloyalty to 31 out of the 46 employees. Private respondents were among the employees
dismissed. They filed a complaint for unfair labor practice and illegal dismissal with money
claims, damages and attorney's fees.
Issues:
1. WON the act of signing an authorization for certification election before the freedom period is
an act of disloyalty
2. WON Article 256 of the Labor Code applies in the case.
Held:
1. No. The acts of private respondents are not enough proof of a violation of the Union Security
Clause which would warrant their dismissal. The mere act of signing an authorization for
a petition for certification election before the freedom period does NOT necessarily demonstrate
union disloyalty, considering that the petition for certification election itself was filed during the
freedom period. We are constrained to believe that an "authorization letter to file a petition for
certification election" is different from an actual "Petition for Certification Election." It is clear that
the actual Petition for Certification Election of FFW was filed only on May 18, 2000. Thus, it
was within the ambit of the freedom period which commenced from March 21, 2000 until May 21,
2000. Strictly speaking, what is prohibited is the filing of a petition for certification election
outside the 60-dayfreedom period. This is not the situation in this case. If at all, the signing of the
authorization to file a certification election was merely preparatory to the filing of the petition for
certification election, or an exercise of respondents right to self-organization

2.YES. Petitioner insists that it is Article 253 that applies in this case. Article 253 of the
Labor Code provides that the terms and conditions of a CBA remain in full force and effect even
beyond the 5-year period when no new CBA has yet been reached. PICOP claims that private
respondents violated this provision when they campaigned for, supported and signed FFWs
petition for certification election on March 19 and 20, 2000, before the onset of the freedom
period.It is Article 256 that applies. Based on the provision, it can be said that while it is
incumbent for the employer to continue to recognize the majority status of the incumbent
bargaining agent even after the expiration of the freedom period, they could only do so when no
petition for certification election was filed. The reason is, with a pending petition for certification,
any such agreement entered into by management with a labor organization is fraught with the
risk that such a labor union may not be chosen thereafter as the collective bargaining
representative. The provision for status quo is conditioned on the fact that no certification
election was filed during the freedom period. Any other view would render nugatory the clear
statutory policy to favor certification election as the means of ascertaining the true expression of
the will of the workers as to which labor organization would represent them. Moreover, the last
sentence of Article 253 which provides for automatic renewal pertains only to the economic
provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA
cannot constitute a bar to a filing of a petition for certification election. When there is a
representational issue, the status quo provision in so far as the need to await the creation of
a new agreement will not apply. Otherwise, it will create an absurd situation where the union
members will be forced to maintain membership by virtue of the union security clause existing
under the CBA and, thereafter, support another union when filing a petition for certification
election. If we apply it, there will always be an issue of disloyalty whenever the employees
exercise their right to self-organization. The holding of a certification election is a statutory policy
that should not be circumvented, or compromised.
Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the
workers. Their freedom to choose who should be their bargaining representative is of paramount
importance. The fact that there already exists a bargaining representative in the unit concerned
is of no moment as long as the petition for certification election was filed within the freedom
period. What is imperative is that by such a petition for certification election the employees are
given the opportunity to make known of who shall have the right to represent them thereafter.
Not only some, but all of them should have the right to do so. What is equally important is that
everyone be given a democratic space in the bargaining unit concerned.

COLEGIO DE SAN JUAN DE LETRAN vs. ASSOCIATION OF EMPLOYEES AND FACULTIES OF LETRAN
and ELEONOR AMBAS
G.R. No. 141471. September 18, 2000

Facts:

During the renegotiation of the respondent unions Collective Bargaining Agreement with the
petitioner, Eleonor Ambas emerged as the newly elected President of the union. 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. However, the union members rejected the
said CBA. Thereafter, petitioner accused the union officers of bargaining in bad faith before the
NLRC. The Labor Arbiter decided in favor of the petitioner. This decision was reversed on appeal
with the NLRC.

The parties later agreed to disregard the unsigned CBA and to start negotiation on new five-year
CBA. During the pendency of approval of proposals, Ambas was informed that her work schedule
was being changed. Ambas protested and requested management to submit the issue to a
grievance machinery under the old CBA.

After the petitioners inaction on the CBA, the union filed a notice to strike. After meeting with
the NCMB to discuss the ground rules for renegotiation, Ambas received a letter dismissing her
for alleged insubordination. The petitioner then ceased negotiations when it received news that
another labor organization had filed a petition for certification.

The union finally struck, but the Secretary of Labor and Employment ordered them to return to
work and for petitioner to accept them back. The Secretary of Labor and Employment later
rendered judgement that the petitioner had been guilty of unfair labor practice. The Court of
Appeals affirmed the findings of the former.

Issue(s):

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 CBA; and

2. Whether the termination of the union president amounts to an interference of the

employees right to self-organization.

Held:

The Supreme Court found the petition unmeritorious.

1. The petitioners failure to act upon the submitted CBA proposal within the ten-day period
exemplified in Article 250 of the Labor Code is a clear violation of the governing procedure
of collective bargaining. As the Court has held in Kiok Loy vs. NLRC, the companys refusal
to make counter-proposal to the unions proposed CBA is an indication of bad
faith. Moreover, the succeeding events are obvious signs that the petitioner had merely
been employing delaying tactics to the passage of the proposed CBA. Moreover, 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.

2. The factual backdrop of the termination of Ambas led the Court 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 in the bargaining table. While the Court recognizes 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 aw and
pursuant to the tenets of equity and fair play. Even assuming arguendo that Ambas was
guilty of insubordination, such disobedience was not a valid ground to terminate her
employment. When the exercise of the management to discipline its employees tends to
interfere with the employees right to self-organization, it amounts to union-busting and is
therefore a prohibited act.